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|   |                                                        |   |
|--------|-------------------------------------------------------------|--------|
|   | INNOTRAC      CORPORATION                                   |   |
|   | (Exact      name of registrant as specified in its charter) |   |

| Georgia                                                                 |   | 58-1592285                                       |
|-------------------------------------------------------------------------|--------|--------------------------------------------------|
| (State      or other jurisdiction ofincorporation      or organization) |   | (I.R.S.      EmployerIdentification      Number) |

| 6655      Sugarloaf Parkway Duluth, Georgia   |   | 30097           |
|-----------------------------------------------|--------|-----------------|
| (Address      of principal executive offices) |   | (Zip      Code) |

| Registrant’s      telephone number, including area code: | (678)      584-4000 |
|----------------------------------------------------------------|---------------------|

|                                                                                                                                            |                             |                     |
|-------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|--------------------------|
| Large      accelerated filer o                                                                                                                  |                             | Accelerated      filer o |
| Non-accelerated      filer o          (Do      not check if a smaller reporting company) | Smaller      reporting company x |

|                                       | Outstanding      at May 8, 2009 |
|--------------------------------------------|---------------------------------|
|                                       |                            |
| Common      Stock $.10 par value per share | 12,334,804      Shares          |

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|                               |   |                                                                                                       |   |   |   |
|------------------------------------|--------|------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                               |   |                                                                                                       |   | Page   |
|                               |   |                                                                                                       |   |   |   |
| Part      I. Financial Information |   |                                                                                                       |   |
|                               |   |                                                                                                       |   |   |   |
| Item      1.                       |   | Financial      Statements:                                                                                 |   | 2      |   |
|                               |   |                                                                                                       |   |   |   |
|                               |   | Condensed      Balance Sheets atMarch      31, 2009 (Unaudited) and December 31, 2008                      |   | 3      |   |
|                               |   |                                                                                                       |   |   |   |
|                               |   | Condensed      Statements of Operations for theThree      Months Ended March 31, 2009 and 2008 (Unaudited) |   | 4      |   |
|                               |   |                                                                                                       |   |   |   |
|                               |   | Condensed      Statements of Cash Flows for theThree      Months Ended March 31, 2009 and 2008 (Unaudited) |   | 5      |   |
|                               |   |                                                                                                       |   |   |   |
|                               |   | Notes      to Condensed Financial Statements (Unaudited)                                                   |   | 6      |   |
|                               |   |                                                                                                       |   |   |   |
| Item      2.                       |   | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations      |   | 13     |   |
|                               |   |                                                                                                       |   |   |   |
| Item      3.                       |   | Quantitative      and Qualitative Disclosures About Market Risks                                           |   | 21     |   |
|                               |   |                                                                                                       |   |   |   |
| Item      4.                       |   | Controls      and Procedures                                                                               |   | 21     |   |
|                               |   |                                                                                                       |   |   |   |
| Part      II. Other Information    |   |                                                                                                       |   |
|                               |   |                                                                                                       |   |   |   |
| Item      6.                       |   | Exhibits                                                                                                   |   | 22     |   |
|                               |   |                                                                                                       |   |   |   |
| Signatures                         |   |                                                                                                       |   | 23     |   |

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|                                                                                                                           |   |                |    |   |                   |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|---------|--------|------------------------|--------|
|                                                                                                                           |   | March      31, 2009 |    |   | December      31, 2008 |   |
|                                                                                                                           |   | (unaudited)         |    |   |                   |   |
|                                                                                                                           |   |                |    |   |                   |   |
| ASSETS                                                                                                                         |   |                |    |   |                   |   |
| Current      assets:                                                                                                           |   |                |    |   |                   |   |
| Cash      and cash equivalents                                                                                                 |   | $                   | 1,101   |   |                   | $      | 1,056 |   |
| Accounts      receivable (net of allowance for doubtful accounts of $224 at March 31,      2009 and $271 at December 31, 2008) |   |                | 21,271  |   |                   |   | 25,793 |   |
| Inventories,      net                                                                                                |   |                | 1,215   |   |                   |   | 1,855 |   |
| Prepaid      expenses and other                                                                                                |   |                | 1,448   |   |                   |   | 1,262 |   |
| Total      current assets                                                                                                      |   |                | 25,035  |   |                   |   | 29,966 |   |
|                                                                                                                           |   |                |    |   |                   |   |   |   |
| Property      and equipment:                                                                                                   |   |                |    |   |                   |   |   |   |
| Rental      equipment                                                                                                          |   |                | 194     |   |                   |   | 207 |   |
| Computer      software and equipment                                                                                           |   |                | 41,648  |   |                   |   | 41,388 |   |
| Furniture,      fixtures and leasehold improvements                                                                            |   |                | 9,068   |   |                   |   | 9,061 |   |
|                                                                                                                           |   |                | 50,910  |   |                   |   | 50,656 |   |
| Less      accumulated depreciation and amortization                                                                            |   |                | (36,009 | )      |                   |   | (34,814 | ) |
|                                                                                                                           |   |                | 14,901  |   |                   |   | 15,842 |   |
|                                                                                                                           |   |                |    |   |                   |   |   |   |
| Goodwill                                                                                                                       |   |                | 25,169  |   |                   |   | 25,169 |   |
| Other      assets, net                                                                                                         |   |                | 863     |   |                   |   | 822 |   |
|                                                                                                                           |   |                |    |   |                   |   |   |   |
| Total      assets                                                                                                              |   | $                   | 65,968  |   |                   | $      | 71,799 |   |
|                                                                                                                           |   |                |    |   |                   |   |   |   |
| LIABILITIES AND SHAREHOLDERS’      EQUITY                                                                                |   |                |    |   |                   |   |   |   |
|                                                                                                                           |   |                |    |   |                   |   |   |   |
| Current      liabilities:                                                                                                      |   |                |    |   |                   |   |   |   |
| Accounts      payable                                                                                                          |   | $                   | 5,590   |   |                   | $      | 9,259 |   |
| Line      of credit                                                                                                            |   |                | 5,143   |   |                   |   | 10,055 |   |
| Accrued      salaries                                                                                                          |   |                | 2,910   |   |                   |   | 2,111 |   |
| Accrued      expenses and other                                                                                                |   |                | 3,182   |   |                   |   | 3,142 |   |
| Total      current liabilities                                                                                                 |   |                | 16,825  |   |                   |   | 24,567 |   |
|                                                                                                                           |   |                |    |   |                   |   |   |   |
| Noncurrent      liabilities:                                                                                                   |   |                |    |   |                   |   |   |   |
| Deferred      compensation                                                                                                     |   |                | 491     |   |                   |   | 547 |   |
| Other      noncurrent liabilities                                                                                              |   |                | 211     |   |                   |   | 206 |   |
| Total      noncurrent liabilities                                                                                              |   |                | 702     |   |                   |   | 753 |   |
|                                                                                                                           |   |                |    |   |                   |   |   |   |
| Commitments      and contingencies (see Note 5)                                                                                |   |                |    |   |                   |   |   |   |
|                                                                                                                           |   |                |    |   |                   |   |   |   |
| Shareholders’      equity:                                                                                               |   |                |    |   |                   |   |   |   |
| Preferred      stock: 10,000,000 shares authorized, $0.10 par value, no shares issued or      outstanding                      |   |                | — |   |                   |   | — |   |
| Common      stock: 50,000,000 shares authorized, $0.10 par value, 12,600,759 issued      and 12,334,804 shares outstanding     |   |                | 1,260   |   |                   |   | 1,260 |   |
| Additional      paid-in capital                                                                                                |   |                | 66,469  |   |                   |   | 66,439 |   |
| Accumulated      deficit                                                                                                       |   |                | (19,288 | )      |                   |   | (21,220 | ) |
| Total      shareholders’ equity                                                                                          |   |                | 48,441  |   |                   |   | 46,479 |   |
|                                                                                                                           |   |                |    |   |                   |   |   |   |
| Total      liabilities and shareholders’ equity                                                                          |   | $                   | 65,968  |   |                   | $      | 71,799 |   |

