# UNITED STATES SECURITIES AND
EXCHANGE COMMISSION

# Washington, D.C. 20549

_________________

# FORM 10-KSB

# (Mark One)

| | x | Annual
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
fiscal year ended December 31, 2004.
| | - | ---------------------------------------------------------------------------------------------------------------------------------

# OR

| | o | Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
transition period from __________ to __________.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------

# Commission File No.
0-7475

_________________

# NATURE VISION, INC.

(Name of Small Business
Issuer in its Charter)

|MINNESOTA                                                                                                                               |  | 41-0831186                           | 
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | 
|(State or other jurisdiction of
                                                                         incorporation or organization) |  | (I.R.S. Employer Identification No.) | 
|                                                                                                                                       
|213 NW 4TH STREET, BRAINERD, MN                                                                                                         |  | 56401                                | 
|(Address of principal executive offices)                                                                                                |  | (Zip Code)                           | 

Issuers Telephone Number,
Including Area Code: (218) 825-0733

Securities registered under Section
12(b) of the Exchange Act: None

Securities
registered pursuant to Section 12(g) of the Exchange Act: Common Stock, par value $0.16
per share

Check
whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of
the Exchange Act during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.    Yesx
Noo

Check if there is no
disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-KSB or any amendment to this Form 10-KSBo
.

Issuers revenues for
fiscal year ended December 31, 2004 were $12,361,543.

The aggregate market value of
voting and non-voting common equity held by non-affiliates of registrant as of April 8, 2005 was approximately $7,765,800.

The number of shares
outstanding of the registrants common stock, par value $0.16 per share, as of April 8, 2005 was 2,178,559.

# DOCUMENTS INCORPORATED BY REFERENCE

The definitive proxy
statement for the 2005 Annual Meeting of Shareholders is incorporated by reference into Part III of this annual report.

Transitional Small Business Disclosure Format (check one).
    Yeso
Nox



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# PART I

# Item 1.   DESCRIPTION OF BUSINESS.

# General

Nature Vision, Inc.
(Nature Vision or the Company) is comprised of two operating divisions. The Companys outdoor
recreation products division primarily designs and markets video viewing systems for the sport fishing market and other video
based consumer and industrial products. The Companys photography division designs, manufactures and markets professional
cameras, electronic flash equipment, lens shades and related photographic accessories and provides peripheral products for the
videoconferencing and the audiovisual markets.

Nature Vision was
incorporated under the laws of the State of Minnesota in 1959 and operated under the name Photo Control Corporation
until August 31, 2004. In 1973, Photo Control acquired all of the outstanding stock of Norman Enterprises, Inc., a California
corporation. In June 1983, Photo Control acquired all of the outstanding stock of Nord Photo Engineering, Inc., a Minnesota
corporation. In October 1997, Normans manufacturing operations were moved to Minnesota and the land and building in
California was sold. In October 1998, the remaining sales and service facility was closed and moved to Minneapolis. Effective
January 1, 1998, Photo Control liquidated both subsidiaries and transferred the assets to Photo Control Corporation, the parent
company. On August 31, 2004, the corporate name was changed to Nature Vision, Inc. in connection with a merger
transaction with Nature Vision Operating Inc. (f/k/a Nature Vision, Inc.) Our executive offices are located at 213 NW
4th Street, Brainerd, Minnesota 56401; our telephone number is (218) 825-0733.

Our annual report on Form
10-KSB, quarterly reports on Form 10-QSB, current reports on Form 8-K and all amendments to such reports filed pursuant to Section
13(a) or 15(d) of the Exchange Act are available, free of charge, on or through our Internet website located at
www.naturevisioninc.com, as soon as reasonably practicable after they are filed with
or furnished to the Securities and Exchange Commission.

# Merger Transaction

On August 31, 2004, PC
Acquisition, Inc., a wholly-owned subsidiary of the Company, merged with and into Nature Vision Operating Inc. (f/k/a Nature
Vision, Inc.), pursuant to the terms of a merger agreement and plan of reorganization dated April 15, 2004. As a result of the
merger, Nature Vision Operating Inc. became a wholly-owned subsidiary of the Company, and the Company amended its articles of
incorporation to change its corporate name to Nature Vision, Inc. from Photo Control Corporation. The
merger received shareholder approval on August 31, 2004 and closed on that day.

Each Nature Vision Operating
Inc. shareholder received 0.58137 shares of the Companys common stock for each share of Nature Vision Operating Inc. common
stock held on the closing date of the merger. Nature Vision Operating Inc. shareholders received cash instead of any resulting
fraction of a share in an amount reflecting the market value of the fractional share. After taking into account a 1-for-2 reverse
stock split of the Companys common shares that was effected immediately after the merger on August 31, 2004, 894,301 common
shares were issued to former Nature Vision Operating Inc. shareholders.

Each outstanding Nature
Vision Operating Inc. option and warrant was converted at the closing of the merger into an option or warrant exercisable for that
number of the registrants common shares equal to the product of (a) the number of shares of Nature Vision Operating Inc.
common stock subject to the option or warrant multiplied by (b) 0.58137. The exercise price was adjusted to equal the quotient of
(x) the current exercise price of the option or warrant divided by (y) 0.58137.

A description of the merger
is included in the joint proxy statement/prospectus on Form S-4 filed with the Securities and Exchange Commission (Commission No.
333-115593).

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# Investment Considerations

Investors should consider all
of the information contained in this report including the factors discussed under Item 1  Description of Business 
Factors That May Affect Future Results, Item 6  Managements Discussion and Analysis of Financial Condition and Results
of Operations and Item 7  Financial Statements, before making an investment decision with regard to our securities.

Some of the statements made
in this report in the sections listed above and elsewhere in this report constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements are subject to the safe harbor provisions of the reform
act. Forward-looking statements may be identified by the use of the terminology such as may, will, expect, anticipate, intend,
believe, estimate, should or continue or the negatives of these terms or other variations on these words or comparable
terminology. To the extent that this report contains forward-looking statements regarding the financial condition, operating
results, business prospects or any other aspect of our business, you should be aware that our actual financial condition,
operating results and business performance may differ materially from that projected or estimated by us in the forward-looking
statements. We have attempted to identify, in context, some of the factors that we currently believe may cause actual future
experience and results to differ from their current expectations. These differences may be caused by a variety of factors
including, but not limited to, adverse economic conditions, intense competition, including entry of new competitors, inability to
obtain sufficient financing to support our operations, progress in research and development activities, variations in costs that
are beyond our control, adverse federal, state and local government regulation, unexpected costs, lower sales and net income (or
higher net losses, than forecasted), price increases for equipment, inability to raise prices, failure to obtain new customers,
the possible fluctuation and volatility of our operating results and financial condition, inability to carry out marketing and
sales plans, loss of key executives and other specific risks that may be alluded to in this report.

# Products

Outdoor Recreation Products Division

Overview

Nature Visions outdoor
recreation products division designs, manufactures and markets products primarily for the sport fishing and hunting markets. We
have also adapted our outdoor recreation products and core technologies for sale into certain industrial markets. Manufacturing of
most of these products is outsourced to companies located in Asia, where we use approximately six suppliers for key components,
sub-assemblies and raw materials. We have identified but not qualified alternative Asian suppliers. Some final assembly is
undertaken at our Brainerd, Minnesota facility, which also serves as the distribution center for our outdoor recreation product
line.

Our outdoor recreation
products have historically been offered to the public by traditional sporting goods dealers. We have begun to focus on significant
retailers to offer our products as we expand our product categories, including Cabelas, Bass Pro Shops, Gander Mountain,
Dicks Sporting Goods and Mills Fleet Farm. Sales to each of Cabelas and Bass Pro Shops accounted for in excess of 10%
of our 2004 revenues. We primarily rely upon independent sales representatives to sell our outdoor recreation products to
retailers. Demand for our outdoor recreation products is seasonal, with most sales occurring in the fourth and first calendar
quarters.

Underwater Viewing Systems

Our outdoor recreation
products division manufactures and markets a family of products called underwater viewing systems that are sold under the trade
name Aqua-Vu. We are credited as the creator of the underwater viewing system product category and were the first to
market a self-contained underwater viewing system. An underwater viewing system consists of a submersible video camera with
internal lighting and a hand held monitor-viewing device with a battery power supply. With the use of attachable weights and fins,
the underwater camera can be lowered into a body of water and used to look in the direction a boat is traveling. In the past the
Aqua-Vu systems have relied on cathode ray tube (CRT) display technology which required a sunshield to shadow the
display.

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In 2004, we began to market Aqua-Vu systems that incorporate a proprietary
sunlight viewable liquid crystal display (LCD) technology that allows multi-person viewing on color display monitors. The 2004
Aqua-Vu systems also incorporate on-screen display information, including the water temperature at the camera, camera
depth and camera direction. The Aqua-Vu systems range in price from $199 to $1,999.

Hunting Products

We also sell products for the
recreational hunting market. These products include Game-Vu camera systems and Woodland Whisper hearing
enhancers. The Game-Vu camera system uses a proprietary digital camera designed to capture images of game as it walks by the
device. The camera system incorporates a passive infrared (PIR) body heat sensor to detect the animal, which triggers the Game-Vu
system to take a photograph and record the time and date on the image. In addition, the Game-Vu system uses invisible infrared
light to illuminate the animal in the dark and includes a hand-held video viewing monocular to view the images in the field. The
Woodland Whisper hearing enhancers aid wild turkey hunters, by detecting distant game calls, and deer and elk hunters, by
amplifying the sounds of approaching prey.

Ice Fishing Products

In 2003 we introduced a
product for the ice fishing market called the Buzz Stix. A Buzz Stix ice fishing rod incorporates a miniature
vibrating motor activated with a push button switch. Fish tend to be inactive during the winter, but successful ice fishermen have
learned that a very slight jigging action is useful to lure fish into striking the bait. The Buzz Stix technology allows amateur
anglers to duplicate this micro-jigging action. In 2004, Nature Vision expanded the Buzz Stix ice fishing rod product
line. An automatic jigging Buzz Stix ice fishing rod that incorporates a small micro processor and three pre-programmed jigging
routines were introduced, as well as a Hot Stix ice fishing rod with a heated handle.

Industrial Products

We
have adapted our underwater viewing technology for use in the water well inspection
industry, offering a line of cameras under the trade name Well-Vu. Our Well-Vu
underwater viewing systems that are submersible to 1,000 feet. In addition, we sell
viewing system products called Tool-Vu and Mini-Vu for use in
automotive and building inspections.

PIDS (Personal Information Delivery System)

In connection with marketing
our current product lines, we have developed the PIDS (personal information delivery system) point-of-sale video kiosk
system for use by retailers. The PIDS video kiosk system uses a 10.5-inch touch-screen LCD to display one of nine informational
video clips selected by a customer. When a selection is made, the PIDS plays a two-minute video presentation. The PIDS video kiosk
system incorporates a MPEG4 media card, which can be updated in minutes. The PIDS video kiosk system is currently used to market
Nature Visions products.

Photography Division

Our photography division
designs, manufactures and markets professional Camerz film cameras, photographic accessories, Norman electronic flash equipment,
and the Lindahl product line which consists of lens shades, light filters and flash brackets. Most of our photography products are
manufactured in our Minneapolis, Minnesota facility and distributed by our employee sales personnel and independent
representatives. In October 2000 we purchased the Bookendz docking station for Apple PowerBook and Ibook, and offer a cradle and
wrap for the IPod product. In January 2004, we acquired the assets comprising the Vaddio product line. As a value-added reseller,
we market peripheral products for the videoconferencing and audiovisual markets under the Vaddio brand to dealers, who in turn
design and install automated camera systems to end-users such as corporations, educational institutions, and religious and
governmental organizations.

