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STEN Corporation Reports Fourth Quarter and Fiscal 2007 Results

MINNEAPOLIS, Dec. 31, 2007 -- STEN Corporation , a Minneapolis-based diversified business, today reported results for its fourth quarter and year ended September 30, 2007. The Company reported a net loss for the year ended September 30, 2007, of $2,205,714 or $1.11 per diluted share compared to a net loss for the year ended October 1, 2006 of $608,238 or $0.30 per diluted share. For the year ended September 30, 2007, the Company had a loss from continuing operations of $2,224,771 or $1.12 per diluted share and net income from discontinued operations of $19,057 or $0.01 per diluted share. This compares to a loss from continuing operations of $935,213 or $0.46 per diluted share and net income from discontinued operations of $326,975 or $0.16 per diluted share for the year ended October 1, 2006. The Company reported a loss for the fourth quarter ended September 30, 2007 of $1,340,060 or $0.67 diluted share compared to a loss of $97,017 or $0.05 per diluted share for the fourth quarter ended October 1, 2006. The loss in the fourth quarter was principally the result of charges incurred as a result of one of the company's auto-dealer customers ceasing operations at the beginning of the fourth quarter. The dealer ceased operations in a manner resulting in charges to reserve for the write-off of certain inventory items and other related costs together with additional charges relating to the installment contracts that were acquired from this dealer prior to its ceasing operations.

STEN Corporation and subsidiaries, headquartered in Minnesota, is a diversified business, primarily focused on its financing and buy/here pay/here auto sales businesses through STEN Financial Corporation. The Company also has a contract manufacturing business and a distribution businesses.

STEN Corporation common stock is traded on the Nasdaq Capital Market under the symbol STEN. More information about STEN Corporation is available at the Company's website: http://www.stencorporation.com/. Except for historical information contained herein, the disclosures in this news release are forward-looking statements that could be affected by certain risks and uncertainties, and actual results may differ materially, depending on a variety of factors. These risks are described in the Company's filings with the Securities and Exchange Commission. The Company undertakes no duty or obligation to update any of the forward-looking statements after the date of this release.

                    STEN CORPORATION AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS

                                  (unaudited)               (audited)

                             For Three Months Ended    For the Year Ended
                             09/30/2007  10/01/2006  09/30/2007  10/01/2006

  REVENUES
    Revenues related to
     Contract manufacturing,
     net                      $ 492,920    $438,021  $1,444,822  $2,156,070
    Finance charges related
     to STEN Financial, net
     of loan losses and
     adjustments of $205,223
     and $0 for the thirteen
     weeks and $395,009 and
     $0 for the years ended
     9/30/2007 and
     10/01/2006               1,412,127      30,313   3,111,453      30,313

  TOTAL REVENUES              1,905,047     468,334   4,556,275   2,186,383

  COST AND EXPENSES
    Costs of goods sold
     related to
     Contract manufacturing     450,237     325,357   1,391,807   1,690,605
    Loss on impairment of note
     receivable from Site
     Equities                         0   1,082,671           0   1,082,671
    Expenses related to STEN
     Financial
      Cost of autos sold        721,273           0   1,002,808           0
      Auto inventory write-down
       and related costs      1,137,439           0   1,137,439           0
      Salaries and benefits     505,357       2,541   1,341,921       2,541
      Occupancy and operation
       expenses                 271,697      38,463     865,170      38,463
      Depreciation and
       amortization              98,646       7,596     346,053       7,596
      Cost of capital           122,227           0     409,960           0
    Selling, general and
     administrative             248,478     254,270   1,179,324     926,673

  TOTAL COST AND EXPENSES     3,555,354   1,710,898   7,674,482   3,748,549

    Loss from Continuing
     Operations              (1,650,307) (1,242,564) (3,118,207) (1,562,166)

  OTHER EXPENSE
    Interest income              21,101      59,076      91,405     207,414
    Interest expense           (255,274)          0    (308,173)          0
      Net Other Income
      (Expense)                (234,173)     59,076    (216,768)    207,414

      Loss from Continuing
       Operations Before
       Income Taxes          (1,884,480) (1,183,488) (3,334,975) (1,354,752)

  BENEFIT FROM INCOME TAXES    (564,604)   (356,343) (1,110,204)   (419,539)

  NET LOSS FROM CONTINUING
   OPERATIONS                (1,319,876)   (827,145) (2,224,771)   (935,213)
    Income (loss) from
     discontinued
     operations                 (32,052)  1,137,615      30,589     477,976
    Provision for (benefit
     from) income taxes
     from discontinued
     operations                 (11,868)    407,487      11,532     151,001
    Income (loss) from
     discontinued
     operations                 (20,184)    730,128      19,057     326,975

  NET LOSS                  $(1,340,060)   $(97,017)$(2,205,714)  $(608,238)

  NET LOSS PER SHARE FROM
   CONTINUING OPERATIONS:
    Basic                        $(0.66)     $(0.41)     $(1.12)     $(0.46)
    Diluted                      $(0.66)     $(0.41)     $(1.12)     $(0.46)
  NET INCOME PER SHARE FROM
   DISCONTINUED OPERATIONS:
    Basic                        $(0.01)      $0.36       $0.01       $0.16
    Diluted                      $(0.01)      $0.36       $0.01       $0.16
  NET LOSS PER SHARE:
    Basic                        $(0.67)     $(0.05)     $(1.11)     $(0.30)
    Diluted                      $(0.67)     $(0.05)     $(1.11)     $(0.30)
  WEIGHTED AVERAGE COMMON AND
   COMMON EQUIVALENT SHARES
   OUTSTANDING
    Basic                     1,991,017   2,041,407   1,989,975   2,032,429
    Diluted                   1,991,017   2,041,407   1,989,975   2,032,429

                    STEN CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS

                                  ASSETS

                                                    09/30/07       10/01/06
  CURRENT ASSETS
    Cash and cash equivalents                        $366,118     $2,786,941
    Current portion of notes and loans
     receivable                                     3,066,619        185,629
    Other current assets                            3,130,743      1,146,280
    Assets of discontinued operations               1,419,643      4,141,098
      Total Current Assets                          7,983,123      8,259,948

  PROPERTY AND EQUIPMENT, NET

  OTHER ASSETS                                      1,293,620        896,223
    Notes and loan receivable, net of current
     portion                                        5,853,949        574,000
    Other assets                                    2,340,089        285,527
      Total Other Assets                            8,194,038        859,527

  TOTAL ASSETS                                    $17,470,781    $10,015,698

                   LIABILITIES AND STOCKHOLDERS' EQUITY

  CURRENT LIABILITIES
    Current portion of long-term debt              $2,886,265             $-
    Other current liabilities                       2,107,572        145,403
    Liabilities of discontinued operations          1,522,292      2,454,229
      Total Current Liabilities                     6,516,129      2,599,632
  LONG-TERM LIABILITIES
    Dealer reserves                                 1,076,707              -
    Long-term debt, net of current portion          4,457,458              -
      Total Long-Term Liabilities                   5,534,165              -

        Total Liabilities                          12,050,294      2,599,632
  STOCKHOLDERS' EQUITY                              5,420,487      7,416,066
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $17,470,781    $10,015,698