----

|                                              |   |                              |    |   |        |   |
|---------------------------------------------------|--------|-----------------------------------|---------|--------|-------------|--------|
|                                              |   | Three      Months Ended March 31, |    |
|                                              |   | 2009                              |    |   | 2008        |   |
|                                              |   | (unaudited)                       |    |   | (unaudited) |   |
|                                              |   |                              |    |   |        |   |   |   |
| Service      revenues                             |   | $                                 | 24,656  |   |        | $      | 25,471 |   |
| Freight      revenues                             |   |                              | 4,119   |   |        |   | 7,242 |   |
| Total      revenues                               |   |                              | 28,775  |   |        |   | 32,713 |   |
|                                              |   |                              |    |   |        |   |   |   |
| Cost      of service revenues                     |   |                              | 10,660  |   |        |   | 12,099 |   |
| Freight      expense                              |   |                              | 4,058   |   |        |   | 7,249 |   |
| Selling,      general and administrative expenses |   |                              | 10,810  |   |        |   | 11,079 |   |
| Depreciation      and amortization                |   |                              | 1,208   |   |        |   | 1,051 |   |
| Total      operating expenses                     |   |                              | 26,736  |   |        |   | 31,478 |   |
| Operating      income                             |   |                              | 2,039   |   |        |   | 1,235 |   |
|                                              |   |                              |    |   |        |   |   |   |
| Other      expense:                               |   |                              |    |   |        |   |   |   |
| Interest      expense                             |   |                              | 106     |   |        |   | 373 |   |
| Total      other expense                          |   |                              | 106     |   |        |   | 373 |   |
| Income      before income taxes                   |   |                              | 1,933   |   |        |   | 862 |   |
| Income      taxes                                 |   |                              | — |   |        |   | — |   |
|                                              |   |                              |    |   |        |   |   |   |
| Net      income                                   |   | $                                 | 1,933   |   |        | $      | 862 |   |
|                                              |   |                              |    |   |        |   |   |   |
| Income      per share:                            |   |                              |    |   |        |   |   |   |
|                                              |   |                              |    |   |        |   |   |   |
| Basic                                             |   | $                                 | 0.15    |   |        | $      | 0.07 |   |
|                                              |   |                              |    |   |        |   |   |   |
| Diluted                                           |   | $                                 | 0.15    |   |        | $      | 0.07 |   |
|                                              |   |                              |    |   |        |   |   |   |
| Weighted      average shares outstanding:         |   |                              |    |   |        |   |   |   |
|                                              |   |                              |    |   |        |   |   |   |
| Basic                                             |   |                              | 12,601  |   |        |   | 12,586 |   |
|                                              |   |                              |    |   |        |   |   |   |
| Diluted                                           |   |                              | 12,601  |   |        |   | 12,605 |   |

----

|                                                                                        |   |                              |   |   |        |   |
|---------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|-------------|--------|
|                                                                                        |   | Three      Months Ended March 31, |   |
|                                                                                        |   | 2009                              |   |   | 2008        |   |
|                                                                                        |   | (unaudited)                       |   |   | (unaudited) |   |
| Cash      flows from operating activities:                                                  |   |                              |   |   |        |   |
| Net      income                                                                             |   | $                                 | 1,933  |   |        | $      | 862 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |                              |   |   |        |   |   |   |
| Depreciation      and amortization                                                          |   |                              | 1,208  |   |        |   | 1,051 |   |
| Provision      for bad debts                                                                |   |                              | (41    | )      |        |   | 22 |   |
| Stock      compensation expense-stock options                                               |   |                              | 11     |   |        |   | 21 |   |
| Stock      compensation expense-restricted stock                                            |   |                              | 19     |   |        |   | 19 |   |
| Changes      in operating assets and liabilities:                                           |   |                              |   |   |        |   |   |   |
| Decrease      in accounts receivable, gross                                                 |   |                              | 4,563  |   |        |   | 3,257 |   |
| Decrease      (increase) in inventory                                                       |   |                              | 640    |   |        |   | (474 | ) |
| Increase      in prepaid expenses and other                                                 |   |                              | (160   | )      |        |   | (493 | ) |
| Decrease      in accounts payable                                                           |   |                              | (3,669 | )      |        |   | (3,362 | ) |
| Increase      (decrease) in accrued expenses and other                                      |   |                              | 839    |   |        |   | (707 | ) |
| Net      cash provided by operating activities                                              |   |                              | 5,343  |   |        |   | 196 |   |
|                                                                                        |   |                              |   |   |        |   |   |   |
| Cash      flows from investing activities:                                                  |   |                              |   |   |        |   |   |   |
| Capital      expenditures                                                                   |   |                              | (268   | )      |        |   | (120 | ) |
| Net      change in noncurrent assets and liabilities                                        |   |                              | (3     | )      |        |   | 28 |   |
| Net      cash used in investing activities                                                  |   |                              | (271   | )      |        |   | (92 | ) |
|                                                                                        |   |                              |   |   |        |   |   |   |
| Cash      flows used in financing activities:                                               |   |                              |   |   |        |   |   |   |
| Net      repayments under line of credit                                                    |   |                              | (4,912 | )      |        |   | (1,132 | ) |
| Loan      commitment fees                                                                   |   |                              | (115   | )      |        |   | — |   |
| Net      cash used in financing activities                                                  |   |                              | (5,027 | )      |        |   | (1,132 | ) |
|                                                                                        |   |                              |   |   |        |   |   |   |
| Net      increase (decrease) in cash and cash equivalents                                   |   |                              | 45     |   |        |   | (1,028 | ) |
| Cash      and cash equivalents, beginning of period                                         |   |                              | 1,056  |   |        |   | 1,079 |   |
| Cash      and cash equivalents, end of period                                               |   | $                                 | 1,101  |   |        | $      | 51 |   |
|                                                                                        |   |                              |   |   |        |   |   |   |
| Supplemental      cash flow disclosures:                                                    |   |                              |   |   |        |   |   |   |
|                                                                                        |   |                              |   |   |        |   |   |   |
| Cash      paid for interest                                                                 |   | $                                 | 73     |   |        | $      | 307 |   |