The principal market for our
Camerz film camera equipment is the sub-segment of the professional photography market requiring high-volume equipment, such as
elementary and secondary school photographers.

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The market with respect to the Norman electronic flash equipment and Lindahl
lens shades is broader, extending to all professional photographers and to experienced amateur photographers. The market for the
Bookendz docking station is owners of the Apple PowerBook, IBook and IPod. The geographic market in which we compete with respect
to camera equipment, flash equipment and lens shades consists of the entire United States and, to a lesser extent, some foreign
countries. The Bookendz docking station is sold internationally, although substantially all sales are in the United States. Our
Vaddio products are marketed to dealers that design and install automated camera systems for the videoconferencing and audiovisual
markets.

We market most of our Camerz
cameras, Norman electronic flash and lighting equipment, Lindahl lens shades and photographic accessories through employee sales
personnel. In addition, independent representatives are used to sell the Lindahl, Norman and Vaddio product lines. Bookendz
products are marketed by employee sales personnel. Our Vaddio product line is marketed primarily in the United States through
independent representatives.

In 2003 we introduced a
14-mega pixel digital camera back which fits onto the Camerz ZII and ZIII film cameras. In the Norman product line the
D12 and D24 series 900 power supplies were introduced which are used with standard AC power. Two new series of softboxes were
introduced, the Norman battery portable and the Norman umbrella type softboxes. In the Lindahl product line the GoPod, a body
mounted camera holder aimed at the sport photographer, was introduced. A docking station for the Apple 12-inch Powerbook was
introduced in May 2003. In 2004 a docking station for the 15-inch Powerbook was introduced. Since acquiring the Vaddio product
line in January 2004, we have served as a value-added reseller of Sony and Canon video cameras. We offer electronic subsystems,
enclosures, brackets and control systems to automate the cameras to our dealer customers.

Materials required for our
photographic equipment consist primarily of fabricated parts, lenses, electronic components, and lights, most of which are readily
available from numerous sources. Material for the Bookendz product consists primarily of electronic components and fabricated
parts, which are readily available. Our Vaddio product line utilizes video cameras manufactured by Sony and Canon, which are
readily available through our OEM relationship with these manufacturers.

The photographic equipment
and the Vaddio business is somewhat seasonal, with a larger volume of sales from April through September. Historically, the
Bookendz product has less sales volume in the summer months.

During the two years ended
December 31, 2004 and 2003, we derived 11.3% and 16.3%, respectively, of our photography division equipment sales from an
unaffiliated customer, Lifetouch Inc. and its affiliates. During the two years ended December 31, 2004 and 2003, 13.2% and 12.1%,
respectively, of our sales were from a second unaffiliated customer, PCA National, Inc. Our photography division does not have
operations based outside of the United States. During each of the last two years ended December 31, 2004, slightly less than five
percent of the photography divisions sales were derived from export sales.

# Intellectual Property

Outdoor Recreation Products Division

We hold 10 patents
and have two patent applications pending for products offered by our outdoor recreation products division. Seven of the patents
relate to aspects of the Aqua-Vu underwater viewing system, including the camera housing. The remaining patents cover our Buzz
Stix ice fishing pole, a bird feeder with a built-in video camera and transmitter and a hand-held monocular video monitor. Pending
patents include the Hot Stix ice fishing products. The patents expire during the period 2014 through 2023. There is no guarantee
that others may not copy any of our products in whole or in part to produce a product similar in design and purpose. Patent
protection of our products does not imply that they will recognize any substantial, competitive edge in the marketplace.

We also hold various
trademarks relating to our outdoor recreation products, including Aqua-Vu, Game-Vu, Tool-Vu, Mini-Vu, Woodland Whisper, Buzz Stix,
Hot Stix and PIDS. We consider these trademarks important in assuring consumer recognition of our products.

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Photography Division

When we acquired the Bookendz
product line in 2000, we also acquired the exclusive license right to patent number 5,186,646, which expires on January 16, 2012.
The patent provides for multiple ports or connections which allows for easy and quick connection between two devices. Also in
2000, utility patent number 6,024,461 (which expires on October 31, 2016) and design patent number 428,661 (which expires July 25,
2014) were issued for a lamphead having a multi-positional base and removable mountable reflector flashtube assembly. The patented
lamphead is used in the Norman flash equipment product line and allows for interchange of the flashtube assembly on the lamphead.
We received U.S. Patents No. 5,294,950 on March 15, 1994 (which expires March 16, 2012) and No. 5,812,895 on September 22, 1998
(which expires March 16, 2012) for an identification system for automated film and order processing including machine and human
readable code.

We are the owner of the
registered trademarks Camerz,  Norman,  Lindahl and Bookendz and the logo-type
designs used in connection with the sale of products under those names. We have common law rights in our Vaddio
trademark.

Although
our patents and trademarks are valuable, they are not considered to be essential to our
photography divisions success. Innovative application of existing technology along
with providing efficient and quality products are of primary importance.

We
have entered into agreements with employees that grant us the exclusive right to use,
make and sell inventions conceived by our employees during their employment. Management
believes that the right to use, make and sell such inventions adequately protects against
any employee who might claim an exclusive proprietary right in an invention developed
while the employee was employed by us.

# Competition

Outdoor Recreation
Products Division

Our
Aqua-Vu systems compete with underwater cameras sold by several small companies. We also
face competition from manufacturers of sonar and global positioning system (GPS) devices.
Sonar devices detect schools of fish and, at times, individual fish, and can provide
information about lake and river bottom contours. GPS devices allow fishers to
mark spots where fish are located and then easily find them again. Large
consumer and marine electronics companies as well as established companies offering
fishing and hunting equipment are sources of potential competition.

Photography Division

Primary
methods of competition for our photography products are product performance, reliability,
service and delivery. Because of varying product lines, we are unable to state accurately
our competitive position in relation to these factors. The Camerz film cameras have no
known competitor. In the somewhat broader market in which the Norman professional studio
electronic flash equipment competes, there are approximately 10 significant competitors,
several of which are well established. We cannot estimate accurately Normans overall
competitive position in relation to these competitors.

# Research and Development

For
the years ended December 31, 2004 and 2003, we spent $54,098 and $83,839, respectively, on
research activities relating to the development of new outdoor recreation products, and
$37,295 and $861,000, respectively, on research activities relating to photography
equipment. We anticipate that spending on research and development in 2005 will be
comparable to that in 2004.

# Government Regulation

Our
outdoor recreation and photography products are not subject to significant government
regulations other than those regulations applicable to businesses generally. When they
were introduced in 1998, the Aqua-Vu systems were the subject of proposed legislation to
ban the devices in Minnesota, but the legislation was never enacted.

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# Employees

As of March 31, 2005, we
employed 61 persons, consisting of 59 full-time employees and two part-time employees. We also are utilizing the services of two
leased personnel.

# Compliance with Environmental Laws

Both of our operating
divisions are in compliance with all applicable federal, state and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants. Compliance with these
environmental laws and regulations has had no material effect on our capital expenditures, earnings or competitive position.

# Management

Executive officers of Nature
Vision are as follows:

|Name              |  | Age |  | Position
|----------------- |  | --- |  | --------
|                  |  |     |  |         
|Jeffrey P. Zernov |  |     |  | 52      
|Michael R. Day    |  |     |  | 43      
|Robin K. Sheeley  |  |     |  | 49      

Jeffrey
P. Zernov has served as our President and Chief Executive Officer and as a director
since August 31, 2004. Prior to August 31, 2004, Mr. Zernov served in the same
capacities for Nature Vision Operating, Inc. (f/k/a Nature Vision, Inc.), which he
founded in 1998. Mr. Zernov also served as Chief Financial Officer of Nature Vision
Operating, Inc from 1998 through 2002. In 1979, Mr. Zernov founded Zercom Corporation, a
defense electronics contractor, which he sold to Communication Systems Inc. in 1990. Mr.
Zernov served as Zercom's Chief Executive Officer until 1996 and, in addition, from 1990
though 1996, he established and served as President of the Zercom Marine division, a
designer and manufacturer of sonar products for sports fishing applications. Prior to
1979, Mr. Zernov served as a field promotion specialist with Lindy Tackle and was a
co-founder of In-Fisherman, a sports fishing publisher and producer of television shows.

Michael
R. Day has served as our Chief Financial Officer and Chief Operating Officer since
August 31, 2004. Prior to August 31, 2004, Mr. Day served in the same capacities for
Nature Vision Operating, Inc. (f/k/a Nature Vision, Inc.). From 1999 through 2002, Mr.
Day served as the Chief Financial Officer of Image Rotational Enterprises, Inc., a
Brainerd, Minnesota manufacturer of rotational molded plastic parts.

Robin
K. Sheeley has served as our Executive Vice President - photography division since
October 11, 2004. Mr. Sheeley joined the Company on January 5, 2004, as Managing
Director of the Vaddio video conferencing and presentation business line, in connection
with the purchase from Vaddio LLC, a Minnesota limited liability company, of the product
line. From January 2003 until he joined the Company, Mr. Sheeley served as Chief
Executive Officer of Vaddio LLC. From August 1999 through May 2002, Mr. Sheeley served
as Chief Technology Officer of the VideoLabs division of E.mergent, Inc., a
publicly-held, Minnesota-based manufacturer of electronic products used in the audio
visual and video conferencing industries. Prior to August 1999, Mr. Sheeley owned and
operated Acoustic Communication Systems, Inc. a privately-held, Minnesota-based
manufacturer of electronic products used in the audio visual and video conferencing
industries.

# Factors That May Affect
Future Results

Factors
that may affect our future results include, but are not limited to, the following items
as well as the information in Item 6  Managements Discussion and Analysis of
Financial Condition and Results of Operations.

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Factors Relating to the Company as a Whole

We may need additional
capital in the future. While we believe that we currently have sufficient resources with current cash and our current
credit facility to conduct business, we may need additional capital in the future. We may not be able to obtain additional debt or
equity financing or, if we do, it may not be on favorable terms. Sources of additional capital may include additional bank debt
financing or the sale of debt or equity securities, the latter of which could result in significant dilution to existing
shareholders.

We depend on patents
and proprietary technology. Our long-term success may depend on our ability to defend current patents and obtain patent
protection for future products and processes. We currently have 15 United States patents. In addition, we have applied for patent
protection on additional aspects of our current products. These patent applications may not be granted. Even if they are, the
scope of any patent protection may be limited, allowing for competitive products, or the patents may be held invalid if
challenged. We also rely upon trade secrets, and no assurance can be given that others will not independently develop or otherwise
acquire substantially equivalent know-how or otherwise gain access to our proprietary technology.

We
depend on our key personnel. Our future success depends to a significant degree upon the continued services of key
technical and senior management personnel including, but not limited to, Jeffrey P. Zernov, our Chief Executive Officer and
President, as well as our ability to attract, retain and motivate highly qualified managerial and technical personnel if we
expand. Failure to attract and retain skilled personnel could hinder our research and development and manufacturing efforts, and
could limit our ability to expand our product offering or to manage growth. The loss of one or more key employees could similarly
affect us.

Factors Relating to our Outdoor Recreation Products
Division

The future growth of
our outdoor recreation products division will depend upon our ability to continue to develop new and innovative products and enter
new markets. A significant portion of our outdoor recreation products divisions current revenue has been
historically dependent upon sales to traditional sporting goods dealers. In addition to current products, we intend to introduce
new products for other applications in the outdoor recreation market. Because some of these new product categories may be new to
us, we may need to develop relationships with major participants in this market, which in many cases are different from our
existing customers. Any new products may not be accepted by the ultimate users. Even if they are, we may need to continue to
develop relationships with significant retailers to penetrate markets and compete against suppliers of similar products.

