180 Connect Inc. announces third quarter 2007 results

------------------------------------------------------------------------- Revenue increases to a record $102 million, representing a 14% increase from the prior year




TORONTO and ENGLEWOOD, CO, Nov. 13  /PRNewswire-FirstCall/ -- 180 Connect Inc. ("180 Connect" or the "Company") (OTCBB: CNCT.OB, CNCTU.OB, CNCTW.OB), one of North America's largest providers of installation, integration and fulfillment services to the home entertainment, communication, and home integration service industries, today released its financial results for the third quarter ended September 30, 2007.

Certain information contained in this news release constitutes forward-looking information, including anticipated growth and financial performance. See "Forward-Looking Information".

Selected Financial Highlights - Third Quarter Ended September 30, 2007

For the three months ended September 30, 2007 as compared to the three months ended September 30, 2006:

  Third Quarter Highlights

  -   Revenue grew to $102.5 million, an increase of $12.6 million, or
      14.0%, compared to revenue of $89.9 million in 2006.

  -   EBITDA from continuing operations(2) was $8.4 million, an increase of
      $1.9 million or 30% compared to $6.5 million in 2006.

  -   Total cash provided by operating activities was $0.8 million, an
      increase of $7.1 million from the cash used by operating activities
      of $6.3 million in 2006.

  -   Loss from continuing operations was $8.8 million, a decrease of
      $13.8 million compared to income from continuing operations of
      $5.0 million in 2006.

  -   Net loss was $8.8 million, a decrease of $13.3 million compared to
      net income of $4.5 million in 2006.

  -   Net income (loss) per share is as follows:

      -   Net income (loss) from continuing operations was a loss of
          $(0.43) per share basic and diluted, respectively, compared to
          net income from continuing operations of $0.34 and $0.32 per
          share basic and diluted, respectively in 2006.

      -   Net income (loss) was a loss of $(0.43) per share basic and
          diluted, respectively, compared to net income of $0.30 and $0.29
          per share basic and diluted, respectively, in 2006.



Peter Giacalone, President and Chief Executive Officer of the Company stated:

"These results reflect another quarter of solid internal growth in our satellite and cable businesses, as well as contributions from 180 Network Services and 180 Home. We are particularly excited about the long term growth opportunities that can be realized from the recent projects announced in our Network Services business, representing a backlog of approximately $100 million - a market that is experiencing significant near term growth given current market conditions.

The standout result from the completion of the merger with Ad.Venture Partners Inc. is the improved financial strength of the Company. The Company's stronger balance sheet provides the foundation for refinancing the balance of its debt and positions the Company to capitalize on attractive strategic acquisitions."

Third Quarter 2007 Highlights

Revenue in the third quarter increased to $102.5 million, up from $89.9 million for the same period in 2006. This 14% growth reflects volume increases across-the-board in both the satellite and cable businesses, as well as contributions from 180 Network Services and 180 Home, all of which benefited from a combination of strong internal growth and a disciplined operational management team. DIRECTV volume increased 14% from the prior year, largely attributable to increased high-definition sales and upgrade initiatives as DIRECTV continues to sell more advanced product. The Company is also very pleased to note that DIRECTV was ranked "Highest in Customer Satisfaction among Satellite/Cable TV Subscribers" in the Southern, Western and Eastern regions of the United States, according to the J.D. Power and Associates 2007 Residential Cable/Satellite TV Customer Satisfaction Study. As 180 Connect is the primary service provider for DIRECTV's western region, the Company believes that the award reflects its commitment and ability to deliver exceptional customer service. 180 Connect believes that its satellite business is on track to complete over 2.3 million work orders for DIRECTV alone this year.

Cable revenues increased 6% from the prior year, as 180 Connect continues to benefit from solid market growth, increased market share and the Company's ability to leverage its competitive advantages in supporting its customer's triple play initiatives.

180 Network Services revenue increased 37% from the prior year and 180 Connect believes it is well positioned to continue its rapid growth. The Company's significant municipal fiber projects in Boise, Idaho and Ontario, Santa Clara and Shafter, California, currently underway, continue to deliver exceptional margins as well as showcase its capabilities to potential future customers. The Company expects that these projects in addition to recently announced contracts, including the City of Palo Alto, CA and Truckee Donner, CA, will more than double its annual revenues in its 180 Network Services business.