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.     | SIGNIFICANT      ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The      accounting policies followed for quarterly financial reporting are the      same as those disclosed in the Notes to Financial Statements included in      the Company’s Annual Report on Form 10-K filed with the Securities and      Exchange Commission for the year ended December 31, 2008. Certain of the      Company’s more significant accounting policies are as    follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Accounting Estimates.      The preparation of financial statements in conformity with      accounting principles generally accepted in the United States of America      requires management to make estimates and assumptions that affect the      reported amounts of assets and liabilities and the disclosures of      contingent assets and liabilities at the date of the financial statements      and the reported amounts of revenues and expenses during the reporting      period. Actual results could differ from those  estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Goodwill and Other Acquired      Intangibles. Goodwill represents the cost of an acquired enterprise      in excess of the fair market value of the net tangible and identifiable      intangible assets acquired. The Company tests goodwill annually for      impairment as of January 1 or sooner if circumstances      indicate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Impairment of Long-Lived      Assets. The Company reviews long-lived assets for impairment when      events or changes in circumstances indicate that the carrying amount of an      asset may not be recoverable. Impairment would be measured based on a      projected cash flow model. If the projected undiscounted cash flows for      the asset are not in excess of the carrying value of the related asset,      the impairment would be determined based upon the excess of the carrying      value of the asset over the projected discounted cash flows for the      asset.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Accounting for Income Taxes.      Innotrac utilizes the liability method of accounting for income      taxes in accordance with SFAS No. 109 “Accounting for Income Taxes”. Under      the liability method, deferred taxes are determined based on the      difference between the financial and tax basis of assets and liabilities      using enacted tax rates in effect in the years in which the differences      are expected to reverse. A valuation allowance was recorded against the      net deferred tax asset as of December 31, 2008 and March 31, 2009 (see      Note 4).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Revenue Recognition.      Innotrac derives its revenue primarily from two sources: (1) fulfillment      operations and (2) the delivery of call center services integrated with      our fulfillment operations. Innotrac’s fulfillment services operations      record revenue at the conclusion of the material selection, packaging and      shipping process. The shipping process is considered complete after      transfer to an independent freight carrier and receipt of a bill of lading      or shipping manifest from that carrier. Innotrac’s call center service      revenue is recognized according to written pricing agreements based on the      number of calls, minutes or hourly rates when those calls and time rated      services occur. All other revenues are recognized as services are      rendered.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Stock-Based Compensation      Plans. In December 2004, the Financial Accounting Standards Board      (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No.      123(R), “Share-Based Payment,” which revises SFAS No. 123, “Accounting for      Stock-Based Compensation.” SFAS No. 123(R) requires all share-based      payments to employees, including grants of employee stock options, to be      recognized as compensation expense in the financial statements based on      their fair values. That expense will be recognized over the period during      which an employee is required to provide services in exchange for the      award, known as the requisite service period (usually the vesting period).      The Company adopted SFAS No. 123(R) effective January 1, 2006 using the      prospective application method. Under this method, SFAS No. 123(R) applies      to new awards and to awards modified, repurchased or cancelled after the      effective date. Additionally, compensation expense for the portion of      awards for which the requisite service has not been rendered that are      outstanding as of the required effective date shall be recognized as the      requisite service is performed on or after the required effective date.      Under the requirements of SFAS No. 123(R) the Company recorded $11,000 and      $21,000 in compensation expense for the three months ended March 31, 2009      and 2008, respectively. As of March 31, 2009, approximately $28,000 of      unrecognized compensation expense related to non-vested stock options is      expected to be recognized over the following 25  months. |

----

|   |                                                                                                                                                                          |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The      fair value of each option was estimated on the date of grant using the      Black-Scholes option-pricing model with the following weighted average      assumptions: |

|                         |   | Three      months ended |           |
|------------------------------|--------|-------------------------|----------------|
|                         |   | March      31, 2009     |           | March      31, 2008 |   |
| Risk-free      interest rate |   |                    | 2.82%          |   |   | 3.51% |   |
| Expected      dividend yield |   |                    |  0%       |   |   | 0% |   |
| Expected      lives          |   |                    | 2.2      Years |   |   | 2.0      Years |   |
| Expected      volatility     |   |                    | 80.6%          |   |   | 75.3% |   |

|   | Fair Value      Measurements. Effective January 1, 2008, the Company adopted SFAS      No. 157, “Fair Value Measurements” (“SFAS No. 157”) for all      financial and non-financial assets and liabilities accounted for at fair      value on a recurring basis. Effective January 1, 2009, the Company adopted      SFAS No. 157 for all non-financial assets and liabilities accounted for at      fair value on a non-recurring basis. SFAS No. 157 defines fair      value, establishes a framework for measuring fair value in accordance with      accounting principles generally accepted in the United States, and expands      disclosures about fair value measurements. There was no impact on the      Company’s financial statements upon adoption. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | The      Company determined the fair values of certain financial instruments based      on the fair value hierarchy established in SFAS No. 157, “Fair Value      Measurements” (“SFAS No. 157”). SFAS No. 157 requires an entity to      maximize the use of observable inputs and minimize the use of unobservable      inputs when measuring fair value. The standard describes three levels of      inputs that may be used to measure fair value.                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Level      1: quoted price (unadjusted) in active markets for identical      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Level      2: inputs to the valuation methodology include quoted prices for similar      assets and liabilities in active markets, and inputs that are observable      for the asset or liability, either directly or indirectly, for      substantially the full term of the instrument                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Level      3: inputs to the valuation methodology are unobservable for the asset or      liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | SFAS      No. 157 defines fair value as the exchange price that would be received      for an asset or paid to transfer a liability (exit price) in the principal      or most advantageous market for the asset or liability in an orderly      transaction between market participants on the measurement      date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | The      carrying value of our debt instrument approximates fair value since our      debt instrument consists of a revolving credit line, which under certain      conditions can mature within one year of March 31, 2009, and because of      its short term nature. The interest rate is equal to the market rate for      such instruments of similar duration and credit  quality.                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | We      did not have any assets or liabilities measured at fair value on a      recurring basis using quoted market prices in active markets (Level 1),      significant other observable inputs (Level 2) or significant unobservable      inputs (Level 3) during the period. Non-financial assets and liabilities      measured at fair value on a non-recurring basis are summarized      below: |

|              |   |  As      of March 31, 2009Fair      Value Measurements Using(in      000’s) |    |
|-------------------|--------|----------------------------------------------------------------------------------------|---------|
|  Description |   | QuotedPrices      inActiveMarketsforIdenticalAssets(Level      1)                      |    |   |        SignificantOtherObservableInputs(Level      2) |   |   |        SignificantUnobservableInputs(Level      3) |   |   |        Total |   |
|              |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |
| Goodwill          |   | $                                                                                      | — |   |   | $ | — |   |   | $ | 25,169 |   |   | $ | 25,169 |   |
|              |   |                                                                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total             |   | $                                                                                      | — |   |   | $ | — |   |   | $ | 25,169 |   |   | $ | 25,169 |   |

|   | In      accordance with the provisions of SFAS No. 142, “Goodwill and Other      Intangible Assets”, (“SFAS No. 142”), the Company tests goodwill annually      for impairment. The annual impairment test is based on fair value      measurements using Level 3 inputs primarily consisting of estimated      discounted cash flows expected to result from the use of the asset. Upon      completion of its analysis for impairment as of January 1, 2009, no      impairment was determined to exist at that time.                                                                                                                                                                                                                                       |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 2.     | FINANCING      OBLIGATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The      Company has a revolving credit facility with Wachovia Bank, (the Credit      Facility) which has a maximum borrowing limit of $15.0 million. The Credit      Facility is used to fund the Company’s capital expenditures, operational      working capital and seasonal working capital needs. The Credit Facility      was renewed on March 27, 2009 when the Company entered into a Fourth      Amended and Restated Loan and Security Agreement (the “2009 Credit      Agreement”) with Wachovia Bank, National Association (the “Bank”) setting      forth the new terms of the Credit Facility including a maturity date of      June 30, 2012. The amount outstanding on March 31, 2009 under the Credit      Facility was $5.1 million. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The      2009 Credit Agreement continues the Bank’s security interest in all of the      Company’s assets, but releases the Bank’s previously granted security      interest in certain personal assets of Scott Dorfman, the Company’s      Chairman, President and CEO, which were treated as additional collateral      under the 2006 Credit Agreement.                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Interest      on borrowings pursuant to the 2009 Credit Agreement is payable monthly at      specified rates of either, at the Company’s option, the Base Rate (as      defined in the 2009 Credit Agreement) plus between 2.00% and 2.50%, or the      LIBOR Rate (as defined in the 2009 Credit Agreement) plus between 3.00%      and 3.50%, in each case with the applicable margin depending on the      Company’s Average Excess Availability (as defined in the 2009 Credit      Agreement). The Company will pay a specified fee on undrawn amounts under      the Credit Facility. After an event of default, all loans will bear      interest at the otherwise applicable rate plus 2.00% per      annum.                                                      |

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The      2009 Credit Agreement contains financial, affirmative and negative      covenants by the Company as are usual and customary for financings of this      kind which can result in the acceleration of the maturity of amounts      borrowed under the Credit Facility, including, without limitation, a      change in ownership control covenant, a subjective material adverse change      covenant and financial covenants establishing a minimum Fixed Charge      Coverage Ratio of 1.35 to 1.00, maximum annual Capital Expenditures, and      minimum Excess Availability (as each of these terms is defined in the 2009      Credit Agreement). The 2009 Credit Agreement also defines as an event of      default any termination of the employment of the Chief Financial Officer      of the Company, if the Company fails to fill such position with a      replacement acceptable to the Bank within 90 days. The provisions of the      2009 Credit Agreement require that the Company maintain a lockbox      arrangement with the Bank, and allows the Bank to declare any outstanding      borrowings to be immediately due and payable as a result of noncompliance      with any of the covenants. Accordingly, in the event of noncompliance, the      Company’s payment obligations with respect to such borrowings could be      accelerated. Therefore, the Company’s line of credit is classified as a      current liability. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Although      the maximum borrowing limit was $15.0 million at March 31, 2009, the      Credit Facility limits borrowings to a specified percentage of eligible      accounts receivable and inventory, which totaled $16.4 million at March      31, 2009. Additionally, the terms of the Credit Facility provide that the      amount borrowed and outstanding at any time combined with certain reserves      for rental payments, letters of credit outstanding and general reserves be      subtracted from the Credit Facility limit or the value of the total      collateral to arrive at an amount of unused availability to borrow. The      total collateral under the Credit Facility at March 31, 2009 amounted to      $16.4 million. The amount borrowed and outstanding and the value of      reserves and letters of credit outstanding at March 31, 2009 totaled $8.2      million. As a result, the Company had $8.2 million of borrowing      availability under the Credit Facility at March 31,  2009.                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | During      the three months ended March 31, 2008, the Company also had a $5.0 million      second lien loan outstanding to a credit management company. The $5.0      million second lien loan was outstanding from September 28, 2007 through      September 26, 2008, and was entered into when we determined that the      completion of capital expenditure projects in late 2007 and forecasted      working capital requirements to support our seasonal volume increase      during the fourth quarter of 2007 required additional short term funding.      The 2007 seasonal working capital needs were significant as a result of      our 48% growth in annual revenue to $121.8 million in 2007. The $5.0      million second lien loan was repaid on September 26, 2008 from a      combination of funds generated by operating income and additional      borrowing under the Credit Facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | For      the three months ended March 31, 2009, we recorded interest expense of      $55,000 on the Credit Facility at a weighted average interest rate of      2.96%. The rate of interest being charged on the Credit Facility at March      31, 2009 was 3.75%. For the three months ended March 31, 2008, we recorded      interest expense of $77,000 on the Credit Facility at a weighted average      interest rate of 5.42% and $190,000 of interest expense on the Second Lien      Credit Agreement at a constant rate of 15.0% for the period. Our weighted      average interest rate for the three months ended March 31, 2008, including      amounts borrowed under both the Credit Facility and the Second Lien Credit      Agreement, was 9.9%. The Company also incurred unused Credit Facility fees      of approximately $12,000 and $5,000 for the three months ended March 31,      2009 and 2008 respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

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|   |                                                                                                                                                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.     | EARNINGS      PER SHARE                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                           |
|   | The      following table shows the shares (in thousands) used in computing diluted      earnings per share (“EPS”) in accordance with Statement of Financial      Accounting Standards No. 128, “Earnings per  Share”: |

|                                                                                                                                 |   |  Three      MonthsEnded      March 31, |    |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|---------|
|                                                                                                                                 |   | 2009                                        |    |   | 2008 |   |
| Diluted      earnings per share:                                                                                                     |   |                                        |    |   |   |   |
| Weighted      average shares outstanding (including 265,956 participating securities at      both March 31, 2009 and March 31, 2008) |   |                                        | 12,601  |   |   |   | 12,586 |   |
| Employee      and director stock options and unvested restricted shares                                                              |   |                                        | — |   |   |   | 19 |   |
| Weighted      average shares assuming dilution                                                                                       |   |                                        | 12,601  |   |   |   | 12,605 |   |

|   | Options      outstanding to purchase 1.2 million shares of the Company’s common stock      for the three months ended March 31, 2009 and 1.2 million shares for the      three months ended March 31, 2008 were not included in the computation of      diluted EPS because their effect was anti-dilutive. On January 1, 2009 we      adopted FSP EITF No. 03-6-1, which requires us to include all unvested      stock awards which contain non-forfeitable rights to dividends or dividend      equivalents, whether paid or unpaid, in the number of shares outstanding      in our basic and diluted EPS calculations. As a result, we have included      the 265,956 restricted shares issued on April 16, 2007 in our calculation      of basic and diluted EPS for current and prior periods. These shares,      which are not vested, were issued under the terms provided in the      Executive Retention Plan which plan was ratified on June 5, 2005 at the      Company’s 2005 annual meeting.                                                                                                                                                                                                                                                       |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 4.     | INCOME      TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Innotrac      utilizes the liability method of accounting for income taxes in accordance      with SFAS No. 109, “Accounting for Income Taxes”. Under the liability      method, deferred taxes are determined based on the difference between the      financial and tax basis of assets and liabilities using enacted tax rates      in effect in the years in which the differences are expected to reverse. A      valuation allowance is recorded against deferred tax assets if the Company      considers it is more likely than not that deferred tax assets will not be      realized. Innotrac’s gross deferred tax asset as of March 31, 2009 and      December 31, 2008 was approximately $17.9 million and $18.7 million,      respectively. This deferred tax asset was generated primarily by net      operating loss carryforwards created mainly by a special charge of $34.3      million recorded in 2000 and the net losses generated in 2002, 2003, 2005      and 2006. Innotrac has a net operating loss carryforward of $48.3 million      at December 31, 2008 that expires between 2020 and2027.                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Innotrac’s      ability to generate the expected amounts of taxable income from future      operations is dependent upon general economic conditions, competitive      pressures on sales and margins and other factors beyond management’s      control. These factors, combined with tax losses in recent years, create      uncertainty about the ultimate realization of the gross deferred tax asset      in future years. Therefore, a valuation allowance of approximately $11.5      million and $12.4 million has been recorded as of March 31, 2009 and      December 31, 2008, respectively. Income taxes associated with future      taxable earnings will be offset by the utilization of the net operating      loss carryforward resulting in a reduction in the valuation allowance. For      the three months ended March 31, 2009, the deferred tax expense of      $849,000 was offset by a corresponding decrease of the deferred tax asset      valuation allowance. When, and if, the Company can return to consistent      profitability, and management determines that it is likely it will be able      to utilize the net operating losses prior to their expiration, then the      valuation allowance can be reduced or  eliminated. |

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | In      June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in      Income Taxes—an interpretation of FASB Statement No. 109 (“FIN No.      48”), which clarifies the accounting for uncertainty in tax positions.      This Interpretation requires that the Company determine whether it is more      likely than not that a tax position will be sustained upon audit, based on      the technical merits of the position. A tax position that meets the more      likely than not recognition threshold is measured to determine the amount      of benefit to recognize in the financial statements. The tax position is      measured at the largest amount of benefit that is greater than 50 percent      likely of being realized upon ultimate settlement. The Company adopted FIN      No. 48 effective January 1, 2007. The Company has a gross deferred tax      asset of approximately $18.7 million at December 31, 2008, which did not      change significantly during the three months ended March 31, 2009. As      discussed in Note 6 to the financial statements in the 2008 Form 10-K, the      Company has a valuation allowance against the full amount of its deferred      tax asset. The Company currently provides a valuation allowance against      deferred tax assets when it is more likely than not that deferred tax      assets will not be realized. The Company has recognized tax benefits from      all tax positions we have taken, and there has been no adjustment to any      net operating loss carryforwards as a result of FIN No. 48 and there are      no unrecognized tax benefits and no related FIN No. 48 tax liabilities at      March 31, 2009. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The      Company generally recognizes interest and/or penalties related to income      tax matters in general and administrative expenses. As of March 31, 2009,      we have no accrued interest or penalties related to uncertain tax      positions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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| 5.     | COMMITMENTS      AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Legal Proceedings. The      Company is subject to various legal proceedings and claims that arise in      the ordinary course of business. There are no material pending legal      proceedings to which the Company is a party.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Employment Commitment.      In June 1999, in conjunction with the opening of a new call center      facility, the Company entered into an employment commitment agreement with      the City of Pueblo, Colorado, whereby the Company received cash incentives      of $968,000. These funds were accounted for as a reduction in the basis of      the assets acquired. In return for this consideration, the Company is      obligated to employ a minimum number of full-time employees at its Pueblo      facility, measured on a quarterly basis. This obligation, which became      effective June 2002, will continue through June 2009. In the event that      the number of full-time employees fails to meet the minimum requirement,      the Company will incur a quarterly penalty of $96.30 for each employee      less than the minimum required amount. During the three months ended March      31, 2009, the Company did not meet the minimum employee requirements of      359 full-time employees, as measured on a quarterly basis, incurring a      penalty of approximately $3,000. During the three months ended March 31,      2008, the Company met the minimum employee requirements of 359 full-time      employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

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| 6.     | RELATED      PARTY TRANSACTION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | In      early 2004, the Company learned that certain trading activity of the IPOF      Fund L.P., an owner of more than 5% of the outstanding Common Stock, may      have violated the short-swing profit rules under Section 16(b) of the      Securities Exchange Act of 1934. The Company promptly conducted an      investigation of the matter. IPOF Fund L.P. and its affiliates entered      into a settlement agreement with the Company on March 4, 2004 regarding      the potential Section 16(b) liability issues that provided for the      Company’s recovery of $301,957 no later than March 3, 2006. In December      2005, the United States District Court in Cleveland, Ohio appointed a      receiver to identify and administer the assets of the IPOF Fund, L.P. and      its general partner, David Dadante. The Company informed the IPOF receiver      of such agreement, but the likelihood of recovering such amount from the      receiver is doubtful. The Company has not recorded any estimated      receivable from this settlement. Additionally, the Federal Court has      prohibited the financial institutions holding Company stock owned by the      IPOF Fund L.P. and Mr. Dadante in margin accounts from selling any of      these shares through June 5, 2009. The court has permitted open market      sales by the receiver as he may in his sole discretion determine to be      consistent with his duty to maximize the value of the assets of IPOF Fund,      L.P. and as warranted by market conditions. The receiver has indicated to      the Company that he does not intend to direct any open market sales during      this period except in circumstances in which he believes that there would      be no material adverse impact on the market price for the Company’s      shares. |

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     | Item 2 – Management’s Discussion and Analysis of      Financial Condition and Results of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|     | The      following discussion may contain certain forward-looking statements that      are subject to conditions that are beyond the control of the Company.      Actual results may differ materially from those expressed or implied by      such forward-looking statements. Factors that could cause actual results      to differ include, but are not limited to, the Company’s reliance on a      small number of major clients; risks associated with the terms and pricing      of our contracts; reliance on the telecommunications and direct marketing      industries and the effect on the Company of the downturns, consolidation      and changes in those industries in recent years; risks associated with the      fluctuations in volumes from our clients; risks associated with upgrading,      customizing, migrating or supporting existing technology; risks associated      with competition; and other factors discussed in more detail in “Item 1A –      Risk Factors” in our Annual Report on Form 10-K. We undertake no      obligation to update any forward-looking statements, whether as a result      of new information, future events or otherwise. |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Overview |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|     | Innotrac      Corporation (“Innotrac” or the “Company”), founded in 1984 and      headquartered in Atlanta, Georgia, is a full-service fulfillment and      logistics provider serving enterprise clients and world-class brands. The      Company employs sophisticated order processing and warehouse management      technology and operates eight fulfillment centers and two call centers in      seven cities spanning all time zones across the continental United      States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|     | We      receive most of our clients’ orders either through inbound call center      services, electronic data interchange (“EDI”) or the Internet. On a      same-day basis, depending on product availability, the Company picks,      packs, verifies and ships the item, tracks inventory levels through an      automated, integrated perpetual inventory system, warehouses data and      handles customer support inquiries. Our fulfillment and customer support      services interrelate and are sold as a package, however they are      individually priced. Our clients may utilize our fulfillment services, our      customer support services, or both, depending on their individual      needs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|     | Our      core service offerings include thefollowing:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|   | Fulfillment      Services:      |
|--------|---------------------------------|
|   |                            | ● | sophisticated      warehouse management technology |
|   |                            | ● | automated      shipping solutions |
|   |                            | ● | real-time      inventory tracking and order status |
|   |                            | ● | purchasing      and inventory management |
|   |                            | ● | channel      development |
|   |                            | ● | zone      skipping for shipment cost reduction |
|   |                            | ● | product      sourcing and procurement |
|   |                            | ● | packaging      solutions |
|   |                            | ● | back-order      management; and |
|   |                            | ● | returns      management. |
|   |                            |   |   |
|   | Customer      Support Services: |
|   |                            | ● | inbound      call center services |
|   |                            | ● | technical      support and order status |
|   |                            | ● | returns      and refunds processing |
|   |                            | ● | call      centers integrated into fulfillmentplatform |

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|   |   |    |                             |
|--------|--------|---------|----------------------------------|
|   |   | ● | cross-sell/up-sell      services |
|   |   | ● | collaborative      chat; and     |
|   |   | ● | intuitive      e-mail response.  |

|   | The      Company is primarily focused on five diverse lines of business, or      industry verticals. This is a result of a significant effort made by the      Company to diversify both its industry concentration and client base over      the past several years. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                  |   |   |
|   |                                                                                                                                                                                                                                                                  |  Business      Mix -Revenues |

|                                          |   | Three      Months Ended March 31, |   |
|-----------------------------------------------|--------|-----------------------------------|--------|
| Business      Line/Vertical                   |   | 2009                              |   |   | 2008 |   |
| eCommerce/Direct-to-Consumer                  |   |                              | 35.3   | % |   |   | 34.5 | % |
| Direct      Marketing                         |   |                              | 31.8   |   |   |   | 36.9 |   |
| Modems                                        |   |                              | 22.5   |   |   |   | 18.4 |   |
| Business-to-Business      (“B2B”) |   |                              | 6.5    |   |   |   | 6.9 |   |
| Telecommunications      products              |   |                              | 3.9    |   |   |   | 3.3 |   |
|                                          |   |                              | 100.0  | % |   |   | 100.0 | % |

|   | eCommerce/Direct-to-Consumer      and Direct Marketing. The Company provides a variety of fulfillment      and customer support services for a significant number of eCommerce,      retail and direct marketing clients, including such companies as      Target.com, a Division of Target Corporation, Ann Taylor Retail, Inc., The      North Face, Smith & Hawken, Ltd., Microsoft, Inc., Product Partners      and Thane International. We take orders for our retail, eCommerce and      direct marketing clients via the Internet, through customer service      representatives at our Pueblo and Reno call centers or through direct      electronic transmission from our clients. The orders are processed through      one of our order management systems and then transmitted to one of our      eight fulfillment centers located across the country and are shipped to      the end consumer or retail store location, as applicable, typically within      24 hours of when the order is received. Inventory for our retail,      eCommerce and direct marketing clients is held on a consignment basis,      with minor exceptions, and includes items such as shoes, dresses,      accessories, books, outdoor furniture, electronics, small appliances, home      accessories, sporting goods and toys. Our revenues are sensitive to the      number of orders and customer service calls received. Our client contracts      do not guarantee volumes. We anticipate that the percentage of our total      revenues attributable to our retail and eCommerce clients will increase      during the remainder of 2009 due to the projected growth rates of our      clients’ business in the retail and eCommerce vertical being greater than      other verticals’ projected rates of growth. |
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | Telecommunications and      Modems. The Company has historically been a major provider of      fulfillment and customer support services to the telecommunications      industry. In spite of a significant contraction and consolidation in this      industry in the past several years, the Company continues to provide      customer support services and fulfillment of consumer telephones and      Digital Subscriber Line Modems (“Modems”) for clients such as AT&T,      Inc. and Qwest Communications International, Inc. and their customers. The      consolidation in the telecommunications industry resulted in the      acquisition of BellSouth by AT&T in December of 2006. On November 6,      2007, AT&T notified us that it intended to transition a portion of its      fulfillment business in-house. The transition date is currently projected      to be the end of the second quarter 2009. After that transition has      occurred, our telecommunications and modems verticals may represent less      than 10% of revenues for periods after June 30,  2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Business-to-Business.      The Company also provides fulfillment and customer support services for      business-to-business (“B2B”) clients, including NAPA and The Walt Disney      Company. We have not concentrated efforts to grow our client base in this      area, and due to the combination of the recent loss of a client and      current economic conditions, we expect this vertical of our business to      become a smaller percentage of our total revenues throughout the rest of      2009.                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Results      of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The      following table sets forth unaudited summary operating data, expressed as      a percentage of revenues, for the three months ended March 31, 2009 and      2008. The data has been prepared on the same basis as the annual financial      statements. In the opinion of management, it reflects normal and recurring      adjustments necessary for a fair presentation of the information for the      periods presented. Operating results for any period are not necessarily      indicative of results for any future period. |
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|   | The      financial information provided below has been rounded in order to simplify      its presentation. However, the percentages below are calculated using the      detailed information contained in the condensed financial      statements.                                                                                                                                                                                                                                                                                           |

|                                              |   | Three      Months Ended March 31, |    |
|---------------------------------------------------|--------|-----------------------------------|---------|
|                                              |   | 2009                              |    |   | 2008 |   |
|                                              |   |                              |    |   |   |   |
| Service      revenues                             |   |                              | 85.7    | % |   |   | 77.9 | % |
| Freight      revenues                             |   |                              | 14.3    |   |   |   | 22.1 |   |
| Total      Revenues                               |   |                              | 100.0   | % |   |   | 100.0 | % |
|                                              |   |                              |    |   |   |   |   |   |
| Cost      of service revenues                     |   |                              | 37.0    |   |   |   | 37.0 |   |
| Freight      expense                              |   |                              | 14.1    |   |   |   | 22.2 |   |
| Selling,      general and administrative expenses |   |                              | 37.6    |   |   |   | 33.9 |   |
| Depreciation      and amortization                |   |                              | 4.2     |   |   |   | 3.2 |   |
| Operating      income                             |   |                              | 7.1     |   |   |   | 3.7 |   |
| Other      expense, net                           |   |                              | 0.4     |   |   |   | 1.1 |   |
| Income      before income taxes                   |   |                              | 6.7     |   |   |   | 2.6 |   |
| Income      tax benefit                           |   |                              | — |   |   |   | — |   |
| Net      income                                   |   |                              | 6.7     | % |   |   | 2.6 | % |

|   | Three      Months Ended March 31, 2009 Compared to Three Months Ended March 31,      2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|   | Service Revenues. Net      service revenues decreased 3.2% to $24.7 million for the three months      ended March 31, 2009 from $25.5 million for the three months ended March      31, 2008. This decrease was primarily attributable to a $551,000 decrease      in revenues from our B2B vertical due to reduced volumes and the loss of a      client, a $474,000 decrease in our eCommerce vertical resulting from      reduced volumes from existing clients offset by the addition of a new      client, and a $245,000 reduction in revenue from our direct marketing      vertical due to an overall reduction in volumes from those clients, offset      by a $443,000 increase in revenue from our DSL clients due to project      work. |
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|   | Freight Revenues. The      Company’s freight revenues decreased 43.1% to $4.1 million for the three      months ended March 31, 2009 from $7.2 million for the three months ended      March 31, 2008. The $3.1 million decrease in freight revenues is primarily      attributable to the transition of Company owned freight accounts to client      owned freight accounts. This transition to client owned accounts has no      material impact on our operating profitability due to pricing practices      for direct freight costs.                                                                                                                                                                                                    |

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|   | Cost of Service      Revenues. Cost of service revenues decreased 11.9% to $10.7 million      for the three months ended March 31, 2009, compared to $12.1 million for      the three months ended March 31, 2008. The cost of revenue decrease was      primarily due to the decrease in labor costs associated with the decrease      in service revenues. Cost of service revenues as a percent of service      revenues decreased to 43.2% from 47.5% mainly from the combined effect of      increased employee rosters allowed by decreasing the use of higher cost      temporary labor services and operating efficiencies resulting from      adjusting labor shifts to correspond with client volumes and fulfillment      equipment installed during 2008.                 |
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|   | Freight Expense. The      Company’s freight expense decreased 44.0% to $4.1 million for the three      months ended March 31, 2009 compared to $7.2 million for the three months      ended March 31, 2008 due to the decrease in freight revenue for the      reasons listed above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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|   | Selling, General and      Administrative Expenses. S,G&A expenses for the three months      ended March 31, 2009 decreased slightly to $10.8 million, or 37.6% of      total revenues, compared to $11.1 million, or 33.9% of total revenues, for      the same period in 2008. The increase in S,G&A expenses as a      percentage of revenue in 2009 as compared to 2008 was primarily      attributable to the overall decrease in revenue, primarily freight      revenue. SG&A expenses as a percentage of service revenue remained      relatively flat at 43.6% for the three months ended March 31, 2009      compared to 43.8% for the three months ended March 31,  2008                                                                                        |
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|   | Interest Expense.      Interest expense for the three months ended March 31, 2009 and 2008      was $106,000 and $373,000, respectively. The decrease was related to the      September 26, 2008 repayment of the $5.0 million term loan which was      outstanding in the first quarter of 2008, partially offset by interest      resulting from an increase in the amount outstanding under the Credit      Facility.                                                                                                                                                                                                                                                                                                                                                              |
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|   | Income Taxes. The      Company’s effective tax rate for the three months ended March 31, 2009 and      2008 was 0%. At December 31, 2003, a valuation allowance was recorded      against the Company’s net deferred tax assets as losses in recent years      created uncertainty about the realization of tax benefits in future years.      Income taxes associated with income for the three months ended March 31,      2009 and 2008 were offset by a corresponding decrease of the valuation      allowance resulting in an effective tax rate of 0% for the three months      ended March 31, 2009 and 2008 respectively.                                                                                                                                         |
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|   | Liquidity      and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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|   | The      Company has a revolving credit facility with Wachovia Bank, (the Credit      Facility) which has a maximum borrowing limit of $15.0 million. The Credit      Facility is used to fund the Company’s capital expenditures, operational      working capital and seasonal working capital needs. The Credit Facility      was renewed on March 27, 2009 when the Company entered into a Fourth      Amended and Restated Loan and Security Agreement (the “2009 Credit      Agreement”) with Wachovia Bank, National Association (the “Bank”) setting      forth the new terms of the Credit Facility including a maturity date of      June 30, 2012. The amount outstanding on March 31, 2009 under the Credit      Facility was $5.1 million. |
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|   | The      2009 Credit Agreement continues the Bank’s security interest in all of the      Company’s assets, but releases the Bank’s previously granted security      interest in certain personal assets of Scott Dorfman, the Company’s      Chairman, President and CEO, which were treated as additional collateral      under the 2006 CreditAgreement.                                                                                                                                                                                                                                                                                                                                                                                                    |

