================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

           |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2004

                                       OR

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
            For the Transition Period from ___________ to ___________

                         Commission File Number: 0-31040

                               ADSERO CORPORATION
             (Exact name of Registrant as specified in its charter)

             Delaware                                    65-0602729
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)

                        2085 Hurontario Street, Suite 300
                              Mississaugua, Ontario
                                     L5A 4G1
          (Address of principal executive offices, including zip code)

                                 (905) 206-1604
              (Registrant's telephone number, including area code)

         Check whether the Registrant  (1) has filed all reports  required to be
filed by Section 13 or 15(d) of the  Securities  Exchange Act of 1934 during the
preceding 12 months,  and (2) has been subject to such filing  requirements  for
the past 90 days. Yes [X] No [ ]

       The number of shares of the  Registrant's  common  stock  outstanding  at
August 18, 2004, was 10,925,755.

       Transitional Small Business Disclosure Format:Yes [ ]  No [X]

================================================================================

<PAGE>

                               ADSERO CORPORATION
                  JUNE 30, 2004 QUARTERLY REPORT ON FORM 10-QSB
                                TABLE OF CONTENTS




                                                                            PAGE

          Special Note Regarding Forward Looking Statements ..................3

                          PART I FINANCIAL INFORMATION

Item 1.   Financial Statements ...............................................4
Item 2.   Plan of Operation..................................................15
Item 3    Controls and Procedures............................................16

                            PART II OTHER INFORMATION

Item 1.   Legal Proceedings..................................................16
Item 2.   Changes in Securities and Use of Proceeds..........................17
Item 5.   Other Information..................................................18
Item 6.   Exhibits and Reports on Form 8-K...................................19




                                       2
<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

         To the extent that the information  presented in this Quarterly  Report
on Form  10-QSB  for the  quarter  ended  June  30,  2004,  discusses  financial
projections,  information  or  expectations  about our  products or markets,  or
otherwise   makes   statements   about  future  events,   such   statements  are
forward-looking.  We are making these forward-looking  statements in reliance on
the safe harbor  provisions of the Private  Securities  Litigation Reform Act of
1995.   Although  we  believe   that  the   expectations   reflected   in  these
forward-looking  statements  are based on  reasonable  assumptions,  there are a
number of risks and  uncertainties  that could  cause  actual  results to differ
materially from such forward-looking  statements.  These risks and uncertainties
are  described,  among  other  places  in this  Quarterly  Report,  in  "Plan of
Operation".

          In addition, we disclaim any obligations to update any forward-looking
statements to reflect events or  circumstances  after the date of this Quarterly
Report.  When considering such  forward-looking  statements,  you should keep in
mind the risks  referenced  above and the other  cautionary  statements  in this
Quarterly Report.



                                       3
<PAGE>

                 PART I - FINANCIAL INFORMATION



ITEM 1.    FINANCIAL STATEMENTS                                             PAGE
                                                                            ----

           Condensed Consolidated Balance Sheet as of June 30, 2004
           (unaudited)                                                        5

           Condensed Consolidated Statements of Operations for the
           three and six months ended June 30, 2004 and 2003
           (unaudited) and for the period from January 1, 2004
           (inception) to June 30, 2004 (unaudited)                           6

           Condensed Consolidated Statements of Cash Flows for the
           six months ended June 30, 2004 and 2003 (unaudited)
           and for the period from January 1, 2004 (inception) to
           June 30, 2004 (unaudited)                                          7

           Notes to Condensed Consolidated Financial Statements (unaudited)   8




                                       4
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A Development Stage Company Commencing January 1, 2004)
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                  June 30, 2004
                                   (unaudited)


<TABLE>
<CAPTION>
                                     ASSETS

<S>                                                                                        <C>
CURRENT ASSETS

               Cash                                                                        $     38,562
                                                                                           ------------
                    TOTAL CURRENT ASSETS                                                         38,562
                                                                                           ============


                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
               Accounts payable                                                            $    144,724
               Accrued expenses                                                                  56,326
               Liabilities of discontinued operation                                          2,125,341
               Notes payable - Related Parties (including accrued interest of $52,864)          235,440
               Loan payable ( including interest of $12,500)                                    262,500
                                                                                           ------------
                    TOTAL CURRENT LIABILITIES                                                 2,824,331
                                                                                           ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
               Common stock, $.001 par value, 100,000,000 shares authorized,                     10,926
                  10,925,755 shares issued and outstanding
               Additional paid-In-capital                                                     8,166,882
               Common stock to be issued (205,000 common shares)                                205,000
               Deficit accumulated during the development stage                                (941,315)
               Accumulated deficit                                                          (10,227,262)
                                                                                           ------------
                    TOTAL STOCKHOLDERS' DEFICIENCY                                           (2,785,769)
                                                                                           ------------
                                                                                           $     38,562
                                                                                           ============
</TABLE>


            See notes to condensed consolidated financial statements


<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A Development Stage Company Commencing January 1, 2004)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                          Cumulative from
                                         Three Months Ended                  Six Months Ended             January 1, 2004
                                         ------------------                  ----------------           (inception) through
                                   June 30, 2004    June 30, 2003     June 30, 2004    June 30, 2003       June 30, 2004
                                   -------------    -------------     -------------    -------------    -------------------
<S>                                   <C>               <C>              <C>              <C>                <C>
REVENUES                              $        --       $       --                                           $       --

COST OF GOODS SOLD                             --               --                                                   --
                                 ---------------------------------------------------------------------------------------
    GROSS PROFIT                               --               --                                                   --
                                 ---------------------------------------------------------------------------------------
OPERATING EXPENSES
    Selling, general and administrative   231,091          147,600          286,114          298,378            286,114
    Conversion of debt expense                 --               --          627,340               --            627,340
    Depreciation and amortization              --            4,000               --            8,000                  -
                                 ---------------------------------------------------------------------------------------
    TOTAL OPERATING EXPENSES              231,091          151,600          913,454          306,378            913,454
                                 ---------------------------------------------------------------------------------------

LOSS FROM OPERATIONS                     (231,091)        (151,600)        (913,454)        (306,378)          (913,454)