180 Home, 180 Connect's structured wiring business, continues to grow rapidly, with third quarter revenue increasing approximately 58% over the prior year. The Company continues to see significant opportunity to expand this business, as in-home technology has become an increasingly important factor in home buying decisions.

EBITDA from continuing operations(2) excluding a non-cash stock based compensation charge of $0.2 million was $8.6 million for the third quarter of 2007, an increase of 33% over results reported for the same period in 2006. For the first nine months of 2007, EBITDA from continuing operations was $14.6 million, an increase of approximately 67% over the first nine months of 2006, on approximately 19% higher revenue. EBITDA from continuing operations(2) excluding US listing costs, restructuring charges and non-cash stock based compensation, for the nine months ended September 30, 2007 was $15.6 million. This increase was primarily due to the growth in work order volume in the Company's satellite and cable businesses, cost savings achieved by implementing better operational controls, as well as increased growth from its Network Services business, partially offset by the impact of higher fuel prices. Seasonally, the third and fourth quarters are the Company's strongest quarters from an EBITDA standpoint, as its customers marketing focus, primarily DIRECTV's NFL Ticket and high definition sales and upgrade initiatives, drive a favorable volume and mix shift in work performed.

Looking Forward

The Company's continued success in the third quarter was due to a relentless focus on business fundamentals under the leadership of a strong management team. Given the strength in demand across the satellite and cable businesses and the increase in non-operating costs the Company is revising its 2007 revenue guidance to between $380 million to $385 million and EBITDA of between $22.5 million to $23 million representing earnings growth between 63% and 67%.

There are four primary factors contributing to the change in EBITDA guidance. First, costs associated with the investment in the quality of the Company's workforce were not offset with its customer's bonus programs. Despite the impact of higher costs, 180 Connect believes that these programs are vital and have been critical in protecting its franchise and maintaining its market share. Second, fuel costs represent a significant cost in the Company's business, with the spike in fuel prices resulting in approximately $750,000 of additional costs for the full year, exceeding its original estimates. The Company is in a constant dialog with its customers regarding these increased costs and will continue to negotiate a surcharge in order to share this burden.

Third, the Company's roll out of an enhanced work force management system had a short term effect on efficiency and costs, affecting the Company's margins, however, the Company expects to recover the cost and productivity benefits of this enhanced system over the longer term. Fourth, 180 Network Services division continues to post impressive earning and margins, certain projects previously forecast to contribute in 2007 have been deferred to 2008 due to delays in municipal permitting, developer entitlements, public financing or vendor specifications. Nevertheless, the Company views these as deferrals of the earnings cycle and remains confident they will be delivered in 2008.

Summary Results

The following is a summary of the Company's selected consolidated financial and operating information for the three and nine months ended September 30, 2007 and 2006 and should be read in conjunction with the accompanying unaudited consolidated financial statements for the three and nine months ended September 30, 2007. The amounts presented below have been reclassified to reflect the adjustments associated with the discontinued operations of the Company.

  Selected Unaudited Consolidated Financial and Operating Data:

                                Three Months   Three Months
                                       Ended          Ended              %
                               Sept 30, 2007  Sept 30, 2006         Change