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|   | Interest      on borrowings pursuant to the 2009 Credit Agreement is payable monthly at      specified rates of either, at the Company’s option, the Base Rate (as      defined in the 2009 Credit Agreement) plus between 2.00% and 2.50%, or the      LIBOR Rate (as defined in the 2009 Credit Agreement) plus between 3.00%      and 3.50%, in each case with the applicable margin depending on the      Company’s Average Excess Availability (as defined in the 2009 Credit      Agreement). The Company will pay a specified fee on undrawn amounts under      the Credit Facility. After an event of default, all loans will bear      interest at the otherwise applicable rate plus 2.00% per      annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
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|   | The      2009 Credit Agreement contains financial, affirmative and negative      covenants by the Company as are usual and customary for financings of this      kind which can result in the acceleration of the maturity of amounts      borrowed under the Credit Facility, including, without limitation, a      change in ownership control covenant, a subjective material adverse change      covenant and financial covenants establishing a minimum Fixed Charge      Coverage Ratio of 1.35 to 1.00, maximum annual Capital Expenditures, and      minimum Excess Availability (as each of these terms is defined in the 2009      Credit Agreement). The 2009 Credit Agreement also defines as an event of      default any termination of the employment of the Chief Financial Officer      of the Company, if the Company fails to fill such position with a      replacement acceptable to the Bank within 90 days. The provisions of the      2009 Credit Agreement require that the Company maintain a lockbox      arrangement with the Bank, and allows the Bank to declare any outstanding      borrowings to be immediately due and payable as a result of noncompliance      with any of the covenants. Accordingly, in the event of noncompliance, the      Company’s payment obligations with respect to such borrowings could be      accelerated. |
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|   | Under      the terms of the Credit Facility, the maximum borrowing limit of $15.0      million is limited to borrowings at a specified percentage of eligible      accounts receivable and inventory, which totaled $16.4 million at March      31, 2009. Additionally, the terms of the Credit Facility provide that the      amount borrowed and outstanding at any time combined with certain reserves      for rental payments, letters of credit outstanding and general reserves be      subtracted from the Credit Facility limit or the value of the total      collateral to arrive at an amount of unused availability to borrow. The      total collateral under the Credit Facility at March 31, 2009 amounted to      $16.4 million. The amount borrowed and outstanding and the value of      reserves and letters of credit outstanding at March 31, 2009 totaled $8.2      million. As a result, the Company had $8.2 million of borrowing      availability under the Credit Facility at March 31,  2009.                                                                                                                                                                                                                                                                                                                                                        |
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|   | During      the three months ended March 31, 2008, the Company also had a $5.0 million      second lien loan outstanding to a credit management company. The $5.0      million second lien loan was outstanding from September 28, 2007 through      September 26, 2008, and was entered into when we determined that the      completion of capital expenditure projects in late 2007 and forecasted      working capital requirements to support our seasonal volume increase      during the fourth quarter of 2007 required additional short term funding.      The 2007 seasonal working capital needs were significant as a result of      our 48% growth in annual revenue to $121.8 million in 2007. The $5.0      million second lien loan was repaid on September 26, 2008 from a      combination of funds generated by operating income and additional      borrowing under the Credit Facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
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|   | For      the three months ended March 31, 2009, we recorded interest expense of      $55,000 on the Credit Facility at a weighted average interest rate of      2.96%. The rate of interest being charged on the Credit Facility at March      31, 2009 was 3.75%. For the three months ended March 31, 2008, we recorded      interest expense of $77,000 on the Credit Facility at a weighted average      interest rate of 5.42% and $190,000 of interest expense on the Second Lien      Credit Agreement at a constant rate of 15.0% for the period. Our weighted      average interest rate for the three months ended March 31, 2008, including      amounts borrowed under both the Credit Facility and the Second Lien Credit      Agreement, was 9.9%. The Company also incurred unused Credit Facility fees      of approximately $12,000 and $5,000 for the three months ended March 31,      2009 and 2008 respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                             |

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|   | For      the three months ended March 31, 2009, compared to the same three month      period in 2008, the Company had an improvement in cash generated from      operating activities of $5.1 million resulting from positive cash flow      from operations of $5.3 million in 2009 compared to $196,000 positive cash      flow from operations in 2008. The $5.1 million improvement for the three      months ended March 31, 2009 from the same period ended 2008 was mostly due      to the combined result of generating a net profit of $1.9 million compared      to a net profit of $862,000 and the net effect of all working capital      accounts providing $2.2 million of cash during the three months ended      March 31, 2009 compared with the net effect of all working capital      accounts using $1.8 million of cash during the three months ended March      31, 2008. The changes in working capital accounts for the three months      ended March 31, 2009 and 2008 resulted mainly from the combined effect of      seasonal reductions in accounts receivable of $4.6 million in 2009      compared to $3.3 million in 2008 and a reduction in inventory in 2009 of      $640,000 compared to an increase in inventory in 2008 of $474,000.      Additionally, non cash expenses for depreciation, which are included in      net income, were $1.2 million compared to $1.1 million for the three      months ended March 31, 2009 and 2008 respectively. |
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|   | During      the three months ended March 31, 2009, net cash used in investing      activities was $271,000 as compared to $92,000 in the same period in 2008.      The expenditures in both years were made at various facilities with no      specific concentration at any location.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|   | During      the three months ended March 31, 2009, net cash used in financing      activities was $5.0 million compared to $1.1 million in the same period of      2008. The $3.9 million increase in cash used in financing activities is      due to additional repayments of the obligations outstanding under the      revolving credit facility in 2009 as compared to 2008. Additionally, the      Company incurred $115,000 of loan commitment fees in March 2009 as a      result of the renewal of the Credit Facility with Wachovia      Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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|   | The      Company estimates that its cash and financing needs through the rest of      2009 will be met by cash flows from operations and availability under its      Credit Facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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|   | Critical      Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   | Critical      accounting policies are those policies that can have a significant impact      on the presentation of our financial position and results of operations      and demand the most significant use of subjective estimates and management      judgment. Because of the uncertainty inherent in such estimates, actual      results may differ from these estimates. Specific risks inherent in our      application of these critical policies are described below. For all of      these policies, we caution that future events rarely develop exactly as      forecasted, and the best estimates routinely require adjustment. These      policies often require difficult judgments on complex matters that are      often subject to multiple sources of authoritative guidance. Additional      information concerning our accounting policies can be found in Note 1 to      the condensed financial statements in this Form 10-Q and Note 2 to the      financial statements appearing in our Annual Report on Form 10-K for the      year ended December 31, 2008. The policies that we believe are most      critical to an investor’s understanding of our financial results and      condition and require complex management judgment are discussed      below.                                                                                                                                                                                           |
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|   | Goodwill and Other Acquired      Intangibles. The Company accounts for goodwill and other intangible      assets in accordance with SFAS No. 142, “Goodwill and Other Intangible      Assets”. Under SFAS No. 142, goodwill impairment may exist if the net book      value of a reporting unit exceeds its estimated fair  value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|   | Innotrac’s      goodwill carrying amount as of March 31, 2009 was $25.2 million. In      accordance with SFAS No. 142, the Company performed a goodwill valuation      in the first quarter of 2009. The valuation supported that the fair value      of the reporting unit at January 1, 2009 exceeded the carrying amount of      the net assets, including goodwill, and thus no impairment was determined      to exist. The Company performs this impairment test annually as of January      1 or sooner if circumstancesindicate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