    INTEREST EXPENSE                       14,050           34,565           27,860           68,058             27,860
                                 ---------------------------------------------------------------------------------------

LOSS FROM CONTINUING OPERATIONS          (245,141)        (186,165)        (941,314)        (374,436)          (941,314)

LOSS FROM DISCONTINUED OPERATIONS              --         (172,298)              --         (210,687)                --
                                 ---------------------------------------------------------------------------------------

NET LOSS                              $  (245,141)      $ (358,463)      $ (941,314)      $ (585,123)        $ (941,314)
                                 =======================================================================================
PER SHARE INFORMATION

NET LOSS FROM CONTINUING
OPERATIONS                            $     (0.02)      $    (0.17)      $    (0.12)      $    (0.35)

NET LOSS FROM DISCONTINUED
OPERATIONS                                     --            (0.16)              --            (0.19)
                                 --------------------------------------------------------------------
NET LOSS PER SHARE,
    BASIC AND DILUTED                 $     (0.02)      $    (0.33)      $    (0.12)      $    (0.54)
                                 ====================================================================
WEIGHTED AVERAGE NUMBER OF
    COMMON SHARES OUTSTANDING          10,925,755        1,082,643        7,699,421        1,082,643
                                 ====================================================================
</TABLE>


            See notes to condensed consolidated financial statements

                                       6
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                       CUMULATIVE FROM
                                                                       SIX MONTHS ENDED                JANUARY 1, 2004
                                                                       ----------------             (INCEPTION) THROUGH
                                                               JUNE 30, 2004       JUNE 30, 2003       MARCH 31, 2004
                                                               -------------       -------------    -------------------
<S>                                                             <C>                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

              Loss from Continuing operations                     (941,314)           (374,437)            (941,314)
              Loss from Discontinued operations                         --            (210,687)                  --
                                                            --------------------------------------------------------

              Net Loss                                            (941,314)           (585,124)            (941,314)
                                                            --------------------------------------------------------

            Adjustments to reconcile net loss to net cash
            used in operating activities:
              Depreciation and amortization                             --               8,000                   --
              Non-cash interest expense                             25,125              18,680               25,125
              Conversion expense on notes payable                  627,340                  --              627,340
            Changes in operating assets and liabilities:
              Accounts payable and accrued expenses                   (608)             26,780                 (608)
              Assets of discontinued operation                          --             304,032                   --
              Liabilities of discontinued operation                                     73,071
                                                            --------------------------------------------------------
                    Total Adjustments                              651,857             430,563              651,857
                                                            --------------------------------------------------------

NET CASH USED IN OPERATING ACTIVITIES                             (289,457)           (154,561)            (289,457)
                                                            --------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
              Proceeds from issuance of notes payable               70,075             183,850               70,075
              Proceeds from issuance of common stock               205,000                                  205,000
              Increase loan payable                                 52,500                                   52,500
                                                            --------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                          327,575             183,850              327,575
                                                            --------------------------------------------------------

NET INCREASE (DECREASE) IN CASH                                     38,118              29,289               38,118

CASH AT BEGINNING OF PERIOD                                            444               6,669                  444
                                                            --------------------------------------------------------

CASH AT END OF PERIOD                                           $   38,562          $   35,958           $   38,562
                                                            ========================================================
</TABLE>


See notes to condensed consolidated financial statements

                                       7
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


1. BASIS OF INTERIM FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared by the  Company in  conformity  with  accounting  principles  generally
accepted in the United States of America and the instructions of Form 10-QSB. It
is  management's   opinion  that  these  statements   include  all  adjustments,
consisting of only normal recurring adjustments considered necessary to make the
financial position,  results of operations,  and cash flows not misleading as of
June 30, 2004 and for all periods presented.

Certain  information and footnote  disclosures  normally  included in the annual
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been  condensed or omitted.  These
condensed  consolidated  financial statements should be read in conjunction with
the consolidated  financial statements and notes thereto as of December 31, 2003
and for each of the two years ended  December  31, 2003 and  December  31, 2002,
which are  included in the  Company's  Annual  Report on Form 10KSB for the year
ended December 31, 2003 filed with the Securities and Exchange Commission.

2. DESCRIPTION OF BUSINESS

Adsero Corp. (the "Company'), formerly known as Reink Corp., changed its name on
March 22, 2004.

In January  2004,  the  Company's  Board of  Directors,  and a  majority  of its
stockholders  approved a  twenty-for-one  reverse split of the Company's  Common
Stock,  effective March 22, 2004. All information  presented in the accompanying
condensed consolidated financial statements gives effect to the reverse split.

Effective  January 1, 2004,  the Company has ceased its  operations  until it is
able to raise the additional  funding it needs to restart its operations  and/or
acquire an existing  business.  The Company has engaged in various  discussions,
from time to time,  with  existing  businesses  within the  imaging  consumables
segment,  with  respect to possible  mergers,  acquisitions  and other  business
combinations. The Company plans to continue to pursue these types of discussions
in the future. However, there can be no assurance that any of the discussions in
which the  Company  is engaged  will  result in the  consummation  of a business
combination  transaction.  If the  Company is not  successful  in its efforts to
identify  a merger or  acquisition  candidate,  it may have to cease  operations
permanently.  Based on these  developments,  the  Company  began  reporting  its
results of operations as a development stage enterprise on January 1, 2004.

3. GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern,  which contemplates the realization of


                                       8
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


assets  and  satisfaction  of  liabilities  in the  normal  course of  business.
However,  the Company's  loss for the six months ended June 30, 2003 amounted to
$941,314  and its  working  capital  deficit  amounts to  $2,785,769,  including
$2,125,341 of liabilities of its discontinued operation. The Company has limited
capital  resources.  These matters raise  substantial  doubt about the Company's
ability to  continue as a going  concern.  The  Company  entered  into an agency
agreement  to  raise up to  $4,250,000  in a  proposed  offering  of its  equity
securities and a non-binding letter of intent to raise up to CDN $2,000,000 in a
proposed   offering  of  secured   subordinated   debt  finding  and  redeemable
convertible preferred stock (Note 5). There can be no assurance that the Company
will consummate either of these proposed financing transactions.

