<SUBMISSION>
<ACCESSION-NUMBER>0001104659-07-040130
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20070331
<FILING-DATE>20070515
<DATE-OF-FILING-DATE-CHANGE>20070515
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>INFOSONICS CORP
<CIK>0001274032
<ASSIGNED-SIC>5065
<IRS-NUMBER>330599368
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>001-32217
<FILM-NUMBER>07853936
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>5880 PACIFIC CENTER BLVD.
<CITY>SAN DIEGO
<STATE>CA
<ZIP>92121
<PHONE>858 373-1600
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>5880 PACIFIC CENTER BLVD.
<CITY>SAN DIEGO
<STATE>CA
<ZIP>92121
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a07-10893_110q.htm
<DESCRIPTION>10-Q
<TEXT>
<html>

<head>







</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">
 <div style="border:none;border-top:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p style="border:none;margin:0pt 0pt .0001pt;padding:0pt;text-autospace:ideograph-numeric ideograph-other;"><a name="scotch"></a><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p> </div>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">UNITED
STATES<br>
SECURITIES AND EXCHANGE COMMISSION</font><br>
Washington, D.C. 20549</b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">FORM 10 -
Q</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.94%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="3" face="Wingdings" style="font-size:12.0pt;font-weight:bold;">x</font></b><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="93%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:93.06%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
  THE SECURITIES EXCHANGE ACT OF 1934.</font></b></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">For the
quarterly period ended March 31, 2007</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">OR</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="3" face="Wingdings" style="font-size:12.0pt;font-weight:bold;">o</font></b><!-- SET mrlNoTableShading --><b><font size="3" style="font-size:12.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="93%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:93.04%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">TRANSITION REPORT PURSUANT TO SECTION&nbsp;13 OR
  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></b></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">For
the transition period
from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Commission
File Number - 001-32217</font></b></p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">InfoSonics
Corporation</font><br>
</b>(Exact name of registrant as
specified in its charter)</p>

<div align="center">

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:48.8%;">
  <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading --><b>Maryland</b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.38%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:48.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">33-0599368</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:48.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or other
  jurisdiction of<br>
  incorporation or organization)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt .7pt;width:2.38%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" valign="top" style="padding:0pt .7pt 0pt .7pt;width:48.8%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(IRS Employer
  Identification Number)</font></p>
  </td>
 </tr>
</table>

</div>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5880
Pacific Center Blvd San Diego, CA 92121<br>
</font></b>(Address of
principal executive offices including zip code)</p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(858)
373-1600<br>
</font></b>(Registrant&#146;s
telephone number, including area code)</p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Not Applicable<br>
</font></b>(Former Name or
Former Address, if Changed Since Last Report)</p>

<p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes&nbsp;&nbsp;&nbsp;</font><font face="Wingdings">x</font>&nbsp;&nbsp;&nbsp;No&nbsp;<font face="Wingdings">o</font></p>

<p style="margin:0pt 0pt 6.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).</font></p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Large Accelerated
Filer&nbsp;&nbsp;</font><font face="Wingdings">o</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accelerated
Filer&nbsp;&nbsp;<font face="Wingdings">o</font>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Accelerated
Filer&nbsp;&nbsp;<font face="Wingdings">x</font>&nbsp;&nbsp;&nbsp;</p>

<p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Yes&nbsp;&nbsp;</font><font face="Wingdings">o</font>&nbsp;&nbsp;&nbsp;No&nbsp;<font face="Wingdings">x</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">As of May 10, 2007, the Registrant had 14,500,353</font>&nbsp;</font>shares outstanding of its
$.001 par value common stock.</p>


 <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p style="border:none;margin:0pt 0pt .0001pt;padding:0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p> </div>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<div style="font-family:Times New Roman;">


<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">InfoSonics Corporation and Subsidiaries</font></b></p>

<p align="center" style="font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Quarterly
Report on Form 10-Q For The Period Ended</font></b><b> March 31, 2007</b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Table of
Contents</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" bgcolor="white" style="background:white;border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="100%" colspan="4" valign="top" style="padding:0pt .7pt 0pt 0pt;width:100.0%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;"><a href="#PartI_FinancialInformation_093736"><!-- SET mrlNoTableShading -->PART I. FINANCIAL
  INFORMATION</a></font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:91.56%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item1_FinancialStatements_093750">Item 1.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item1_FinancialStatements_093750">Financial Statements</a></font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#InfosonicsCorporationAndSubsidiar_093809">Consolidated
  Balance Sheets as of March 31, 2007 (unaudited) and December 31, 2006</a></font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#InfosonicsCorporationAndSubsidiar_175831" title="Click to goto ">Consolidated Statements of Operations for the Three
  Months Ended March 31, 2007 and 2006 (restated) (unaudited)</a></font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#InfosonicsCorporationAndSubsidiar_094725">Consolidated
  Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006
  (restated) (unaudited)</a></font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#InfosonicsCorporationAndSubsidiar_094530" title="Click to goto ">Consolidated Statements of Comprehensive Operations
  for the Three Months Ended March 31, 2007 and 2006 (unaudited)</a></font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#InfosonicsCorporationCondensedNot_095747">Condensed
  Notes to Consolidated Financial Statements (unaudited)</a></font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item2_ManagementsDiscussionAndAna_101820">Item 2.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item2_ManagementsDiscussionAndAna_101820">Management&#146;s
  Discussion and Analysis of Financial Condition and Results of Operations</a></font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item3_QuantitativeAndQualitativeD_105554">Item 3.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item3_QuantitativeAndQualitativeD_105554">Quantitative
  and Qualitative Disclosures About Market Risk</a></font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item4_ControlsAndProcedures_105604">Item 4.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item4_ControlsAndProcedures_105604">Controls and Procedures</a></font></p>
  </td>
  <td width="6%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:91.56%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="100%" colspan="4" valign="top" style="padding:0pt .7pt 0pt 0pt;width:100.0%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;"><a href="#PartIi_OtherInformation_105612" title="Click to goto ">PART
  II. OTHER INFORMATION</a></font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:91.56%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item1_LegalProceedings_105616">Item 1.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><a name="CellsToJoin"></a><a href="#Item1_LegalProceedings_105616">Legal
  Proceedings</a></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item1a_RiskFactors_105621">Item 1A.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><a href="#Item1a_RiskFactors_105621">Risk
  Factors</a></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item2_UnregisteredSalesOfEquitySe_105654">Item 2.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><a href="#Item2_UnregisteredSalesOfEquitySe_105654">Unregistered
  Sales of Equity Securities and Use of Proceeds</a></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item3_DefaultsOnSeniorSecurities_105657">Item 3.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><a href="#Item3_DefaultsOnSeniorSecurities_105657">Defaults
  Under Senior Securities</a></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item4_SubmissionOfMattersToAVoteO_105700">Item 4.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><a href="#Item4_SubmissionOfMattersToAVoteO_105700">Submission
  of Matters to a Vote of Security Holders</a></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item5_OtherInformation_112353">Item 5.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><a href="#Item5_OtherInformation_112353">Other
  Information</a></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:7.84%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:.6%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="8%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.44%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;"><a href="#Item6_Exhibits_105703">Item 6.</a></font></p>
  </td>
  <td width="85%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:85.36%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><a href="#Item6_Exhibits_105703">Exhibits</a> </p>
  </td>
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.2%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<div>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Part I.&#160;
FINANCIAL INFORMATION</font></b><a name="PartI_FinancialInformation_093736"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 1.&#160;
Financial Statements</font></b><a name="Item1_FinancialStatements_093750"></a></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">InfoSonics Corporation and Subsidiaries<br>
Consolidated Balance Sheets</font></b><a name="InfosonicsCorporationAndSubsidiar_093809"></a></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">March&nbsp;31,<br>
  2007</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">December&nbsp;31,<br>
  2006</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(unaudited)</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p align="center" style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ASSETS</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Current assets:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash and cash
  equivalents</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12,201,544</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">30,243,392</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Trade accounts
  receivable, net of allowance for doubtful accounts of $779,008 (unaudited)
  and $679,522</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">44,885,428</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">37,798,284</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Inventory, net of
  reserves of $437,073 (unaudited) and $254,508</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18,342,097</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11,174,200</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Prepaid inventory</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">237,816</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">162,146</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Prepaid expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">433,846</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">316,919</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Prepaid taxes</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,351,009</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">973,749</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net assets of
  discontinued operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,209</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,209</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred tax assets &#150;
  current</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,115,000</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,041,000</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total current assets</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">78,570,949</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">81,713,899</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Property and equipment,
  net</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,234,093</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">615,185</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Intangible assets</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">504,000</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">504,000</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred tax assets &#150;
  non-current</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">286,298</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other assets</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">155,825</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">137,381</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Total assets</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">80,751,165</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">82,970,465</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p align="center" style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">LIABILITIES
  AND STOCKHOLDERS&#146; EQUITY</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Current liabilities:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Line of credit</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">22,369,071</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">25,648,614</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accounts payable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18,248,520</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18,099,985</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accrued expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,417,411</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,261,988</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Income taxes payable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">31,870</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">17,100</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total current
  liabilities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">43,066,872</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">45,027,687</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred tax liability
  non-current</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">36,000</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Total liabilities</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">43,066,872</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">45,063,687</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Commitments and contingencies</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Stockholders&#146; equity:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Preferred stock, $0.001
  par value 10,000,000 shares authorized (no shares issued and outstanding as
  of applicable period end)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common stock, $0.001
  par value 40,000,000 shares authorized (14,400,068 and 14,180,068 shares
  issued and outstanding as of applicable period end)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,400</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,180</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Additional paid-in
  capital</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">31,101,981</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">30,751,372</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accumulated other
  comprehensive loss</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(24,046</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(8,865</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Retained earnings</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6,591,958</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7,150,091</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total stockholders&#146;
  equity</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">37,684,293</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">37,906,778</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="70%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:70.6%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Total liabilities and stockholders&#146; equity</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">80,751,165</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">82,970,465</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
</table>

<p style="font-family:Times New Roman;font-size:1.0pt;line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;">&nbsp;</p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Accompanying
notes are an integral part of these financial statements.</font></i></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<br clear="all" style="page-break-before:always;">


<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">InfoSonics Corporation and Subsidiaries<br>
Consolidated Statements of Operations<br>
(unaudited)</font></b><a name="InfosonicsCorporationAndSubsidiar_175831"></a></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="26%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:26.18%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">For&nbsp;the&nbsp;Three&nbsp;Months<br>
  Ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(restated)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Net
  sales</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">58,403,610</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">54,127,089</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cost of
  sales</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">55,254,746</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">49,947,224</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Gross
  profit</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,148,864</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,179,865</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Operating
  expenses, including non-cash expense for stock options of $97,449 and $52,443</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,031,293</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,096,100</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Operating
  income (loss) from continuing operations</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(882,429</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,083,765</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Other
  income (expense)</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Change in fair value of derivative liability</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">399,009</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest expense</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(55,472</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(80,565</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Income (loss)
  from continuing operations before provision for income taxes</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(937,901</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,402,209</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Provision
  (benefit) for income taxes</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(379,768</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">227,038</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Income
  (loss) from continuing operations</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(558,133</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1,175,171</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Loss
  from discontinued operations, net of income tax benefit</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(1,844</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Net
  income (loss)</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(558,133</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">1,173,327</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Basic
  earnings (loss) per share:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">From continuing operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(0.04</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">0.09</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">From discontinued operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(0.00</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(0.00</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net income (loss)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(0.04</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">0.09</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Diluted
  earnings (loss) per share:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">From continuing operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(0.04</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">0.08</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">From discontinued operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(0.00</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(0.00</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net income (loss)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(0.04</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 1.125pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">)</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="10%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:10.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">0.08</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Basic
  weighted-average number of common shares outstanding</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">14,318,912</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12,795,822</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="69%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:69.66%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Diluted weighted-average number
  of common shares outstanding</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">14,318,912</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">15,466,938</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.78%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
</table>

<p style="font-family:Times New Roman;font-size:1.0pt;line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;">&nbsp;</p>

<p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Accompanying
notes are an integral part of these financial statements.</font></i></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p align="center" style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">INFOSONICS CORPORATION AND
SUBSIDIARIES<br>
</font></b><b>CONSOLIDATED
STATEMENTS OF COMPREHENSIVE OPERATIONS</b><a name="InfosonicsCorporationAndSubsidiar_094530"></a></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="71%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:71.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="26%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:26.18%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">For&nbsp;the&nbsp;Three&nbsp;Month&nbsp;Ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="71%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:71.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="71%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:71.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(restated)</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="71%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:71.1%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net income
  (loss)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(558,133</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,173,327</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="71%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:71.1%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other
  comprehensive loss:</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="71%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:71.1%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Foreign currency translation adjustments</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(15,181</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="11%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="71%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:71.1%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Comprehensive income
  (loss)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(573,314</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 2.25pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="10%" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:10.92%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,173,327</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Accompanying notes are an
integral part of these financial statements</font></i></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">InfoSonics Corporation and Subsidiaries<br>
Consolidated Statements of Cash Flows<br>
(unaudited)</font></b><a name="InfosonicsCorporationAndSubsidiar_094725"></a></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="28%" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:28.16%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">For&nbsp;the&nbsp;Three&nbsp;Months&nbsp;Ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p align="left" style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(restated)</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cash
  flows from operating activities:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net income (loss)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(558,133</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,175,171</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Adjustments to reconcile net income (loss) from
  continuing operations to net cash provided by (used in) operating activities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Depreciation and amortization</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">43,032</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">31,935</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Provision for bad debt</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">99,455</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">312,297</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Provision for obsolete inventory</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">182,565</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">168,974</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Tax benefit from stock option exercises</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">96,409</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stock option expense</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">97,449</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">52,443</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Change in fair value of derivative liability</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(399,009</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Increase) decrease in</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Trade accounts receivable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(7,186,599</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(23,652,578</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Inventory</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(7,403,373</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2,406,482</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Prepaid inventory</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(22,759</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2,432,581</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Prepaid expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(494,187</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(363,784</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other assets</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(18,443</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">511</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred tax asset current</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(74,000</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(94,000</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Deferred tax asset non current</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(322,298</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(19,207</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 50.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Increase (decrease) in</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accounts payable</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">148,535</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9,971,802</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Accrued expenses</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,155,423</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">478,726</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Income tax liabilities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,770</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">244,629</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash provided by
  (used in) continuing operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(14,338,563</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(16,834,744</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash provided by
  (used in) discontinued operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">629</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net cash
  provided by (used in) operating activities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(14,338,563</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(16,834,115</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cash
  flows from investing activities:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Purchase of property and equipment</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(661,939</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(27,092</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net cash
  provided by (used in) investing activities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(661,939</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(27,092</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cash
  flows from financing activities:</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Borrowings from line of credit</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">222,856,230</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23,998,241</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Payments on line of credit</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(226,135,774</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(16,086,310</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash paid for offering costs</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(991,680</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cash received for stock and warrants</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">253,380</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14,574,354</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net cash provided by (used in) financing activities</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3,026,164</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">21,494,605</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effect of exchange rate changes on cash</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(15,181</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net increase
  (decrease) in cash and cash equivalents</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(18,041,847</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,633,398</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cash and cash equivalents, beginning of period</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">30,243,392</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7,712,915</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.9%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="68%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:68.64%;">
  <p style="margin:0pt 0pt .0001pt 30.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cash
  and cash equivalents, end of period</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12,201,544</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">$</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:11.9%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">12,346,313</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.82%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
 </tr>
</table>