We use Asian-based
sources of supply for some of our products.We currently purchase, and will continue to purchase, finished goods,
components and raw materials from Asian-based vendors for our outdoor recreation products. Although we have identified alternative
finished goods manufacturers and suppliers for key components, sub-assemblies and raw materials, at the present time we use
approximately six Asian suppliers. Should a key supplier be unwilling or unable to supply components or sub-assemblies in a timely
manner or subject to specifications, or should approval of a current or proposed supplier be delayed, withheld or withdrawn, we
could experience delays in obtaining alternative suppliers, which might result in reduced product output. In addition, the price
that we pay for these products could increase due to trade barriers, tariffs or other trade restrictions imposed by the United
States or changes in international currency rates.

Government regulation
banning or restricting the use of underwater video cameras would hurt our business. The use of the Aqua-Vu underwater
viewing system is not regulated by any federal or state governmental entity, nor is management aware of any similar restrictions
in Canada or other foreign countries. In 1998, at the time the product was introduced, the Minnesota Senate passed a bill that
would have outlawed the use of underwater video cameras for sport fishing. The Minnesota House of Representatives did not act upon
the bill, and it was never enacted. If a federal, state or foreign governmental entity were to enact legislation banning or
restricting the use of underwater video cameras, sales of the Aqua-Vu underwater viewing system would decline and our business
would suffer as a result of fewer sales of our flagship product.

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Potential competitors
could lower our revenues or cause expenses to increase.Our current competition for the Aqua-Vu underwater viewing
system and other products consists of several small companies. Potential competitors include large consumer and marine electronics
companies with broader product lines and better name recognition and market acceptance. These companies also have significantly
greater financial, technical, marketing and other resources. Increased competition, especially by these larger, more established
potential competitors, may result in increased pricing pressure resulting in reduced gross profit margins. We may also be forced
to increase its spending on marketing, sales and product development, which would further reduce profits.

Factors relating to our Photography Division

The photography
divisions core business faces a rapidly changing industry, which has hurt revenues and resulted in losses in 2003 and in
2004. Our photography divisions core business of designing, manufacturing and marketing professional cameras,
flash equipment and accessories has recently experienced, and is expected to continue to experience, significant changes due to
the introduction and acceptance of digital photography. As a result, demand for our camera line has declined. In addition,
engineering and selling, general and administrative expenses are not affected directly by variations in revenue.

Our photography division's
revenues have declined in each of the last two years, which has affected profitability. It lost $371,337 in 2004 and lost $964,471
in 2003. Notwithstanding efforts to diversify, sales and profitability may continue to suffer.

A limited number of our
photography division customers generate a significant portion of revenues. Our photography division had two major
customers in the two years ended December 31, 2004 and 2003 which accounted for 24.5% and 28.4%, respectively, and these customers
will likely account for a significant percentage of its revenues during 2005. There is no assurance that we will be able to retain
these major customers or continue to maintain the levels of sales to them. The loss of or reduction in demand for our products
from major customers could have a material adverse effect on operating results and cash flow from operations.

Our photography
divisions business is subject to frequent technological change. Digital camera technology has had rapid changes in
recent years and our camera units are subject to obsolescence as larger competitors continue to develop technologically advanced
products. Similarly, the Bookendz docking stations are designed for 12- and 15-inch Apple Powerbook laptop computers. Changes in
the Powerbook design by Apple for the port connections configuration or in the size or shape of the Powerbook, or the development
of enhanced wireless capabilities would render this product line obsolete and significantly impair the value of the Bookendz
patent.

We have a limited
source of product supply so our photographic division is subject to higher prices. Because of the small quantities
of products we order from vendors and our inability to develop digital sensor and camera boards, we rely on outside vendors for
development and supply of these products, including large companies such as Sony and Canon. Our limited purchasing power and
dependence upon vendors technology means we cannot benefit from lower prices and other favorable terms provided to larger
competitors.

Our photography
divisions sales are seasonal, so uneven revenues are experienced throughout the year. Our photography
divisions sales are seasonal, with over 60% of revenues realized in the second and third quarters. However, orders from
certain large customers can significantly reduce or exacerbate the seasonal pattern. Conversely, expenses are largely constant
throughout the year. Management is forced to rely on credit facilities and other sources of funds during periods where expenses
are higher than revenues. Operations would be harmed if sufficient credit was not made available during a seasonal downturn in
revenues, or if the lender imposed unfavorable credit terms.

There is a lot of
competition that could hurt our photography divisions revenues or cause expenses to increase.Our current and
prospective competitors include many companies with financial, technical, marketing and other resources that are substantially
greater than ours. We may not have the financial resources, technical expertise

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or marketing, sales and support capabilities to compete successfully. The
presence of these competitors could hurt its business by causing us to:

- Reduce the selling prices for products and services.
- Increase spending on marketing, sales and product development.

We may not be able to offset the
effects of price reductions or increases in spending. Further, our financial condition may
put us at a competitive disadvantage relative to our competitors.

# Item 2. DESCRIPTION OF
PROPERTY.

Nature
Vision owns two facilities used in its business. A 35,000 square foot facility located at
213 NW 4thStreet, Brainerd, Minnesota houses administrative, manufacturing,
research and development, sales, accounting and customer service departments. The facility
is secured by a mortgage. Nature Vision is obligated under a related promissory note with
an interest rate equal to prime plus .75%. As of December 31, 2004, the interest rate was
6% and monthly payments of principal and interest totaled $4,126. The promissory note
matures in June 2009. Approximately 10,000 square feet of the space is leased to unrelated
parties.

A
55,000 square feet facility located at 4800 Quebec Avenue North, Minneapolis, Minnesota is
used by the photography division for manufacturing and administrative purposes.

Nature
Vision believes its present facilities are adequate for its current level of operation and
provide for a reasonable increase in production activities.

# Item 3. LEGAL
PROCEEDINGS.

Not
applicable.

# Item 4.  SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

# PART II

# Item 5.  MARKET FOR
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY
SECURITIES.

Market
Information. The number of record holders of our common stock on April 12, 2005 was
286. The table below sets forth the high and low sale prices for the common stock during
the two years ended December 31, 2004, and gives effect to the 1-for-2 reverse stock split
of Nature Visions common stock that was effected on August 31, 2004. The information
shown is based on information provided by Yahoo! Inc. and Nasdaq. These quotations
represent prices between dealers, and do not include retail markups, markdowns or
commissions, and may not represent actual transactions. Our common stock is currently
quoted on the Nasdaq Small-Cap Market under the symbol NRVN. Nature Vision did
not pay any cash dividends on our common stock during the periods presented.

|             |  | Common Stock
|------------ |  | ------------
|
|             |  |             
|2003         |  |             
|March 31     |  |             
|June 30      |  |             
|September 30 |  |             
|December 31  |  |             
|            
|2004         |  |             
|March 31     |  |             
|June 30      |  |             
|September 30 |  |             
|December 31  |  |             

Unregistered Sales of
Equity Securities and Use of Proceeds. During the quarter ended December 31, 2004, Nature Vision issued common shares upon the
exercise of 13 warrants. The warrants were exercised between October 4, 2004 and December 17, 2004, for a total of 12,575 common
shares. Each of the issuances was exempted from registration under the Securities Act of 1933, as amended, in reliance upon
Section 4(2) as a transaction not involving a public offering. Nature Vision received cash proceeds of $1,001 from the exercises,
as all but one were cashless. The proceeds have been used for general working capital purposes.

10

---

Securities Authorized for
Issuance Under Equity Compensation Plans. The following table sets forth the securities authorized for issuance under Nature
Visions compensation plans as of December 31, 2004.

|                                      | Number of securities to be issued upon exercise of outstanding options, warrants and rights |  | Weighted average exercise price of outstanding options, warrants and rights |  | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|------------------------------------- | ------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|                                      |                                                                                             |  |                                                                             |  |                                                                                                                                            
|                                      |                                                                                             |  | (a)                                                                         |  |                                                                                                                                            
|Equity compensation plans approved by
|security holders                      |                                                                                             |  | 167,456                                                                     |  |                                                                                                                                            
|Equity compensation plans not         |                                                                                             | 
|approved by securities holders        |                                                                                             |  | 116,502                                                                     |  |                                                                                                                                            
|                                      |                                                                                             |  |                                                                             |  |                                                                                                                                            
|Total                                 |                                                                                             |  | 283,958                                                                     |  |                                                                                                                                            
|                                      |                                                                                             |  |                                                                             |  |                                                                                                                                            

# Item 6.   MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

# Company History

Nature Vision, Inc., was
initially founded in 1998. Pursuant to a merger agreement and plan of reorganization by and among the Company, PC Acquisition,
Inc. and Nature Vision Operating Inc. (f/k/a Nature Vision, Inc.), PC Acquisition, Inc., (a wholly-owned subsidiary of Photo
Control Corporation), merged with and into Nature Vision Operating, Inc. As part of the merger, Nature Vision Operating Inc.
became a wholly-owned subsidiary of the Company, and Photo Control Corporation changed its name to Nature Vision, Inc. The shares
of the combined company trade on the Nasdaq SmallCap Market under the symbol, NRVN.

The consolidated financial
statements include the operations of Nature Vision Operating Inc. for the entirety of the periods presented, whereas, Photo
Control Corporations operations have been included as of August 31, 2004, the date of the consumption of the merger. Please
see the reverse merger footnote (footnote 2), for the pro forma financial information for the consolidated statements of
operations as if the merger occurred on January 1, 2003.

# Off Balance Sheet Financing Arrangements

As of December 31, 2004,
there were no off-balance sheet arrangements, unconsolidated subsidiaries and commitments or guaranties of other parties.

# Results of Operations

Sales for the year ended
December 31, 2004 increased by 37% to $12,361,543 from 2003, an increase of $3,362,303. This increase was due to the reverse
merger with Photo Control effective August 31, 2004. Sales in 2004 for the Photo Control division totaled $3,388,791. Of this
amount, 42%, or $1,440,213, came from the Vaddio product line and the balance of $1,948,578 came from the photographic product
line. As of December 31, 2004, the Nature Vision division had a total sales backlog of $2,205,000, an increase of $1,333,000 from
December 31, 2003. Of this backlog, $953,000 was scheduled to be shipped in 2004, which would have provided an 11% increase in
Nature Vision division sales over 2003. The excess backlog was caused by fourth quarter sales of a new product exceeding forecast
by four times. Nature Vision sales are very cyclical, with fourth quarter sales generating 39% of the annual sales volume. Due to
the use of overseas production, management was unable to react quickly enough to such a large increase in orders. Management
believes that there were lost sales opportunities and will adjust inventory levels to attempt to avoid this situation in future
quarters. As a result of this excess backlog, sales from the Nature Vision division were essentially flat from 2003 to 2004.

11

---

Gross profit margin for 2004
decreased to 27.5% from 35.2% in 2003. A portion of the decrease is due to the combining of sales between the Photo Control
division and the Nature Vision division as a result of the reverse merger. The Nature Vision divisions gross profit margins
in 2004 were 28.7%, decreasing from 35.2%. This decrease is due the delay in the sales of the new product series at increased
margins, the sale of the end of life products at reduced margins and increased freight costs to fill the sales backlog. Management
has a plan in place to return margins to near prior year levels. The Nature Vision divisions gross profit margins have been
historically higher than that of the Photo Control division. The Photo Control divisions gross margins for the period
reported were 24.4%, with the Vaddio product line producing a 23.7% gross margin and the photographic product line producing a
25.0% gross margin. Management has set specific goals for Photo Control to increase gross profit margins, concentrating on
increased efficiencies and exploring outsourcing opportunities. Management believes that the Companys over all gross profit
margins will improve in future quarters with the increased efficiencies, continued efforts to outsource and the sale of the new
higher margin product series.

Selling, general and
administrative expenses for 2004 decreased to 25.5% from 26.5% in 2003. The Nature Vision divisions selling, general and
administrative expenses decreased to 24.2% from 26.5% in 2003. The major reduction in expenses came from a revised marketing and
advertising schedule at the Nature Vision division. All other costs are similar to prior period expenditures. The Photo Control
divisions selling, general and administrative expenses for 2004 were 28.9%, with the Vaddio product line at 38.4% and
photographic product line at 21.9%. Vaddio is an emerging product line and in the process of building an infrastructure to support
its sales growth. Management believes these costs as a percentage of sales will begin to reduce in future quarters. The
photographic product line is a mature product line.

An income tax benefit was
recorded for the potential return of taxes paid in a prior period by Nature Vision Operating Inc.. Nature Vision Operating Inc.
will file a short year return for a period ending August 31, 2004. The remainder of the year will be incorporated into a tax
return with a full year of the Photo Control division results. With Nature Vision Operating, Inc. creating profits, management
believes that Photo Controls losses, both current and prior, will be recoverable. A deferred tax asset of $1,050,000 was
established as of August 31, 2004, the date of the reverse merger, with $200,000 being realized by year end, December 31, 2004.

# Liquidity and Capital Resources

Cash decreased by $49,938 to
$41,572 at December 31, 2004 from $91,510 at December 31, 2003. The decrease is a combination of factors including a decrease of
$2,391,000 from operations, a decrease from capital expenditures of $469,000, an increase of $1,453,000 from cash acquired in the
reverse merger with Photo Control, a sale of stock as a condition of the reverse merger of $1,000,000, exercise of common stock
options and warrants of $70,000, draws of $240,000 against the line of credit and payments against long-term debt of $42,000.
Moving manufacturing of the Aqua-Vu product line offshore has caused an approximate 150 day acceleration of cash requirements.
Offshore manufacturing requires units to be partially prepaid prior to delivery, with the remainder due upon delivery. Prior
contract manufacturing provided favorable payment terms of up to net 90 days, from date of delivery. Management believes this is a
one-time change in cash requirements for this product line.

As of December 31, 2004
working capital was $6,061,137, an increase of $5,201,208 from $859,929 at December 31, 2003, primarily as a result of the reverse
merger.

Nature Vision Inc. has a
secured line of credit for $1,500,000 at prime plus 1%. The prime rate at December 31, 2004 was 5.25%. The line expires on June
30, 2005. Management believes it can renegotiate a new line of credit at that time. That line of credit along with the cash flow
from operations will be sufficient to finance operations for a period of at least the next 12 months.

The Company believes that the
effect of inflation has not been material during the year ended December 31, 2004.

# Critical Accounting Policies

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 reported amounts. The more significant estimates include reserves for obsolete inventory, reserves for
warranty and sales returns and the carrying value of intangible assets.

In assessing the ultimate
realization of inventories, management is required to make judgments as to future demand requirements and compare them with the
inventory levels. Reserve requirements increase as projected demand decreases due to market conditions, technological and product
life cycle changes. The photography division has experienced significant changes in reserves in recent periods due to photography
switching from film to digital capture and consolidation of customers resulting in excess capacity and declining requirements for
equipment. Such estimates are difficult to make under current volatile economic conditions and it is possible significant changes
in required inventory reserves may continue to occur in the future.

Warranty and sales returns
reserves are determined by applying historical claim rate experience to the current installed base of equipment. Historical claim
rates and return rates are developed using actual warranty and sales returns expense to establish the reserve requirement for any
given accounting period.

The intangible assets consist
of the patent for the Bookendz docking station and identifiable intangible assets related to the Companys Vaddio product
line acquisition. The patent is being amortized over a six-year period and the identifiable intangible assets are being amortized
over a three to five year life. If significant changes would occur to the estimated future cash flow of the product sales under
the patent right, or from the Vaddio product line, an additional write down would be determined based on the reduction of such
cash flows.

12

---

# Item 7.   FINANCIAL STATEMENTS.

See Financial Statements
beginning on page F-1.

# Item 8.   CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

# Item 8A.   CONTROLS AND PROCEDURES.

Our Chief Executive Officer,
Jeffrey P. Zernov, and our Chief Financial Officer, Michael R. Day, have reviewed our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon
this review, Messrs. Zernov and Day believe that our disclosure controls and procedures are effective in ensuring that
material information related to Nature Vision is made known to them by others within Nature Vision.

There have been no
significant changes in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) that occurred during the fiscal period covered by this report that have materially affected, or are reasonably likely to
materially affect, Nature Visions internal control over financial reporting.

# Item 8B.   OTHER INFORMATION.

Not
applicable.

# PART III

# Item 9.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Incorporated by reference
from Nature Visions definitive proxy statement for the 2005 Annual Meeting of Shareholders.

# Item 10.   EXECUTIVE COMPENSATION.

Incorporated
by reference from Nature Visions definitive proxy statement for the 2005 Annual
Meeting of Shareholders.

# Item 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Incorporated by reference
from Nature Visions definitive proxy statement for the 2005 Annual Meeting of Shareholders.

# Item 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Incorporated by reference
from Nature Visions definitive proxy statement for the 2005 Annual Meeting of Shareholders.

# Item 13.   EXHIBITS.

For a list of Exhibits filed
as a part of this report, see Exhibit Index page following the signature page to this annual report on Form 10-KSB.

# Item 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Incorporated by reference
from Nature Visions definitive proxy statement for the 2005 Annual Meeting of Shareholders.

13

---

# SIGNATURES

In accordance with Section 13
or 15(d) of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

|                       | Nature Vision, Inc.                                                                                                                             
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------
|Date:   April 14, 2005 | By:   /s/   Jeffrey P. Zernov                                                                                                                   
|                       |                                                                                                                                                 
|                       | Jeffrey P. Zernov, President
                                                                                        and Chief Executive Officer

Know
all persons by these presents, that each person whose signature appears below hereby
constitutes and appoints Jeffrey P. Zernov and Michael R. Day, and each of them, his true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and in his name, place, and stead, in any and all capacities, to
sign any and all amendments to this report and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them, full powers
and authority to do and perform each and every act and things requisite or necessary to be
done in and about the premises, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents
or their or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

In
accordance with the Exchange Act, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.

|/s/ Jeffrey P. Zernov                                                                                                       | April 14, 2005
|--------------------------------------------------------------------------------------------------------------------------- | --------------
|                                                                                                                            |               
|Jeffrey P. Zernov                                                                                                           |               
|(President, Chief Executive Officer
                                                                        and a Director) |               

|/s/ Michael R. Day                                                                                                                                      | April 14, 2005
|------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------
|                                                                                                                                                        |               
|Michael R. Day                                                                                                                                          |               
|(Chief Financial Officer, Chief Accounting Officer
                                                                        and Chief Operating Officer) |               

|                   | 
|------------------ | 
|                   | 
|Richard P. Kiphart | 
|(Director)         | 

|/s/ Steve Shanesy | April 14, 2005
|----------------- | --------------
|                  |               
|Steve Shanesy     |               
|(Director)        |               

|/s/ Scott S. Meyers | April 14, 2005
|------------------- | --------------
|                    |               
|Scott S. Meyers     |               
|(Director)          |               

|/s/ Curtis A. Sampson | April 14, 2005
|--------------------- | --------------
|                      |               
|Curtis A. Sampson     |               
|(Director)            |               

|/s/ Thomas F. Leahy | April 14, 2005
|------------------- | --------------
|                    |               
|Thomas F. Leahy     |               
|(Director)          |               

14

---

# Exhibits:

| | 2.1 |  | Merger
agreement and plan of reorganization dated April 15, 2004, by and among Nature Vision,
Inc. (n/k/a Nature Vision Operating Inc.), Photo Control Corporation (n/k/a Nature
Vision, Inc.), PC Acquisition, Inc., Jeffrey P. Zernov (as shareholders' representative)
and certain Nature Vision, Inc. (n/k/a Nature Vision Operating Inc.) shareholders
(previously filed as Exhibit 10.2 to the registrant's Quarterly Report on Form 10-QSB for
the period ended March 31, 2004).
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.1 |  | Amended
and restated articles of incorporation (previously filed as Exhibit 3.1 to the registrants
Report on Form 8-K dated September 7, 2004).
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.2 |  | Amended
and restated bylaws (previously filed as Exhibit 3.2 to the registrants Report on
Form 8-K dated September 7, 2004).
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------

| | 10.1 |  | Amended
and restated retention agreement with Curtis R. Jackels (previously filed as Exhibit 10.1
to the registrants Quarterly Report on Form 10-QSB for the period ended March 31,
2004).
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.2 |  | 2004
Stock Incentive Plan, dated May 10, 2004 (previously filed as Exhibit 10.2 to Amendment
No. 1 to the                   registrant's Registration Statement on Form S-4,
Commission File No. 333-115593).
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3 |  | Executive
salary continuation plan adopted August 9, 1985, including exhibits (previously filed as
Exhibit 10.4 to the registrants Annual Report on Form 10-K for the year ended June
30, 1986).
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.4 |  | 1983
Stock Option Plan (previously filed as Exhibit 10.4 to the registrants Annual
Report on Form 10-K for the fiscal year ended June 30, 1989).
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.5 |  | Form
of stock option agreement under the 1983 Stock Option Plan (previously filed as Exhibit 5
to the registrants Registration Statement on Form S-8, Commission File No.
2-85849).
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.6 |  | Cash
bonus plan for officers and key employees (previously filed as Exhibit 10.4 to the
registrants Annual Report on Form 10-K for the fiscal year ended December 31,
1999).
| | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.7 |  | Amendment
to the registrants 1983 Stock Option Plan dated August 29, 1994 (previously filed
as Exhibit 10.5 to the registrants Annual Report on Form 10-K for the fiscal year
ended December 31, 1994).
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.8 |  | Amendment
to the registrants 1983 Stock Option Plan dated February 23, 1996 (previously filed
as Exhibit 10.6 to the registrants Annual Report on Form 10-K for the fiscal year
ended December 31, 1995).
| | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.9 |  | Amendment
to the registrants 1983 Stock Option Plan dated November 7, 1997 (previously filed
as Exhibit 10.7 to the registrants Annual Report on Form 10-K for the fiscal year
ended December 31, 1997).
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.10 |  | Purchase
and license agreement of Bookendz product line (previously filed as Exhibit 10.1 to the
registrants Report on Form 8-K dated October 19, 2000).
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.11 |  | Retention
agreement with Curtis R. Jackels, dated March 12, 2004 (previously filed as Exhibit 10.9
to the registrants Annual Report on Form 10-K for the fiscal year ended December 31,
2003).
| | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.12 |  | Subscription
and investment representation agreement with Richard P. Kiphart, including form of
irrevocable proxy (previously filed as Exhibit 10.3 to the registrants Quarterly
Report on Form 10-QSB for the period ended March 31, 2004).
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.13 |  | Employment
agreement between Nature Vision, Inc. and Jeff Zernov dated August 31, 2004 (previously
filed                   as Exhibit 10.1 to the registrant's Report on Form 8-K dated
September 7, 2004).
| | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.14 |  | Employment
Agreement by and between Photo Control Corporation (n/k/a Nature Vision, Inc.) and Robin
K. Sheeley, dated January 5, 2004 (previously filed as Exhibit 10.1 to the registrants
Report on Form 8-K dated October 15, 2004).
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.15 |  | Bonus
plan for the fiscal year ending December 31, 2005 for certain executive officers
(previously disclosed in the registrants Report on Form 8-K dated March 23, 2005).
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.16 |  | Summary
of director compensation for 2005.
| | ----- |  | ------------------------------------------

| | 31.1 |  | Certification
of Chief Executive Officer.
| | ---- |  | -----------------------------------------

| | 31.2 |  | Certification of Chief Financial Officer.
| | ---- |  | -----------------------------------------

| | 32.1 |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- |  | -----------------------------------------------------------------------------------------------------------------------



---

# Item 7.   FINANCIAL STATEMENTS.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders, Audit Committee and Board of Directors
Nature Vision Inc.

We have audited the accompanying consolidated balance sheets of Nature Vision
Inc. as of December 31, 2004 and 2003, and the related consolidated statements of operations, stockholders equity and cash
flows for the years then ended. These consolidated financial statements are the responsibility of the companys management.
Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the
overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Nature Vision Inc. as of December 31, 2004 and 2003 and the
results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting
principles.

/s/   Virchow, Krause & Company, LLP

Minneapolis, Minnesota
February 18, 2005

F-1

---

# Nature Vision, Inc.
Balance Sheets
December 31, 2004 and 2003

|                                                | 2004 |  | 2003
|----------------------------------------------- | ---- |  | ----
|ASSETS                                         
|CURRENT ASSETS                                  |      |  |     
|Cash and Cash Equivalents                       |      |  | $   
|Accounts Receivable, net                        |      |  |     
|Inventories, net                                |      |  |     
|Prepaid Expenses                                |      |  |     
|Income Taxes Receivable, net                    |      |  |     
|Deferred Income Taxes                           |      |  |     
|                                                |      |  |     
|Total Current Assets                            |      |  |     
|PROPERTY AND EQUIPMENT, NET                     |      |  |     
|Cash Value Life Insurance                       |      |  |     
|Deferred Income Taxes                           |      |  |     
|Intangibles  net                               |      |  |     
|                                                |      |  |     
|                                               
|TOTAL ASSETS                                    |      |  | $   
|                                                |      |  |     
|LIABILITIES AND STOCKHOLDERS EQUITY            |      | 
|CURRENT LIABILITIES                             |      | 
|Checks issued in excess of cash in bank         |      |  | $   
|Current Portion Contract Payable Vaddio         |      |  |     
|Current Portion of Long-Term Debt               |      |  |     
|Current Portion of Deferred Retirement Benefits |      |  |     
|Line of Credit, Bank                            |      |  |     
|Account Payable                                 |      |  |     
|Accrued Payroll and Payroll Taxes               |      |  |     
|Income Taxes Payable                            |      |  |     
|Accrued Expenses                                |      |  |     
|                                                |      |  |     
|Total Current Liabilities                       |      |  |     
|LONG-TERM LIABILITIES                           |      | 
|Long-term Debt, Net of Current Portion          |      |  |     
|Deferred Retirement Benefits                    |      |  |     
|Contract Payable Vaddio, Net of Current Portion |      |  |     
|Deferred Income Taxes                           |      |  |     
|                                                |      |  |     
|Total Liabilities                               |      |  |     
|                                                |      |  |     
|STOCKHOLDERS EQUITY                            |      | 
|Common Stock, $.16 Par Value per Share          |      | 
|25,000,000 Shares Authorized                    |      | 
|Common Shares Issued and Outstanding at         |      | 
|December 31, 2004 and 2003                      |      | 
|2,178,559 and 894,301, respectively             |      |  |     
|Additional Paid-In Capital                      |      |  |     
|Retained Earnings                               |      |  |     
|                                                |      |  |     
|Total Stockholders Equity                      |      |  |     
|                                                |      |  |     
|                                               
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY      |      |  | $   
|                                                |      |  |     

See accompanying notes to financial statements.

F-2

---

# Nature Vision, Inc.
Statements of Operations
Years Ended December 31, 2004 and 2003

|                                             | 2004 |  | 2003
|-------------------------------------------- | ---- |  | ----
|SALES, NET                                   |      |  | $   
|                                            
|COST OF GOODS SOLD                           |      |  |     
|                                             |      |  |     
|                                            
|GROSS PROFIT                                 |      |  |     
|                                            
|SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |      |  |     
|                                             |      |  |     
|                                            
|INCOME FROM OPERATIONS                       |      |  |     
|                                             |      |  |     
|                                            
|OTHER INCOME(EXPENSE)                        |      | 
|Interest Expense                             |      |  |     
|Interest Income                              |      |  |     
|Other Income (Expense)                       |      |  |     
|                                             |      |  |     
|Net Other Expenses                           |      |  |     
|                                             |      |  |     
|                                            
|INCOME BEFORE TAXES                          |      |  |     
|                                            
|PROVISION FOR INCOME TAXES                   |      |  |     
|                                             |      |  |     
|                                            
|NET INCOME                                   |      |  | $   
|                                             |      |  |     
|                                            
|                                            
|Earnings per Common Share                    |      | 
|Basic                                        |      |  | $   
|Diluted                                      |      |  | $   
|                                            
|Weighted Average Common Shares               |      | 
|Basic                                        |      |  |     
|Diluted                                      |      |  |     

See accompanying notes to financial statements.

F-3

---

# Nature Vision, Inc.
Statements of Stockholders Equity
Years Ended December 31, 2004 and 2003

|                                                                                        | Shares |  | CommonStock |           | AdditionalPaid-InCapital |   | RetainedEarnings |  | TotalStockholdersEquity
|--------------------------------------------------------------------------------------- | ------ |  | ----------- | --------- | ------------------------ | - | ---------------- |  | ------------------------
|                                                                                        |        |  |             |           |                          |   |                  |  |                         
|Balance, December 31, 2002                                                              |        |  |             | 894,301   |                          | $ | 143,088          |  | $                       
|                                                                                       
|Net Income                                                                              |        |  |             | 0         |                          |   | 0                |  |                         
|                                                                                        |        |  |             |           |                          |   |                  |  |                         
|                                                                                       
|Balance, December 31, 2003                                                              |        |  |             | 894,301   |                          |   | 143,088          |  |                         
|                                                                                       
|Reverse Merger August 31, 2004  Conversion of          Photo Control Corporation Stock |        |  |             | 860,082   |                          |   | 137,613          |  |                         
|Reverse Merger August 31, 2004  Sale of Stock to          Richard Kiphart              |        |  |             | 324,395   |                          |   | 51,903           |  |                         
|Exercise of Common Stock Warrants                                                       |        |  |             | 12,575    |                          |   | 2,012            |  |                         
|Exercise of Common Stock Options                                                        |        |  |             | 87,206    |                          |   | 13,953           |  |                         
|Net Income                                                                              |        |  |             | 0         |                          |   | 0                |  |                         
|                                                                                        |        |  |             |           |                          |   |                  |  |                         
|                                                                                       
|Balance, December 31, 2004                                                              |        |  |             | 2,178,559 |                          | $ | 348,569          |  | $                       
|                                                                                        |        |  |             |           |                          |   |                  |  |                         

See accompanying notes to financial statements.

F-4

---

# Nature Vision, Inc.
Statements of Cash Flows
Years Ended December 31, 2004 and 2003

|                                                                                | 2004 |  | 2003
|------------------------------------------------------------------------------- | ---- |  | ----
|CASH FLOWS FROM OPERATING ACTIVITIES                                            |      |  |     
|Net Income                                                                      |      |  | $   
|Adjustments to reconcile net income to net cash flows from operating activities |      | 
|Depreciation and Amortization                                                   |      |  |     
|Loss of Disposal of Property and Equipment                                      |      |  |     
|Provision for Deferred Income Taxes                                             |      |  |     
|Change in Deferred Compensation                                                 |      |  |     
|Changes in Operating Assets and Liabilities                                     |      | 
|Accounts Receivable, net                                                        |      |  |     
|Income Taxes Receivable, net                                                    |      |  |     
|Inventories, net                                                                |      |  |     
|Prepaid Expenses                                                                |      |  |     
|Accounts Payable                                                                |      |  |     
|Other Non-current Assets                                                        |      |  |     
|Accrued Payroll and Payroll Taxes                                               |      |  |     
|Income Taxes Payable                                                            |      |  |     
|Accrued Expenses                                                                |      |  |     
|                                                                                |      |  |     
|Net Cash Flows from Operating Activities                                        |      |  |     
|                                                                                |      |  |     
|                                                                               
|CASH FLOWS FROM INVESTING ACTIVITIES                                            |      | 
|Purchases of Property and Equipment                                             |      |  |     
|Proceeds from Sale of Property and Equipment                                    |      |  |     
|Purchases of Intangibles                                                        |      |  |     
|Cash Acquired in Reverse Merger, net of Merger Costs of $92,663                 |      |  |     
|                                                                                |      |  |     
|Net Cash Flows from Investing Activities                                        |      |  |     
|                                                                                |      |  |     
|                                                                               
|CASH FLOWS FROM FINANCING ACTIVITIES                                            |      | 
|Increase in checks issued in excess of Cash in Bank                             |      |  |     
|Net Advances (Payments) from Line of Credit, Bank                               |      |  |     
|Proceeds from Long-term Debt                                                    |      |  |     
|Principal Payments on Long-term Debt                                            |      |  |     
|Issuance of Common Stock for Cash                                               |      |  |     
|Cash Received from Exercise of Options                                          |      |  |     
|Cash Received from Exercise of Warrants                                         |      |  |     
|                                                                                |      |  |     
|Net Cash Flows from Financing Activites                                         |      |  |     
|                                                                                |      |  |     
|                                                                               
|Net Change in Cash and Cash Equivalents                                         |      |  |     
|                                                                               
|CASH AND CASH EQUIVALENT  Beginning of Year                                    |      |  |     
|                                                                                |      |  |     
|                                                                               
|CASH AND CASH EQUIVALENT  End of Year                                          |      |  | $   
|                                                                                |      |  |     

See accompanying notes to financial statements.

F-5

---

NATURE VISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003

# NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

Nature  Vision,  Inc. (the Company) was established in 1998 to design and
market video viewing systems for the sport fishing market and other video based consumer and industrial products. The
Companys wholly-owned subsidiary, Photo Control Corporation (Photo) designs, manufactures and markets professional cameras,
electronic flash equipment, lens shades and related photographic accessories and sells products used in the video conferencing and
presentation industry (photographic and Vaddio segment). Another line of business of Photo consists of the Bookendz docking
stations for the Apple PowerBook, IBook and IPod. Nature Vision, Inc. grants unsecured credit to its customers which are primarily
dealers and consumers located throughout the United States and Canada. Nature Vision, Inc. contracts with outside organizations
for the manufacture and sale of its products. The geographic market in which Photo competes consists of the entire United States
and, to a lesser extent, some foreign countries and also grants unsecured credit to its customers. Nature Vision, Inc. and Photo
are here-in after referred to as the Company. See Note 2 for a description of the reverse merger which closed on August 31, 2004.

PRINCIPLES OF CONSOLIDATION

On September 7, 2004, Photo Control Corporation, (PHOC), filed a Current
Report on Form 8-K with the Securities and Exchange Commission reporting the merger of Nature Vision, Inc. with PC Acquisition
Corp, (PC Acquisition), then a wholly owned subsidiary of PHOC. For accounting purposes, the merger was accounted for as a reverse
acquisition, with Nature Vision, Inc as the acquirer. The historical financial statements of Nature Vision, Inc. became the
historical financial statements of PHOC, and the assets and liabilities of PHOC are accounted for as required under the purchase
method of accounting. Results of operations of PHOC are included in the financial statements from August 31, 2004, the effective
date of the merger. All share data has been restated to give effect of the merger under which each Nature Vision, Inc. shares were
converted into .58137 shares of PHOC and the reverse 1 for 2 share stock split, (Note 2).