The Company's  ability to continue as a going concern is dependent  upon several
factors  including  its ability to raise the  financing  it needs to restart its
operations,  acquire an existing business,  and generate revenues  sufficient to
fund  its  operations.  There  can be no  assurance  that  the  Company  will be
successful in its efforts to accomplish any of the objectives  that it considers
necessary to sustain the business.  The Company also believes that even if it is
able to raise operating capital,  there can be no assurance that the proceeds it
receives will be  sufficient  for it to develop the business to a level in which
it  is  able  to  generate   operating  profits  and  positive  cash  flow.  The
accompanying financial statements do not include any adjustments relating to the
recovery of the recorded assets or the  classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosures of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.

Stock Based Compensation

As   permitted    under   SFAS   No.   148,    "Accounting    for    Stock-Based
Compensation--Transition  and  Disclosure",  which  amended  SFAS No. 123 ("SFAS
123"),  "Accounting  for Stock-Based  Compensation",  the Company has elected to
continue to follow the intrinsic  value method in accounting for its stock-based
employee  compensation  arrangements as defined by Accounting  Principles  Board
Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees",  and related
interpretations  including "Financial  Accounting Standards Board Interpretation
No. 44, Accounting for Certain Transactions  Involving Stock  Compensation",  an


                                       9
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004

interpretation  of APB No.  25. No  stock-based  employee  compensation  cost is
reflected in net income,  as all options  that the Company  granted had exercise
prices equal to the fair market value of the underlying  common stock,  on their
dates of grant.  The Company granted 300,000 stock options  exercisable at $0.25
per share (the quoted market price) during the quarter ended June 30, 2004. Such
grants  include  100,000  options each to Anthony  Pallante,  Wayne Maddever and
William Smith. The options vest over a period of three years and are exercisable
for ten years from their date of issuance.

The following tables  illustrates what the Company's net loss and loss per share
would  have  been if the  Company  had used  the  fair  value  based  method  of
accounting for its employee stock option plans, as prescribed by SFAS No. 123:

<TABLE>
<CAPTION>
                                                    For the Three          For the Six
                                                        Months                Months
                                                    Ended June 30,        Ended June 30,
                                                         2004                 2004
                                                    --------------        --------------
<S>                                                  <C>                  <C>
Net loss, as reported                                $ (245,141)          $ (941,314)

Incremental amount of stock based employee
  compensation expense determined under the
  fair value method                                      (3,125)              (3,125)
                                               --------------------  -------------------
Net loss, proforma                                   $ (248,266)          $ (944,439)
                                               ====================  ===================
Loss per share:

  Net loss, as reported                                  $ (.02)              $ (.12)
                                               ====================  ===================

  Net loss, proforma                                     $ (.02)               $ (12)
                                               ====================  ===================
</TABLE>

Net Loss Per Common Share

Statement of Financial  Accounting  Standards  ("SFAS") No. 128,  "Earnings  per
Share",  requires  the  presentation  of basic and  diluted  earnings  per share
("EPS"). Basic EPS is computed by dividing loss available to common stockholders
by the  weighted-average  number of common  shares  outstanding  for the period.
Diluted EPS includes the potential dilution that could occur if options or other
contracts  to issue common stock were  exercised or  converted.  Loss per common
share for the three and six month  periods ended June 30, 2004 and 2003 excludes
outstanding options,  warrants and convertible  debentures as their effect would


                                       10
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


be  anti-dilutive.  Loss per common share does include  205,000 shares of common
stock that the Company  committed to issue pursuant to a private  placement that
it  consummated  during  the  quarter  ended  June 30,  2003 (Note 8). The stock
certificates  for the shares  that the  Company  sold in the  private  placement
transactions have not yet been issued.

Potentially  dilutive  securities that are not included the computation of basic
EPS are as follows:

                                                        June 30,
                                                 2004              2003
                                                 ----              ----
           Options                             337,500            37,500
           Warrants                            281,430            76,430
           Convertible Debt                     70,000           170,000
                                          -------------      ------------
           Total                               688,930           283,930
                                          =============      ============

New Accounting Pronouncements

In January 2003,  Financial  Accounting  Standards  Board  ("FASB")  issued FASB
Interpretation  No. 46,  ""Consolidation  of Variable  Interest  Entities" ("FIN
46"). This interpretation of Accounting Research Bulletin No. 51,  "Consolidated
Financial  Statements," provides guidance for identifying a controlling interest
in a variable  interest  entity  ("VIE")  established by means other than voting
interest.  FIN 46 also required  consolidation  of a VIE by an  enterprise  that
holds such  controlling  interest.  In December  2003,  the FASB  completed  its
deliberations  regarding  the proposed  modifications  to FIN No., 46 and issued
Interpretation  Number 46R,  "Consolidation  of Variable  Interest Entities - an
Interpretation  of ARB 51" ("FIN No. 46 R"). The  decisions  reached  included a
deferral of the effective date and provisions  for additional  scope  exceptions
for certain types of variable interests.  Application of FIN No. 46R is required
in  financial  statements  of public  entities  that have  interests  in VIEs or
potential  VIEs  commonly  referred to as  special-purpose  entities for periods
ending after  December  15, 2003.  Application  by public  issuers'  entities is
required in all interim and annual financial statements for periods ending after
December 15, 2004.

The adoption of this  pronouncement  is not expected to have material  effect on
the Company's financial statements.

5. NOTES PAYABLE

On January 1, 2004 the  Company  issued a 10%,  $250,000  promissory  note to BG
Capital Group Bahamas Ltd. of which  $197,500 was received prior to December 31,
2003 and the remaining  $52,500 was received  during the quarter March 31, 2004.
The Note is due  January  1, 2005,  or  earlier  in the event  that the  Company
consummates a business  combination with an entity having revenues of $3,000,000


                                       11
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


or more in its last completed fiscal year. In such latter event, the Note is due
thirty days after the completion of the business combination.

In April 2004, the Company issued a convertible promissory note bearing interest
at 10% per annum to Manchester Consolidated Corp. (a related party). The note is
due on demand and is  convertible  into 70,000  shares of the  Company's  common
stock at a conversion  price of $1.00 per share. The Company received $30,000 of
the proceeds  during the quarter ended March 31, 2004 and the remaining  $40,000
was received during the quarter June 30, 2004.