<p style="font-family:Times New Roman;font-size:1.0pt;line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;">&nbsp;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Accompanying
notes are an integral part of these financial statements</font></i>.</p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<div>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">InfoSonics Corporation<br>
Condensed Notes to Unaudited Consolidated Financial Statements<br>
as of and at March 31, 2007<br>
(unaudited)</font></b><a name="InfosonicsCorporationCondensedNot_095747"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 1. Basis of Presentation</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The accompanying unaudited consolidated financial
statements and these condensed notes have been prepared in accordance with
accounting principles generally accepted in the United States (&#147;GAAP&#148;) for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended
(the &#147;Exchange Act&#148;). Accordingly, they do not include all of the information
and footnotes required by GAAP for complete financial statements. The
preparation of financial statements requires management to make estimates and
assumptions that affect amounts reported in the financial statements and
accompanying notes. Actual results are likely to differ from those estimates,
but management does not believe such differences will materially affect the
financial position or results of operations of InfoSonics Corporation (the
&#147;Company&#148;), although they may. These unaudited consolidated financial
statements and condensed notes should be read in conjunction with the financial
statements and notes as of and for the year ended December 31, 2006 included in
the Company&#146;s Annual Report on Form 10-K for the year ended December 31,
2006.&#160; These unaudited consolidated
financial statements reflect all adjustments considered, in the opinion of the
Company&#146;s management, necessary to fairly present the results for the periods
covered herein and such adjustments are considered of a normal recurring
nature.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The unaudited
consolidated financial statements include the accounts of the Company and its
subsidiaries, Axcess Mobile LLC, InfoSonics Latin America, Inc. InfoSonics de
Mexico S.A. de C.V., InfoSonics de Guatemala S.A., InfoSonics El Salvador S.A.
de C.V., InfoSonics S.A., InfoSonics Chile y Compania Limitada and InfoSonics
Colombia S.A. all of which are wholly owned. Significant intercompany accounts
and transactions have been eliminated in consolidation of these consolidated
financial statements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The unaudited consolidated balance sheet at March 31, 2007
does not include all of the information and footnotes required by GAAP for
complete financial statements. Due to seasonality of the Company&#146;s business and
other factors, the Company&#146;s interim results may not be indicative of the
condition at or the results for the full fiscal year of 2007 or for any other
future period. The unaudited Consolidated Statements of Income for the three
months ended March 31, 2007 and the unaudited Consolidated Statement of Cash
Flows for the three months ended March 31, 2007 are not necessarily indicative
of the operating results or cash flows that may be expected for the full fiscal
year of 2007 or for any future period.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Share and per
share amounts for all periods presented in this report (unless otherwise
stated) have been adjusted to reflect the two-for-one common stock split in the
form of a stock dividend effected on June 19, 2006.&#160; Additionally amounts presented for the period
ended March 31, 2006 are restated.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE </font></b><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">2. Stock-Based Compensation</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company has three
equity incentive plans, the 2006 Equity Incentive Plan (2006 Plan), the 2003
Stock Option Plan (2003 Plan) and, the 1998 Stock Option Plan (1998 Plan).&#160; Each of the plans has been approved by our
shareholders. The 2006 Plan is the only plan from which additional equity
incentives will be granted. The 2006 Plan authorizes the grant of up to 1,000,000
equity incentives. The Company is also a party to non-plan option agreements
with several non-employee directors and several institutions.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective January 1, 2006
the Company adopted Financial Accounting Standards Board SFAS No. 123R, &#147;Share
Based Payments&#148; using the modified prospective method, which requires
measurement of compensation cost for all stock-based awards at fair value on
the date of grant and recognition of compensation over the service period for
awards expected to vest. The fair value of stock options was determined using
the Black-Scholes valuation model, which is consistent with our valuation
techniques previously utilized for stock options in footnote disclosures
required under SFAS 123, as amended by SFAS 148. Such fair value is recognized
as expense over the service period, net of estimated forfeitures.</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On March 29, 2005, the
Securities and Exchange Commission (&#147;SEC&#148;) published Staff Accounting Bulletin
(&#147;SAB&#148;) No. 107, which provides the SEC Staff&#146;s views on a variety of matters
relating to stock-based payments. SAB 107 requires stock-based compensation to
be classified in the same expense line items as cash compensation. Information
about stock-based compensation included in the results of operations for the
three months ended March 31, 2007 and 2006 is as follows:</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:20.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="371" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:278.15pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="149" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:112.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;Months&nbsp;ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="371" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:278.15pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="371" valign="top" style="padding:0pt .7pt 0pt 0pt;width:278.15pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Officer
  compensation</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">46,018</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18,297</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="371" valign="top" style="padding:0pt .7pt 0pt 0pt;width:278.15pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Non-employee
  directors</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,451</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="371" valign="top" style="padding:0pt .7pt 0pt 0pt;width:278.15pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sales, general
  and administrative</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">47,980</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">34,146</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="371" valign="top" style="padding:0pt .7pt 0pt 0pt;width:278.15pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total stock option
  expense, included in total operating expenses</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">97,449</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:45.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">52,443</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our stock options
vest on an annual or a monthly basis. As of March 31, 2007, there was $709,000
of total unrecognized compensation costs related to the non-vested stock
options.&#160; The Company recognizes stock-based compensation costs on a
straight-line basis over the requisite service period of the award, which is
generally the option vesting term.&#160;&#160;
That cost is expected to be recognized over the weighted-average period
of 3.75 years.&#160; Such amounts may change
as a result of additional grants, forfeitures, modifications in assumptions and
other factors. SFAS 123R provides that income tax effects of share-based
payments are recognized in the financial statements for those awards which will
normally result in tax deductions under existing tax law. During the first
quarter of 2007, we recorded an expense of $97,449, related to options
previously granted. Under current U.S. federal tax law, we would receive a
compensation expense deduction related to non-qualified stock options only when
those options are exercised and vested shares are received. Accordingly, the
financial statement recognition of compensation cost for non-qualified stock
options creates a deductible temporary difference which results in a deferred
tax asset and a corresponding deferred tax benefit in our Consolidated
Statements of Income.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The fair value of each
option grant is estimated on the date of grant using the Black-Scholes option
pricing model with the following weighted-average assumptions used for grants
in 2007, 2006 and 2005: risk-free interest rate of 4.66% in 2007 and ranging
from 4.88% to 5.04% in 2006 and 3.22% to 4.41% in 2005 based on the U.S.
Treasury yields in effect at the time of grant; expected dividend yields of zero
percent as the Company has not, and does not intend to, issue dividends; and
expected lives of 3 to 7 years based upon the historical life of options. For
grants in 2007, 2006 and 2005, the expected volatility used ranged from 62% to
91%, based on the Company&#146;s historical stock price fluctuations for a period
matching the expected life of the options.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A summary of option
activity under all of the above plans as of March 31, 2007, and changes during
the three months then ended is presented in the table below:</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:40.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="179" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:134.35pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Shares</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Wtd.&nbsp;Avg.&nbsp;<br>
  Exercise&nbsp;Price</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Wtd.&nbsp;Avg.&nbsp;<br>
  Remaining&nbsp;<br>
  Contractual&nbsp;<br>
  Life</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Aggregate&nbsp;<br>
  Intrinsic&nbsp;<br>
  Value</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="179" valign="top" style="padding:0pt .7pt 0pt 0pt;width:134.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Outstanding at
  January 1, 2007</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,117,324</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.56</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="179" valign="top" style="padding:0pt .7pt 0pt 0pt;width:134.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Granted</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">40,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.79</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.95</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="179" valign="top" style="padding:0pt .7pt 0pt 0pt;width:134.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Exercised</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">194,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.71</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="179" valign="top" style="padding:0pt .7pt 0pt 0pt;width:134.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Forfeited</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="179" valign="top" style="padding:0pt .7pt 0pt 0pt;width:134.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Outstanding at
  March 31, 2007</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,963,324</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.68</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.26</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="179" valign="top" style="padding:0pt .7pt 0pt 0pt;width:134.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Vested and
  expected to vest</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,963,324</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.68</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.26</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="179" valign="top" style="padding:0pt .7pt 0pt 0pt;width:134.35pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Exercisable at March
  31, 2007</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,799,071</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.42</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.15</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A summary of the status
of the Company&#146;s non vested options at March 31, 2007, and changes during the
three months ended March 31, 2007, is presented below:</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;">
 <tr style="page-break-inside:avoid;">
  <td width="427" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:320.4pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="62" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Shares</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="96" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:72.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Weighted-average&nbsp;<br>
  grant-date&nbsp;fair&nbsp;value</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="427" valign="top" style="padding:0pt .7pt 0pt 0pt;width:320.4pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Nonvested at
  December 31, 2006</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">177,269</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="90" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:67.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.65</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="427" valign="top" style="padding:0pt .7pt 0pt 0pt;width:320.4pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Granted</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">40,000</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="90" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:67.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.79</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="427" valign="top" style="padding:0pt .7pt 0pt 0pt;width:320.4pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Vested</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">17,177</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="90" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:67.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.03</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="427" valign="top" style="padding:0pt .7pt 0pt 0pt;width:320.4pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Forfeited</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="90" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:67.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="427" valign="top" style="padding:0pt .7pt 0pt 0pt;width:320.4pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Non-vested at March 31,
  2007</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="62" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:46.5pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">164,253</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="90" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:67.2pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.41</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The weighted-average
grant-date fair value of options granted during the three months ended March
31, 2007 was $3.79. The total intrinsic value of options granted during the
three months ended March 31, 2007 and 2006 was $0 and $0 respectively. There
was $253,000 and $164,000 cash received from options exercised for the three
months ended March 31, 2007 and 2006, respectively. The stock based
compensation unrecognized expense for future periods as of March 31, 2007 is
approximately $709,000 with a weighted average remaining vesting period of 3.75
years.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 3. Earnings Per Share</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company utilizes SFAS No. 128, &#147;<i>Earnings per
Share</i>.&#148; Basic earnings per share is computed by dividing income
available to common stockholders by the weighted-average number of common
shares outstanding. Diluted earnings per share is computed similarly to basic
earnings per share, except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential additional common shares that were dilutive had been issued. Common
share equivalents are excluded from the computation if their effect is
anti-dilutive. The Company&#146;s common share equivalents consist of stock options
and warrants.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following table represents a reconciliation of the
shares used to calculate basic and diluted earnings per share for the
respective periods indicated:</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;">
 <tr style="page-break-inside:avoid;">
  <td width="506" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;Months&nbsp;Ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="506" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="506" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(restated)</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Numerator: Net
  income</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="141" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:105.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,173,327</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Denominator:</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Denominator for
  basic earnings per share &#150; weighted average shares</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12,795,822</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effect of
  dilutive securities</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Employee stock
  options</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,671,116</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Denominator for
  diluted earnings per share &#150; adjusted weighted average shares and assumed
  conversion</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15,466,938</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Basic earnings
  per share</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="141" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:105.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.09</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="148" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:110.7pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="506" valign="top" style="padding:0pt .7pt 0pt 0pt;width:379.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Diluted earnings per
  share</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="141" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt .7pt 0pt 0pt;width:105.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.08</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="font-family:Times New Roman;font-size:1.0pt;line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;">&nbsp;</p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Common shares from exercise of
certain options and warrants have been excluded from the computation of diluted
earnings per share because their exercise prices are greater than the Company&#146;s
weighted-average stock price for the period. For the three months ende</font>d March 31, 2006, the number
of shares excluded was 1,926,753.</p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Since their effect would have been, anti-dilutive, 2,963,324,
stock options and warrants to purchase shares of common stock have been
excluded from the computation of diluted net loss per share for the three
months ended March 31, 2007.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 4. Income Taxes</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company adopted the provisions of FIN 48, &#147;Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109,&#148; (FIN 48), on January 1, 2007. As a result of the implementation of FIN 48, the Company made a comprehensive review of its portfolio of uncertain tax positions in accordance with recognition standards established by FIN 48. In this regard, an uncertain tax position represents the Company&#146;s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial</font></p>
 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

