|   |   |                                                                                                    |
|--------|--------|---------------------------------------------------------------------------------------------------------|
| x      |   | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT      OF 1934  |
|   |   | For      the quarterly period ended June 30, 2009                                                       |
| OR     |   |                                                                                                    |
|   |   |                                                                                                    |
| o      |   | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT      OF 1934 |
|   |   | For      the transition period from _________ to  __________                                            |

| Delaware                                                                |   | 13-3612110                                   |
|-------------------------------------------------------------------------|--------|----------------------------------------------|
| (State      or other jurisdiction ofincorporation      or organization) |   | (I.R.S.      Employer Identification Number) |
|                                                                    |   |                                         |
|  42      West 39th      Street, New York, NY                       |   |  10018                                  |
|  (Address of      principal executive offices)                     |   |  (Zip      Code)                        |

----

TABLE OF CONTENTS

|            |   |                                                                                             |   | PAGE   |          |
|-----------------|--------|--------------------------------------------------------------------------------------------------|--------|--------|---------------|
| PART I –  |   | FINANCIAL INFORMATION                                                                            |   |   | 3             |   |
|            |   |                                                                                             |   |   |          |   |
| Item 1.    |   | Financial Statements:                                                                            |   |   | 3             |   |
|            |   |                                                                                             |   |   |          |   |
|            |   | Balance Sheets as of June 30, 2009 (unaudited)  and      December 31, 2008             |   |   | 3             |   |
|            |   |                                                                                             |   |   |          |   |
|            |   | Statements of Operations for the three months ended June 30,      2009 and 2008 (unaudited)      |   |   | 4             |   |
|            |   |                                                                                             |   |   |          |   |
|            |   | Statements of Operations for the six months ended June      30, 2009 and 2008 (unaudited)   |   |   | 5             |   |
|            |   |                                                                                             |   |   |          |   |
|       |   | Statements of Cash Flows for the six months ended June      30, 2009 and 2008 (unaudited)   |   |   | 6             |   |
|            |   |                                                                                             |   |   |          |   |
|            |   | Condensed Notes to Financial Statements      (unaudited)                                         |   |   | 7 – 15  |   |
|            |   |                                                                                             |   |   |          |   |
| Item 2.    |   | Management’s Discussion and Analysis of Financial Condition      and Results of Operations |   |   | 16 – 22 |   |
|            |   |                                                                                             |   |   |          |   |
| Item 3.    |   | Quantitative and Qualitative Disclosures About Market      Risk                                  |   |   | 22            |   |
|            |   |                                                                                             |   |   |          |   |
| Item 4T.   |   | Controls and Procedures                                                                          |   |   | 23            |   |
|            |   |                                                                                             |   |   |          |   |
| PART II – |   | OTHER INFORMATION                                                                                |   |   | 24            |   |
|            |   |                                                                                             |   |   |          |   |
| Item 4.         |   | Submission of Matters to a Vote of Security      Holders                                         |   |   | 24            |   |
|            |   |                                                                                             |   |   |          |   |
| Item 6.    |   | Exhibits                                                                                         |   |   | 24            |   |
|            |   |                                                                                             |   |   |          |   |
| Signatures      |   |                                                                                             |   |   | 25            |   |

----

TABLE OF CONTENTS
P

I

B

|                                                                                                                                                                                                                                                                                                                                                         |   | June      30, |         |   | December      31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                         |   | 2009          |         |   | 2008              |   |
| Assets                                                                                                                                                                                                                                                                                                                                                       |   |          |         |   |              |   |   |   |
| Current      assets:                                                                                                                                                                                                                                                                                                                                         |   |          |         |   |              |   |   |   |
| Cash      and cash equivalents                                                                                                                                                                                                                                                                                                                               |   | $             | 1,812,000    |   |              | $      | 4,004,000 |   |
| Accounts      receivable — net of allowance for doubtful accounts                                                                                                                                                                                                                                                                                      |   |          | 3,335,000    |   |              |   | 3,300,000 |   |
| Inventories,      net                                                                                                                                                                                                                                                                                                                                        |   |          | 18,452,000   |   |              |   | 23,157,000 |   |
| Prepaid      inventory                                                                                                                                                                                                                                                                                                                                       |   |          | 101,000      |   |              |   | 155,000 |   |
| Prepaid      expenses                                                                                                                                                                                                                                                                                                                                        |   |          | 207,000      |   |              |   | 470,000 |   |
| Other      current assets                                                                                                                                                                                                                                                                                                                                    |   |          | 433,000      |   |              |   | 422,000 |   |
| Total      current assets                                                                                                                                                                                                                                                                                                                                    |   |          | 24,340,000   |   |              |   | 31,508,000 |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |          |         |   |              |   |   |   |
| Property      and equipment, net                                                                                                                                                                                                                                                                                                                             |   |          | 4,565,000    |   |              |   | 6,058,000 |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |          |         |   |              |   |   |   |
| Other      assets                                                                                                                                                                                                                                                                                                                                            |   |          | 173,000      |   |              |   | 184,000 |   |
| Total      assets                                                                                                                                                                                                                                                                                                                                            |   | $             | 29,078,000   |   |              | $      | 37,750,000 |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |          |         |   |              |   |   |   |
| Liabilities      and Stockholders’ Equity                                                                                                                                                                                                                                                                                                              |   |          |         |   |              |   |   |   |
| Current      liabilities:                                                                                                                                                                                                                                                                                                                                    |   |          |         |   |              |   |   |   |
| Accounts      payable                                                                                                                                                                                                                                                                                                                                        |   | $             | 4,395,000    |   |              | $      | 8,344,000 |   |
| Allowance      for sales returns                                                                                                                                                                                                                                                                                                                             |   |          | 2,305,000    |   |              |   | 3,707,000 |   |
| Accrued      expenses and other current liabilities                                                                                                                                                                                                                                                                                                          |   |          | 625,000      |   |              |   | 1,323,000 |   |
| Deferred      revenue                                                                                                                                                                                                                                                                                                                                        |   |          | 2,765,000    |   |              |   | 2,876,000 |   |
| Total      current liabilities                                                                                                                                                                                                                                                                                                                               |   |          | 10,090,000   |   |              |   | 16,250,000 |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |          |         |   |              |   |   |   |
| Notes      payable to related party shareholders, net                                                                                                                                                                                                                                                                                                        |   |          | 2,298,000    |   |              |   | 3,000,000 |   |
| Embedded      derivative financial liability to related party    shareholders                                                                                                                                                                                                                                                                                |   |          | 273,000      |   |              |   | — |   |
| Interest      payable to related party shareholders                                                                                                                                                                                                                                                                                                          |   |          | 226,000      |   |              |   | 106,000 |   |
| Total      liabilities                                                                                                                                                                                                                                                                                                                                       |   |          | 12,887,000   |   |              |   | 19,356,000 |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |          |         |   |              |   |   |   |
| Commitments      and contingencies                                                                                                                                                                                                                                                                                                                           |   |          |         |   |              |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |          |         |   |              |   |   |   |
| Stockholders’      equity:                                                                                                                                                                                                                                                                                                                             |   |          |         |   |              |   |   |   |
| Common      stock – $.01 par      value;  200,000,000 shares authorized as of June 30, 2009 and      December 31, 2008; 14,088,762 and 14,061,237 shares issued as of June 30,      2009 and December 31, 2008, respectively, 13,853,172 and l3,831,950 shares      outstanding as of June 30, 2009 and December 31, 2008,      respectively |   |          | 138,000      |   |              |   | 138,000 |   |
| Treasury      stock                                                                                                                                                                                                                                                                                                                                          |   |          | (1,617,000   | )      |              |   | (1,612,000 | ) |
| Additional      paid-in capital                                                                                                                                                                                                                                                                                                                              |   |          | 164,075,000  |   |              |   | 163,746,000 |   |
| Accumulated      deficit                                                                                                                                                                                                                                                                                                                                     |   |          | (146,405,000 | )      |              |   | (143,878,000 | ) |
| Total      stockholders’ equity                                                                                                                                                                                                                                                                                                                        |   |          | 16,191,000   |   |              |   | 18,394,000 |   |
| Total      liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                        |   | $             | 29,078,000   |   |              | $      | 37,750,000 |   |

| The      accompanying notes are an integral part of these financial      statements. |
|--------------------------------------------------------------------------------------|