6. COMMITMENTS AND CONTINGENCIES

Litigation

On December 31, 2002, the Company's  Chief  Executive  Officer  ("CEO") and Vice
President of Finance  ("VP of  Finance"),  and a  production  chemist in its R&D
facility  (collectively,  the "Former Officers")  resigned from their positions.
Prior to resigning  the Former  Officers  dismissed  all employees of Reink USA,
which left the left the Company  with no  employees.  On May 7, 2003 the Company
commenced  legal  proceedings  against the Former  Officers in the United States
Bankruptcy Court for the District of New Jersey (Case Number 03-11053 (JHW)) for
actions that it believes violate the non-competition and confidentiality clauses
of their employment contracts. In this action the Company is seeking damages and
other  relief  in  the  amount  of  $1,000,000.  The  Former  Officers  filed  a
counter-suit  against the Company  for back wages and other  costs.  The Company
considers  the  counter-claim  to be without  merit.  On  September  7, 2003 the
Company filed a defense against the counter-claim.

On May 21, 2004, John Calzaretto instituted an action against the Company in the
Superior  Court of New Jersey,  Law  Division,  Burlington  County  (Docket No.:
BUR-L-001259-04)   seeking   approximately   $25,000   together  with  interest,
attorney's  fees and  costs of suit  based  upon a claim for  payment  for legal
services  rendered.  The Company is contesting the amount due. The case has been
moved to mediation.  At present,  the Company is waiting for the mediator to set
dates to  conduct  mediation  hearings.  The  Company  is  currently  unable  to
determine the outcome of this  uncertainty or estimate a possible range of loss,
if any.  Accordingly,  the Company did not record any  accruals  with respect to
this matter in the accompanying financial statements.

Bankruptcy of Reink USA

In January,  2003 the three  largest  creditors of Reink USA  ("Reink")  filed a
petition to force Reink into Chapter 7 under the US Federal  Bankruptcy Act. The
Company  believes  that certain of the creditors  involved  with the  bankruptcy
petition assisted the new business,  which competed directly against the Company
that was  founded by the former CEO and VP of  Finance.  Reink filed a motion to
have the petition  thrown out since the third creditor  withdrew from the filing


                                       12
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


and  counsel  to  the  petitioners  withdrew.  Subsequently  the  remaining  two
creditors  provided a new third creditor and amended the filing.  This new third
creditor also  subsequently  withdrew and the two remaining  creditors found two
other  creditors and filed an amendment.  During March 2003,  Reink's  motion to
convert to a voluntary  Chapter 11 was  accepted by the  District of New Jersey,
Federal  Bankruptcy  Court. As a result of failed  negotiations with our largest
suppliers,  on July 10, 2003,  Reink was moved from Chapter 11  "Reorganization"
into  Chapter  7  "Liquidation"  and  a  Bankruptcy  Trustee  was  appointed  to
administer  the  estate.  As a  result,  the  Company  lost  control  of  Reink.
Accordingly,  Reink is presented for all period as a  discontinued  operation in
the accompanying  financial statement.  The Company is unaware of any changes in
the status of the Bankruptcy proceedings.

7. EXCHANGES OF DEBT FOR EQUITY

Effective  January 2004, the Company  converted an aggregate of $170,000 in note
principal  plus  accrued  interest  thereon  into  an  aggregate  of  18,360,000
restricted  shares of  common  stock.  Following  the  effectuation  of our 20:1
reverse stock split on March 22, 2004 these shares became approximately  918,000
shares.  The  conversions  were made pursuant to Note  Cancellation  and Release
Agreements  between the Company and nine noteholders.  The Company has agreed to
register these shares on behalf of the recipients thereof.

Effective  January  2004,  the Company  converted an aggregate of  approximately
$196,900 in debt into an aggregate  of  19,690,000  restricted  shares of common
stock.  Following the  effectuation of our 20:1 reverse stock split on March 22,
2004 these shares became approximately 984,500 shares. The conversions were made
pursuant to Debt Conversion and General Release  Agreements  between the Company
and three debtholders.  100,000 of these shares were issued to Wayne Maddever in
connection with the conversion by BBP Consulting of $20,000 of debt.  384,500 of
these shares were issued to William  Smith,  through  Manchester  Administrative
Services,  in  connection  with the  conversion  of $76,900  owed to  Manchester
Administrative  Services for services  performed by William Smith prior to 2003.
500,000 of these  shares  were issued to R. World Inc.  in  connection  with the
conversion of $100,000 of debt.

In April 2004,  the Company issued an aggregate of 5,405,055  restricted  shares
(the  "Interhold  Shares") of common  stock to Interhold  Co. and its  designees
pursuant to a February  28, 2004 Note  Cancellation  and General  Release  under
which a  $308,000  promissory  note of  Reink  Imaging  USA,  Ltd.  in  favor of
Interhold Co., plus all interest due thereon was  cancelled.  Also cancelled was
an April 7, 2003 Guarantee and Security Agreement between Interhold and us which
had been put in place as a result of a January 2002  agreement.  The Company has
agreed to register the Interhold shares on behalf of the recipients thereof.


                                       13
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


In April 2004,  the Company issued an aggregate of 2,350,500  restricted  shares
(the   "Manchester   Shares")  of  common  stock  to  designees  of   Manchester
Administrative Services Ltd. ("Manchester") pursuant to a February 28, 2004 Debt
Conversion  and General  Release under which a debt of the Company to Manchester
in the  approximate  amount of $328,500  was  cancelled.  This debt was incurred
pursuant  to our  January  6, 2003  Consulting  Agreement  with  Manchester  and
includes  debts incurred in January and February 2004. The Company has agreed to
register the Manchester Shares on behalf of the recipients thereof.

In April 2004, the Company issued an aggregate of 185,000 restricted shares (the
"Stock") to three individuals  pursuant to Note Cancellation and General Release
Agreements  dated  February  25,  2004;  March 29,  2004;  and  March  30,  2004
respectively.  Under these agreements an aggregate of $185,000 of note principal
plus accrued interest thereon was cancelled in consideration  for the Stock. The
Company has agreed to register these shares on behalf of the recipients thereof.