FINANCIAL INSTRUMENTS

The carrying amounts for all financial instruments approximate fair value.
The carrying amounts for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair
value because of the short maturity of these instruments. The fair value of long-term debt, line of credit-bank, contract payable
and deferred liabilities  retirement benefits approximates the carrying amounts based upon the Companys expected
borrowing rate for debt with similar remaining maturities and comparable risk.

CASH AND CASH
EQUIVALENTS

The Company maintains its cash balances in various area banks. Cash balances
are insured up to $100,000 per bank by the FDIC. The balances, at times, may exceed federally insured limits. The Company defines
cash and cash equivalents as highly liquid, short-term investments with a maturity at the date of acquisition of three months or
less.

F-6

---

ACCOUNTS RECEIVABLE

The Company reviews customers credit history before extending unsecured
credit and establishes an allowance for uncollectible accounts based upon factors surrounding the credit risk of specific
customers and other information. Accounts receivable are generally due 30 days after invoice date. Accounts receivable over 30
days are considered past due. The Company does not accrue interest on past due accounts receivable. If accounts receivable are in
excess of the provided allowance are determined uncollectible, they are charged to expense in the year that determination is made.
Accounts receivable are written off after all collection efforts have failed. Accounts receivable have been reduced by an
allowance for uncollectible accounts of approximately $43,000 at December 31, 2004 and $15,000 at December 31, 2003.

INVENTORIES

Inventories consist of raw materials, work in process and finished goods and
are valued at lower of cost using the first-in, first-out (FIFO) method or market. Market represents estimate realizable value in
the case of finished goods and replacement or reproduction cost in the case of other inventories. Because of changing technology
and market demand, inventory is subject to obsolescence. An annual review is made of all inventories to determine if any obsolete,
discontinued or slow moving items are in inventory. Based on this review, inventory is disposed of or an allowance for
obsolescence established to cover any future disposals. Such estimates are difficult to make under current volatile economic
conditions and it is possible significant changes in required inventory reserves may occur in the future.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company reviews long-lived assets, including property and equipment and
intangible assets, for impairment whenever events or changes in business circumstances indicate that the carrying amount of an
asset may not be fully recoverable. An impairment loss would be recognized when the estimated future cash flows from the use of
the asset are less than the carrying amount of that asset. To date, there have been no such losses.

DEPRECIATION

Property and equipment are recorded at cost. Depreciation is provided for
using the straight-line method over an estimated useful life of 25 to 30 years for buildings and improvements and over useful
lives ranging from three to seven years for all other property and equipment. Improvements are capitalized while maintenance,
repairs and minor renewals are expensed when incurred.

INTANGIBLE ASSETS

Intangible assets consisted primarily of patents, and indefinable intangible
assets, (distribution network, intellectual property and work-force for the Vaddio product line), and are being amortized using
the straight-line method over their estimated useful lives ranging from three to six years. Amortization expense was $26,114 and
$11,102 for the year ended December 31, 2004 and 2003, respectively. Accumulated amortization related to these assets was $37,986
at December 31, 2004 and $11,872 at December 31, 2003. Estimated amortization expense for the years ending December 31, 2005,
2006, 2007, 2008 and 2009 is $70,350, $68,258, $66,503, $45,664 and $39,180, respectively.

F-7

---

Schedule of Intangible Assets

|                               | GrossAmount |  | AccumulatedAmortization |         | Net Valueat December 31, 2004
|------------------------------ | ----------- |  | ----------------------- | ------- | -----------------------------
|Trademarks                     |             |  | $                       | 5,490   |                              
|Patents                        |             |  | $                       | 26,830  |                              
|Vaddio  Employment Contract   |             |  | $                       | 23,328  |                              
|Vaddio  Distribution Network  |             |  | $                       | 32,715  |                              
|Vaddio  Intellectual Property |             |  | $                       | 40,114  |                              
|Bookendz Patent Rights         |             |  | $                       | 225,582 |                              
|                               |             |  |                         |         |                              
|                              
|Totals                         |             |  | $                       | 354,059 |                              
|                               |             |  |                         |         |                              
|                              
|
|Trademarks                     |             |  | $                       | 5,490   |                              
|Patents                        |             |  | $                       | 17,570  |                              
|                               |             |  |                         |         |                              
|                              
|Totals                         |             |  | $                       | 23,060  |                              
|                               |             |  |                         |         |                              

REVENUE RECOGNITION

Sales for Photo are recorded when the product is shipped and returns are
permitted only for defective equipment. Nature Vision, Inc. recognizes revenue on the date products are shipped to the customer.
Most sales for Nature Vision, Inc. are made with the right of return or exchange based on their policy. Estimated reserves for
returns are established by management based on historical experience and are subject to ongoing review and adjustment by Nature
Vision, Inc. Sales and cost of goods sold are reported net of the provision for actual and estimated future returns in the
accompanying consolidated statements of operations. Revenues are reported net of discounts and allowances. The Companys
revenue is recognized in accordance with generally accepted accounting principles as outlined in the SECs Staff Accounting
Bulletin No. 104 Revenue Recognition, which requires that four basic criteria be met before revenue can be recognized:
(i) persuasive evidence of an arrangement exists; (ii) the price is fixed or determinable; (iii) reasonably assured it is
collectible; and (iv) product delivery has occurred. The Company recognizes revenue as products are shipped based on FOB shipping
point terms when title passes to customers.

SHIPPING AND HANDLING COSTS

Shipping and handling costs charged to customers are included in sales and
shipping and handling costs incurred by the Company have been included in cost of goods sold.

ALLOWANCE ACCOUNTS

The Company has established allowance reserves for sales returns and warranty
cost. Reserves are estimated based on historical experience, current product lines being sold, and managements estimates.
Nature Vision, Inc. provides a standard one-year warranty program for its products. Photo warrants its products for one or two
years. The allowance reserve for sales returns and warranty cost was $200,000 and $80,000 at December 31, 2004 and December 31,
2003, respectively. The following table provides the expense recorded and charges against the reserve for years ended December 31,
2004 and 2003.

F-8

---

|                                   | December 31
|---------------------------------- | -----------
|
|Accrued balance  beginning        |            
|Accrual recorded on reverse merger |            
|Provision                          |            
|Expense                            |            
|                                   |            
|                                  
|Accrued balance  ending           |            
|                                   |            

PREPAID EXPENSES

Included in prepaid expenses is purchased advertising time on television
programs, advertising space in outdoor publications and catalogs for Nature Vision, Inc. products. These costs are then expensed
over the contract, as the television shows are aired, and when the publications and catalogs are issued. Advertising costs for
Photo are expensed as incurred. Prepaid advertising expenses were $155,701 and $90,505 for December 31, 2004 and 2003,
respectively. Advertising expensed was $762,888 and $580,405 for 2004 and 2003, respectively.

RESEARCH AND DEVELOPMENT

The Company expenses all costs related to product research and development as
incurred. Research and development expense for years ended December 31, 2004 and 2003 was $91,393 and $83,839, respectively.

STOCK-BASED COMPENSATION

The Company uses the intrinsic value-based method prescribed by Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting
for employee stock options. Under the intrinsic value method, compensation expense is recorded only to the extent that the market
price of common stock exceeds the exercise price of the stock option on the date of grant.

In December 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 148 as an amendment to SFAS No. 123 providing alternative methods of
transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation and also
provides required additional disclosures about the method of accounting for stock-based employee compensation. The amendments are
effective for financial statements for fiscal years ending after December 15, 2002. The Company adopted the annual disclosure
provision of SFAS No. 148 during the year ended December 31, 2002. The Company has currently chosen to not adopt the voluntary
change to the fair value based method of accounting for stock-based employee compensation, pursuant to SFAS No. 148.

The Company has adopted the disclosure-only provisions of SFAS No. 123,
Accounting for Stock-Based Compensation. Pursuant to APB No. 25 and related interpretations, no compensation cost was
recognized in the statements of operations for the years ended December 31, 2004 and 2003 as the fair value of the Companys
stock approximated the option price. Stock options issued to non-employees, (which no options were issued to non-employees), are
accounted for in accordance with SFAS No. 123 and Emerging Issues Task Force, (EITF), 96-18. Had compensation cost been recognized
based on the fair values of options at the grant dates consistent with the provisions of SFAS No. 123, the Companys net
income would have changed as follows for the periods presented.

F-9

---

|                                     | Years EndedDecember 31,
|------------------------------------ | -----------------------
|
|Net income:                          |                        
|As reported                          |                        
|Pro forma                            |                        
|Basic net income per common share:   |                        
|As reported                          |                        
|Pro forma                            |                        
|Diluted net income per common share: |                        
|As reported                          |                        
|Pro forma                            |                        
|Stock based compensation:            |                        
|As reported                          |                        
|Pro forma                            |                        

In determining the compensation cost of options granted during the three and
years ended December 31, 2004 and 2003, as specified by SFAS No. 123, the fair value of each option grant has been estimated on
the date of grant using the Black-Scholes option pricing model and the weighted average assumptions used in these calculations are
summarized as follows:

|                                 | Years EndedDecember 31,
|-------------------------------- | -----------------------
|
|Risk-free interest rate          |                        
|Expected life of options granted |                        
|Expected volatility              |                        
|Expected dividend yield          |                        

Note: Nature Vision, Inc. was a privately-held company until the reverse
merger occurred as noted in footnote 2 and, as such, was not required to use expected volatility. Since no options vested during the year ended December 31, 2004, no pro forma compensation was required.

NET INCOME PER COMMON SHARE

Net income per common share was based on the weighted average number of
common shares outstanding during the periods when computing the basic net income per share. When dilutive, stock options and
warrants are included as equivalents using the treasury stock market method when computing the diluted net income per share. There
were dilutive common stock equivalents, options and warrants, of 136,986, and 102,192 for the years ended December 31, 2004 and
2003, respectively. Anti-dilutive options were 76,500 and 0 at December 31, 2004 and 2003, respectively.

INCOME TAXES

The Company accounts for income taxes using the asset and liability approach,
which requires the recognition of deferred tax assets and liabilities for tax consequences of temporary differences between the
financial statement and income tax reporting bases of assets and liabilities based on currently enacted rates and laws. These
temporary differences principally include depreciation, net operating losses, deferred retirement benefits, contract payable,
allowance for doubtful accounts, sales returns allowance, and warranty reserves. Deferred taxes are reduced by a valuation
allowance to the extent that realization of the related deferred tax assets is not assured.

F-10

---

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 disclosure 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.

RECENT ISSUED ACCOUNTING PRONOUNCEMENTS

SFAS No. 151

In November 2004, FASB issued SFAS No. 151 Inventory Costs which
amends the guidance in ARB No. 43, Chapter 4 Inventory Pricing, to clarify the accounting for abnormal amounts of idle
facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated
that under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may
be so abnormal as to require treatment as current period charges. SFAS No. 151 requires that those items be recognized as
current-period charges regardless of whether they meet the criterion of so abnormal. In addition, SFAS No, 151
requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the
production facilities. SFAS No. 151 shall be effective for inventory costs incurred during fiscal years beginning after June 15,
2005. Earlier application is permitted for inventory costs incurred during fiscal years beginning after the date SFAS No. 151 was
issued. SFAS No. 151 shall be applied prospectively. The Company does not expect the adoption of SFAS No. 151 to have a material
effect on its financial statements.

SFAS No. 153

In December 2004, FASB issued SFAS No. 153 Exchanges of Nonmonetary
Assets which amends APB Opinion No. 29, Accounting for Nonmonetary Transactions. APB No. 29 is based on the
principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in
that Opinion, however, included certain exceptions to that principle. SFAS No. 153 amends APB No. 29 to eliminate the exception
for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary
assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the
entity are expected to change significantly as a result of the exchange. SFAS No. 153 shall be effective for nonmonetary asset
exchanges occurring in fiscal periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset
exchanges occurring in fiscal periods beginning after the date SFAS No. 153 was issued. SFAS No. 153 shall be applied
prospectively. The Company does not expect the adoption of SFAS No. 153 to have a material effect on its financial statements.

SFAS No. 123R

In December 2004, FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment, that focuses primarily on accounting for transactions in which an entity obtains employee services in share-based
payment transactions. This statement replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes
APB Opinion No. 25, Accounting for Stock Issued to Employees. Beginning with our quarterly period that begins January
1, 2006, we will be required to expense the fair value of employee stock options and similar awards. As a public company, we are
allowed to select from two alternative transition methods, each having different reporting implications. The impact of SFAS No.
123R has not been determined at this time.

F-11

---

# NOTE 2  REVERSE MERGER

Effective August 31, 2004, PHOC completed its merger pursuant to an Agreement
and Plan of Merger dated April 15, 2004 by and among PHOC, Nature Vision, Inc. and PC Acquisition, a wholly owned subsidiary of
PHOC. In the Merger, PC Acquisition merged with Nature Vision, Inc. with Nature Vision, Inc. being the surviving company and
becoming a wholly-owned subsidiary of PHOC. In the Merger, the former stockholders of Nature Vision, Inc. received shares of PHOC
common stock. In addition, in the Merger, warrants and options to purchase shares of Nature Vision, Inc. common stock were
converted into warrants and options to purchase shares of PHOC common stock. As a part of the merger, PHOC conducted a reverse 1
for 2 stock split. Each share of Nature Vision, Inc common stock was converted into .58137 shares of PHOC common stock, after the
reverse 1 for 2 stock split. Each warrant and option to purchase one share of Nature Vision, Inc common stock was converted into a
warrant or option to purchase .58137 shares of PHOC common stock, after the reverse 1 for 2 stock split. As a condition of the
merger agreement, Richard P. Kiphart, a director of PHOC, was required to purchase 324,395 shares of common stock for an aggregate
purchase price of $1,000,000.

Immediately after the Merger and prior to the Kiphart investment, the former
Nature Vision, Inc stockholders, option holders and warrant holders together owned a total of approximately 53% of PHOC common
stock on a fully-diluted basis, (assuming the exercise of all options and warrants to purchase PHOC common stock), and the
pre-merger PHOC, stockholders owned a total of approximately 43% of PHOC common stock on a fully-diluted basis. The merger
involved the issuance of 894,301 shares of PHOC common stock valued at $4,875,048, (including transaction costs of $329,300 and
$81,313 related to the fair value of new employee stock options issued in connection with the merger), and no cash consideration
or other consideration was issued or used in the merger. The basis of determining the fair value of the stock issued was based on
PHOCs common stock, based on the weighted average closing price of shares 10 days before and 10 days after the announcement
of the merger on April 16, 2004. In addition to the ownership of the common stock, a Nature Vision, Inc board member became the
Chairman of the board of directors post merger and the management of Nature Vision, Inc became the controlling management team of
the Company.

The Merger was accounted for as a reverse acquisition by Nature, Inc, and,
accordingly, was deemed to be equivalent, for accounting purposes, to the issuance of Nature Vision, Inc. capital stock in
exchange for the fair market value of the assets and liabilities of PHOC. PHOC had monetary assets, those assets and liabilities
of PHOC were recorded at fair value. PHOC also had several real and intangible assets that were revalued as of the date of
the merger. This revaluation resulted in negative goodwill which was allocated proportionately over the long-term assets of PHOC.
The reasons for the merger are as follows:

| |  | The merger allows for diversity for the companies in
its product line and to broaden its customer base
|- |  | ------------------------------------------------------------------------------------------------------

| |  | The potential cost savings that may be realized by
having both companies products produced through common manufacturing processes, by using a common facility for storage and
distribution, and through reduced management personnel
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The ability to utilize publicly-traded securities as
consideration in connection with future potential mergers or acquisitions
|- |  | ------------------------------------------------------------------------------------------------------------------------------

Photo Control Corporation, PHOC, changed its name to Nature Vision, Inc,
NRVN, on August 31, 2004 and Nature Vision, Inc changed its name to Nature Vision Operating, Inc, on August 31, 2004. Nature
Vision Operating, Inc continues to be an operating business and wholly-owned subsidiary of Nature Vision, Inc. Photo Control
Corporation will continue to do business under the same name and operate under Nature Vision, Inc. The consolidated statements of
operations include the results of Nature Vision, Inc. for each of the years ended December 31, 2004 and 2003, and the results of
operations of PHOC for the period from September 1, 2004, (effective date of the merger), to December 31, 2004. The following pro
forma consolidated statements of operations assume the merger was effective January 1, 2003.

F-12

---

|                                            | Years EndedDecember 31,
|------------------------------------------- | -----------------------
|
|Net sales                                   |                        
|As reported                                 |                        
|Add: Photo Control Corporation              |                        
|Pro forma adjustments                       |                        
|Pro forma                                   |                        
|Net income (loss)                           |                        
|As reported                                 |                        
|Add: Photo Control Corporation              |                        
|Pro forma adjustments                       |                        
|Pro forma                                   |                        
|                                           
|Diluted net income (loss) per common share: |                        
|As reported                                 |                        
|Pro forma                                   |                        

The allocation of the purchase, prior to the $1,000,000 stock purchase by Mr.
Kiphart, is as follows:

|Cash                                                         |  |  | $ | 1,545,665  |  
|------------------------------------------------------------ |  |  | - | ---------- | -
|Accounts receivable                                          |  |  | $ | 1,269,729  |  
|Inventories                                                  |  |  | $ | 2,685,653  |  
|Other current assets                                         |  |  | $ | 57,627     |  
|Property and equipment, net of negative goodwill             |  |  | $ | 700,543    |  
|Intangible assets and other assets, net of negative goodwill |  |  | $ | 448,395    |  
|Deferred Tax Asset                                           |  |  | $ | 1,050,000  |  
|Current liabilities                                          |  |  | $ | (1,372,747 | )
|Long-term liabilities                                        |  |  | $ | (1,509,817 | )
|Total equity                                                 |  |  | $ | (4,875,048 | )

The amount assigned to intangible assets were identifiable intangible assets
and have a weighted average life of 4.5 years. The intangible assets include patents, Vaddio-employment contracts, Vaddio
distribution network and Vaddio intellectual property and Bookendz patent rights of $23,328, $32,715, $40,114 and $225,582,
respectively. There is no contingent consideration specified in the Merger Agreement.

# NOTE 3  INVENTORIES

Inventories consisted of the following at:

|                          | December 31,2004 |  | December 31,2003
|------------------------- | ---------------- |  | ----------------
|Raw Materials             |                  |  | $               
|Work in Progress          |                  |  |                 
|Finished Goods            |                  |  |                 
|                          |                  |  |                 
|Total                     |                  |  |                 
|Less: Valuation Allowance |                  |  |                 
|                          |                  |  |                 
|Inventories, net          |                  |  | $               
|                          |                  |  |                 

F-13

---

# NOTE 4  PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

|                               | December 31,2004 |  | December 31,2003
|------------------------------ | ---------------- |  | ----------------
|Land                           |                  |  | $               
|Buildings and improvements     |                  |  |                 
|Tooling                        |                  |  |                 
|Office furniture and equipment |                  |  |                 
|Warehouse equipment            |                  |  |                 
|Vehicles                       |                  |  |                 
|Construction in progress       |                  |  |                 
|                               |                  |  |                 
|Total                          |                  |  |                 
|Less: Accumulated depreciation |                  |  |                 
|                               |                  |  |                 
|Net                            |                  |  | $               
|                               |                  |  |                 

Depreciation expense of $214,134 and $188,822 was recorded for the years
ended December 31, 2004 and 2003, respectively.

# NOTE 5  LINE OF CREDIT, BANK

The Company has a line of credit financing agreement with First National Bank
of Deerwood up to a maximum amount of $1,500,000 which expires June 30, 2005. Interest was payable monthly at prime, which was at
5.25% at December 31, 2004, plus 1% with a minimum interest rate of 5%. The line of credit was collateralized by accounts
receivable, inventories, property and equipment. The agreement requires the following affirmative covenants, minimum net worth of
$6,000,000, debt to equity ratio of 1.0 to 1.0 and debt service ratio of 1.2 to 1.0. The Company was in compliance with all
covenants at year end. The balance outstanding on the line of credit was $240,000, and $0 at December 31, 2004 and 2003,
respectively.

# NOTE 6  LONG-TERM DEBT

Long-term debt consisted of the following at:

|                                                   | December 31,2004 |  | December 31,2003
|-------------------------------------------------- | ---------------- |  | ----------------
|Note Payable  First National Bank of              |                  |  |                 
|Deerwood  monthly installments of $4,126         
|including interest at a variable rate of .75% over
|the index rate (4.75%, and 6.0% at                
|December 31, 2003 and December 31, 2004,          
|respectively), with a final payment due June 10,  
|2009, secured by a mortgage on the Companys      
|land and building located in Brainerd, MN          |                  |  | $               
|                                                  
|Note Payable  GMAC  monthly installments         |                  | 
|of $1,378 through April 2008. The note is non-     |                  | 
|interest bearing, and is secured by two vehicles   |                  |  |                 
|                                                   |                  |  |                 
|                                                  
|Totals                                             |                  |  |                 
|Less: Current portion                              |                  |  |                 
|                                                   |                  |  |                 
|Net Long-term Debt                                 |                  |  | $               
|                                                   |                  |  |                 

F-14

---

Principal requirements on long-term debt for years ending after December 31,
2004 are as follows:

|2005  |  |  | $ | 42,619  | 
|----- |  |  | - | ------- | 
|2006  |  |  |   | 42,764  | 
|2007  |  |  |   | 44,382  | 
|2008  |  |  |   | 35,070  | 
|2009  |  |  |   | 316,450 | 
|      |  | 
|Total |  |  | $ | 481,285 | 
|      |  | 

# NOTE 7  STOCKHOLDERS EQUITY

The Company has a Stock Option Plan, (the Plan), which provides for granting
of incentive and non-statutory stock options to employees and others. The aggregate of 390,914 shares of the Companys common
stock may be granted at exercise prices not less than fair market value at the date of grant. The Compensation Committee from the
Board of Directors administers the Plan. In general, options vest immediately and up to 4.5 years, and expire 5 years from the
date of grant.

Information regarding stock options is summarized below:

|                                       | Number ofOptions |  | WeightedAverageOptionExercise Price
|-------------------------------------- | ---------------- |  | -----------------------------------
|Options Outstanding, December 31, 2002 |                  |  |                                    
|Granted                                |                  |  |                                    
|Expired                                |                  |  |                                    
|Exercised                              |                  |  |                                    
|                                       |                  |  |                                    
|                                      
|Options Outstanding, December 31, 2003 |                  |  |                                    
|Granted                                |                  |  |                                    
|Expired                                |                  |  |                                    
|Exercised                              |                  |  |                                    
|Options assumed in Reverse Merger      |                  |  |                                    
|                                       |                  |  |                                    
|                                      
|Options Outstanding, December 31, 2004 |                  |  |                                    
|                                       |                  |  |                                    

The weighted average fair market value of options issued during the years
ended December 31, 2004 and 2003, were $4.25 and $0.10, respectively. The weighted average contractual life of options outstanding
at December 31, 2004 and 2003 was 3.15 and 4.42 years, respectively.