<!-- SEQ.=1,FOLIO='9',FILE='C:\JMS\mchin\07-10893-1\task2126005\10893-1-ga.htm',USER='105388',CD='May 16 01:42 2007' -->
<br clear="all" style="page-break-before:always;">
<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">reporting purposes. As a result of this review, the Company concluded that at this time there are no uncertain tax positions. As a result of applying the provisions of FIN 48, there was no cumulative effect on retained earnings.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company is subject to US federal income tax as well as
income tax in multiple states and foreign jurisdictions. For all major taxing
jurisdictions, the tax years 2002 through 2006 remain open to examination. As
of March&nbsp;31, 2007, the Company does not expect any material changes to
unrecognized tax positions within the next twelve months.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">SFAS No. 109, &#147;<i>Accounting for Income
Taxes,</i>&#148; establishes financial accounting and reporting standards for
the effect of income taxes. The objectives of accounting for income taxes are
to recognize the amount of taxes payable or refundable for the current year and
deferred tax liabilities and assets for the future tax consequences of events
that have been recognized in an entity&#146;s financial statements or tax returns.
Judgment is required in assessing the future tax consequences of events that
have been recognized in our financial statements or tax returns. Fluctuations
in the actual outcome of these future tax consequences could materially impact
our financial position or our results of operations.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 5. Inventory</font></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Inventory is valued at the lower of cost or market using
standard costs that approximate average cost. Inventories are reviewed
periodically and items considered to be slow moving or obsolete are reduced to
estimated net realizable value through an appropriate reserve.&#160; In addition, at March 31, 2007, we had
in-transit inventory of $1 million, which is under the control of a common
freight carrier until it arrives at one of our warehouse facilities.&#160; This inventory is owned by the Company while
it is in-transit.&#160; Inventory consists of
the following:</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:40.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="368" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:276.05pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">March&nbsp;31,<br>
  2007</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">December&nbsp;31,<br>
  2006</font></b></p>
  </td>
  <td width="6" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:4.15pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="368" valign="top" style="padding:0pt .7pt 0pt 0pt;width:276.05pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Finished goods</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18,779,170</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11,428,708</font></p>
  </td>
  <td width="6" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:4.15pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="368" valign="top" style="padding:0pt .7pt 0pt 0pt;width:276.05pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Inventory reserve</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(437,073</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">(</font>254,508</font></p>
  </td>
  <td width="6" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:4.15pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="368" valign="top" style="padding:0pt .7pt 0pt 0pt;width:276.05pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net inventory</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18,342,097</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11,174,200</font></p>
  </td>
  <td width="6" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:4.15pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="font-family:Times New Roman;font-size:1.0pt;line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;">&nbsp;</p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 6. Property and Equipment</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Property and
equipment are primarily located in the United States, with the exception of
$262,000 of machinery and equipment located at our Mexico facility (installed
in June 2006 and included in the table below) and consisted of the following as
of the dates presented:</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:80.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="344" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:258.1pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">March&nbsp;31,<br>
  2007</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">December&nbsp;31,<br>
  2006</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="344" valign="top" style="padding:0pt .7pt 0pt 0pt;width:258.1pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Machinery and
  equipment</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">786,547</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">774,465</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="344" valign="top" style="padding:0pt .7pt 0pt 0pt;width:258.1pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Furniture and
  fixtures</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">166,921</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">166,921</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="344" valign="top" style="padding:0pt .7pt 0pt 0pt;width:258.1pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Tooling and
  molds</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">649,858</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="344" valign="top" style="padding:0pt .7pt 0pt 0pt;width:258.1pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Subtotal</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,603,326</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">941,386</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="344" valign="top" style="padding:0pt .7pt 0pt 0pt;width:258.1pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Less accumulated
  depreciation</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">369,233</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">326,201</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="344" valign="top" style="padding:0pt .7pt 0pt 0pt;width:258.1pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,234,093</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">615,185</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="font-family:Times New Roman;font-size:1.0pt;line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;">&nbsp;</p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Depreciation expense was $43,032 and $31,935 for the three
months ended March 31, 2007 and 2006, respectively</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 7. Line of Credit</font></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company has a line of credit from Wells Fargo HSBC
Trade Bank N.A., which provides for advances not to exceed 80% of eligible
domestic accounts receivable and 85% of foreign-insured accounts receivable
(depending on the country of the debtor), up to a maximum of $30,000,000. As of
March 31, 2007, the majority of our debt was based on foreign accounts
receivable.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest is payable on a monthly basis (i) at Wells Fargo&#146;s
prime rate minus 0.25% (8.25% at March 31, 2007) or (ii) at the one-month LIBOR
plus 1.50% (5.32% at March 31, 2007). The interest rate is floating at Wells
Fargo&#146;s prime rate or is at LIBOR plus 1.5% if the debt is a fixed amount drawn
upon.&#160; The line of credit is
collateralized by substantially all of the assets of the Company, and expires
October 1, 2008. In addition to reporting and other non-financial covenants, the
line of credit contains certain financial covenants which require the Company
to maintain a tangible net worth of not less than $30,000,000 plus 50% of net
profit after tax from January 1, 2007, a pre-tax profit of not less than $1 on
a rolling four quarter basis, a quick ratio of not less than one-to-one, a
debt-to-net worth ratio of not greater than two-to-one, and an annual net</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">income after taxes of at least $1. Management believes the
Company was in compliance with these covenants at March 31, 2007. At March 31,
2007 and December 31, 2006 the amounts drawn against the line of credit were
$22,369,071 and $25,648,614, respectively.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company has no other notes payable.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 8. Stockholders&#146; Equity</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:0pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sale of Common Stock and
Warrants</font></u></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On January&nbsp;30, 2006<b>, </b>the Company sold an aggregate of 2,200,000
shares of its common stock at $6.55 per share with accompanying warrants, for
total gross proceeds of $14,410,000.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stock Options</font></u></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective
March 9, 2007, the Company granted options to purchase an aggregate of 40,000
of its common stock to certain foreign contractors</font> (the &#147;Contractor Options&#148;).
One-fourth of the total options subject to these option grants become
exercisable one year from the contractor&#146;s grantee&#146;s first date of duties, and 1/48th
of the total options become exercisable each month thereafter until fully
vested.&#160; These options have exercise
prices of $3.79 per share, which was the closing price per share of the
Company&#146;s common stock on March 9, 2007, and expire six years from the
date of grant.</p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 9. Recent Accounting Pronouncements</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:39.6pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In February 2006
the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) 155 &#147;Accounting for Certain Hybrid Financial
Instruments.&#148;&nbsp; SFAS 155 amends SFAS 133 to narrow the scope exception for
interest-only and principal-only strips on debt instruments to include only
such strips representing rights to receive a specified portion of the
contractual interest or principal cash flows. SFAS 155 also amends SFAS 140 to
allow qualifying special-purpose entities to hold a passive derivative
financial instrument pertaining to beneficial interests that itself is a
derivative financial instrument. Generally, FASB Statement of Financial
Accounting Standards SFAS No. 133, &#147;Accounting for Derivative Instruments and
Hedging Activities,&#148; requires that a derivative embedded in a host contract
that does not meet the definition of a derivative be accounted for separately
(referred to as bifurcation) under certain conditions. That general rule
notwithstanding, SFAS No. 133 (prior to amendments made to it by SFAS No. 155)
provides a broad exception for interest-only and principal-only strips
initially resulting from the separation of rights to receive contractual cash
flows of a financial instrument that itself does not contain an embedded
derivative that would have been accounted for separately. SFAS 155 amends SFAS
133 to restrict the scope exception to strips that represent rights to receive
only a portion of the contractual interest cash flows or of the contractual
principal cash flows of a specific debt instrument.&nbsp; Prior to amendments
made by SFAS 155, SFAS 140, &#147;Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities,&#148; permitted a qualifying
special-purpose entity (SPE) to hold only passive derivative financial
instruments pertaining to beneficial interests (other than another derivative
financial instrument) issued or sold to parties other than the transferor. SFAS
155 amends SFAS 140 to allow a qualifying SPE to hold a derivative instrument
pertaining to beneficial interests that itself is a derivative financial
instrument.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:39.6pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In March 2006, the
FASB issued SFAS No. 156, &#147;Accounting for Servicing of Financial Assets&#148; (&#147;SFAS
NO. 156&#148;), which provides an approach to simplify efforts to obtain hedge-like
(offset) accounting.&nbsp; This Statement amends FASB Statement No. 140,
&#147;Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities&#148;, with respect to the accounting for separately recognized
servicing assets and servicing liabilities.&nbsp; The Statement (1) requires an
entity to recognize a servicing asset or servicing liability each time it
undertakes an obligation to service a financial asset by entering into a servicing
contract in certain situations; (2) requires that a separately recognized
servicing asset or servicing liability be initially measured at fair value, if
practicable;&nbsp; (3) permits an entity to choose either the amortization
method or the fair value method for subsequent measurement for each class of
separately recognized servicing assets or servicing liabilities; (4) permits at
initial adoption a one-time reclassification of available-for-sale securities
to trading securities by an entity with recognized servicing rights, provided
the securities reclassified offset the entity&#146;s exposure to changes in the fair
value of the servicing assets or liabilities; and (5) requires separate
presentation of servicing assets and servicing liabilities subsequently measured
at fair value in the balance sheet and additional disclosures for all
separately recognized servicing assets and servicing liabilities.&nbsp; SFAS
No. 156 is effective for all separately recognized servicing assets and
liabilities as of the beginning of an entity&#146;s fiscal year that begins after
September 15, 2006, with earlier adoption permitted in certain
circumstances.&nbsp; The Statement also describes the manner in which it should
be initially applied.&nbsp; The Company does not believe that SFAS No. 156 will
have a material impact on its financial position, results of operations or cash
flows.&nbsp; As a</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">result, we do not believe
the adoption of SFAS 156 has a material impact on the Company&#146;s Consolidated
Financial Statements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:39.6pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In September 2006,
the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 157, &#147;Fair Value Measurements&#148; (&#147;SFAS 157&#148;), which
defines the fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements.&nbsp; This statement is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years.&nbsp; Early
adoption is encouraged, provided that the registrant has not yet issued
financial statements for that fiscal year, including any financial statements
for an interim period within that fiscal year.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:39.6pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In September 2006,
the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 158, &#147;Employers&#146; Accounting for Defined Benefit
Pension and Other Postretirement Plans&#148; (&#147;SFAS 158&#148;), which improves financial
reporting by requiring an employer to recognize the over or under funded status
of a defined benefit postretirement plan as an asset or liability in its
statement of financial position and to recognize changes in that funded status
in the year in which the changes occur through comprehensive income of a
business entity or changes in unrestricted net assets of a not-for-profit
organization.&nbsp; This statement also improves financial reporting by
requiring an employer to measure the funded status of a plan as of the date of
its year end statement of financial position, with limited exceptions.&nbsp;
This Statement amends Statement 87, FASB Statement No. 88, &#147;Employers&#146;
Accounting for Settlements and Curtailments of Defined Benefit Pension Plans
and for Termination Benefits&#148;, Statement 106, and FASB Statement No. 132
(revised 2003), &#147;Employers&#146; Disclosures about Pensions and Other Postretirement
Benefits&#148;.&nbsp; Upon the initial application of this statement and
subsequently, and employer should continue to apply the provisions in
Statements, 87, 88, and 106 in measuring plan assets and benefit obligations as
of the date of its statement of financial position and in determining the
amount of net periodic benefit cost.&nbsp; An employer with publicly traded
equity securities is required to initially recognize the funded status of a
defined benefit postretirement plan and to provide the required disclosures as
of the end of the fiscal year ending after December 31, 2006.&nbsp; An employer
without publicly traded equity securities is required to recognize the funded
status of a defined benefit postretirement plan and to provide the required
disclosures as of the end of the fiscal year ending after June 15, 2007.&nbsp;
Early application of the recognition or measurement date provisions is
encouraged; however, early application must be for all of an employer&#146;s benefit
plans.&nbsp; Retrospective application of the Statement is not permitted.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:39.6pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In September 2006,
the United States Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin (SAB) No. 108, &#147;Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements.&#148; This SAB No. 108 provides guidance on the consideration of the
effects of prior year misstatements in quantifying current year misstatements
for the purpose of a materiality assessment. SAB No. 108 establishes an
approach that requires quantification of financial statement errors based on
the effects of each of the Company&#146;s balance sheet and statement of operations
financial statements and the related financial statement disclosures. The SAB
No. 108 permits existing public companies to record the cumulative effect of
initially applying this approach in the first year ending after November 15,
2006 by recording the necessary correcting adjustments to the carrying values
of assets and liabilities as of the beginning of that year with the offsetting
adjustment recorded to the opening balance of retained earnings. Additionally,
the use of the cumulative effect transition method requires detailed disclosure
of the nature and amount of each individual error being corrected through the
cumulative adjustment and how and when it arose.&#160; The adoption of SAB 108 did not have a
material impact on the Company&#146;s results of operations and financial position.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:39.6pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In July 2006, the
FASB issued FASB Interpretation No. 48, &#147;Accounting for Uncertainty in Income
Taxes&#148; (FIN 48). FIN 48 clarifies the accounting for income taxes by
prescribing a minimum probability threshold that a tax position must meet
before a financial statement benefit is recognized. The minimum threshold is
defined in FIN 48 as a tax position, that based solely on its technical merits
is more likely than not to be sustained upon examination by the applicable
taxing authority. The tax benefit to be recognized is measured as the largest
amount of benefit that is greater than fifty percent likely of being realized
upon ultimate settlement. FIN 48 must be applied to all existing tax positions
upon initial adoption. The cumulative effect of applying FIN 48 at adoption, if
any, is to be reported as an adjustment to opening retained earnings for the
year of adoption. FIN 48 is effective for fiscal years beginning after December
15, 2006, although early adoption is permitted.&#160;
The adoption of FIN 48 did not have a material impact on the Company&#146;s
results of operations and financial position.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:39.6pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
October&nbsp;2006, the Emerging Issues Task Force (EITF)&nbsp;issued EITF 06-3,
How Taxes Collected from Customers and Remitted to Governmental Authorities
Should Be Presented in the Income Statement (That is, Gross versus Net
Presentation) to clarify diversity in practice on the presentation of different
types of taxes in the financial statements. The Task Force concluded that, for
taxes within the scope of the issue, a company may adopt a policy of presenting
taxes either gross within revenue or net. That is, it may include charges to
customers for taxes within revenues and the charge for the taxes from the
taxing authority within cost of sales, or, alternatively, it may net the charge
to the customer and the charge</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">from the taxing
authority. If taxes subject to EITF 06-3 are significant, a company is required
to disclose its accounting policy for presenting taxes and the amounts of such
taxes that are recognized on a gross basis. The guidance in this consensus is
effective for the first interim reporting period beginning after
December&nbsp;15, 2006 (the first quarter of our fiscal year 2007). The
adoption of EITF 06-3 did not have a material impact on the Company&#146;s results
of operations, financial position or cash flow.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:39.6pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In February 2007,
the FASB issued Statement No. 159, &#147;<i>The Fair
Value Option for Financial Assets and Financial Liabilities &#151; Including an
amendment of FASB Statement No. 115</i> &#147; (&#147;SFAS 159&#148;). &nbsp;This
standard amends FASB Statement No. 115, &#147;<i>Accounting
for Certain Investment in Debt and Equity Securities</i> ,&#148; with respect
to accounting for a transfer to the trading category for all entities with
available-for-sale and trading securities electing the fair value option.
&nbsp;This standard allows companies to elect fair value accounting for many
financial instruments and other items that currently are not required to be
accounted as such, allows different applications for electing the option for a
single item or groups of items, and requires disclosures to facilitate
comparisons of similar assets and liabilities that are accounted for
differently in relation to the fair value option. &nbsp;SFAS 159 is effective
for fiscal years beginning after November 15, 2007. If elected, the
implementation of FAS 159 is not expected to have a material impact on the
Company&#146;s consolidated financial statements.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 10. Geographic Information</font></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company currently operates in one business
segment.&#160; All fixed assets are located in
Company facilities in the United States and Mexico. Net sales by geographical
area for the three and three months ended March 31, 2007 and March 31, 2006
were:</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:120.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="158" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:118.2pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="176" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:132.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;months&nbsp;ended</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="158" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:118.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">March&nbsp;31,&nbsp;2007</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">March&nbsp;31,&nbsp;2006</font></b></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="158" valign="top" style="padding:0pt .7pt 0pt 0pt;width:118.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">United States</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12,158,256</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,720,699</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="158" valign="top" style="padding:0pt .7pt 0pt 0pt;width:118.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Central America</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10,860,333</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19,375,215</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="158" valign="top" style="padding:0pt .7pt 0pt 0pt;width:118.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">South America</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">35,385,021</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="80" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:60.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">33,031,175</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="158" valign="top" style="padding:0pt .7pt 0pt 0pt;width:118.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">58,403,610</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="73" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:55.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">54,127,089</font></p>
  </td>
  <td width="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:1.7pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="font-family:Times New Roman;font-size:1.0pt;line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;">&nbsp;</p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 11.&#160; Commitments and
Contingencies</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Securities Class Actions</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Six securities
actions, originally filed between June and July 2006, were recently
consolidated as In Re: InfoSonics Corporation Securities Litigation, Lead Case
No. 06 CV 1231, before Judge Moskowitz in the Southern District of
California.&#160; Plaintiffs&#146; consolidated
complaint was filed on February 14, 2007.&#160;
Plaintiffs assert claims for violation of section 10(b) of the Exchange
Act and associated Rule 10b-5, 20(a) and 20A in connection with the Company&#146;s
restatement announced June 12, 2006 and allegedly false and/or misleading
statements and accounting related to the Company&#146;s distribution agreement with
VK Mobile.&#160; Plaintiffs seek a declaration
that their action is a proper class action pursuant to Rule 23(a) and (b)(3),
unspecified damages, prejudgment and post-judgment interest, attorneys&#146; fees,
expert witness fees, other costs, and other unspecified relief.&#160; The plaintiffs purport to represent a class
of purchasers of the Company&#146;s stock during the period February 6, 2006 to
August 9, 2006.&#160; On April 16, 2007, the
defendants filed a motion to dismiss the consolidated complaint on the grounds,
among others, that the plaintiffs have failed to adequately plead violations of
the securities laws.&#160; Plaintiffs&#146;
response to defendants&#146; motion to dismiss is due May 16, 2007 and the motion is
currently scheduled to be heard on June 15, 2007.&#160; As of this time, the Court has not set a date
for trial or completion of discovery.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Derivative Lawsuits</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The three
derivative lawsuits originally filed on June 27, 2006, July 14, 2006, and July
28, 2006 in the United States District Court for the Southern District of
California, purportedly on behalf of the Company against certain of our
officers and directors, and the Company as a nominal defendant, have been
consolidated as In Re InfoSonics Corporation Derivative Litigation, Lead Case
No. 06 CV 1336, and transferred to Judge Moskowitz in the Southern District of
California.&#160; Plaintiffs&#146; consolidated
complaint was received on November 8, 2006.&#160;
It asserts claims for disgorgement under the Sarbanes-Oxley Act of 2002,
violation of Section 14(a) of the Exchange Act, violation of California
Corporations Code section 25403, violation of California Corporations Code
section 254403, breach of fiduciary duty, abuse of control, gross
mismanagement, waste of corporate assets, unjust enrichment, and an accounting,
in connection with the Company&#146;s restatement of first quarter 2006 earnings and
in connection with allegations of wrongdoing with respect to granting,
exercising, accounting and reporting of the stock options that the Company
granted in December 2005.&#160; Plaintiffs
seek unspecified damages, declaratory relief regarding the Sarbanes-Oxley Act
of 2002, Section 14(a) of the Exchange Act, and the legality of stock options,
a</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">constructive trust,
restitution, disgorgement, modification of certain corporate governance and
internal procedures, extraordinary equitable and/or injunctive relief, costs,
and such other relief as is just and proper.&#160;
On January 12, 2007, defendants filed a motion to dismiss on the
grounds, among others, that the plaintiffs had failed to make a demand on the
Company&#146;s board of directors and to adequately allege their other purported
claims.&#160; The two non-resident director
defendants also filed motions to dismiss based upon a lack of personal
jurisdiction in California.&#160; The motion
to dismiss for failure to make a demand and failure to state a claim was
submitted on April 27, 2007.&#160; The hearing
on the personal jurisdiction motion has been continued until May 22, 2007 to
allow plaintiffs to conduct limited discovery on the personal jurisdiction
issue.&#160; As of this time, the Court has
not set a date for trial or completion of discovery.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">NOTE 12. Restatement</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company has
reassessed its application of certain provisions of EITF 00-19, Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in a
Company&#146;s Own Stock, it recorded $564,000 of other income during the quarter
ended March 31, 2006 related to a mark to market adjustment of certain
warrants.&#160; Since these warrants became
part of permanent equity on February 17, 2006, InfoSonics should have ceased
applying the mark to market provisions of EITF 00-19, on that date.&#160; Accordingly, the net income for the quarter
ended March 31, 2006 has been reduced by a non-cash amount of $564,000.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following tables set
forth for the quarter ended March 31, 2006 the amounts of the restatement
adjustments and reconciliation from previously reported amounts to restated
amounts for the quarter.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Statement of Operations</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" bgcolor="white" style="background:white;border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="64%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:64.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="33%" colspan="8" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:33.18%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;Months&nbsp;Ended&nbsp;March&nbsp;31,&nbsp;2006<br>
  (Unaudited)</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="64%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:64.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">As&nbsp;Previously<br>
  Reported</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Effect&nbsp;of<br>
  Restatement</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Restated</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="64%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:64.1%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Other Income: change in
  fair value of derivative liability</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.48%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">963,351</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.48%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(564,342</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.48%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">399,009</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="64%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:64.1%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Income from continuing
  operations before provision for income taxes</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,966,551</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(564,342</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,402,209</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="64%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:64.1%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Income
  from Continuing operations</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,739,513</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(564,342</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,175,171</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="64%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:64.1%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net income</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,737,669</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(564,342</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.46%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,173,327</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="64%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:64.1%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Basic earnings per
  share</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.48%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.27</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.48%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(0.09</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.48%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.18</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="64%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:64.1%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Diluted earnings per share</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.48%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.22</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.48%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(0.07</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.48%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.15</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 2. Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations</font></b><a name="Item2_ManagementsDiscussionAndAna_101820"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Forward-Looking Statements and Other General Information</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This discussion and analysis of
financial condition and results of operations should be read in conjunction
with the accompanying unaudited consolidated financial statements and condensed
notes thereto included in this report and with our Annual Report on Form 10-K for
the year ended December 31, 2006 (including our 2006 audited consolidated
financial statements and related notes thereto). InfoSonics Corporation&#146;s
(&#147;InfoSonics&#148; or the &#147;Company&#148;) discussion and analysis of financial condition
and results of operations are based upon consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States (&#147;GAAP&#148;). The preparation of financial statements
in conformity with GAAP requires us to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure of any
contingent liabilities as of and at the financial statement date, and reported
amounts of revenue and expenses during the reporting period. On an ongoing basis
we review our estimates and assumptions. Our estimates are based on our
historical experience and other assumptions that we believe to be reasonable
under the circumstances. Actual results are likely to differ from these
estimates under different assumptions or conditions, but we do not believe such
differences will materially affect our consolidated statement of operations.
Our critical accounting policies, the policies we believe are most important to
the presentation of our financial statements and require the most difficult,
subjective and complex judgments, are outlined below in &#147;&#151;Critical Accounting
Policies.&#148; &#160;All references to results of
operations in this discussion are to results from continuing operations, unless
otherwise noted.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Safe Harbor Statement</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The matters in
this report that are forward-looking statements, including without limitation
to statements about future revenues, sales levels, operating income and
margins, wireless handset sales, stock-based compensation expense, gain (loss)
in value of derivatives, cost synergies, operating efficiencies, profitability,
market share and rates of return, are based on current management expectations
that involve certain risks which, if realized, in whole or in part, could cause
such expectations to fail to be achieved and have a material adverse effect on
InfoSonics&#146; business, financial condition and results of operations, including,
without limitation: (1) intense competition, regionally and internationally,
including competition from alternative business models, such as
manufacturer-to-carrier sales, which may lead to reduced prices, lower sales or
reduced sales growth, lower gross margins, extended payment terms with
customers, increased capital investment and interest costs, bad debt risks and
product supply shortages; (2) inability to secure adequate supply of
competitive products on a timely basis and on commercially reasonable terms;
(3) foreign exchange rate fluctuations, devaluation of a foreign currency,
adverse governmental controls or actions, political or economic instability, or
disruption of a foreign market, and other related risks of our international
operations; (4) the ability to attract new sources of profitable business from
expansion of products or services or risks associated with entry into new
markets, including geographies, products and services; (5) an interruption or
failure of our information systems or subversion of access or other system
controls may result in a significant loss of business, assets, or competitive
information; (6) significant changes in supplier terms and relationships; (7)
termination of a supply or services agreement with a major supplier or product
supply shortages; (8) continued consolidation in the wireless handset carrier
market; (9) extended general economic downturn; (10) loss of business from one
or more significant customers; (11) customer and geographical accounts
receivable concentration risk; (12) rapid product improvement and technological
change resulting in inventory obsolescence; (13) future terrorist or military
actions; (14) the loss of a key executive officer or other key employees; (15)
changes in consumer demand for multimedia wireless handset products and
features; (16) our failure to adequately adapt to industry changes and to
manage potential growth and/or contractions; (17) future periodic assessments
required by current or new accounting standards such as those relating to
long-lived assets, goodwill and other intangible assets and expensing of stock
options and valuing gain or loss on fair value of derivatives may result in
additional non-cash income or expenses; (18) seasonal buying patterns;</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(19) dependency on Latin
American sales; and (20) uncertain political and economic conditions
internationally; (21) the impact, if any, of changes in EITF 00-19 or SFAS 133
guidance as it relates to warrants and registration rights; (22) the resolution
of any litigation against the company and (23) the ability of the Company to
generate income in future periods in order to utilize and realize any quarterly
tax benefits recorded.&#160; Our actual
results could differ materially from those anticipated in our forward looking
statements</font><i>.</i></p>