  Revenue                       $102,521,340   $ 89,908,346          14.0%

  Expenses
  Direct                          89,914,862     78,711,246          14.2%
  General and administrative       4,054,289      4,712,862         -14.0%
  Stock-based compensation           227,019              -         100.0%
  Foreign exchange loss (gain)       (72,760)          (469)             -
  Restructuring costs                      -              -              -
  Depreciation                     3,058,116      3,433,006         -10.9%
  Amortization of customer
   contracts                         920,376        929,727          -1.0%
  Interest expense                 7,801,006      2,898,538         169.1%
  (Gain) loss on fair market
   value of derivatives              887,062     (4,599,330)       -119.3%
  Gain on extinguishment of debt           -     (1,233,001)       -100.0%
  Other expense                    4,379,459              -         100.0%
  (Gain) loss on sale of assets       (7,336)       135,696        -105.4%
                                -------------------------------------------
  Income (loss) from continuing
   operations before income
   taxes                          (8,640,753)     4,920,071        -275.6%
  Income tax expense (recovery)      130,583        (96,965)       -234.7%
                                -------------------------------------------
  Gain (loss) from continuing
   operations                     (8,771,336)     5,017,036        -274.8%
  Loss from discontinued
   operations, net of income
   taxes of nil                            -       (538,899)       -100.0%
                                -------------------------------------------
  Net income (loss) and total
   comprehensive income (loss)
   for the period                 (8,771,336)     4,478,137        -295.9%
                                -------------------------------------------
                                -------------------------------------------


                                 Nine Months    Nine Months
                                       Ended          Ended              %
                               Sept 30, 2007  Sept 30, 2006         Change

  Revenue                       $283,615,672   $239,245,733          18.6%
  Expenses
  Direct                         254,853,816    216,089,499          17.9%
  General and administrative      13,802,266     13,933,478          -0.9%
  Stock-based compensation           227,019         91,214         100.0%
  Foreign exchange loss (gain)      (113,442)         3,033              -
  Restructuring costs                275,000        392,879         -30.0%
  Depreciation                     8,574,819     10,013,336         -14.4%
  Amortization of customer
   contracts                       2,761,122      2,789,180          -1.0%
  Interest expense                14,012,024      6,925,495         102.3%
  (Gain) loss on fair market
   value of derivatives            5,576,723     (3,433,755)       -262.4%
  Gain on extinguishment of debt           -     (1,233,001)       -100.0%
  Other expense                    4,379,459              -         100.0%
  (Gain) loss on sale of assets      491,884     (1,114,467)       -144.1%
                                -------------------------------------------
  Income (loss) from continuing
   operations before income
   taxes                         (21,225,018)    (5,211,158)        307.3%
  Income tax expense (recovery)      383,027        (58,165)       -758.5%
                                -------------------------------------------
  Gain (loss) from continuing
   operations                    (21,608,045)    (5,152,993)        319.3%
  Loss from discontinued
   operations, net of income
   taxes of nil                      (79,527)    (1,876,694)        -95.8%
                                -------------------------------------------
  Net income (loss) and total
   comprehensive income (loss)
   for the period                (21,687,572)    (7,029,687)        208.5%
                                -------------------------------------------
                                -------------------------------------------


  Per Share data

                              Three        Three         Nine         Nine
                             Months       Months       Months       Months
                              Ended        Ended        Ended        Ended
                            Sept 30,     Sept 30,     Sept 30,     Sept 30,
                               2007         2006         2007         2006
                        ------------ ------------ ------------ ------------
  Income (loss) from
   continuing
   operations:
    Basic.............  $     (0.43) $      0.34  $     (1.27) $     (0.35)
    Diluted...........  $     (0.43) $      0.32  $     (1.27) $     (0.35)
  Net income (loss)
   for the period:
    Basic.............  $     (0.43) $      0.30  $     (1.27) $     (0.48)
    Diluted...........  $     (0.43) $      0.29  $     (1.27) $     (0.48)
  Weighted average
   number of shares:
    Basic.............   20,243,082   14,685,976   17,011,000   14,625,856
  Weighted average
   number of shares:
    Diluted...........   20,243,082   15,510,667   17,011,000   14,625,856



  Selected Consolidated Balance Sheet Data

                                                  For the period ended:
                                                    Sept 30,   December 31,
                                                       2007           2006
                                               ----------------------------
  Cash and cash equivalents..................  $    969,285   $  2,904,098
  Working capital deficit....................    15,625,580     11,684,299
  Total assets...............................   158,370,876    165,443,572
  Total debt and capital lease obligations...    51,074,549     73,289,517
  Total shareholders' equity.................  $ 17,318,538   $  9,402,081




A copy of the interim unaudited consolidated financial statements of the Company for the three and nine months ended September 30, 2007 are attached to this news release. The Company will be releasing its third quarter report on November 14, 2007 which will be available on EDGAR and the Company's website. Additional information relating to the Company is available on EDGAR at http://www.sec.gov/edgar.shtml, on SEDAR at http://www.sedar.com/ and on the Company's website at http://www.180connect.net/.

