Full Circle Image, Inc. Enters into Share Exchange Agreement with Smart Cartridge Limited.

ROCHESTER, Minn. -- Full Circle Image, Inc., a franchisor and remanufacturer of printer ribbons, laser toner and ink jet cartridges, today announced that it has entered into a share exchange agreement with Smart Cartridge Limited and its shareholders. As a result of the transaction, Smart Cartridge, a company based in Edinburgh Scotland, will become a wholly owned subsidiary of Full Circle, and the shareholders of Smart Cartridge will acquire approximately 65% of Full Circle's common stock. Full Circle will continue the combined operations of the businesses under the name "Smart Cartridge, Inc."

The transaction, which is subject to customary closing conditions, is expected to close during the third quarter of 2006, and is also contingent upon Full Circle entering into certain financing arrangements with a third party capital provider and the approval of certain matters by the current shareholders of Full Circle.

Full Circle Image is an International Franchise Company that deals in the remanufacturing and distribution of new and remanufactured Laser Toner Cartridges, Ink Jet Cartridges, Computer Printer Ribbons, and other types of consumable printing or imaging products. It currently has sales and remanufacturing facilities in Rochester and Grand Rapids, Minnesota, and a sales office in Lakeville, Minnesota. In addition to its Franchisee owned sales operations in the United States it also has minority ownership positions in the Full Circle Image Franchisee owned remanufacturing plants in Jeddah, Saudi Arabia and Panama City, Panama.

The company trades under the symbol FCLE and can be found at http://www.pinksheets.com

Smart Cartridge Limited was conceived in the late 1990's to enter the rapidly growing ink cartridge franchising business in the United Kingdom. The company was organized in 2001 to specialize in (i) the refilling and remanufacturing of ink jet, laser, copier and fax cartridges; (ii) the provision of related office supplies; and (iii) the development of a franchising system under the name "Smart Cartridge." Since opening the first Smart Cartridge Limited store in 2001, the company has franchised 47 Smart Cartridge Limited stores in Scotland, England, Ireland, Spain, Portugal and the Dominican Republic.

Certain matters discussed in this news release may constitute forward-looking statements within the meaning of the federal securities laws. Although Full Circle believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected.