SecProbe.io

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MAIL STOP 05-11

February 23, 2005

Mr. Bryan Klinger, President
American TonerServ Corp.
475 Aviation Boulevard
Suite 100
Santa Rosa, California  95043

      Re: 	American TonerServ Corp.
  Registration Statement on Form SB-2
  File No. 333-120688
  Amendment No. 1 Filed January 31, 2005

Dear Mr. Klinger:

      We have reviewed your amended filing and have the following
comments.  Where indicated, we think you should revise your
document
in response to these comments.  If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary.  Please be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

General
1. The word "company" has been capitalized throughout.  Please
revise
so that it appears in lower case.
2. Please ensure the accuracy of the amounts disclosed within the
forepart of the registration statement cross reference to amounts
disclosed within the financial statements.  For example, the
weighted
average number of shares outstanding in your summary financial
information (page 4) at September 30, 2003 (7,315,264 shares) does
not reconcile to the corresponding amount in your interim
financial
statements on F-18 (6,570,974 shares). Please revise as necessary.

Prospectus Cover Page

3. We note that your registration statement registers the resale
of
400,000 shares.  We also note that there is currently no market
for
your securities.  Given this, please revise the prospectus,
including
the cover page and plan of distribution, to indicate that you will
offer your securities at a fixed price of $0.25 per shares until
your
securities are quoted on the OTC Bulletin Board or other specified
market and thereafter at prevailing market prices or privately
negotiated prices.  See Item 16 of Schedule A to the Securities
Act
of 1933 and revise throughout.

Summary Financial Information, page 4
4. Please round per share amounts here, and throughout your
prospectus (including your statements of operations on F-3 and F-
18),
to the nearest penny, or NIL, if applicable.
5. We noted that the working capital balance for December 31, 2003
was calculated utilizing total assets.  Working capital should be
calculated using current assets.  Please revise as necessary.

Risk Factors, page 4

6. The narrative to risk factor 1 beginning with "Our business
plan
assumes that compatible toner remanufacturing providers will be
interested in partnering with us" seems to discuss a risk distinct
from the subheading.  Each subheading should discuss only one
risk.
Please revise to include an additional subheading.

7. In prior comment 7, we noted that several of your risk factor
subheadings allude to a risk but do not clearly state the material
risk to investors.  Generally, the subheading should clearly state
the particular risk and the consequences that may result if that
risk
should occur.  Revise your subheadings to present the risks you
are
addressing in concrete terms.  For example, we note that risk
factors
2, 3 and 5 do not clearly state the risks and potential
consequences
to an investor and should be revised accordingly.

8. Please quantify the dollar amount by which payments are past
due
as referenced in risk factor 2.

9. Risk factor 3 is generic and could apply to any company.
Please
provide the material and specific risks posed should the company
lose
any member of its management team or consider relocating this
disclosure to a more appropriate section of the prospectus.

  Management`s Discussion and Analysis, page 8
10. We note your supplemental response regarding Rule 419 and
request
that you affirmatively state in the prospectus that you are not a
blank check company and that you do not have any intentions to
acquire another company and/or become a vehicle for a reverse
acquisition.

Overview

11. After reviewing your MD&A and Business sections, we are
unclear
as to whether you intend to continue offering office equipment
service and maintenance in addition to entering the toner
cartridge
market.  Please clarify.  If you do intend to continue offering
office equipment service and maintenance, will you do so only for
existing customers or do you plan to seek out new business?  In
this
regard, we note disclosure on page 9 that cost of sales for
service
and maintenance has increased and that this has had an adverse
affect
on your results of operations as well as the disclosure on page 12
that management has not focused its efforts on securing more
service
revenue.  Please clarify throughout whether you intend to exit the
office equipment service and maintenance sector entirely and focus
your efforts on the toner market or whether your plan of
operations
contemplates continuing with both lines of business.

12. In the last paragraph of this subheading, you state that the
revenue range of the companies you intend to acquire will be
between
$1 and $3 million annually and that you expect gross margins in
the
35% to 45% range and operating income in the 20% to 25% range.
Please reconcile these figures with the figures provided on page
19
under "Profile of a Typical Distributor/Re-Manufacturer After
Acquisition."

Liquidity and Capital Resources

13. Please update the disclosure regarding the amount owed your
providers to the latest practicable date and amount.

14. Per prior comment number 37, please allocate the amounts
necessary over the next 12 months to cover all budgeted expenses
deemed material.  Discuss the anticipated milestones in
implementing
your plan of operation and the time frame for beginning and
completing each.