8. PRIVATE PLACEMENT

During the quarter ended June 30, 2004, the Company sold $205,000 worth of units
in the  Company,  each  unit  comprised  of one  common  share  and one  warrant
entitling  the holder to purchase  one common share at $1.50 per common share at
any time over the next 24 months.  The 205,000  shares have been shown as common
shares to be issued in the financial statements.

9. DISCONTINUED OPERATION

As discussed  in Note 6,  Reink's  Chapter 11  bankruptcy  "Reorganization"  was
converted into a Chapter 7 bankruptcy "Liquidation" and a Bankruptcy Trustee was
appointed to administer  and liquidate the estate on July 10, 2003.  The Company
lost  control  of  Reink  upon  the  conversion  of  the  Reorganization  into a
Liquidation.  Accordingly,  the Company  has  reported  Reink as a  discontinued
operation.

In connection with such  conversion,  the Company  recorded a $370,816 charge to
operations  during the year ended  December 31, 2003,  for the carrying value of
assets  that  are  no  longer  considered  recoverable.   In  addition,  Reink's
liabilities are presented in the balance sheet as discontinued  operations until
the bankruptcy is adjudicated by the Bankruptcy court. The Company is unaware of
any changes in the status of the  Bankruptcy  proceedings.  A  breakdown  of the
liabilities  remaining  on  Reink's  balance  sheet  from the time in which  its
Bankruptcy case was converted to a "Liquidation" is as follows:


                                       14
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


                                             June 30, 2004
                                             -------------
          Accounts Payable                     $1,806,242
          Accrued Expenses                        319,099
                                             -------------
                                               $2,125,341
                                             =============

The following  table  represents the results of the  discontinued  operations of
Reink USA:

<TABLE>
<CAPTION>
                                                     For the Three Months   For the Six Months Ended
                                                     Ended June 30, 2003          June 30, 2004
                                                     --------------------   ------------------------
<S>                                                      <C>                     <C>
Revenues                                                 $    117,684            $     183,097
Cost of sales                                                  87,657                  117,251
                                                      ----------------         ----------------
         Gross profit                                          30,027                   65,846
                                                      ----------------         ----------------
Operating Expenses
     Selling, general and administrative expenses             195,364                  266,183
     Depreciation and Amortization                              3,390                    6,780
                                                      ----------------         ----------------
         Total Expenses                                       198,754                  272,963
                                                      ----------------         ----------------

Loss from operations                                        (168,727)                (207,117)

Interest Expense                                                3,571                    3,571
                                                      ----------------         ----------------

Net loss                                                 $  (172,298)            $   (210,688)
                                                      ================         ================
</TABLE>


There were no discontinued operations for the comparable periods in 2004.

10. PROPOSED ACQUISITION

On May 3, 2004 the Company  entered  into two related,  non-binding,  letters of
intent to purchase,  through an acquisition  subsidiary to be formed, all of the
issued and outstanding  shares of  Teckn-O-Laser  Global,  Inc.  ("Techn-O"),  a
wholesaler and recycler of  laser-printer  and ink jet cartridges.  The proposed
purchase price for Teckn-O  consists of an aggregate of  CDN$8,364,000  in cash,
6,000,000  shares  of the  acquisition  subsidiary's  common  stock,  which  are
convertible  on a share for share basis into shares of Adsero common stock,  and
300,000 stock options,  each exercisable for the purchase of one share of Adsero
common  stock at an  exercise  price of not more than  US$1.00  per  share.  The
letters of intent are subject to further due diligence and the  preparation  and
execution of a formal, binding agreement.  The closing date under the letters of
Intent have been  extended to September  30, 2004 from their  original date July
31, 2004. There can be no assurances that the Company will be able to consummate
these proposed business combinations.


                                       15
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


11. PROPOSED FINANCING TRANSACTIONS

On June 22, 2004 the Company  entered into an Agency  Agreement  with DGM Bank &
Trust Inc. ("DGM") whereby DGM was appointed as exclusive placement agent for an
offering  (the  "Offering")  of up to 4,250,000  special  warrants (the "Special
Warrants") at a price of $1.00 per Special Warrant or $4,250,000 on an aggregate
basis.  The  Offering is comprised of a first  offering  (the "First  Offering")
consisting of up to 750,000 Special  Warrants and a second offering (the "Second
Offering") consisting of up to 3,500,000 Special Warrants. The proceeds from the
Second  Offering  will be held in escrow  pending  the  closing of the  proposed
acquisition of  Teckn-O-Laser  Global Inc. In the First  Offering,  each Special
Warrant is exercisable, for no additional consideration,  to receive one Class A
Unit (the "A Units").  Each A Unit consists of one share of common stock and one
common stock purchase warrant to purchase an additional share of common stock at
a price of $1.50 per share at any time during the two year period  commencing on
the closing date of the First  Offering.  In the Second  Offering,  each Special
Warrant is exercisable, for no additional consideration,  to receive one Class B
Unit (the "B  Units").  Each B Unit  consists  of one share of common  stock and
one-half common stock purchase warrant.  Each full common stock purchase warrant
is  exercisable  to purchase  one share of common  stock at a price of $1.50 per
share at any time during the two year period  commencing  on the closing date of
the Second Offering.  In consideration of the Agent's services,  the Company has
agreed to pay the Agent a commission  equal to 10% of the gross proceeds  raised
in the Offering,  except with respect to sales to certain persons  identified by
us to the Agent.  For these sales,  the commission  shall be 5%. The Company has
further  agreed  to pay the  Agent a 10%  commission  with  respect  to  certain
unrelated  financings  by the Company,  if any,  during the period June 22, 2004
through the closing date of the Second Offering.  The Agent may elect to receive
commission in cash, Special Warrants or some combination thereof. The Company is
further  obligated to issue to the Agent Special  Warrants in an amount equal to
10% of the Special  Warrants  sold in the  Offering.  In the event,  the Company
raises  gross  proceeds of $500,000 or more in the First  Offering,  the Company
will issue 100,000  common shares to the Agent on the closing date for the First
Offering.  The  Company has also agreed to pay the Agent a break fee of $212,500
together with expense  reimbursement  if the Company decides not to proceed with
the  offering,  except  where  such  decision  is  based  on the  Agent's  gross
negligence or malfeasance or based upon the Agent's failure to raise the maximum
proceeds.  In the event at least $750,000 is raised in the offering,  the Agency
Agreement  also grants the Agent a right of first  refusal to act as lead agent,
underwriter, or advisor for the Company during the two year period following the
closing date for the Second  Offering with respect to any securities  offerings,
acquisitions,  dispositions or takeovers by the Company.  The Company has agreed
to file a registration statement as soon as practicable following the closing of
the Second Offering to register the common stock  comprising part of the A Units
and B Units and the common stock  underlying the common stock purchase  warrants
comprising part of such Units.