<p style="margin:5.0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">InfoSonics has instituted
in the past and continues to institute changes to its strategies, operations
and processes to address risks and uncertainties and to mitigate their impact
on InfoSonics&#146; results of operations and financial condition. However, no
assurances can be given that InfoSonics will be successful in these efforts.
For a further discussion of significant factors to consider concerning
InfoSonics, see &#147;Item 1A. Risk Factors&#148; of InfoSonics&#146; Annual Report on Form
10-K for the year ended December 31, 2006 and &#147;Part&nbsp;II. Item 1A. Risk
Factors&#148; of this report. In addition, other risks or uncertainties may be detailed
from time to time in InfoSonics&#146; future SEC filings.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Overview</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are one of the premier
providers and distributors of wireless handsets and accessories in Latin
America and the United&nbsp;States. We provide end-to-end handset and wireless
terminal solutions for carriers in both Latin America and the United
States.&#160;&#160; We distribute products of
several key original equipment manufacturers, including Samsung, Alcatel/TCL,
VK Corporation, LG, Novatel and others.&#160;
We also distribute semi-proprietary products under the Disney brand in
Latin America, and are designing and distributing our recently announced
proprietary line of products under our own <i>verykool&#153;</i>
brand, which will include entry level, mid-tier and high-end products.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As an integral
part of our customers&#146; supply chain, we perform value added services and
solutions, including product approval and certification, light assembly,
warehousing, logistics services (packing, shipping and delivery), marketing
campaigns, warranty services and end-user support. We provide these services
for wireless handset manufacturers in order to facilitate sales to carriers,
agents, resellers, distributors, independent dealers and retailers in Latin
America and the United States.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:35.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our corporate headquarters is in San Diego,
California, and from our facility in Miami Florida, where we have our Latin
America sales and executive offices, we operate our main warehouse and
distribution center. This warehouse and distribution center services our
customers in the United States and Latin America. In addition, we have
warehouse and office facilities in Mexico. We have wholly-owned subsidiaries in
Latin America, which conduct some of our business activities in their
respective regions of Latin America.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:35.0pt;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">Due to
seasonal and other factors, our interim condition or results may not be indicative
of fiscal year 2007 or other future condition or results. Our financial
condition and operating results are influenced by several seasonal and other
factors, which may cause our financial condition and operating results to
fluctuate on a quarterly basis, including, but not limited to, the timing and
introduction of new products by our suppliers and competitors, promotions and
subsidies by network operators, technical and certification delays by industry
bodies as well as the operators, purchasing patterns of customers, the timing
of holidays, the introduction of our proprietary <i>verykool&#153;</i>
products line and other events </font>affecting consumer demand.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Areas of Management Focus and Performance
Indicators</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We focus on the
needs of our customers, developing and maintaining close relationships with
manufacturers, expanding in and entering into new markets, and sourcing new and
innovative products, while maintaining close attention to operational
efficiencies and costs. We intend to increase shipping volumes and improve
efficiencies to enable higher levels of profitability and earnings growth.&#160; We provide distribution and other services
for original equipment manufacturers, such as Samsung, as well as
semi-proprietary products, such as Disney in Latin America, and our own
proprietary line of <i>verykool&#153;</i>
handsets.&#160; Performance indicators that
are key for the monitoring and management of our business include operating and
net income, cost of sales and gross margin percentage, operating expenses as a
percent of revenues, and overall net sales growth. We make extensive use of our
customized information system to closely monitor all aspects of our business,
including customer relationship management, intelligent purchasing, inventory
control, and inventory flow, line item margin control for every order, and
weighted average cost and statistical data for every product, customer and
supplier. We believe a strong focus on providing better service to customers
leads to increased customer satisfaction and retention and potential increases
in sales.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Management spends a significant amount of time
traveling with the purpose of spending time with key customers, suppliers and
employees. We believe that these relationships are vital to our success, and we
will continue to dedicate a significant amount of time to this area.</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Industry Trends and Risks</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">According to a
January 2007 report by Deutsche Bank, in 2006, overall worldwide wireless
handset sales increased by approximately 20%, and are forecasted to increase
12% in 2007 and 8% in 2008. A rapid decline in wireless handset sales growth
could negatively impact our net sales. Excess supply conditions can reduce the
market prices of the products we sell and therefore affect our ability to
generate net sales and gross profit at historical levels and could affect the
value of our inventory. Conversely, should manufacturers be unable to respond
to an unanticipated increase in demand on a timely basis, we, along with others
in our industry, could experience supply constraints that would affect our
ability to deliver products. We are unable to quantify these effects, as it is
difficult to predict future supply conditions and demand patterns which affect
our ability to meet customer demand or sell handsets at an acceptable gross
profit.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Company Specific Trends and Risks</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our strategy incorporates overall market growth
elements for each aspect of our business, which we hope will result in
continued growth. In the quarter ended March 31, 2007, our net sales increased
by 8%, and wireless handset units sold increased by 10%, compared with the
quarter ended March 31, 2006. Although we have incorporated growth into our
strategy, there can be no assurances that this trend will continue.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">During the quarter ended March 31, 2007, we
experienced significant growth in our United States region, accounting for 21%
of our total net sales, as compared to 3% for the quarter ended March 31,
2006.&#160; The South American and Central
American regions collectively accounted for 79% of net sales for the first
quarter of 2007, compared to 97% for the first quarter of 2006. This increase
in the United States was primarily the result of increased product
availability.&#160; By contrast the decrease
of net sales in the Central America region was a result of a significant decrease
in handset demand as a result of industry wide excess inventory in the channel
for that particular region, which had an impact on our net sales to that region
and our overall gross profit.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">Results of Operations:</font></b></p>

<p style="font-style:italic;font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Three Months Ended
March 31, 2007 and 2006</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Net Sales</font></b></p>

<p style="margin-left:0pt;margin-right:0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For the three months ended March 31, 2007 (first
quarter of 2007), our net sales of $58.4 million represented an increase of 8%
compared to $54.1 million for the same period of 2006 (first quarter of
2006).&#160; This increase was primarily
attributable to a 10% increase in wireless handset volume, partially offset by
a 5% decrease in average selling price per unit sold. The geographic mix of net
sales shifted in the first quarter of 2007 as sales in the United States
increased substantially to 21% of net sales, as compared to 3% of net sales for
the first quarter of 2006.&#160; In contrast,
our net sales in Central America significantly decreased to 18% of our net
sales for the first quarter of 2007, as compared to 36% of net sales for the
first quarter of 2006.&#160; Our South America
region continued to represent the majority of our business accounting for 61%
of our net sales in the first quarter of 2007 and 2006.&#160; This regional shift in net sales was the
result of two primary factors.&#160; Product
availability in the United States was sufficient to meet the demands of our
customers.&#160; However in contrast, the
Central American region had excess inventory in the channel, resulting in a
reduction of opportunity for sales and gross margin.&#160; We continued our sales and marketing efforts
in all regions and in the United States we were able to achieve incremental
sales to existing customers.&#160; In South
America our efforts enabled sales to new customers and additional sales to
existing customers.&#160; This region
continues to experience a general increase in handset sales.&#160;&#160; In the first quarter of 2007 we had a net
loss of $558,000, or $0.04 per diluted share, as compared to income of $1.2
million or $0.08 per diluted share in the first quarter of 2006.&#160; The first quarter of 2006 included non-cash
income of $399,000 resulting from change in fair value of derivative liability
of warrants issued in conjunction with a financing completed during that
quarter.&#160; Excluding this non-cash income,
we had non-GAAP net income of $774,000 or $0.05 per diluted share for the first
quarter of 2006.&#160; (see reconciliation
below)</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">16</font></p>
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<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:70.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="224" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="148" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:110.9pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Quarter&nbsp;ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Increase</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
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 <tr style="page-break-inside:avoid;">
  <td width="224" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="66" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Decrease)</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="224" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="148" colspan="5" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:110.9pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Dollar&nbsp;amounts&nbsp;in&nbsp;thousands,&nbsp;<br>
  except&nbsp;per&nbsp;share&nbsp;amounts)<br>
  (unaudited)</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="224" valign="top" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net sales</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="59" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:44.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">58,404</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="59" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:44.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">54,127</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="224" valign="top" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gross profit</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,149</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,180</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(25)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="224" valign="top" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net income (loss) GAAP</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(558</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,173</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(147)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="224" valign="top" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net income (loss)
  non-GAAP</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(461</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">774</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(171)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="224" valign="top" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="224" valign="top" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Diluted earnings (loss)
  per share from net income (loss) GAAP</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="59" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:44.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(0.04</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="59" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:44.45pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.08</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(138)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="224" valign="top" style="padding:0pt .7pt 0pt 0pt;width:168.3pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Diluted earnings (loss) per share from net income (loss) non-GAAP</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="59" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:44.45pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(0.03</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="59" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:44.45pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.05</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="66" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:49.45pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(160)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin-left:0pt;margin-right:0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Net sales by geographic region</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:70.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="216" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:162.2pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="152" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:114.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Quarter&nbsp;ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Increase&nbsp;</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="216" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:162.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Decrease)</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="216" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:162.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="152" colspan="5" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:114.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Dollar&nbsp;amounts&nbsp;in&nbsp;thousands)<br>
  (unaudited)</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="216" valign="top" style="padding:0pt .7pt 0pt 0pt;width:162.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">United States</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">12,158</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,721</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">607%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="216" valign="top" style="padding:0pt .7pt 0pt 0pt;width:162.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Central America</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10,861</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19,375</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(44)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="216" valign="top" style="padding:0pt .7pt 0pt 0pt;width:162.2pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">South America</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">35,385</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">33,031</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="216" valign="top" style="padding:0pt .7pt 0pt 0pt;width:162.2pt;">
  <p style="margin:0pt 0pt .0001pt 60.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="61" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">58,404</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;border-bottom:double windowtext 2.25pt;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="61" valign="bottom" style="border-bottom:double windowtext 2.25pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">54,127</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cost of
Sales, Gross Profit and Gross Margin</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For the quarter ended March 31, 2007, cost of sales
was $55.3 million, or 94.6% of net sales, compared with $49.9 million, or 92.3%
of net sales, for the quarter ended March 31, 2006. The increase in our total
cost of sales was a direct result of many factors including our increased sales
levels on a consolidated basis, as well as increased product mix of higher cost
products.&#160; In the Central America region,
a significant decrease in handset demand as a result of industry wide excess
inventory in the channel for that particular region, also impacted our ability
to sell higher margin products.&#160; Our gross
margin continues to be impacted by the change of product and regional mix of
our sales, as different products and different regions can have varying
margins.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For the quarter ended March 31, 2007, our gross profit
decreased to $3.2 million from $4.2 million, compared with the same quarter last
year, a decrease of 25%. This decrease in gross profit was primarily the result
of increased inventory levels in the Central American region, impacting gross
margin potential on those regional sales.</font></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:70.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="216" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:162.0pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="152" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:114.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Quarter&nbsp;Ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Increase&nbsp;</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="216" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:162.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Decrease)</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="216" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:162.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="152" colspan="5" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:114.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Dollar&nbsp;amounts&nbsp;in&nbsp;thousands)<br>
  (unaudited)</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="216" valign="top" style="padding:0pt .7pt 0pt 0pt;width:162.0pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Cost of sales</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">55,255</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">49,947</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">11%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="216" valign="top" style="padding:0pt .7pt 0pt 0pt;width:162.0pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gross profit</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,149</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,180</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(25)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="216" valign="top" style="padding:0pt .7pt 0pt 0pt;width:162.0pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Gross margin</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.4</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
  <td width="68" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.7</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
  <td width="68" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:51.0pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(30)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Operating
Expenses and Operating Income (loss) from Continuing Operations</font></b></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For the quarter ended March 31, 2007, operating
expenses were $4.0 million, an increase of 30%, compared with the same quarter
last year. As a percentage of net sales, operating expenses were 6.9% in the
quarter ended March 31, 2007, compared with 5.7% in the same quarter last
year.&#160; During the quarter ended March 31,
2007, we incurred $97,000, or 0.2% of net sales, of non-cash expense </font>relating to stock options,
compared to $52,000, or 0.1% of net sales for the quarter ended March 31, 2006.
Excluding such non-cash expense, operating expenses as a percentage of net
sales were 6.7%, a significant increase from the same quarter last year.&#160; This increase was primarily the result of
investments in facilities, marketing, engineering and product and market
development, predominantly attributable to</p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">17</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">our proprietary <i>verykool&#153;</i> product line.&#160;
We believe such investments are necessary to help build a solid
foundation in these regions as well as for the <i>verykool&#153; </i>products&#160; to support potential future growth.&#160; (see reconciliation below)</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For the quarter ended March 31, 2007, our operating
loss from continuing operations was $882,000, including the non-cash expense of
$97,000 </font>relating
to stock options, compared with income of $1.1 million for the quarter
ended March 31, 2006, a decrease of 198%. As a percentage of net sales,
operating loss from continuing operations was 1.5% for the quarter ended March
31, 2007, compared to income of 2.0% for the quarter ended March 31, 2006. The
decrease in operating income from continuing operations was a result of the
increase in operating expenses discussed above, in addition to the decrease in
gross margin.</p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;text-indent:0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Operating Expenses</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:80.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="210" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:157.15pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="138" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:103.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Quarter&nbsp;Ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.6pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Increase</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="210" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:157.15pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:45.6pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:45.6pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:45.6pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Decrease)</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="210" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:157.15pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="138" colspan="5" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:103.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Dollar&nbsp;amounts&nbsp;in&nbsp;thousands)<br>
  (unaudited)</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.6pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="210" valign="top" style="padding:0pt .7pt 0pt 0pt;width:157.15pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operating expenses</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="54" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:40.6pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4,031</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="54" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:40.6pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,096</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.6pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(30)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="210" valign="top" style="padding:0pt .7pt 0pt 0pt;width:157.15pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Percentage of net sales</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.6pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.9</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
  <td width="61" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.6pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.7</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.6pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(21)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="210" style="border:none;"></td>
  <td width="16" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="54" style="border:none;"></td>
  <td width="16" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="54" style="border:none;"></td>
  <td width="16" style="border:none;"></td>
  <td width="61" style="border:none;"></td>
  <td width="17" style="border:none;"></td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Operating
Income (loss) from Continuing Operations</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:80.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="208" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:155.8pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="140" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:105.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Quarter&nbsp;Ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.1pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Increase</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="208" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:155.8pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.1pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.1pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:46.1pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Decrease)</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="208" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:155.8pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="140" colspan="5" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:105.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Dollar&nbsp;amounts&nbsp;in&nbsp;thousands)<br>
  (unaudited)</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.1pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="208" valign="top" style="padding:0pt .7pt 0pt 0pt;width:155.8pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Operating income (loss)
  from continuing operations</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="55" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:41.1pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(882</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="55" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:41.1pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,084</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.1pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(181)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="208" valign="top" style="padding:0pt .7pt 0pt 0pt;width:155.8pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Percentage of net sales</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="61" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.1pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1.5</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)%</font></p>
  </td>
  <td width="61" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.1pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.0</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">%</font></p>
  </td>
  <td width="61" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:46.1pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(175)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="208" style="border:none;"></td>
  <td width="16" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="55" style="border:none;"></td>
  <td width="17" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="55" style="border:none;"></td>
  <td width="16" style="border:none;"></td>
  <td width="61" style="border:none;"></td>
  <td width="17" style="border:none;"></td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Other Income (Expense)</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">During
the quarter ended March 31, 2007, we incurred&#160;
$55,000 of interest expense, compared to interest expense of $81,000 the
same period last year.&#160; We expect to
utilize larger amounts on our revolving line of credit regularly which will
impact our interest expense in future periods.&#160;
Additionally during the quarter ended March 31, 2006, we had non-cash
income from change in fair value of derivative liability of $399,000, compared
to no such income during the quarter ended March 31, 2007.</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Other
Income</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse;font-family:Times New Roman;margin-left:80.0pt;">
 <tr style="page-break-inside:avoid;">
  <td width="193" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:145.1pt;">
  <p style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlHTMLTableLeft --></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="150" colspan="5" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:112.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Quarter&nbsp;Ended&nbsp;March&nbsp;31,</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Increase</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="193" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:145.1pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2007</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">2006</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Decrease)</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="193" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:145.1pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="150" colspan="5" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:112.4pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">(Dollar&nbsp;amounts&nbsp;in&nbsp;thousands)<br>
  (unaudited)</font></b></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="193" valign="top" style="padding:0pt .7pt 0pt 0pt;width:145.1pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Change in fair value of
  derivative liability</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:45.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">399</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">100%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="193" valign="top" style="padding:0pt .7pt 0pt 0pt;width:145.1pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Interest income
  (expense)</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(55</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="67" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(81</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(32)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="193" valign="top" style="padding:0pt .7pt 0pt 0pt;width:145.1pt;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:45.2pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(55</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="7" valign="bottom" style="border:none;padding:0pt 0pt 0pt 0pt;width:5.0pt;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="60" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:45.2pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">318</font></p>
  </td>
  <td width="16" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="67" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:50.2pt;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(117)%</font></p>
  </td>
  <td width="17" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:13.0pt;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Net
Income (Loss)</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">During
the quarter ended March 31, 2007, our net loss was $558,000, compared to net
income of $1.2 million in the same period last year.&#160; This loss was primarily related to the
factors discussed above including our decreased sales in the Central American
region in addition to our reduced gross margin and increased operational
expenses and investments towards the potential future of our proprietary line
of <i>verykool&#153;</i> products.</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Reconciliation of Non-GAAP Financial Measures to
the Corresponding GAAP Financial Measures for the Three Months ended March 31,
2007 (unaudited)</font></b></p>