15. Per prior comment number 40, fully discuss all debts owed by
the
company.  Such disclosure would include the identify of the
parties,
the principal amounts outstanding, time to maturity, interest
rates
and all efforts undertaken or planned to satisfy payment
obligations.
File all material notes as exhibits.

Business, page 14

	Business Strategy

16. We note the statement that "American TonerServ sells its
service
agreements and time and material programs through Xerox
Corporation...."  We also note your response number 12 to our
letter
dated December 30, 2004 where you state the company is no longer
actively soliciting business from Xerox.  Please reconcile as
necessary.  In doing so, update the disclosure under "Manor
Customers" as appropriate.

The Market for Toner and Inkjet Cartridges
17. Please provide us with marked copies of all of the market
studies
to which you make reference throughout the prospectus.  We assume
that all referenced reports are generally available at no charge
or
for a de minimis payment.  Please advise.

Legal Proceedings

18. We note that interest, attorneys` fees and "other damages" are
being sought in addition to the $58,500.  If material, please
disclose what these amounts are.

Summary Compensation Table, page 24

19. Please update this disclosure through the end of the last
completed fiscal year.  See Item 402 of Regulation S-B.

Employment Arrangements, page 25

20. Briefly elaborate on the stock compensation plan to be awarded
Mr. Klinger based upon acquisition target identification,
qualification and transaction execution.

Certain Transactions, page 28
21. With respect to the private offerings, please reconcile the
period of time and dollar amount raised in the private offerings
to
the disclosure in Item 26, Recent Sales of Unregistered
Securities.

Financial Statement Comments

Note 1.  Summary of Significant Accounting Policies

   Revenue Recognition, F-7
22. We read your response to comment 75 regarding revenue
recognition
under SAB 104 and your reference to question 2 in section (f) of
that
guidance.  We noted from your disclosure on page 9 that your
customers generally pay monthly or quarterly in advance,
presumably
for your full service maintenance contracts.  Considering the
payment
arrangements with your customers, it appears your accounting
treatment upon the initial signing of your contracts (debit to
contracts outstanding and credit to deferred revenue) is
inconsistent
with GAAP.  Please revise to remove this gross up accounting.
Please also discuss, and disclose, how customer cancellation
rights
are considered with respect to revenue recognition.
23. We have reviewed your supplemental response to comment 77
regarding your consideration of EITF 00-21 for recognition of
toner
cartridge revenue.  In light or your response, as well as other
disclosures made throughout your registration statement, that
toner
cartridge revenue will become a larger overall component of the
company`s revenues, please revise your policy disclosure to
indicate
how your accounting treatment complies with EITF 00-21.

   Earnings Per Share, F-9
24. We read your response and revised disclosure regarding comment
79.  Your disclosure should indicate the number of common stock
equivalents that were anti- dilutive (i.e. options, warrants,
etc.),
not shares outstanding, for each period for which earnings (loss)
per
share is presented in your statements of operations.  Please
revise.

Note 8.  General and Administrative Expenses, F-14
25. We read your response to comment 66 and your revised
disclosure.
Please tell us supplementally why service-customer service,
service-
preferred service provider, and service-other amounts are not
reported as cost of sales in your statements of operations.
Please
revise.

Interim Financial Statements for the period ended September 30,
2004

   General
26. It appears that you have included duplicate financial
statements
for the period ended September 30, 2004 (F-26 through F-33).
Please
remove.

Other Regulatory
27. The financial statements included in the registration
statements
should be current at the effective date.  Please revise to include
the audited financial statements for the fiscal year ended
December
31, 2004 in the registration statement to comply with Item 310 (g)
of
Regulation S-B, and provide a current consent of the independent
accountants in any amendment.

Part II

Item 26.  Recent Sales of Unregistered Securities

28. We note reference in Note 6 to the financial statements to a
warrant liability and to certain registration rights.  Please
discuss.
29. We noted your disclosure that in January 2002 you issued
24,288
shares of common stock upon the exercise of options held by
Laurianne
Meyer.  This disclosure is inconsistent with your response to
comment
67 and your revised disclosure in the statement of stockholders`
deficit.  Please revise.

Closing Comments

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.

      Any questions regarding the financial statements may be
directed to Angela Halac at (202) 824-5683.  Questions on other
disclosure issues may be directed to William Bennett at (202) 942-
0135.

							Sincerely,

							John Reynolds, Assistant
Director
							Office of Emerging Growth
Companies

cc:	James P. Beck, Esq.
	Fax: (303) 893-2882

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