Non-GAAP Measures:

(1) The term "Direct Contribution Margin" ("DCM") consists of revenue less direct expense and excludes general and administrative expense, foreign exchange loss (gain), stock-based compensation, (gain) loss in sale of investments and assets, depreciation, amortization of customer contracts, interest and expense, (gain) loss on fair market value of derivatives, gain on extinguishment of debt, interest expense, and income tax expense (recovery). DCM, as referred to in this news release, is a non-GAAP measure which does not have any standardized meaning prescribed by US GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. We believe that this term provides a better assessment of the contribution of the field operations dealing directly with our customers' subscribers by eliminating: (1) the general and administrative costs that are not part of the direct costs of generating revenue; (2) the charge for the amortization of customer contracts and depreciation and stock based compensation which are non-cash expense items; and (3) (gain) or loss on sale of assets, (gain) loss on fair market value of derivatives, gain on extinguishment of debt, and other expense, which are not considered to be in the normal course of operating activity. Investors should be cautioned, however, that DCM should not be construed as an alternative to income (loss) from continuing operations determined in accordance with US GAAP as an indicator of our performance. For a reconciliation of DCM to the comparable US GAAP measure, loss from continuing operations, see "Direct Contribution Margin"

  Following is a reconciliation of DCM to loss from continuing operations:

                              Three        Three         Nine         Nine
                             Months       Months       Months       Months
                              Ended        Ended        Ended        Ended
                            Sept 30,     Sept 30,     Sept 30,     Sept 30,
                               2007         2006         2007         2006
                        ------------ ------------ ------------ ------------
  Direct contribution
   margin(1)            $12,606,478  $11,197,100  $28,761,856  $23,156,234
  General and
   administrative         4,054,289    4,712,862   13,802,266   13,933,478
  Non-cash stock-based
   compensation             227,019            -      227,019       91,214
  Foreign exchange loss
   (gain)                   (72,760)        (469)    (113,442)       3,033
  Restructuring costs             -            -      275,000      392,879
  Depreciation            3,058,116    3,433,006    8,574,819   10,013,336
  Amortization of
   customer contracts       920,376      929,727    2,761,122    2,789,180
  Interest expense        7,801,006    2,898,538   14,012,024    6,925,495
  Gain on extinguishment
   of debt                        -   (1,233,001)           -   (1,233,001)
  (Gain) loss on sale
   of assets                 (7,336)     135,696      491,884   (1,114,467)
  (Gain) loss on change
   in fair value of
   derivative liabilities   887,062   (4,599,330)   5,576,723   (3,433,755)
  Other expense           4,379,459            -    4,379,459            -
  Income tax expense
   (recovery)               130,583      (96,965)     383,027      (58,165)
                        ------------ ------------ ------------ ------------
  Income (loss) from
   continuing
   operations           ($8,771,336)  $5,017,036 ($21,608,045) ($5,152,993)
                        ------------ ------------ ------------ ------------
                        ------------ ------------ ------------ ------------

  (2) The term "EBITDA from continuing operations" refers to income from
      continuing operations before deducting depreciation, amortization of
      customer contracts, (gain) loss in sale assets, interest expense,
      (gain) loss on fair market value of derivatives, gain on
      extinguishment of debt, other expense, and income tax expense
      (recovery). EBITDA from continuing operations, as referred to in this
      news release, is a non-GAAP measure which does not have any
      standardized meaning prescribed by US GAAP and is therefore unlikely
      to be comparable to similar measures presented by other issuers.
      Management believes that EBITDA from continuing operations provides a
      better assessment of cash flow from the Company's operations by
      eliminating: (1) the charge for depreciation, amortization of
      customer contracts and stock-based compensation, which are non-cash
      expense items and (2) (gain) or loss on sale of assets, (gain) loss
      on fair market value of derivatives, gain on extinguishment of debt,
      and other expense, which are not considered to be in the normal
      course of operating activity. In addition, financial analysts and
      investors use a multiple of EBITDA from continuing operations for
      valuing companies within the same sector, in order to eliminate the
      differences in accounting treatment from one company to the next.
      Given that the Company is in a growth stage, we believe the focus on
      EBITDA from continuing operations gives the investor or reader of the
      Company's consolidated financial statements and MD&A more insight
      into the operating capabilities of management and its utilization of
      the Company's operating assets. Management further believes that
      EBITDA from continuing operations is also the best metric for
      measuring the Company's valuation. Investors should be cautioned,
      however, that EBITDA from continuing operations should not be
      construed as an alternative to income (loss) from continuing
      operations determined in accordance with US GAAP as an indicator of
      the Company's performance. For a reconciliation of EBITDA from
      continuing operations to the comparable GAAP measure, being income
      (loss) from continuing operations, see "EBITDA from Continuing
      Operations."



