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iSatori, Inc. Reports Third Quarter Operating Results

Company Expects Strengthened Internet Marketing Capabilities to Benefit Fourth Quarter and 2013 Results as iSatori Prepares for Entry Into Mass Market Retail Channel

GOLDEN, CO -- (Marketwire) -- 11/09/12 -- iSatori, Inc. (OTCQB: IFIT), an emerging leader in the development and marketing of scientifically engineered nutritional supplements for healthier lifestyles, announced its operating results for the third quarter and first nine months of 2012 today. A summary of these results is provided in the following table. A complete report of the Company's operating results will be filed later today with the Securities and Exchange Commission on Form 10-Q.

The Company's product revenue improved slightly (net of returns and discounts) during the nine months ending September 30, 2012, to $6.99 million, compared with $6.97 million in the first nine months of 2011. Income (loss) from continuing operations declined from $529,000 in the first nine months of 2011 to a loss of ($243,000) in the first nine months of 2012. However, when the extraordinary gain on the divestiture by the Company of its dormant product line of children's vitamins (approximately $500,000) and merger costs ($562,000) in connection with the Company's merger into the "shell" corporation, Integrated Security Systems, Inc., are excluded, the Company's recorded 2012 restated (non-GAAP) nine-month pretax loss of ($181,000) compared with restated pretax income of $529,000 in the first nine months of 2011.

Third quarter product revenue (net of returns and discounts) declined 17% from $2.815 million in the three months ending September 30, 2011 to $2.349 million in the comparable 2012 period. The Company's income (loss) from continuing operations for the 2012 third quarter of ($517,000) compared with a loss from continuing operations in the 2011 third quarter of ($44,000).

"Our third quarter results were impacted by planned increases in Internet product marketing costs, as well as higher than expected professional fees," noted Stephen Adelé, Chief Executive Officer of iSatori. "We continue to strategically deploy the working capital procured through our merger with IZZI into projects that should benefit operating results as we move into 2013 and prepare our Company for entry into the Mass Market retail channel."

In related news, iSatori confirmed it is in the process of procuring an initial stocking order for its newly reconstituted energy product, Energize™, from Walgreens, a Fortune 500 company and the largest drug retailer in the United States. Walgreens, a major mass merchandiser with over 8,300 retail outlets, distributes a variety of consumer goods, including nutritional supplements and energy products. iSatori anticipates receiving an initial stocking order before the end of the year from Walgreens. Other terms and conditions regarding this potential commercial relationship may be publicly disclosed if and when the commercial relationship matures.

The Company also announced it will be presenting at the LD Micro Conference ( at the Luxe Hotel in Los Angeles, California, on December 5, 2012. iSatori will join over 130 small- and micro-cap companies invited to present at the conference, which is expected to attract over 600 investment professionals and institutional investors from around the world. Additional details on the LD Micro Conference will be forthcoming in a later news release.

                                iSatori, Inc.
               Summary of Third Quarter and Nine-Month Results
                   for Calendar Years 2011 and 2012 ($000)

                                     Third Quarter Ended  Nine Months Ended
                                          Sept. 30            Sept. 30
                                       2012      2011      2012      2011
Product revenue (Net of returns and   $2,349    $2,815    $6,990    $6,970
Income (loss) from operations         ($428)      $76     ($136)     $722
Income (loss) from continuing         ($517)     ($44)    ($243)     $529
Less: Divestiture Gain(1)               n/a       n/a     ($500)      n/a
Less: Merger Costs(2)                   n/a       n/a      $562       n/a
Restated Income (loss) from           ($517)     ($44)    ($181)     $529
 continuing operations(3)

1) Includes gain on sale of Company's dormant product line of children's
2) Includes all costs related to Company's merger into IZZI (see above).
3) Non-GAAP restatement of Company's profit (or loss) for the applicable
   periods taking into account its divestiture gain (see Note 1, above) and
   its merger costs (see Note 2, above).

iSatori, Inc. is a consumer products firm which develops and sells nutritional products in the performance, weight loss, and energy markets through online marketing, Fortune 500 retailers, and thousands of retail stores around the world. More information about the Company is available at

Statements made in this news release relating to the Company's future sales, expenses, revenue, product developments, and all other statements except statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, the timing and extent of changes in demand for the Company's products, the relationships with our distributors, the results of our marketing efforts, entrance into mass market retail distributors, the availability and price of ingredients necessary to manufacture such products, and the outcome of any current or future litigation regarding such products or similar products of competitors. All forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update any such statement.

  iSatori, Inc., iSatori Technologies, Inc. and iSatori Technologies, LLC
                   Condensed Consolidated Balance Sheets
                                               September 30,   December 31,
                                                    2012           2011
                                               -------------  -------------
Current assets:
  Cash and cash equivalents                    $   2,425,419  $     364,608
  Accounts receivable
      Trade, net of allowance for doubtful
       accounts                                    1,003,198        937,841
  Income tax receivable                                    -         54,841
  Other receivables - current portion                 35,828         44,722
  Inventories                                      1,200,348        757,250
  Assets held for sale                                29,338        168,474
  Deferred tax asset, net                             35,747         35,746
  Prepaid expenses                                   178,721        119,147
                                               -------------  -------------
    Total current assets                           4,908,599      2,482,629

Property and equipment
  Vehicle                                                  -         67,135
  Furniture and fixtures                              56,680         50,304
  Office equipment                                    36,600         32,131
  Computer equipment                                 312,883        262,737
  Dies and cylinders                                  49,422         49,422
  Less accumulated depreciation                     (312,484)      (324,257)
                                               -------------  -------------

      Total property and equipment                   143,101        137,472

Note Receivable - net of current portion              81,714         81,714

Other assets:
  Deferred tax asset, net                            216,498        216,498
  Deposits and other assets                           19,234         37,257
  Debt Issuance Costs                                  6,250        157,242
  Deferred Offering Costs                                  -        141,826
                                               -------------  -------------
    Total other assets                               241,982        552,823
                                               -------------  -------------

      Total assets                             $   5,375,396  $   3,254,638
                                               =============  =============


Current liabilities:
  Trade accounts payable                       $     608,670  $     695,775
  Accrued expenses                                   190,433        446,950
  Line of credit, less debt discount                 673,155        785,044
  Current portion of vendor payables                       -          1,000
  Current portion of notes payable                         -        489,352
                                               -------------  -------------
    Total current liabilities                      1,472,258      2,418,121

Long-term liabilites
  Note payable, less current maturities and
   debt discounts                                          -        478,729
  Other long-term liabilities                        128,422         92,606
                                               -------------  -------------
    Total long-term liabilities                      128,422        571,335

Stockholders' Equity:
  Convertible preferred stock, $0.01 par
   value, 750,000 shares authorized; 22,500
   shares issued and outstanding ($450,000 of
   liquidation value)                                    225              -
  Common stock, $0.01 par value, 56,250,000
   shares authorized; 12,622,756 and 5,610,100
   shares issued and outstanding, respectively       126,228        100,000
  Additional paid-in capital                       4,149,208        (56,017)
  Retained earnings (accumulated deficit)           (500,945)       221,199
                                               -------------  -------------
    Total stockholders' equity                     3,774,716        265,182
                                               -------------  -------------

      Total liabilities and stockholders'
       equity                                  $   5,375,396  $   3,254,638
                                               =============  =============

  iSatori, Inc., iSatori Technologies, Inc. and iSatori Technologies, LLC
              Condensed Consolidated Statements of Operations

                           For the Three Months       For the Nine Months
                                   Ended                     Ended
                               September 30,             September 30,
                         ------------------------  ------------------------
                             2012         2011         2012         2011
                         -----------  -----------  -----------  -----------
  Product revenue (Net
   of returns and
   discounts)            $ 2,348,773  $ 2,814,966  $ 6,989,596  $ 6,969,690
  Royalty revenue             22,439       31,559       83,105       91,632
  Other revenue               93,389      114,333      135,103      218,457
                         -----------  -----------  -----------  -----------
    Total revenue          2,464,601    2,960,858    7,207,804    7,279,779

Cost of sales                931,095      937,778    2,763,694    2,397,795
                         -----------  -----------  -----------  -----------
  Gross profit             1,533,506    2,023,080    4,444,110    4,881,984

Operating Expenses:
  Selling and marketing    1,189,092    1,271,886    2,098,778    2,411,218
  Salaries and labor
   related expenses          393,303      522,124    1,420,976    1,337,388
  Administration             357,782      153,228    1,003,302      349,971
  Depreciation and
   amortization               21,256         (214)      57,000       61,633
                         -----------  -----------  -----------  -----------
    Total operating
     expenses              1,961,433    1,947,024    4,580,056    4,160,210

                         -----------  -----------  -----------  -----------
Income (loss) from
 operations                 (427,927)      76,056     (135,946)     721,774
                         -----------  -----------  -----------  -----------

Gain on sale of product
 lines                             -            -      499,525            -
Other income (expense)        (2,096)           -       13,933          433
Financing expense            (91,277)     (71,508)    (379,403)    (106,355)
Interest expense               4,776      (48,523)    (241,301)     (87,059)
                         -----------  -----------  -----------  -----------

Income (loss) from
 continuing operations      (516,524)     (43,975)    (243,192)     528,793

Income tax benefit
 (expense)                    (2,244)      (3,156)    (114,543)     268,326
                         -----------  -----------  -----------  -----------

Net income (loss)        $  (518,768) $   (47,131) $  (357,735) $   797,119
                         ===========  ===========  ===========  ===========

Net income (loss) per
 common share            $     (0.04) $     (0.01) $     (0.03) $      0.12

Weighted average shares
  Basic and fully
   diluted                12,622,756    6,680,203   10,591,630    6,680,203

iSatori, Inc.
Stephen Adele
(303) 215-9174
Email Contact

R.J. Falkner & Company, Inc.
R. Jerry Falkner
(800) 377-9893

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