Following is a schedule of options outstanding and exercisable at
December 31, 2004:

|Options Outstanding |              | Options Exercisable
|------------------- | ------------ | -------------------
|
|$                   | 0.89         |                    
|$                   | 4.40         |                    
|$                   | 4.72         |                    
|$                   | 5.43         |                    
|$                   | 6.38         |                    
|$                   | 6.88         |                    
|                    |              |                    
|                   
|$                   | 0.89 - $6.88 |                    
|                    |              |                    

Stock Warrants

In connection with the private placement offering the Company did in 1998,
the Company issued 31,292 six year common stock warrants exercisable at $3.44 per warrant. All the warrants were either exercised
or expired during the year ended December 31, 2004.

F-15

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# NOTE 8  INCOME TAXES

The provision for income taxes consists of the following components for the
years ended December 31;

|                                 | 2004 |  | 2003
|-------------------------------- | ---- |  | ----
|Current                          |      |  | $   
|Deferred                         |      |  |     
|                                 |      |  |     
|Total Provision for Income Taxes |      |  | $   
|                                 |      |  |     

The provision for taxes differs from the expected provision that would result
from the application of federal tax rates to pre-tax income. A comparison of the provision for income tax expense at the federal
statutory rate of 34% for the years ended December 31 to the Companys effective rate is as follows;

|                                  | 2004 |  | 2003
|--------------------------------- | ---- |  | ----
|Federal statutory rate            |      |  |     
|State tax, net of federal benefit |      |  |     
|Permanent differences and other   |      |  |     
|Research and development credit   |      |  |     
|                                  |      |  |     
|Effective Tax Rate                |      |  |     
|                                  |      |  |     

The net deferred tax assets and liabilities included in the financial statements include the following amounts;

|                                               | 2004 |  | 2003
|---------------------------------------------- | ---- |  | ----
|Current Amounts                                |      |  |     
|Deferred tax assets                            |      |  | $   
|                                               |      |  |     
|Net Current Deferred Tax Assets                |      |  | $   
|                                               |      |  |     
|                                              
|Non-current Amounts                            |      | 
|                                              
|Deferred Tax Assets                            |      |  | $   
|Deferred Tax Liabilities                       |      |  |     
|                                               |      |  |     
|                                              
|Net Non-current Deferred Tax Asset (Liability) |      |  | $   
|                                               |      |  |     
|                                              
|
|Deferred Tax Assets                            |      |  |     
|Net Operating Loss Carryforwards               |      |  | $   
|Contract Payable                               |      |  |     
|Depreciation & Amortization                    |      |  |     
|Deferred Compensation                          |      |  |     
|Returns Allowance                              |      |  |     
|Inventory Reserve                              |      |  |     
|Bad Debt Reserve                               |      |  |     
|Other Allowances                               |      |  |     
|                                               |      |  |     
|Total                                          |      |  |     
|Less Valuation Allowances                      |      |  |     
|                                               |      |  |     
|Net Deferred Tax Assets                        |      |  | $   
|                                               |      |  |     
|Deferred Tax Liabilities                       |      |  |     
|Depreciation & Amortization                    |      |  | $   
|                                               |      |  |     

The Company has a federal and state net operating loss of approximately
$850,000, which, if not used, will begin to expire in 2024. Future changes in the ownership of the Company may place limitations
on the use of these net operating losses.

The Company as part of the reverse merger accounting prepare a preliminary
calculation of the net operating loss carryforward pursuant to the Internal Revenue Service guidance related to ownership change.

F-16

---

# NOTE 9  SEGMENT REPORTING

The Company has three product lines, Vaddio video equipment used for video
conferencing and presentations, photographic cameras and lighting equipment and the Nature Vision, Inc. products. The following
summarizes the Companys segments:

|                               | December 31,2004 |  | December 31,2003
|------------------------------ | ---------------- |  | ----------------
|Assets                         |                  |  |                 
|Nature Vision, Inc.            |                  |  | $               
|Vaddio                         |                  |  |                 
|Photographic                   |                  |  |                 
|                               |                  |  |                 
|Total                          |                  |  | $               
|                               |                  |  |                 
|                              
|Property & Equipment Additions |                  | 
|Nature Vision, Inc.            |                  |  | $               
|Photographic                   |                  |  |                 
|                               |                  |  |                 
|Total                          |                  |  | $               
|                               |                  |  |                 
|                              
|Sales                          |                  | 
|Nature Vision, Inc.            |                  |  | $               
|Vaddio                         |                  |  |                 
|Photographic                   |                  |  |                 
|                               |                  |  |                 
|Total                          |                  |  | $               
|                               |                  |  |                 
|                              
|Gross Profit                   |                  | 
|Nature Vision, Inc.            |                  |  | $               
|Vaddio                         |                  |  |                 
|Photographic                   |                  |  |                 
|                               |                  |  |                 
|Total                          |                  |  | $               
|                               |                  |  |                 
|                              
|Depreciation and Amortization  |                  | 
|Nature Vision, Inc.            |                  |  | $               
|Vaddio                         |                  |  |                 
|Photographic                   |                  |  |                 
|                               |                  |  |                 
|Total                          |                  |  | $               
|                               |                  |  |                 

F-17

---

# NOTE 10  CONTRACT PAYABLE  VADDIO

Photo Control Corporation entered into employment agreements with 3 employees
in connection with the acquisition of the Vaddio assets. The agreements, which expire on December 31, 2006, provide for an
annual base salary and bonus payments under each employment agreement, equal to 3.4% of annual sales of Vaddio products (net of
allowances for returns and billing errors) in excess of $1,200,000, $1,600,000 and $2,000,000 in 2004, 2005 and 2006,
respectively. If the Company terminates the employment agreement with the employee without cause prior to December 31, 2006, or if
the employee terminates his employment prior to December 31, 2006 under certain conditions (including a sale of all or
substantially all of the assets comprising the Vaddio division or the discontinuation of the Vaddio division), then the employee
is entitled to the bonus payment as defined in the agreement at the time of the termination of his employment. The employee has
agreed, during his employment and for a period of three years thereafter, not to compete with the Company in any business that the
Company is conducting on the date of termination, nor will he solicit employees, customers and suppliers of the Company or accept
employment or provide services to the Companys customers during this three-year time period. Since the bonus payment is not
contingent on the continued employment of the employee and the amount due can be estimated and is likely to be paid, the amount of
$900,000 (the estimated bonus payment due) was accrued at the date of the reverse merger (see Note 2). The amount accrued was the
fair value of the liability at the date of the reverse merger. The current portion of the contract of $187,149, was expensed in
2004 and has been paid in February 2005. Future bonuses are estimated to be $312,851 and $400,000, in 2005 and 2006 respectively.

# NOTE 11  DEFERRED RETIREMENT BENEFITS

The Company has retirement benefit agreements with past employees, which are
funded by life insurance. Under the agreements, covered individuals become vested immediately upon death or if employed at age 65.
Benefit costs are recognized over the period of service and recorded as accrued retirement benefits. The total accrued balance due
was $841,478 and $0 at December 31, 2004 and 2003, respectively.

# NOTE 12  RELATED PARTY TRANSACTIONS

The Company had sales for the years ended December 31, 2004 and 2003 to a
business in which a former member of the Board of Directors is an owner of approximately, $35,000 and $68,000, respectively.

The Company has significant purchases from a business in which a member of
the Board of Directors maintains significant control. See Note 14  Concentrations for details.

The Company had a royalty agreement with a company owned by one of its
stockholders. Total royalty expense under the agreement was, $0 and $46,662, for years ended December 31, 2004 and 2003
respectively. The Company terminated the agreement at the beginning of 2004.

# NOTE 13  COMMITMENTS AND CONTINGENCIES

Leases

The Company had a lease agreement for the rental of an office and shop
building in Baxter, Minnesota. The lease expired March 31, 2003. Rent expense under the lease agreement was, $0 and $12,018 for
the years ended December 31, 2004 and 2003, respectively.

License Agreement

In January 2002, Waterstrike Incorporated, (Waterstrike) granted the Company
an exclusive license for the use of certain underwater camera technologies. Under the agreement, the Company is required to pay
Waterstrike a royalty of $23 for each licensed product sold beginning on January 1, 2002. The agreement requires the Company to
pay annual royalties based on a minimum level of unit sales (5,000 units per the agreement). If the minimum level of unit sales in
not met, the Company must pay additional royalties up to the minimum required, or forfeit the exclusivity of the agreement. For
the years ended December 31, 2004 and 2003, the Company did not meet the minimum unit sales level required under the agreement and
may lose the exclusivity of the license agreement. The license will terminate upon the later of the date of expiration or the date
the patent is to expire included in the licensed technology, or the date that the Company permanently ceases the sale of the devises
using the technology. Royalty expense pursuant to this exclusive license agreement was $26,036 and $33,281 for the years ended
December 31, 2004 and 2003, respectively.

F-18

---

Foreign Inventory

Included in the consolidated balance sheets are international inventories of
$273,647 and $0 at December 31, 2004 and 2003, respectively.

Employment Agreement

The Company has entered into an employment agreement with the President and
Chief Executive Officer. Upon termination of employment the agreement provides for a non-compete period of 5 years. In exchange for the
non-compete, the Company is obligated to pay the employee at his base rate for a period of up to 2 years.

# NOTE 14  CONCENTRATIONS

Major Customers

During the year ended December 31, 2004, sales to two customers amounted to
approximately 12% and 11% of net sales, respectively. For the year ended December 31, 2003, sales to the same two customers
amounted to 20% and 14% of net sales, respectively. At December 31, 2004, approximately 14% and 12% of total accounts receivable
was due from two customers. At December 31, 2003, approximately 41% and 13% of total accounts receivable was due from two
customers.

Major Suppliers

Purchases for the years ended December 31, 2004 and 2003 include purchases
from a major supplier that individually accounted for 29% and 62%, respectively, of the materials and supplies used by the
Company. During 2004, the Company has moved its contract manufacturing offshore. Management believes no risk is present
under this arrangement due to other suppliers being readily available.

# NOTE 15  RETIREMENT PLAN

The Company has a Savings Incentive Match Plan for Employees, (SIMPLE),
retirement plan for its employees. Company contributions made to the plan for the years ended December 31, 2004 and 2003 were
$13,385 and $13,957, respectively. As of January 1, 2005, the SIMPLE plan was discontinued.

As part of the reverse merger agreement, the Company adopted a 401(K)
Employee Retirement Plan that was in place at Photo Control Corporation. Company contributions made to the Plan for the four
months from September 1, 2004 to December 31, 2004, were $13,339.

# NOTE 16  SUPPLEMENTAL CASH FLOWS INFORMATION

|                                   | 2004 |  | 2003
|---------------------------------- | ---- |  | ----
|Supplemental Cash Flow Disclosures |      |  |     
|Cash paid for Interest             |      |  | $   
|Cash paid for Income Taxes         |      |  | $   

|Noncash investing and financing activities:                                                                                 |  |  |   |           | 
|--------------------------------------------------------------------------------------------------------------------------- |  |  | - | --------- | 
|Issuance of common stock related to reverse merger for the following assets          and assumptions of certain liabilities |  |  |   |           | 
|Cash acquired                                                                                                               |  |  | $ | 1,545,665 | 
|Accounts receivable                                                                                                         |  |  |   | 1,269,729 | 
|Inventories                                                                                                                 |  |  |   | 2,685,653 | 
|Other current assets                                                                                                        |  |  |   | 57,627    | 
|Property and equipment                                                                                                      |  |  |   | 700,543   | 
|Intangible assets and other assets                                                                                          |  |  |   | 448,395   | 
|Deferred tax assets                                                                                                         |  |  |   | 1,050,000 | 
|Current liabilities                                                                                                         |  |  |   | 1,372,747 | 
|Long-term liabilities                                                                                                       |  |  |   | 1,509,817 | 
|Common stock                                                                                                                |  |  |   | 4,875,048 | 

F-19

---