Following is a reconciliation of EBITDA from continuing operations to net loss from continuing operations:

                              Three        Three         Nine         Nine
                             Months       Months       Months       Months
                              Ended        Ended        Ended        Ended
                            Sept 30,     Sept 30,     Sept 30,     Sept 30,
                               2007         2006         2007         2006
                        ------------ ------------ ------------ ------------
  EBITDA from continuing
   operations(2)          8,397,930    6,484,707   14,571,013    8,735,630
  Depreciation            3,058,116    3,433,006    8,574,819   10,013,336
  Amortization of
   customer contracts       920,376      929,727    2,761,122    2,789,180
  Interest expense        7,801,006    2,898,538   14,012,024    6,925,495
  Gain on extinguishment
   of debt                        -   (1,233,001)           -   (1,233,001)
  (Gain) loss on sale of
   assets                    (7,336)     135,696      491,884   (1,114,467)
  (Gain) loss on change
   in fair value of
   derivative liabilities   887,062   (4,599,330)   5,576,723   (3,433,755)
  Other expense           4,379,459            -    4,379,459            -
  Income tax expense
   (recovery)               130,583      (96,965)     383,027      (58,165)
                        ------------ ------------ ------------ ------------
  Income (loss) from
   continuing
   operations           ($8,771,336)  $5,017,036 ($21,608,045) ($5,152,993)
                        ------------ ------------ ------------ ------------
                        ------------ ------------ ------------ ------------

  Conference Call Information



A live webcast of 180 Connect Inc.'s third quarter 2007 earnings call will be available at http://www.180connect.net/. The call will begin at 4:30 p.m. EST, November 13, 2007. The dial-in numbers for the call are international dial 617.213.8857 and toll free at 866.831.6267, participant pass code is 81992339. The webcast will be archived on the Company's website and a replay of the call will be available beginning at 6:30 p.m. EST on Tuesday, November 13, 2007 through to 11:59 p.m. EST Tuesday, November 20, 2007. The dial-in numbers for the replay are 617.801.6888 International Dial and toll free at 888.286.8010 pass code 27422392.

180 Connect Inc.

180 Connect Inc. is one of North America's largest providers of installation, integration and fulfillment services to the home entertainment, communications and home integration service industries. With more than 4,000 skilled technicians and 750 support personnel based in over 85 operating locations, 180 Connect is well positioned as the only pure play national residential service provider in the market. 180 Connect shares are traded under the name of 180 Connect Inc. on the OTCBB under the symbols CNCT.OB, CNCTU.OB and CNCTW.OB.

Forward-Looking Information

This news release contains forward-looking statements which reflect management's expectations regarding the Company's future growth, results of operations, performance and business prospects and opportunities. Statements about the Company's future plans and intentions, results, levels of activity, performance, goals or achievements or other future events constitute forward-looking statements. Wherever possible, words such as "will be", "may", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict" or "potential" or the negative or other variations of these words, or other similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors, including those discussed under section 1A "Risk Factors" of the Report Form 10-Q could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

                             180 Connect Inc.
                       Consolidated Balance Sheets
                       (in United States Dollars)
                               (Unaudited)