                                       16
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


Subsequent  to the period  covered by this report 62,500  Special  Warrants were
sold in the First Offering resulting in gross proceeds of $62,500.

On June 25, 2004 the Company  entered into a non binding  letter  agreement with
Dancap Private Equity Inc. ("Dancap") respecting the proposed sale of $2,000,000
of a 5  year,  12%  secured  subordinated  debenture  to  Dancap.  The  proposed
transaction  also involves the sale to Dancap of 800,000  shares of  redeemable,
convertible preferred stock for nominal consideration. The sales are conditioned
on the  execution of a formal  agreement  between the parties and several  other
conditions.  No assurance can be given that the Company will enter into a formal
agreement  with  Dancap  or,  if  entered  into,  it will be on terms  presently
contemplated.

In July, 2004 the Company amended a January 2004 exclusive  financing  agreement
arrangement with Manchester  Consolidated  Corp.  ("Manchester"),  a corporation
owned  by  Anthony  Pallante.  Thereunder,  the  Company  is  obligated  to  pay
Manchester a fee upon successful  completion of a financing or any acquisitions,
mergers, or other business  combinations  arranged for the Company by or through
Manchester. The revised fee structure for financings are 10% for transactions up
to and including  $2,000,000;  7% for transactions in excess of $2,000,000 up to
and including $5,000,000;  and 5% for transactions in excess of $5,000,000.  The
revised fee structure for acquisitions,  mergers or other business  combinations
is 12% for transactions up to and including  $5,000,000;  7% for transactions in
excess of $5,000,000 up to and including $10,000,000; and 4% for transactions in
excess  of  $10,000,000.  All other  material  terms of the  arrangement  remain
unchanged.



                                       17
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


ITEM 2.    PLAN OF OPERATION

The following  discussion and analysis  should be read in  conjunction  with the
consolidated  financial  statements and the notes thereto appearing elsewhere in
this Report.

MANAGEMENT'S PLAN OF OPERATION

We have ceased operations until additional  financing has been obtained in order
to restart operations or acquire an existing  business.  We have been in various
discussions,  from time to time,  with  existing  businesses  within the Imaging
consumables  segment,  with respect to possible mergers,  acquisitions and other
business  combinations,  and plan to continue  these types of discussions in the
future.  There  can be no  assurance  that  any of  these  discussions  will  be
successful, and if not, we may have to cease operations permanently.

As a result of the  departure  of certain  former  officers,  in January 2003 we
closed down our manufacturing  facility in Pennsauken,  New Jersey and moved all
inventory and equipment to other  locations.  At December 31, 2002 we wrote down
inventories  related  to the impact  ribbons  and toner  product  lines to their
estimated fair values, and had an impairment charge on certain fixed assets as a
result of closing the manufacturing  facility.  In addition at December 31, 2002
we had an  impairment  charge on our  goodwill  relating  to the  changes to the
impact  ribbon and toner  product lines and wrote down the entire amount of such
goodwill.

In January,  2003 the three  largest  creditors of Reink USA filed a petition to
force Reink USA into Chapter 7 under the US Federal  Bankruptcy Code. We believe
that some of the creditors  involved with the petition  assisted a new business,
which competed  directly with us, that had been founded by the former  officers.
Reink  USA  filed a motion  to have the  petition  thrown  out  since  the third
creditor withdrew from the filing and also since the counsel for the petitioners
withdrew. Subsequently the remaining two creditors provided a new third creditor
and amended the filing.  This new third creditor also subsequently  withdrew and
the two remaining  creditors  found two other  creditors and filed an amendment.
During March 2003, the subsidiary's  motion to convert to a voluntary chapter 11
was accepted by the District of New Jersey,  Federal  Bankruptcy  Court.  Due to
failed negotiations with our largest suppliers,  on July 10, 2003, Reink USA was
moved from  Chapter  11  "Reorganization"  into  Chapter 7  "Liquidation"  and a
Bankruptcy  Trustee was appointed to administer the estate. As a result, we lost
control  of  Reink  USA  and  Reink  USA  is  presented  for  all  periods  as a
discontinued operation.

We have financed our cash requirements primarily through sales of our securities
to  accredited  investors,  operations,  and bank  borrowings.  We had a lending
facility with an asset based lender providing a $1,000,000 facility based on 80%
of accounts  receivable.  As a result of ceasing  operations we terminated  this
facility after meeting all obligations under the agreement.


                                       18
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


As of  June  30,  2004,  we  had a  working  capital  deficiency  of  $2,785,769
(including  $2,125,341  related  to the  discontinued  operations.  Our  working
capital  deficiency,  after giving effect to the exclusion of amounts associated
with our discontinued operation amounts to $660,428.

During January  through April,  2004, we converted notes payable of $816,318 and
other  liabilities of $426,650 for a total of $1,242,968  into 9,843,055  common
shares.  We have no  further  obligations  related  to  these  notes  and  other
liabilities that we converted.

The auditor's report on our financial  statements  included in our Annual Report
for the year ended December 31, 2003 contains an explanatory paragraph about our
ability to continue as a going concern. We expect that to restart operations, it
will require capital infusions of a minimum of $2,000,000  necessary to fund the
purchase of inventory and to meet our working capital needs.