<p style="margin:5.0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The following are
selected results including and excluding the impact of SFAS 123R and SFAS 133:</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="29%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:29.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="32%" colspan="8" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:32.46%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;Months&nbsp;ended&nbsp;3-31-07</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="33%" colspan="8" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:33.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Three&nbsp;Months&nbsp;ended&nbsp;3-31-06</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="29%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:29.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">GAAP</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.78%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Non-GAAP</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">GAAP</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Non-GAAP</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="29%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:29.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Actual</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Adjustment</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.78%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Results</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Actual</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Adjustment</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Results</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.22%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">97,449</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.78%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">52,443</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.22%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#151;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.78%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(399,009</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0.375pt 0pt;width:3.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)(b)</font></p>
  </td>
  <td width="9%" colspan="2" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:9.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF" style="page-break-inside:avoid;">
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.22%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Net income (loss)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(558,133</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">97,449</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.78%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(460,684</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.26%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,173,327</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="border:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(346,566</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">826,761</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.22%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Diluted earnings (loss) per share</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(0.04</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.00</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.78%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(0.03</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.26%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.08</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(0.02</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">)</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0pt 0pt 0pt 0pt;width:1.0%;">
  <p align="left" style="margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="8%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:8.1%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0.06</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="margin:0pt 0pt .0001pt 54.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160; Eliminates non-cash stock-option compensation
charges under SFAS 123R recorded in the three months ended March 31, 2007 and
2006.</font></p>

<p style="margin:0pt 0pt 12.0pt 54.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160; To eliminate non-cash change in fair value of
derivative liability under SFAS 133 recorded in the three months ended March
31, 2006.&#160; This derivative liability was
reclassified to equity on February 17, 2006.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective January 1, 2006, the Company adopted
Statement of Financial Accounting Standards (SFAS) No. 123R, &#147;Share-Based
Payment,&#148; which requires the cost relating to share-based payment transactions
in which an entity exchanges its equity instruments for goods or services from
either employees or non-employees to be recognized in the consolidated
financial statements as the goods or services are rendered.&#160; The cost is measured at the fair value of the
equity instrument issued as it vests.&#160;
The Company is no longer permitted to follow the intrinsic value
accounting method under previous accounting guidance, which previously resulted
in no expense for stock options for which the exercise price was equal to the
fair value of the underlying stock on the date of grant.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company believes that this financial information
is useful in assessing the Company&#146;s historical performance and year-over-year
growth and when planning, forecasting and analyzing future periods.&#160; The incremental impact of SFAS 123R during
the three months ended March 31, 2007 represents the stock option expense
related to stock options issued prior to the adoption of SFAS 123R and vested
during the three months ended March 31, 2007 and the impact of estimating
forfeitures related to nonvested shares.</font></p>

<p style="margin:5.0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company believes that
excluding the incremental impact of SFAS 133 from net income provides
meaningful supplemental information regarding its financial results for the
three months ended March 31, 2007 as compared to the same period in 2006.&#160; The Company believes that this financial
information is useful in assessing the Company&#146;s historical performance and
year-over-year growth and when planning, forecasting and analyzing future
periods.&#160; The incremental impact of SFAS
133 during the three months ended March 31, 2006 represents the change in fair
value of the derivative liability (for the January 2006 financing related
warrants).</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">In September 1998</font>, FASB issued SFAS No. 133, <i>Accounting for Derivative Instruments and Hedging Activities</i>.
SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those
instruments at fair value.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In January&nbsp;2006, the Company sold shares of
common stock and warrants to purchase common stock.&#160; The Company evaluated the warrants in the
transaction as derivative liabilities in accordance with SFAS No.&nbsp;133
until the date that the Company&#146;s registration statement registering the shares
of common stock underlying such warrants was declared effective on February 17,
2006, after which such warrants were classified as equity.&#160; The change in the fair value of the warrants,
determined under the Black- Scholes option pricing formula from the initial
transaction date to the effectiveness date of the registration statement is
recorded as an adjustment to the liability. The income relating to the change
in the fair value of the Company&#146;s stock reflected in the change in the fair
value of the warrants is included as other income (expense). As the warrants
have been classified as equity, the Company no longer &#147;marks to market&#148; the
change in fair value of such warrants.</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">19</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Financial Condition, Liquidity and Capital
Resources</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cash used in Operating Activities</font></b></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At March 31, 2007, we had $12.2 million in cash. </font>During the three months
ended March 31, 2007, we continued to leverage our bank and vendor lines of
credit to fund our growth. The net cash used by operating activities was $14.3
million for the three months ended March 31, 2007, which resulted primarily
from increased accounts receivable and increased inventory levels. Our accounts
receivable increased $7.1&nbsp;million during the three months ended March 31,
2007 due to increased sales and increased net payment terms&#160; to certain regions during that period, as
described in the following paragraph. The $7.2&nbsp;million increase in
inventory during the three months ended March 31, 2007 and was due to higher
sales levels and buying opportunities which were available to us at March 31,
2007. Allowance for doubtful accounts at March 31, 2007 increased to $779,000,
compared to $680,000 at December 31, 2006. This increase<b>  </b>was related to the timing of customer
purchases towards the end of the quarter during the three months ended March
31, 2007. We believe that at March 31, 2007, our reserve for doubtful accounts
was adequate. Our increase in accounts payable of $149,000 and increase in
accrued expenses of $1.2 million at March 31, 2007 compared to December 31,
2006 was an offset to the cash used for increased accounts receivable and
inventory.</p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Days of sales outstanding</font></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Days of sales outstanding (the
average number of days it takes to collect revenue after a sale is made) at
March 31, 2007 were 64 days, compared with 62 days at December 31, 2006. Normal
payment terms require our customers to pay on a net 30-day or net<br>
60-day basis depending on the region. We are constantly working with our
customers to reduce our days of sales outstanding. The extension of net 60-day
terms was required to remain competitive in several of the regions we currently
operate, most notably in Central and South America.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Cash Used in Investing Activities</font></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The net cash used in investing
activities was $662,000 for the three months ended March 31, 2007, compared
with $27,000 for the three months ended March 31, 2006. This use of cash is
primarily the result of expenditures for new furniture and fixtures related to
our facility in Mexico and our office, technical assembly and warehouse space,
as well as the technical tools and equipment necessary for the customization
process of wireless handsets.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Net Cash used in Financing Activities</font></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The net cash used in financing
activities for the three months ended March 31, 2007 of $3.0 million was
primarily the result of borrowings on our bank line of credit and approximately
$253,000 from the exercise of employee stock options.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Working Capital</font></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our net working capital at March
31, 2007 was $35.5 million, compared with $36.7 million at December 31, 2006.
This increase was primarily due to our increase in accounts receivable and
inventory for the three months ended March 31, 2007.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Borrowings</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company
has a line of credit from Wells Fargo HSBC Trade Bank N.A., which provides for
advances not to exceed 80% of eligible domestic accounts receivable and 85% of
foreign-insured accounts receivable (depending on the country of the debtor),
up to a maximum of $30,000,000. As of March 31, 2007, the majority of our debt
was based on foreign accounts receivable.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">Interest </font>is</font> payable on a monthly basis
(i) at Wells Fargo&#146;s prime rate minus 0.25% (8.25% at March 31, 2007) or (ii)
at the one-month LIBOR plus 1.50% (5.32% at March 31, 2007). The interest rate
is floating at Wells Fargo&#146;s prime rate or is at LIBOR plus 1.5% if the debt is
a fixed amount drawn upon.&#160; The line of
credit is collateralized by substantially all of the assets of the Company, and
expires October 1, 2008. In addition to reporting and other non-financial
covenants, the line of credit contains certain financial covenants which
require the Company to maintain a tangible net worth of not less than
$30,000,000 plus 50% of net profit after tax from January 1, 2007, a pre-tax
profit of not less than $1 on a rolling four quarter</p>


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<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">basis, a quick ratio of not less than one-to-one, a
debt-to-net worth ratio of not greater than two-to-one, and an annual net
income after taxes of at least $1. Management believes the Company was in
compliance with these covenants at March 31, 2007.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We have no other notes payable.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman"><font style="font-size:10.0pt;">At March
31, 2007 and December 31, 2006 the amounts drawn against the line of credit
were $22,369,071 and $25,648,614, respectively.</font> Our credit lines have
been important parts of growing our business, and market changes affecting
accounts receivable could diminish the borrowing base of available funds. At
March 31, 2007 and December 31, 2006, advances were 75% and 84% of the
available borrowing base.</font></p>

<p style="font-style:italic;font-weight:bold;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:normal;">Critical
Accounting Policies</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We believe the following critical accounting policies
are important to the presentation of our financial condition and operating
results, and require management&#146;s judgments to make assumptions and estimates
about the effects of matters that are inherently uncertain.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Revenue
Recognition and Allowance for Returns</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Revenues for
wireless handset and accessory sales are recognized upon (i)&nbsp;shipment of
the products to customers, (ii)&nbsp;when collection of the outstanding
receivables are probable and (iii)&nbsp;the final price of the product is
determined. Sales are recorded net of discounts, rebates, cooperative
arrangements (marketing, training and promotional funds), returns, and
allowances.&#160; Consideration is given on
select sales for cooperative arrangements related to market development,
training and special promotions usually agreed upon in advance. The amount
given is generally in the form of a credit memo, which is applied as a
reduction of the sale. The same amount is recorded as a current liability. Expenditures
made pursuant to the agreed upon activity reduce this liability. To the extent
that the Company incurs costs in excess of the established cooperative fund,
the Company recognizes the amount as a selling or marketing expense. As part of
the sales process, the Company may perform certain valued added services such
as programming, software loading and quality assurance testing. These value
added services are considered an ancillary component of the sales process and
amounts attributable to these processes are included to in the unit cost to the
customer. Furthermore, these value added services are related to services prior
to the shipment of the products, and no value added services are provided after
delivery of the products.&#160; The Company
recognizes as a reserve against the related receivables estimates for product
returns based on historical experience and other judgmental factors, evaluates
these estimates on an on-going basis and adjusts its estimates each period
based on actual product return activity. The Company recognizes freight costs
billed to its customers in revenue and actual freight costs incurred as a
component of cost of revenue.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Allowance for
Doubtful Accounts</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Credit evaluations are undertaken for all major sales
transactions before shipment is authorized. Normal payment terms require
payment on a net 30 or 60 day basis depending on the customer. On an ongoing
basis, we analyze the payment history of customer accounts, including recent
customer purchases. We evaluate aged items in accounts receivable and provide
reserves for doubtful accounts. Customer creditworthiness and economic
conditions may change, including increasing the risk of collectibility and
sales returns, and may require additional provisions, which could negatively
impact our operating results.</font></p>