                                                           As at
                                               ----------------------------
                                               September 30,   December 31,
                                                       2007           2006
                                               ----------------------------
  Assets
  Current Assets
  Cash and cash equivalents                    $    969,285   $  2,904,098
  Accounts receivable (less allowance for
   doubtful accounts of $1,652,894 and
   $2,506,637, respectively)                     52,009,680     48,934,952
  Inventory                                      18,388,807     15,816,148
  Restricted cash                                11,859,300     14,503,000
  Prepaid expenses and other assets               7,523,344      7,910,255
                                               ----------------------------
    TOTAL CURRENT ASSETS                         90,750,416     90,068,453

  Property, plant and equipment                  31,375,700     34,882,890
  Goodwill                                       11,034,723     11,034,723
  Customer contracts, net                        22,311,634     25,072,756
  Deferred tax asset                                276,608              -
  Other assets                                    2,621,795      4,384,750
                                               ----------------------------
    TOTAL ASSETS                               $158,370,876   $165,443,572
                                               ----------------------------
                                               ----------------------------

  Liabilities and Shareholders' Equity
  Current liabilities
  Accounts payable and accrued liabilities     $ 81,395,821   $ 78,686,245
  Current portion of long-term debt               6,817,352      5,967,674
  Fair value of derivative financial
   instruments                                    8,194,756      4,065,729
  Current portion of capital lease
   obligations                                    9,968,067     13,033,104
                                               ----------------------------
    TOTAL CURRENT LIABILITIES                   106,375,996    101,752,752

  Income tax liability                              387,212              -
  Long-term debt                                 18,667,844     32,799,043
  Convertible debt                                        -      6,276,584
  Capital lease obligations                      15,621,286     15,213,112
                                               ----------------------------
    TOTAL LIABILITIES                           141,052,338    156,041,491

  Shareholders' Equity
  Common stock $.0001 par value; authorized
   100,000,000, at September 30, 2007 and
   December 31, 2006 issued and outstanding
   shares  25,500,152 and 14,685,976,
   respectively                                       2,550          1,469
  Paid- in capital                              121,698,780     91,871,813
  Treasury stock, 500,000 shares and nil at
   September 30, 2007 and December 31, 2006
   respectively                                    (224,019)             -
  Deficit                                      (104,643,803)   (82,956,231)
  Accumulated other comprehensive income            485,030        485,030
                                               ----------------------------
    TOTAL SHAREHOLDERS' EQUITY                   17,318,538      9,402,081
                                               ----------------------------
    TOTAL LIABILITIES AND SHAREHOLDERS'
     EQUITY                                    $158,370,876   $165,443,572
                                               ----------------------------
                                               ----------------------------



                             180 Connect Inc.
  Consolidated Statements of Operations and Comprehensive Income (Loss)
                       (in United States Dollars)
                               (Unaudited)

                 Three Months   Three Months    Nine Months    Nine Months
                        Ended          Ended          Ended          Ended
                 September 30,  September 30,  September 30,  September 30,
                         2007           2006           2007           2006
                 ----------------------------------------------------------
  Revenue        $102,521,340   $ 89,908,346   $283,615,672   $239,245,733
  Expenses
    Direct
     expenses      89,914,862     78,711,246    254,853,816    216,089,499
    General and
     administra-
     tive           4,054,289      4,712,862     13,802,266     13,933,478
       Non-cash
        stock-
        based
        compen-
        sation        227,019              -        227,019         91,214
    Foreign
     exchange
     loss (gain)      (72,760)          (469)      (113,442)         3,033
    Restructur-
     ing costs              -              -        275,000        392,879
    Depreciation    3,058,116      3,433,006      8,574,819     10,013,336
    Amortization
     of customer
     contracts        920,376        929,727      2,761,122      2,789,180
  Other (income)
   expense
    Interest and
     loan fees      7,801,006      2,898,538     14,012,024      6,925,495
    Gain on
     extinguish-
     ment of
     debt                   -     (1,233,001)             -     (1,233,001)
    (Gain) loss
     on sale of
     investments
     and assets        (7,336)       135,696        491,884     (1,114,467)
    (Gain) loss
     on change
     in fair
     value of
     derivative
     liabilities      887,062     (4,599,330)     5,576,723     (3,433,755)
    Other
     expense        4,379,459              -      4,379,459              -
                 ----------------------------------------------------------
  Income (loss)
   from continu-
   ing opera-
   tions before
   income tax
   expense         (8,640,753)     4,920,071    (21,225,018)    (5,211,158)
  Income tax
   expense
   (recovery)         130,583        (96,965)       383,027        (58,165)
                 ----------------------------------------------------------
  Income (loss)
   from continu-
   ing opera-
   tions           (8,771,336)     5,017,036    (21,608,045)    (5,152,993)
  Loss from
   discontinued
   operations,
   net of
   income taxes
   of nil                   -       (538,899)       (79,527)    (1,876,694)
                 ----------------------------------------------------------
  Net income
   (loss) and
   comprehensive
   income (loss)
   for the
   period        $ (8,771,336)  $  4,478,137   $(21,687,572)  $ (7,029,687)
                 ----------------------------------------------------------
                 ----------------------------------------------------------