Except as provided in this Report, we have no present  commitment that is likely
to result in our  liquidity  increasing  or  decreasing  in any material way. In
addition,  except  as noted in this  Report,  we know of no  trends,  additional
demands,  events or  uncertainties  that will result in, or that are  reasonably
likely to result in, our liquidity increasing or decreasing in any material way.
We have no material commitments for capital expenditures. We know of no material
trends, favorable or unfavorable,  in our capital resources. We do not presently
engage in any product  research or development  initiatives and have no plans to
do so in the  foreseeable  future.  We do  not  own  any  plant  or  significant
equipment.  We have no present plans to add  employees  although we may do so in
the foreseeable future if we engage in any merger or acquisition transactions.

ITEM 3.  CONTROLS AND PROCEDURES

Our principal  executive  officer and principal  financial officer evaluated the
effectiveness  of our  disclosure  controls and  procedures  (as defined in Rule
13a-14(c) under the Securities Exchange Act of 1934) as of the end of the second
quarter of 2004. Based on this evaluation,  our principal  executive officer and
principal  financial officer have concluded that our controls and procedures are
effective in providing  reasonable assurance that the information required to be
disclosed  in this  report  is  accurate  and  complete  and has been  recorded,
processed,  summarized  and  reported  within the time period  required  for the
filing of this report. Subsequent to the date of this evaluation, there have not
been any significant  changes in our internal controls or, to our knowledge,  in
other factors that could significantly affect our internal controls.

                           PART II--OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS


                                       19
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


On May 21, 2004, John Calzaretto instituted an action against us in the Superior
Court  of  New  Jersey,   Law   Division,   Burlington   County   (Docket   No.:
BUR-L-001259-04) seeking $25,768.50 together with interest,  attorney's fees and
costs of suit based upon a claim for payment for legal services rendered. We are
contesting the amount due. The case has been moved to mediation.  At present, we
are waiting for the mediator to set dates to conduct mediation hearings.

No material  developments  with respect to our other material legal  proceedings
took place  during  the  quarter.  See our  Annual  Report on Form 10KSB for the
fiscal year ended December 31, 2003.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

In April  2004,  we issued an  aggregate  of  2,350,500  restricted  shares (the
"Manchester   Shares")  of  our  common  stock  to   designees   of   Manchester
Administrative Services Ltd. ("Manchester") pursuant to a February 28, 2004 Debt
Conversion  and General  Release under which a debt of ours to Manchester in the
approximate amount of $328,500 was cancelled. This debt was incurred pursuant to
our January 6, 2003  Consulting  Agreement  with  Manchester  and includes debts
incurred in January and February  2004. The issuance of these shares was made in
reliance on Section 4(2) of the Securities Act of 1933, as amended.

In April 2004, we issued an aggregate of 185,000 restricted shares (the "Stock")
to 3 persons pursuant to Note Cancellation and General Release  Agreements dated
February 25, 2004; March 29, 2004; and March 30, 2004 respectively.  Under these
agreements an aggregate of $185,000 of note principal plus all accrued  interest
due thereon was cancelled in consideration  for the Stock. The issuance of these
shares was made in reliance on Section 4(2) of the  Securities  Act of 1933,  as
amended.  We have agreed to register  these  shares on behalf of the  recipients
thereof.

In April 2004, we issued a $70,000 convertible  promissory note bearing interest
at 10% per annum to Manchester  Consolidated Corp. The note is due on demand. It
is  convertible  into shares of our common stock at a conversion  price of $1.00
per share.  The issuance of the Note was made in reliance on Section 4(2) of the
Securities Act of 1933, as amended.

On April 15, 2004 we granted  100,000 stock  options,  with an exercise price of
$.25 per share, to each of Wayne Maddever, William Smith and Anthony Pallante in
consideration   of  services   rendered  in   connection   with  our   corporate
reorganization  and services  related to Reink USA's  bankruptcy.  These options
vest  over a three  year  period  commencing  on the  first  anniversary  of the
issuance date and are exercisable  for a period of ten years from issuance.  The
issuance of these options was made in reliance on Section 4(2) of the Securities
Act of 1933, as amended.


                                       20
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


In May and June 2004 we sold an aggregate of 205,000  units at $1.00 per unit or
an aggregate of  $205,000.  Each unit  consists of one share of our common stock
and one common  stock  purchase  warrant  (the "Unit  Warrants").  Each  warrant
entitles  the holder to purchase an  additional  share of our common  stock at a
price of $1.50 per share at any time  during the two year period  commencing  on
the  subscription  date.  The units have yet to be issued but are expected to be
issued shortly.  The sale of the securities was made in reliance on Regulation S
of the Securities Act of 1933, as amended. We have agreed to register the shares
comprising  part of the units and the shares  underlying  the Unit  Warrants  on
behalf of the unit subscribers.

In July,  2004 we sold an aggregate of 62,500 Special  Warrants  pursuant to the
Offering  discussed in Item 5 below. The Special Warrants have yet to be issued.
The sale of  these  securities  was  made in  reliance  on  Regulation  S of the
Securities Act of 1933, as amended.



                                       21
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


ITEM 5.    OTHER INFORMATION

On May 3, 2004 we entered  into two related,  non-binding,  letters of intent to
purchase,  through an acquisition subsidiary to be formed, all of the issued and
outstanding shares of Teckn-O-Laser Global, Inc.  ("Techn-O"),  a wholesaler and
recycler of laser-printer  and ink jet cartridges.  The proposed  purchase price
for Teckn-O consists of an aggregate of CDN$8,364,000 in cash,  6,000,000 shares
of the acquisition  subsidiary  which are convertible on a share for share basis
into shares of our common stock, and 300,000 stock options, each exercisable for
the  purchase of one share of our common  stock at a price of not more than US$1
per share.  As part of the  transaction,  we have  further  agreed to enter into
three year management contracts, on terms to be negotiated, with two key members
of Techn-O management.  CDN$3,000,000 of the cash purchase price is payable on a
deferred  basis,  in 3  payments,  over a period of 3 years.  The  amount of the
deferred payments are subject to downward adjustment in the event that Techn-O's
EBITDA (Earnings Before Interest,  Taxes, Depreciation and Amortization) for the
12 months ended April 30, 2004 is less than  CDN$2,000,000.  In such event,  the
CDN$3,000,000  payment  obligation will be reduced by an amount equal to 3 times
the shortfall below CDN$2,000,000.  The letters of intent are subject to further
due diligence and the preparation and execution of a formal,  binding agreement.
Closing of the  transaction  is  presently  expected  to take place on or before
September 30, 2004. No assurance can be given,  however,  that we will execute a
formal agreement and complete and close the proposed transaction.