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|   | Accounting for Income Taxes.      Innotrac utilizes the liability method of accounting for income      taxes in accordance with SFAS No. 109, “Accounting for Income Taxes”.      Under the liability method, deferred taxes are determined based on the      difference between the financial and tax basis of assets and liabilities      using enacted tax rates in effect in the years in which the differences      are expected to reverse. A valuation allowance is recorded against      deferred tax assets if the Company considers it more likely than not that      deferred tax assets will not be realized. Innotrac’s gross deferred tax      asset as of March 31, 2009 and December 31, 2008 was approximately $17.9      million and $18.7 million, respectively. This deferred tax asset was      generated primarily by net operating loss carryforwards created primarily      by the special charge of $34.3 million recorded in 2000 and the net losses      generated in 2002, 2003, 2005 and 2006. Innotrac has a net operating loss      carryforward of $48.3 million at December 31, 2008 that expires between      2020 and 2027.                                                             |
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|   | Innotrac’s      ability to generate the expected amounts of taxable income from future      operations is dependent upon general economic conditions, competitive      pressures on sales and margins and other factors beyond management’s      control. These factors, combined with losses in recent years, create      uncertainty about the ultimate realization of the gross deferred tax asset      in future years. Therefore, a valuation allowance of approximately $11.5      million and $12.4 million has been recorded as of March 31, 2009 and      December 31, 2008, respectively. Income taxes associated with future      earnings will be offset by the utilization of the net operating loss      carryforward resulting in a reduction in the valuation allowance. For the      three months ended March 31, 2009, an income tax expense of $849,000 was      offset by a corresponding decrease of the deferred tax asset valuation      allowance. When, and if, the Company can return to consistent      profitability, and management determines that it will be able to utilize      net operating losses prior to their expiration, then the valuation      allowance can be reduced or eliminated. |
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|   | Accounting Estimates.      The preparation of financial statements in conformity with      accounting principles generally accepted in the United States requires      management to make estimates and assumptions that affect the reported      amounts of assets and liabilities and the disclosures of contingent assets      and liabilities at the date of the financial statements and the reported      amounts of revenues and expenses during the reporting period. Actual      results could differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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|   | Recent      Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   | In      September 2006, the FASB issued SFAS No. 157, “Fair Value      Measurements” (“SFAS No. 157”). SFAS No. 157 defines fair      value, establishes a framework for measuring fair value in accordance with      accounting principles generally accepted in the United States, and expands      disclosures about fair value measurements. SFAS No. 157 was      effective for fiscal years beginning after November 15, 2007, with      earlier application encouraged. There was no impact on the Company’s      financial statements upon adoption on January 1, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   | Relative      to SFAS No. 157, the FASB issued FASB Staff Positions (“FSP”) 157-1      and 157-2. FSP 157-1 amends SFAS No. 157 to exclude SFAS No. 13,      “Accounting for      Leases,” and its related interpretive accounting pronouncements      that address leasing transactions. FSP 157-2 delays the effective      date of the application of SFAS No. 157 to fiscal years beginning      after November 15, 2008 for all nonfinancial assets and nonfinancial      liabilities that are recognized or disclosed at fair value in the      financial statements on a nonrecurring basis. There was no impact on the      Company’s financial statements upon adoption on January 1,      2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   | In      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for      Financial Assets and Financial Liabilities – Including an amendment of      FASB Statement No. 115” (“SFAS No. 159”). This standard permits an entity      to choose to measure certain financial assets and liabilities at fair      value. SFAS No. 159 also revises provisions of SFAS No. 115 that apply to      available-for-sale and trading securities. This statement is effective for      fiscal years beginning after November 15, 2007. There was no impact on the      Company’s financial statements upon adoption on January 1,      2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

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|   | In      December 2007, the FASB issued SFAS No. 141(R) which revised SFAS No. 141      “Business Combinations”. This revised standard became effective for fiscal      years beginning after December 15, 2008 and changes the requirements for      measuring the value of acquired assets, the date of the measurement of the      acquired assets, the use of fair value accounting and the rules for      capitalization of costs of acquisition. There was no impact on the      Company’s financial statements upon adoption on January 1,      2009.                                                                                                                                                                                                                                                                                                                                     |
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|   | In      December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in      Consolidated Financial Statements” which amended Accounting Research      Bulletin No. 51. This standard became effective for fiscal years beginning      after December 15, 2008 and applies to reporting requirements for minority      interest ownership. There was no impact on the Company’s financial      statements upon adoption on January 1, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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|   | In      June 2008, relative to SFAS No. 128, “Earnings per Share”, the FASB      issued FASB Staff Positions (“FSP”) Emerging Issues Task Force      (“EITF”)  No. 03-6-1, which requires all unvested stock awards which      contain non-forfeitable rights to dividends or dividend equivalents,      whether paid or unpaid, to be included in the number of shares outstanding      in basic and diluted EPS calculations. FSP EITF No. 03-6-1 became      effective on January 1, 2009. As a result, our 265,956 restricted shares      which are unvested but carry a non-forfeitable right to cash dividends      have been included in our earnings per share calculations for all      comparable periods presented in our financial statements. The dollar      amount of earnings for all periods was not affected by this new reporting      standard. |

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|   | Item 3 - Quantitative and Qualitative Disclosures      About Market Risks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|   | Management      believes the Company’s exposure to market risks (investments, interest      rates and foreign currency) is immaterial. Innotrac holds no market risk      sensitive instruments for trading purposes. At present, the Company does      not employ any derivative financial instruments, and does not currently      plan to employ them in the future. The Company does not transact any sales      in foreign currency. To the extent that the Company has borrowings      outstanding under its Credit Facility and its second lien term loan, the      Company will have market risk relating to the amount of borrowings due to      variable interest rates under the credit facility. All of the Company’s      lease obligations are fixed in nature as noted in Note 5 to the Financial      Statements contained in our Annual Report on Form 10-K for the year ended      December 31, 2008, and the Company has no long-term purchase      commitments.                                                                                                                                                                                                                                                                                                                                                                                                                 |
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|   | Item 4 – Controls and      Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
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|   | Evaluation      of Disclosure Controls and Procedures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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|   | The      Company’s management, under the supervision and with the participation of      the Company’s Chief Executive Officer and Chief Financial (and principal      accounting) Officer, carried out an evaluation of the effectiveness of the      design and operation of the Company’s disclosure controls and procedures      (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act      of 1934) as of March 31, 2009. Based upon that evaluation, and the      identification of the material weakness in the Company’s internal control      over financial reporting as described below and more fully in “Item 9A –      Controls and Procedures – Management’s Report on Internal Control over      Financial Reporting” in the Company’s Annual Report on Form 10-K for the      year ended December 31, 2008, the Chief Executive Officer and Chief      Financial Officer concluded that the disclosure controls and procedures      were ineffective as of the end of the period covered by this report. The      identified material weakness consists of an understaffed financial and      accounting function and the need for additional personnel to prepare and      analyze financial information in a timely manner and to allow review and      on-going monitoring and enhancement of our controls. |
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|   | Changes      in Internal Control Over Financial Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
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|   | In      March, 2009, we extended offers of employment to two staff accountants      which were accepted in the first week of April 2009. These two positions      had been identified as the understaffing weakness described above. During      the second quarter of 2009, we expect to determine what additional changes      are needed to determine a final plan to remediate the understaffing      material weakness. As described more fully in “Item 9A – Controls and      Procedures – Plan for Remediation of Material Weaknesses” in the Company’s      Annual Report on Form 10-K for the year ended December 31, 2008, we      continue to monitor our disclosure and financial reporting control      procedures and will continue to review changes in our staffing      requirements to remediate the materialweakness.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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|   |                    |
|--------|-------------------------|
|   | Item 6 – Exhibits |
|   |                    |
|   | Exhibits:               |

| 31.1 | Certification      of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d –      14(a).     |
|------|------------------------------------------------------------------------------------------------------|
| 31.2 | Certification      of principal financial officer Pursuant to Rule 13a-14(a)/15d –      14(a). |
| 32.1 | Certification      of Chief Executive Officer Pursuant to 18 U.S.C. §1350.                      |
| 32.2 | Certification      of principal financial officer Pursuant to 18 U.S.C. §    1350.              |

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| SIGNATURES                                                                                                                                                                                             |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                   |
| Pursuant      to the requirements of the Securities Exchange Act of 1934, the registrant      has duly caused this report to be signed on its behalf by the undersigned      thereunto dulyauthorized. |

|   |   | INNOTRAC      CORPORATION |   |
|--------|--------|---------------------------|--------|
|   |   | (Registrant)              |

| Date:      May 15, 2009 |   | By:                                                  | /s/      Scott D. Dorfman |   |
|-------------------------|--------|------------------------------------------------------|---------------------------|--------|
|                    |   | Scott      D. Dorfman                                |
|                    |   | President,      Chief Executive Officer and Chairman |
|                    |   | of      the Board (Principal ExecutiveOfficer)       |

| Date:      May 15, 2009 |   | By:                                                                                              | /s/      George M. Hare |   |
|-------------------------|--------|--------------------------------------------------------------------------------------------------|-------------------------|--------|
|                    |   | George      M. Hare                                                                              |
|                    |   | Chief      Financial Officer (Principal Financial Officer and Principal      Accounting Officer) |