  Net income
   (loss) per
   share from
   continuing
   operations:
    Basic        $      (0.43)  $       0.34   $      (1.27)  $      (0.35)
    Diluted      $      (0.43)  $       0.32   $      (1.27)  $      (0.35)
  Net income
   (loss) per
   share:
    Basic        $      (0.43)  $       0.30   $      (1.27)  $      (0.48)
    Diluted      $      (0.43)  $       0.29   $      (1.27)  $      (0.48)

  Weighted
   average
   number of
   shares
   outstand-
   ing -
   basic           20,243,082     14,685,976     17,011,000     14,625,856
  Weighted
   average
   number of
   shares
   outstand-
   ing -
   diluted         20,243,082     15,510,667     17,011,000     14,625,856



                             180 Connect Inc.
                  Consolidated Statements of Cash Flows
                 (in United States Dollars) (Unaudited)

                         Three Months Ended          Nine Months Ended
                 ----------------------------  ----------------------------
                 September 30,  September 30,  September 30,  September 30,
                 -------------  -------------  -------------  -------------
                      2007           2006           2007           2006
                 -------------  -------------  -------------  -------------
  Cash provided
   by (used in)
   the follow-
   ing activi-
   ties:
  Operating
  Income (loss)
   from contin-
   uing opera-
   tions         $ (8,771,336)  $  5,017,036   $(21,608,045)  $ (5,152,993)
  Add (deduct)
   items not
   affecting
   cash:
    Deprecia-
     tion and
     amortiza-
     tion           3,978,492      4,362,733     11,335,941     12,802,516
    Non-cash
     interest
     expense        4,680,713      1,008,180      6,865,837      2,124,570
    Stock-
     based
     compensa-
     tion             227,019              -        227,019         91,214
    Future
     income
     taxes                  -       (180,000)             -       (180,000)
    Settlement
     of deriv-
     ative
     liability     (2,766,573)             -     (2,766,573)             -
    Gain on
     extinguish-
     ment of
     debt                   -     (1,233,001)             -     (1,233,001)
    (Gain) loss
     on change
     in fair
     value of
     derivative
     liabili-
     ties             887,062     (4,599,330)     5,576,723     (3,433,755)
    (Gain) loss
     on sale of
     invest-
     ments and
     assets            (7,336)       135,696        491,884     (1,114,467)
    Other              34,067            961         73,993          3,106
  Changes in
   non-cash
   working
   capital
   balances
   related to
   operations:
    Accounts
     receivable   (11,009,290)   (13,939,349)    (3,074,728)     4,339,502
    Inventory      (3,624,307)    (5,004,743)    (2,572,659)     2,522,490
    Other
     current
     assets          (320,110)      (419,655)      (700,259)      (305,961)
    Insurance
     premium
     deposits      (3,289,009)      (525,317)     1,316,723     (2,827,125)
    Other assets      918,776        (58,765)      (453,287)       (38,063)
    Restricted
     cash                   -              -      2,643,700        247,366
    Accounts
     payable and
     accrued
     liabilities   19,886,709      9,613,919      2,593,371     (6,123,210)
    Operating
     cash flows
     from dis-
     continued
     operations             -       (472,882)       (60,507)    (1,529,897)
                 -------------  -------------  -------------  -------------

