PALM SPRINGS, Calif., January 23, 2008 – U.S. Dry Cleaning Corporation (OTCBB:UDRY) (“U.S. Dry Cleaning”) announced today it has reported results for the Fiscal Year (“FY”) that ended September 30, 2007.  For the year, U.S. Dry Cleaning reported a 38% increase in revenue over the same period in FY 2006. 

At the same time, U.S. Dry Cleaning announced that Robert Y. Lee, the company’s Chief Executive Officer, has purchased 188,510 shares of common stock in privately negotiated transactions with two early investors in U.S. Dry Cleaning, at a price exceeding the per-share average market price of the stock on the dates of purchase.
 
In its Annual Report for FY 2007, filed with the Securities and Exchange Commission, U.S. Dry Cleaning reported revenues of approximately $8.4 million compared to revenues of approximately $6.1 million in the prior fiscal year.  U.S. Dry Cleaning also reported an unusually high number of non-cash charges against the balance sheet (primarily goodwill related to acquisitions) as well as administrative costs in connection with the company’s initial public offering. These non-cash charges totaled approximately $4.95 million, while non-recurring cash charges for the year represented an additional $3.73 million of the $9.8 million net loss.

“I am confident that as we move forward in 2008 we will see continued strength in our revenue and a significant reduction in our loss,” said Robert Y. Lee, Chief Executive Officer of U.S. Dry Cleaning, adding, “We are seeing an increase in same-store sales in stores we have owned for 12 months or more – a key measure of growth for any retail business.  Same-store revenue rose 3.4% in calendar year 2007 over the same period in 2006. We believe that the very nature of the dry cleaning business protects us from economic fluctuations better than other industries,” Mr. Lee explained. 

Mr. Lee added, “As a measure of my confidence in U.S. Dry Cleaning’s business plan and future growth, I recently purchased common stock at a per-share price exceeding the closing price of the stock on the dates of my purchases. I believe our record of achievement this past year and going forward into 2008 warrants this confidence.”

Since June 2007, U.S. Dry Cleaning has:

1. Raised $6.1 million in an Initial Public Offering, completed June 19, 2007.
2. Begun trading on the OTCBB under the symbol “UDRY” on August 30, 2007.
3. Appointed a highly experienced Chief Financial Officer.
4. Signed Purchase Agreements and Memorandums of Understanding to acquire five additional dry cleaning chains, which are expected to add $27 million to the company’s annualized revenue run rate.
5. Closed on initial convertible debt financing of approximately $3.5 million.  

The full Annual Report on Form 10-KSB for FY 2007 has been filed and is available at http://www.sec.gov.

About U.S. Dry Cleaning Corporation

U.S. Dry Cleaning Corporation’s mission is to create the premier national chain in the dry cleaning industry. Over the last year and half, U.S. Dry Cleaning has completed acquisitions with combined annual revenues of over $9 million. U.S. Dry Cleaning combines a management team with extensive experience in retail consolidations and premier dry cleaning operations, with a proven operating model.

U.S. Dry Cleaning intends to rapidly acquire profitable, positive cash flow operations at accretive valuations. Each acquisition target is expected to be self-sufficient and senior management is expected to remain in place to ease the assimilation. U.S. Dry Cleaning is focused on acquiring profitable businesses that hold a leading share in their individual markets.

U.S. Dry Cleaning management believes that the current absence of extensive competition to acquire the larger dominant operators will change radically as the industry consolidates. Management believes that the greatest value achieved in any consolidation occurs during the earliest phases and intends to grow as rapidly as possible to deliver shareholder value.