<p style="font-style:italic;margin:0pt 0pt 12.0pt 10.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:-10.0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;">Inventory
Write-Off and Effect on Gross Margin</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We regularly monitor inventory quantities on hand and
record a provision for excess and obsolete inventories based primarily on
historical usage rates and our estimated forecast of product demand for a
period of time, generally three months. Because of obsolescence, we will
generally provide a full reserve for the costs of our inventories in excess of
our relevant demand forecast for the applicable period. We attempt to control
our inventory levels so that we limit inventories in excess of demand for the
succeeding three months. However, because we need to place non-cancelable
orders with significant lead time and because it is difficult to estimate
product demand, we sometimes build inventories in excess of demand for the
applicable future periods. If this occurs, we provide a reserve, which may have
a negative impact on our reported results of operations and financial
condition.</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 3. Quantitative and Qualitative
Disclosures About Market Risk</font></b><a name="Item3_QuantitativeAndQualitativeD_105554"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The primary objective of the following information is
to provide forward-looking quantitative and qualitative information about our
potential exposure to market risks. The term &#147;market risk&#148; for us refers to the
risk of loss arising from adverse changes in interest rates and various foreign
currencies. The disclosures are not meant to be precise indicators of expected
future losses, but rather indicators of reasonably possible losses. This
forward-looking information provides indicators of how we view and manage our
ongoing market risk exposures.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:20.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Interest Rate</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are exposed to market risk from changes in interest
rates on our outstanding revolving line of credit. At March 31, 2007, we had
$22.4 million outstanding, which could be affected by changes in short-term
interest rates. The interest rate for our revolving line of credit is (i) Wells
Fargo&#146;s prime rate minus 0.25 (8.25% at March 31, 2007) or LIBOR plus 1.50%
(5.32% at March 31, 2007). For every 1% increase in Wells Fargo&#146;s prime rate or
one-month LIBOR, our interest expense increases by $224,000 assuming $22.4
million remained outstanding for the entire year.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The above sensitivity analysis for interest rate risk
excludes accounts receivable, accounts payable and accrued liabilities because
of the short-term maturity of such instruments. The analysis does not consider
the effect interest rate movement may have on other variables relating to our
business, including changes in sales volumes that could be indirectly
attributed to changes in interest rates. The actions that we would take in
response to such a change are also not considered. If it were possible to
quantify this impact, the results could differ from the sensitivity effects
shown above.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:20.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Market Risk</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Substantial portions of our revenue and expenses are
transacted in markets outside the United States; however, all sales
transactions and accounts receivable are denominated in U.S. dollars. As a
result of our international sales, our future operating results could be
adversely affected by a variety of factors, including changes in specific
countries&#146; political, economic or regulatory conditions, and trade protection
measures.&#160; Our market risk management
includes an accounts receivable insurance policy for both our domestic and
foreign sales. &#160;However, there can be no
assurance that our insurance policy will substantially offset the impact of
fluctuations in currency exchange rates, political, economic or regulatory
conditions on its results of operations and financial position. Foreign currency
fluctuations did not have a material impact on our financial results during the
three months ended March 31, 2007.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 4. Controls and Procedures</font></b><a name="Item4_ControlsAndProcedures_105604"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:20.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Disclosure
Controls</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:20.15pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to Rule
13a-15(e) and 15d-15(e) under the Exchange Act, an evaluation was performed
under the supervision and with the participation of the Company&#146;s management,
including the Chief Executive Officer and President and the Chief Financial
Officer, of the effectiveness of the design and operation of the Company&#146;s
disclosure controls and procedures as of the end of the period covered by this
report.&#160; Based on the evaluation, the
Chief Executive Officer and President and the Chief Financial Officer,
concluded that the Company&#146;s disclosure controls and procedures were effective
as of the end of the period covered by the report.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:20.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Changes
in Internal Control Over Financial Reporting</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Chief Executive Officer and President and the
Chief Financial Officer conducted an evaluation of our internal control over
financial reporting (as defined in Exchange Act Rule&nbsp;13a-15(f)) (&#147;Internal
Control&#148;) to determine whether any changes in Internal Control occurred during
the quarter ended March 31, 2007, that have materially affected or which are
reasonably likely to materially affect Internal Control. Based on that
evaluation, no such change occurred during such period.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company is not an &#147;accelerated filer&#148; (i.e. the
Company&#146;s public float is less than $75 million) for the fiscal year 2006;
hence, the internal controls certification and attestation requirements of
Section 404 of the Sarbanes-Oxley act will not be applicable to the Company
until the fiscal year ended December 31, 2007.&#160;
Notwithstanding the fact that these internal control requirements are
not applicable to the Company at this time, the Company has been reviewing its
internal control procedures and it has retained an outside firm to assist in
this process.</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PART II. OTHER
INFORMATION</font></b><a name="PartIi_OtherInformation_105612"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 1. Legal Proceedings</font></b><a name="Item1_LegalProceedings_105616"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Securities Class Actions</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Six securities
actions, originally filed between June and July 2006, were recently
consolidated as <i>In Re: InfoSonics Corporation Securities
Litigation</i>, Lead Case No. 06 CV 1231, before Judge Moskowitz in the
Southern District of California.&#160;
Plaintiffs&#146; consolidated complaint was filed on February 14, 2007.&#160; Plaintiffs assert claims for violation of
section 10(b) of the Exchange Act and associated Rule 10b-5, 20(a) and 20A in
connection with the Company&#146;s restatement announced June 12, 2006 and allegedly
false and/or misleading statements and accounting related to the Company&#146;s
distribution agreement with VK Mobile.&#160;
Plaintiffs seek a declaration that their action is a proper class action
pursuant to Rule 23(a) and (b)(3), unspecified damages, prejudgment and
post-judgment interest, attorneys&#146; fees, expert witness fees, other costs, and
other unspecified relief.&#160; The plaintiffs
purport to represent a class of purchasers of the Company&#146;s stock during the
period February 6, 2006 to August 9, 2006.&#160;
On April 16, 2007, the defendants filed a motion to dismiss the consolidated
complaint on the grounds, among others, that the plaintiffs have failed to
adequately plead violations of the securities laws.&#160; Plaintiffs&#146; response to defendants&#146; motion to
dismiss is due May 16, 2007 and the motion is currently scheduled to be heard
on June 15, 2007.&#160; As of this time, the
Court has not set a date for trial or completion of discovery.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Derivative Lawsuits</font></i></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The three
derivative lawsuits originally filed on June 27, 2006, July 14, 2006, and July
28, 2006 in the United States District Court for the Southern District of
California, purportedly on behalf of the Company against certain of our
officers and directors, and the Company as a nominal defendant, have been
consolidated as <i>In Re InfoSonics Corporation Derivative
Litigation</i>, Lead Case No. 06 CV 1336, and transferred to Judge
Moskowitz in the Southern District of California.&#160; Plaintiffs&#146; consolidated complaint was
received on November 8, 2006.&#160; It asserts
claims for disgorgement under the Sarbanes-Oxley Act of 2002, violation of
Section 14(a) of the Exchange Act, violation of California Corporations Code
section 25403, violation of California Corporations Code section 254403, breach
of fiduciary duty, abuse of control, gross mismanagement, waste of corporate
assets, unjust enrichment, and an accounting, in connection with the Company&#146;s
restatement of first quarter 2006 earnings and in connection with allegations
of wrongdoing with respect to granting, exercising, accounting and reporting of
the stock options that the Company granted in December 2005.&#160; Plaintiffs seek unspecified damages,
declaratory relief regarding the Sarbanes-Oxley Act of 2002, Section 14(a) of
the Exchange Act, and the legality of stock options, a constructive trust,
restitution, disgorgement, modification of certain corporate governance and
internal procedures, extraordinary equitable and/or injunctive relief, costs,
and such other relief as is just and proper.&#160;
On January 12, 2007, defendants filed a motion to dismiss on the grounds,
among others, that the plaintiffs had failed to make a demand on the Company&#146;s
board of directors and to adequately allege their other purported claims.&#160; The two non-resident director defendants also
filed motions to dismiss based upon a lack of personal jurisdiction in
California.&#160; The motion to dismiss for
failure to make a demand and failure to state a claim was submitted on April
27, 2007.&#160; The hearing on the personal
jurisdiction motion has been continued until May 22, 2007 to allow plaintiffs to
conduct limited discovery on the personal jurisdiction issue.&#160; As of this time, the Court has not set a date
for trial or completion of discovery.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We may become involved in certain
other legal proceedings and claims which arise in the normal course of
business. Other than as described above, as of March 31, 2007, we did not have
any significant litigation outstanding.</font></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 1A.&#160; Risk Factors</font></b><a name="Item1a_RiskFactors_105621"></a></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
addition to the other information set forth in this report, you should
carefully consider the factors discussed in &#147;Part I. Item 1A. Risk Factors&#148; in
our Annual Report on Form 10-K for the year ended December 31, 2006, which
could materially affect our business, financial condition or operating results.
The risk factors and uncertainties described in our Annual Report on Form 10-K
are not the only risks and uncertainties facing us. Additional risks and
uncertainties not currently known to us or that we currently deem to be
immaterial also may materially affect our business, financial condition or
operating results.&#160; Except as set forth
below, there have been no material changes to the risk factors included in our
Annual Report on Form 10-K during the period covered by this report.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We buy a significant amount of our products from a limited
number of suppliers, who may not provide us with competitive products at
reasonable prices when we need them in the future.</font></i></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We purchase wireless handsets and accessories
principally from wireless communications equipment manufacturers</font></p>


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<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">and
distributors. We depend on these suppliers to provide us with adequate
inventories of currently popular brand name products on a timely basis and on
favorable pricing and other terms, as well as depending on our suppliers&#146;
abilities and financial stability. </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">For
the quarter ended March 31, 2007, two suppliers accounted for 45% and 25%, respectively,
of our total cost of sales</font><font size="2" face="Times New Roman" style="font-size:10.0pt;">.&#160; We currently have one exclusive and several
non-exclusive agreements with our principal suppliers, which can be terminated
on short notice and provide for certain territorial restrictions. Our suppliers
may not offer us competitive products on favorable terms or with timely
delivery. In addition new products from other manufacturers could impact the
demand for products from manufacturers we represent. From time to time, we have
been unable to obtain sufficient product supplies. Any failure or delay by our
suppliers, particularly our three primary vendors, in supplying us with
products on favorable terms may severely diminish our ability to obtain and
deliver products to our customers on a timely and competitive basis. If we lose
any of our principal suppliers, or if these suppliers are unable to fulfill our
product needs, or if any principal supplier imposes substantial price increases
and alternative sources of supply are not readily available, it would have a
material adverse effect on our results of operations.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">The loss or reduction in orders from principal customers or
a reduction in prices we are able to charge these customers will have a
negative impact upon our revenues and could cause our stock price to decline.</font></i></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our four largest customers in the quarter ended
March 31, 2007 represented 21%, 13%,&#160; 11%
and 11% of our net sales.&#160; These
customers are carriers in South America and the United States. The markets we
serve are subject to significant price competition. Additionally, our customers
are not contractually obligated to purchase products from us. For these and
other reasons, such as competitive pricing and competitive pressures, customers
may seek to obtain products or services from us at lower prices than we have
been able to obtain from these customers in the past. This could occur, for
example, in the case of a customer purchasing large quantities of a product
from us, who then terminates this relationship because the customer can obtain
a lower price by buying directly from the manufacturer or other supplier. The
loss of any of our principal customers, a reduction in the amount of product or
services our principal customers order from us or the inability to maintain
current terms, including price, with these or other customers could have an
adverse effect on our financial condition, results of operations and liquidity.
In addition, we have experienced losses of certain customers through industry
consolidation and in the ordinary course of business. There can be no assurance
that any of our customers will continue to purchase products or services from
us or that their purchases will be at the same or greater levels than in prior
periods.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric;"><b><i><font size="2" face="Times New Roman"><font style="font-size:10.0pt;font-style:italic;font-weight:bold;">Approximately 79% of our revenues during the
quarter ended March 31, 2007 </font>were generated outside of the United States in
countries that may have volatile currencies or other risks.</font></i></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We engage in significant sales activities in
territories and countries outside of the United States, particularly Latin
American countries, including Argentina.&#160;
All our sales transactions are completed in U.S. dollars. The fact that
we distribute products into a number of territories and countries exposes us
to, among other things, increased credit risks, customs duties, import quotas
and other trade restrictions, potentially greater and more unpredictable
inflationary pressures, and shipping delays. Changes may occur in social,
political, regulatory and economic conditions or in laws and policies governing
foreign trade and investment in the territories and countries where we
currently distribute products. United States laws and regulations relating to
investment and trade in foreign countries could also change to our detriment.
Any of these factors could have material adverse effects on our business and operations.
Although we purchase and sell products and services in U.S. dollars and do not
engage in exchange swaps, futures or options contracts or other hedging
techniques, fluctuations in currency exchange rates could reduce demand for
products sold in U.S. dollars. We cannot predict the effect that future
exchange rate fluctuations will have on our operating results. We may in the
future engage in currency hedging transactions, which could result in our
incurring significant additional financial risks, including losses.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We have outstanding indebtedness, which is secured by
substantially all our assets and could prevent us from borrowing additional
funds, if needed.</font></i></b></p>