  Total cash
   provided by
   (used in)
   operating
   activities         824,877     (6,294,517)      (110,867)       192,292
                 -------------  -------------  -------------  -------------
  Investing
  Purchase of
   property,
   plant and
   equipment         (360,421)      (630,210)    (2,052,529)    (2,091,671)
  Net proceeds
   from disposi-
   tion of
   investments              -              -              -      1,327,693
                 -------------  -------------  -------------  -------------
  Total cash
   used in
   investing
   activities        (360,421)      (630,210)    (2,052,529)      (763,978)
                 -------------  -------------  -------------  -------------
  Financing
  Repayment of
   capital
   lease obli-
   gations         (1,755,783)    (3,533,928)    (9,241,450)   (11,378,009)

  Repayment of
   long-term
   debt            (7,000,001)             -    (10,333,336)    (7,350,000)
  Proceeds
   from share
   issuance            14,704              -         61,372        259,712
  Net proceeds
   from
   reverse
   merger          37,933,165              -     37,933,165              -
  Issuance
   costs on
   reverse
   merger          (6,976,440)             -     (6,976,440)             -
  Redemption
   of convert-
   ible debt      (10,393,577)             -    (10,393,577)             -
  Increase
   (decrease)
   in borrow-
   ings under
   long-term
   debt           (11,418,105)     1,098,488     (3,993,853)     1,098,488
  Issuance
   costs on
   long-term
   debt                     -     (3,414,390)             -     (3,515,471)
  Net proceeds
   from
   refinancing
   of vehicles              -              -      3,470,714              -
  Proceeds from
   issuance of
   convertible
   debt                     -              -              -     10,686,101
  Proceeds from
   refinancing
   of long-term
   debt                     -     42,140,497              -     42,140,497
  Extinguishment
   of long-term
   debt                     -    (32,863,525)             -    (32,863,525)
  Repurchase of
   common stock      (224,019)             -       (224,019)             -
  Issuance costs
   paid on
   convertible
   debt                     -              -              -     (1,388,985)
                 -------------  -------------  -------------  -------------
  Total cash
   provided by
   (used in)
   financing
   activities         179,944      3,427,142        302,578     (2,311,192)
                 -------------  -------------  -------------  -------------
  Effect of
   exchange
   rates on
   cash and
   cash
   equivalents        (34,067)       (19,892)       (73,993)       (22,037)
                 -------------  -------------  -------------  -------------
  Net increase
   (decrease)
   in cash and
   cash
   equivalents
   during the
   period             610,333     (3,517,477)    (1,934,813)    (2,904,915)
  Cash and
   cash
   equivalents,
   beginning of
   period             358,952      3,966,014      2,904,098      3,353,452
                 -------------  -------------  -------------  -------------
  Cash and
   cash
   equivalents,
   end of
   period        $    969,285   $    448,537   $    969,285   $    448,537
                 -------------  -------------  -------------  -------------
                 -------------  -------------  -------------  -------------

  Supplemental
   cash flow
   information:
  Interest paid  $  1,691,880   $  1,425,122   $  6,102,000   $  4,504,060
                 -------------  -------------  -------------  -------------
                 -------------  -------------  -------------  -------------
  Income taxes
   paid          $     76,715   $    228,935   $    219,298   $    323,292
                 -------------  -------------
                 -------------  -------------

  -------------------------------------------------------------------------
  -------------------------------------------------------------------------

  Supplemental disclosure of non-cash investing and financing transactions:


For the nine months ended September 30, 2007 and September 30, 2006, the Company had additional capital lease obligations for vehicles of $3,182,956 and $6,797,554, respectively. 

DATASOURCE: 180 Connect Inc.



CONTACT: please contact the following or visit our website at

http://www.180connect.net/. Claudia A. Di Maio, Director Investor Relations, TEL:

[phone], DIRECT LINE: [phone], EMAIL: ;

Devlin Lander, Integrated Corporate Relations, TEL.: [phone]

Copyright