On June 22, 2004 we entered into an Agency  Agreement with DGM Bank & Trust Inc.
("DGM")  whereby  DGM was  appointed  as our  exclusive  placement  agent for an
offering  (the  "Offering")  of up to 4,250,000  special  warrants (the "Special
Warrants") at a price of $1.00 per Special Warrant or $4,250,000 on an aggregate
basis.  The  Offering is comprised of a first  offering  (the "First  Offering")
consisting of up to 750,000 Special  Warrants and a second offering (the "Second
Offering") consisting of up to 3,500,000 Special Warrants. The proceeds from the
Second  Offering  will be held in escrow  pending  the  closing of our  proposed
acquisition of  Teckn-O-Laser  Global Inc. In the First  Offering,  each Special
Warrant is exercisable, for no additional consideration,  to receive one Class A
Unit (the "A Units").  Each A Unit consists of one share of our common stock and
one common stock purchase  warrant to purchase an additional share of our common
stock at a price of $1.50  per  share  at any time  during  the two year  period
commencing on the closing date of the First  Offering.  In the Second  Offering,
each Special Warrant is exercisable, for no additional consideration, to receive
one  Class B Unit  (the "B  Units").  Each B Unit  consists  of one share of our
common stock and one-half common stock purchase warrant.  Each full common stock
purchase  warrant is  exercisable to purchase one share or our common stock at a
price of $1.50 per share at any time  during the two year period  commencing  on
the  closing  date of the  Second  Offering.  In  consideration  of the  Agent's
services, we have agreed to pay the Agent a commission equal to 10% of the gross
proceeds raised in the Offering, except with respect to sales to certain persons
identified by us to the Agent.  For these sales,  the commission shall be 5%. We
have further  agreed to pay the Agent a 10%  commission  with respect to certain


                                       22
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


unrelated  financings by us, if any, during the period June 22, 2004 through the
closing date of the Second Offering.  The Agent may elect to receive  commission
in cash, Special Warrants or some combination  thereof. We are further obligated
to issue to the Agent Special  Warrants in an amount equal to 10% of the Special
Warrants sold in the Offering. In the event, we raise gross proceeds of $500,000
or more in the First Offering,  we will issue 100,000 common shares to the Agent
on the closing date for the First Offering. We have also agreed to pay the Agent
a break fee of $212,500 together with expense  reimbursement if we decide not to
proceed with the  offering,  except where such  decision is based on the Agent's
gross  negligence or malfeasance or based upon the Agent's  failure to raise the
maximum proceeds. In the event at least $750,000 is raised in the offering,  the
Agency  Agreement  also grants the Agent a right of first refusal to act as lead
agent,  underwriter,  or advisor for us during the two year period following the
closing date for the Second  Offering with respect to any securities  offerings,
acquisitions,  dispositions  or  takeovers  by us.  We  have  agreed  to  file a
registration  statement  as soon as  practicable  following  the  closing of the
Second Offering to register the common stock  comprising part of the A Units and
B Units and the common  stock  underlying  the common  stock  purchase  warrants
comprising part of such Units.

Subsequent  to the period  covered by this report 62,500  Special  Warrants were
sold in the First Offering resulting in gross proceeds of $62,500.

On June 25, 2004 we entered  into a non  binding  letter  agreement  with Dancap
Private Equity Inc. ("Dancap") respecting the proposed sale of $2,000,000 of our
5 year, 12% secured subordinated  debentures to Dancap. The proposed transaction
also  involves  the  sale  to  Dancap  of  800,000  shares  of  our  redeemable,
convertible preferred stock for nominal consideration. The sales are conditioned
on the  execution of a formal  agreement  between the parties and several  other
conditions. No assurance can be given that we will enter into a formal agreement
with Dancap or, if entered into, it will be on terms presently contemplated.

In  July,  2004 we  amended  our  January  2004  exclusive  financing  agreement
arrangement with Manchester  Consolidated  Corp.  ("Manchester"),  a corporation
owned by Anthony Pallante.  Thereunder, we are obligated to pay Manchester a fee
upon successful completion of a financing or any acquisitions, mergers, or other
business combinations arranged for us by or through Manchester.  The revised fee
structure  for  financings  are  10% for  transactions  up to and  including  $2
million;  7% for  transactions  in excess of $2 million up to and  including  $5
million;  and 5% for  transactions  in excess of $5  million.  The  revised  fee
structure for  acquisitions,  mergers or other business  combinations is 12% for
transactions up to and including $5 million; 7% for transactions in excess of $5
million up to and including $10 million;  and 4% for  transactions  in excess of
$10 million. All other material terms of the arrangement remain unchanged.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.


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<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


(a)      Exhibits

The following exhibits are filed as a part of this report on Form 10-QSB:

EXHIBIT NO.                              DESCRIPTION

10.1              Agency Agreement dated June 22, 2004 between Registrant and
                  DGM Bank & Trust Inc.

31.1              Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal
                  Executive Officer

31.2              Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal
                  Financial Officer

32.1              Rule 1350 Certification of Chief Executive Officer

32.2              Rule 1350 Certification of Chief Financial Officer

(b) Reports on Form 8-K

No reports on Form 8K were filed by us during the quarter ended June 30, 2004.


                                       24
<PAGE>

                          ADSERO CORP. AND SUBSIDIARIES
            (A DEVELOPMENT STAGE COMPANY COMMENCING JANUARY 1, 2004)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10-QSB to be
signed on its behalf by the undersigned, thereunto duly authorized.


Dated: August 26, 2004                        Adsero Corporation


                                              By: /s/ Wayne Maddever
                                                  ----------------------------
                                              Wayne Maddever
                                              President, Chief Executive Officer



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