<p align="left" style="margin:0pt 0pt 12.0pt;text-align:left;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
had outstanding debt in the amount of $22.4 million at March 31, 2007 and $25.6
million at December 31, 2006 in the form of a bank line of credit of up to $30
million based on a borrowing base, which is based on a percentage of eligible
accounts receivable.</font><font size="2" face="Times New Roman" style="font-size:10.0pt;">
Any significant decrease in our level of eligible accounts receivable will
reduce our ability to borrow additional funds to adequately finance our
operations and expansion strategies.</font><font size="2" face="Times New Roman" style="font-size:10.0pt;"> If</font><font size="2" face="Times New Roman" style="font-size:10.0pt;"> we violate our loan covenants, default
on our obligations or become subject to a change of control, our indebtedness
would become immediately due and payable. The terms of our credit facility
restrict us from incurring additional indebtedness, which could limit our
ability to expand our operations. We are also subject to negative covenants
that, among other things, limit our ability to sell certain assets and make
certain payments, including but not limited to, dividends, repurchases of
common stock and other payments outside the normal course of business, as well
as prohibiting us from merging or consolidating with another corporation or
selling all or substantially all of our assets.</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">24</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">We depend on
third parties to manufacture our proprietary verykool&#153; products that we
distribute and, accordingly, rely on their quality control procedures and we
assume the inventory risk associated with those products.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Product manufacturers
typically provide no warranties on these proprietary products directly to the
end consumer or to us, therefore we are solely responsible for such warranty to
the end consumer. If a product we distribute for a manufacturer has quality or
performance problems, our ability to provide products to our customers could be
disrupted.&#160; In addition as the <i>verykool&#153;</i> products are manufactured exclusively for us, we
are burdened with carrying the inventory and there can be no assurance that we
will be able to sell these devices before payment is due and at prices above
our cost. Either of these risks could have a negative effect on our operations
and future liquidity.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Stockholders have been and may be diluted as a result of
past or future offerings or other financings or equity grants.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We may in the future raise additional capital through
one or more public offerings, private placements or other financings involving
our securities or make stock option or other equity grants. As a result of
these financings or grants, ownership interests in us may be diluted,
potentially substantially.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">Class
action and derivative lawsuits have been filed against us, our board of
directors and certain of our officers, and other lawsuits may be instituted
against us from time to time.</font></i></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We are currently, and from time to time in the
future may become, subject to claims and litigation, which could be expensive,
lengthy, and disruptive to our normal business operations.&#160; In addition, the outcome of any claims or
litigation may be difficult to predict and could have a material adverse effect
on our business, operating results or financial condition.&#160; For further information regarding certain
claims and litigation in which we are currently involved, see &#147;Part II &#150; Item
1.&#160; Legal Proceedings&#148; above.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;2.&#160;&#160;&#160; Unregistered Sales Of Equity Securities And
Use Of Proceeds</font></b><a name="Item2_UnregisteredSalesOfEquitySe_105654"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">None.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;3.&#160;&#160;&#160; Defaults on Senior Securities</font></b><a name="Item3_DefaultsOnSeniorSecurities_105657"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">None.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;4.&#160;&#160;&#160; Submission of Matters to a Vote of Security
Holders</font></b><a name="Item4_SubmissionOfMattersToAVoteO_105700"></a></p>

<h2 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">None</font></h2>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;5.&#160;&#160;&#160; Other Information</font></b><a name="Item5_OtherInformation_112353"></a></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">None.</font></p>

<p style="font-family:Times New Roman;font-size:10.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 6.</font></b><b>&#160;&#160;&#160; </b><b>Exhibits</b><a name="Item6_Exhibits_105703"></a></p>

<table border="1" cellspacing="0" cellpadding="0" width="100%" style="border:none;border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p align="left" style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading -->Exhibit Number</p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="90%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman"><font style="font-size:8.0pt;"><br>
  </font>Description of Exhibit</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amendment to the Bylaws of the Company (*)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Distribution Agreement by and between InfoSonics
  Corporation and Samsung Electronics Argentina S.A. effective as of January 1,
  2007 (1)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.2</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Credit Agreement Amendment by and between InfoSonics
  Corporation and Wells Fargo HSBC Trade Bank, N.A. entered into February 16,
  2007 (2)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.3</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amendment to Employment Agreement as of March 5,
  2007, with Joseph Ram (3)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.4</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amendment to Employment Agreement as of March 5, 2007,
  with Abraham Rosler (3)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10.5</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amendment to Employment Agreement as of March 5, 2007,
  with Jeffrey Klausner (3)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">31.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certification of Chief Executive Officer pursuant to
  Rule 13a-14(a) of the Securities Exchange Act of 1934, implementing
  Section&nbsp;302 of Sarbanes-Oxley Act of 2002 (*)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">31.2</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certification of Chief Financial Officer pursuant to
  Rule 13a-14(a) of the Securities Exchange Act of 1934, implementing
  Section&nbsp;302 of Sarbanes-Oxley Act of 2002 (*)</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">32.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certification of Chief Executive Officer pursuant to
  18 U.S.C. Section 1350, as adopted pursuant to Section&nbsp;906 of
  Sarbanes-Oxley Act of 2002 (*)</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">25</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<br clear="all" style="page-break-before:always;">


<p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>

<table border="1" cellspacing="0" cellpadding="0" width="100%" style="border:none;border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p align="left" style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading -->Exhibit Number</p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="90%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="1" face="Times New Roman"><font style="font-size:8.0pt;"><br>
  </font>Description of Exhibit</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="7%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:7.32%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">32.2</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="90%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:90.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certification of Chief Financial Officer pursuant to
  18 U.S.C. Section 1350, as adopted pursuant to Section&nbsp;906 of
  Sarbanes-Oxley Act of 2002 (*)</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<div style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;"><hr size="1" width="160" noshade color="black" align="left" style="width:120.0pt;"></div>

<p style="margin:0pt 0pt .0001pt 15.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(*)&#160; Filed herewith.</font></p>

<p style="margin:0pt 0pt .0001pt 15.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)&#160; Incorporated by reference from the Company&#146;s
Current Report on Form 8-K filed on January 4, 2007.</font></p>

<p style="margin:0pt 0pt .0001pt 15.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)&#160; Incorporated by reference from the Company&#146;s
Current Report on Form 8-K filed on February 16, 2007.</font></p>

<p style="margin:0pt 0pt 12.0pt 15.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)&#160; Incorporated by reference
from the Company&#146;s Current Report on Form 8-K filed on March 8, 2007.</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">26</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<br clear="all" style="page-break-before:always;">


<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SIGNATURE</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the requirements
of the Securities Exchange Act of 1934, as amended, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading --></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="52%" colspan="4" valign="top" style="padding:0pt .7pt 0pt 0pt;width:52.46%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">InfoSonics
  Corporation</font></b></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.66%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:34.64%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="13%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:13.66%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:34.64%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date:</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May 15,
  2007</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="13%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:13.66%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/&nbsp;&nbsp;Joseph
  Ram</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:34.64%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" colspan="3" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joseph
  Ram</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" colspan="3" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief
  Executive Officer</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.54%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="16%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.54%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date:</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May 15,
  2007</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="16%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:16.76%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/&nbsp;&nbsp;Jeffrey
  Klausner</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.54%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" colspan="3" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jeffrey
  Klausner</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="6%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:6.42%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="37%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:37.98%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.96%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="1%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:1.18%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="4%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:4.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="48%" colspan="3" valign="top" style="padding:0pt .7pt 0pt 0pt;width:48.3%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief
  Financial Officer</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="48" style="border:none;"></td>
  <td width="284" style="border:none;"></td>
  <td width="15" style="border:none;"></td>
  <td width="9" style="border:none;"></td>
  <td width="31" style="border:none;"></td>
  <td width="102" style="border:none;"></td>
  <td width="23" style="border:none;"></td>
  <td width="236" style="border:none;"></td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">27</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>a07-10893_1ex3d1.htm
<DESCRIPTION>EX-3.1
<TEXT>
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<head>







</head>

<body lang="EN-US">

<div>

<p align="right" style="margin:0pt 0pt 12.0pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXHIBIT 3.1</font></b></p>

<p align="center" style="line-height:normal;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Amendment to Bylaws of InfoSonics Corporation</font></b></p>

<p align="center" style="line-height:normal;margin:0pt 0pt 12.0pt;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(approved by the Board of
Directors March 5, 2007)</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Section 1 of Article V of the
bylaws of InfoSonics Corporation is hereby amended to add the following section
in its entirety:</font></p>

<p style="line-height:normal;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Notwithstanding any other provision
in these Bylaws, the corporation may adopt a system of issuance, recordation
and transfer of its shares by electronic or other means not involving any
issuance of certificates, including provisions for notice to purchasers in
substitution for any required statements on certificates, and as may be
required by applicable corporate securities laws, which system has been
approved by the United States Securities and Exchange Commission. Any system so
adopted shall not become effective as to issued and outstanding certificated
securities until the certificates therefor have been surrendered to the
corporation.</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>a07-10893_1ex31d1.htm
<DESCRIPTION>EX-31.1
<TEXT>
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<head>







</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">

<p align="right" style="margin:0pt 0pt 12.0pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXHIBIT 31.1</font></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-autospace:none;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">CERTIFICATIONS</font></u></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I,
Joseph Ram, Chief Executive Officer of InfoSonics Corporation, certify that:</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>I have reviewed this
Quarterly Report on Form 10-Q of InfoSonics Corporation;</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>The
registrant&#146;s other certifying officer(s) and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the registrant and have:</p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;</font></p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)
Evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and</font></p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)
Disclosed in this report any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s most recent fiscal
quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant&#146;s internal control over financial reporting; and</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>The
registrant&#146;s other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant&#146;s auditors and the audit committee of the registrant&#146;s board of
directors (or persons performing the equivalent functions):</p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to
adversely affect the registrant&#146;s ability to record, process, summarize and
report financial information; and</font></p>

<p style="margin:0pt 0pt 24.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant&#146;s internal control over financial
reporting.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="66%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:66.68%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading -->Date: May 15, 2007</p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="30%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:30.94%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/&nbsp;Joseph
  Ram</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="66%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:66.68%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:30.94%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joseph
  Ram, Chief Executive Officer</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>a07-10893_1ex31d2.htm
<DESCRIPTION>EX-31.2
<TEXT>
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<head>







</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">

<p align="right" style="margin:0pt 0pt 12.0pt;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXHIBIT 31.2</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">I, Jeffrey Klausner, Chief Financial Officer of InfoSonics
Corporation, certify that:</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>I have reviewed this
Quarterly Report on Form 10-Q of InfoSonics Corporation.;</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;</p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>The
registrant&#146;s other certifying officer(s) and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) for the registrant and have:</p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;</font></p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)
Evaluated the effectiveness of the registrant&#146;s disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and</font></p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)
Disclosed in this report any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s most recent fiscal
quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant&#146;s internal control over financial reporting; and</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 12.0pt 36.0pt;text-autospace:none;text-indent:-18.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160; </font>The
registrant&#146;s other certifying officer(s) and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant&#146;s auditors and the audit committee of the registrant&#146;s board of
directors (or persons performing the equivalent functions):</p>

<p style="margin:0pt 0pt 12.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to
adversely affect the registrant&#146;s ability to record, process, summarize and
report financial information; and</font></p>

<p style="margin:0pt 0pt 24.0pt 72.0pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant&#146;s internal control over financial
reporting.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="63%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:63.7%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading -->Date: May 15, 2007</p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="33%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:33.92%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/&nbsp;Jeffrey
  Klausner</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="63%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:63.7%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="33%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:33.92%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jeffrey
  Klausner, Chief Financial Officer</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>a07-10893_1ex32d1.htm
<DESCRIPTION>EX-32.1
<TEXT>
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<head>







</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">

<p align="right" style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;text-indent:0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXHIBIT 32.1</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION&nbsp;1350,<br>
AS ADOPTED PURSUANT TO SECTION&nbsp;906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In connection with
the filing of the Quarterly Report on Form&nbsp;10-Q (the &#147;Report&#148;) of
InfoSonics Corporation (the &#147;Company&#148;) for the period ended March 31, 2007,
Joseph Ram, the Chief Executive Officer of the Company, hereby certifies
pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to
Section&nbsp;906 of the Sarbanes-Oxley Act of 2002, that:</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)&nbsp;the
Report fully complies with the requirements of Section&nbsp;13(a)&nbsp;or
15(d)&nbsp;of the Securities Exchange Act of 1934&#160; (15 U.S.C. 78m or 78o(d)); and</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)&nbsp;the
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="66%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:66.16%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading -->Dated: May 15, 2007</p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:31.46%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/&nbsp;<font style="text-transform:uppercase;">Joseph
  Ram</font></font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="66%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:66.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:31.46%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Joseph Ram,</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="66%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:66.16%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.46%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Chief Executive Officer and President</font></i></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>6
<FILENAME>a07-10893_1ex32d2.htm
<DESCRIPTION>EX-32.2
<TEXT>
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<head>







</head>

<body lang="EN-US">

<div style="font-family:Times New Roman;">

<p align="right" style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:right;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXHIBIT 32.2</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;text-autospace:ideograph-numeric ideograph-other;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION&nbsp;1350,<br>
AS ADOPTED PURSUANT TO SECTION&nbsp;906 OF THE SARBANES-OXLEY ACT OF 2002</font></b></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In connection with
the filing of the Quarterly Report on Form&nbsp;10-Q (the &#147;Report&#148;) of
InfoSonics Corporation (the &#147;Company&#148;) for the period ended March 31, 2007,
Jeffrey Klausner, Chief Financial Officer of the Company, hereby certifies
pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to
Section&nbsp;906 of the Sarbanes-Oxley Act of 2002, that:</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)&nbsp;the
Report fully complies with the requirements of Section&nbsp;13(a)&nbsp;or
15(d)&nbsp;of the Securities Exchange Act of 1934&#160; (15 U.S.C. 78m or 78o(d)); and</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-autospace:ideograph-numeric ideograph-other;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)&nbsp;the
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr style="page-break-inside:avoid;">
  <td width="63%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:63.0%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><!-- SET mrlNoTableShading -->Dated: May 15, 2007</p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="34%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:34.74%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/&nbsp;<font style="text-transform:uppercase;">Jeffrey
  Klausner</font></font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="63%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:63.0%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="34%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:34.74%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jeffrey Klausner,</font></p>
  </td>
 </tr>
 <tr style="page-break-inside:avoid;">
  <td width="63%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:63.0%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.26%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
  </td>
  <td width="34%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:34.74%;">
  <p style="margin:0pt 0pt .0001pt;text-autospace:ideograph-numeric ideograph-other;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Chief Financial Officer</font></i></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;text-autospace:ideograph-numeric ideograph-other;"><font size="1" face="Times New Roman">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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