----

TABLE OF CONTENTS
S

|                                                |   | Three      Months EndedJune      30, |       |
|-----------------------------------------------------|--------|--------------------------------------|------------|
|                                                |   | 2009                                 |       |   | 2008 |   |
| Net      sales                                      |   | $                                    | 19,858,000 |   |   | $ | 23,334,000 |   |
| Cost      of sales                                  |   |                                 | 11,974,000 |   |   |   | 14,236,000 |   |
| Gross profit                                        |   |                                 | 7,884,000  |   |   |   | 9,098,000 |   |
|                                                |   |                                 |       |   |   |   |   |   |
| Selling      and fulfillment expenses               |   |                                 | 4,031,000  |   |   |   | 4,523,000 |   |
| Marketing      expenses                             |   |                                 | 1,763,000  |   |   |   | 2,926,000 |   |
| General      and administrative expenses            |   |                                 | 1,929,000  |   |   |   | 3,590,000 |   |
| Total operating      expenses                       |   |                                 | 7,723,000  |   |   |   | 11,039,000 |   |
|                                                |   |                                 |       |   |   |   |   |   |
| Operating      income (loss)                        |   |                                 | 161,000    |   |   |   | (1,941,000 | ) |
|                                                |   |                                 |       |   |   |   |   |   |
| Interest      income                                |   |                                 | 5,000      |   |   |   | 13,000 |   |
| Interest      expense to related party shareholders |   |                                 | (275,000   | ) |   |   | (43,000 | ) |
| Interest      expense                               |   |                                 | (77,000    | ) |   |   | (65,000 | ) |
|                                                |   |                                 |       |   |   |   |   |   |
| Net      loss                                       |   |                                 | (186,000   | ) |   |   | (2,036,000 | ) |
|                                                |   |                                 |       |   |   |   |   |   |
| Preferred      stock dividends                      |   |                                 | —    |   |   |   | (11,000 | ) |
|                                                |   |                                 |       |   |   |   |   |   |
| Net      loss available to common shareholders      |   | $                                    | (186,000   | ) |   | $ | (2,047,000 | ) |
|                                                |   |                                 |       |   |   |   |   |   |
| Basic      and diluted net loss per common share    |   | $                                    | (0.01      | ) |   | $ | (0.15 | ) |
|                                                |   |                                 |       |   |   |   |   |   |
| Weighted      average common shares outstanding     |   |                                 |       |   |   |   |   |   |
| (basic      and diluted)                            |   |                                 | 13,843,985 |   |   |   | 13,269,123 |   |

| The      accompanying notes are an integral part of these financial      statements. |
|--------------------------------------------------------------------------------------|

----

TABLE OF CONTENTS
S

|                                                |   | Six      Months Ended June      30, |       |
|-----------------------------------------------------|--------|-------------------------------------|------------|
|                                                |   | 2009                                |       |   | 2008 |   |
| Net      sales                                      |   | $                                   | 39,760,000 |   |   | $ | 48,579,000 |   |
| Cost      of sales                                  |   |                                | 25,101,000 |   |   |   | 30,545,000 |   |
| Gross profit                                        |   |                                | 14,659,000 |   |   |   | 18,034,000 |   |
|                                                |   |                                |       |   |   |   |   |   |
| Selling      and fulfillment expenses               |   |                                | 8,425,000  |   |   |   | 9,592,000 |   |
| Marketing      expenses                             |   |                                | 4,780,000  |   |   |   | 6,448,000 |   |
| General      and administrative expenses            |   |                                | 4,099,000  |   |   |   | 6,837,000 |   |
| Total operating      expenses                       |   |                                | 17,304,000 |   |   |   | 22,877,000 |   |
|                                                |   |                                |       |   |   |   |   |   |
| Operating      loss                                 |   |                                | (2,645,000 | ) |   |   | (4,843,000 | ) |
|                                                |   |                                |       |   |   |   |   |   |
| Interest      income                                |   |                                | 10,000     |   |   |   | 49,000 |   |
| Interest      expense to related party shareholders |   |                                | (512,000   | ) |   |   | (43,000 | ) |
| Interest      expense                               |   |                                | (159,000   | ) |   |   | (137,000 | ) |
|                                                |   |                                |       |   |   |   |   |   |
| Net      loss                                       |   |                                | (3,306,000 | ) |   |   | (4,974,000 | ) |
|                                                |   |                                |       |   |   |   |   |   |
| Preferred      stock dividends                      |   |                                | —    |   |   |   | (22,000 | ) |
|                                                |   |                                |       |   |   |   |   |   |
| Net      loss available to common shareholders      |   | $                                   | (3,306,000 | ) |   | $ | (4,996,000 | ) |
|                                                |   |                                |       |   |   |   |   |   |
| Basic      and diluted net loss per common share    |   | $                                   | (0.24      | ) |   | $ | (0.38 | ) |
|                                                |   |                                |       |   |   |   |   |   |
| Weighted      average common shares outstanding     |   |                                |       |   |   |   |   |   |
| (basic      and diluted)                            |   |                                | 13,838,363 |   |   |   | 13,259,059 |   |

| The      accompanying notes are an integral part of these financial      statements. |
|--------------------------------------------------------------------------------------|

----

TABLE OF CONTENTS
S

|                                                                                                    |   | Six      Months Ended June      30, |       |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------------------|------------|
|                                                                                                    |   | 2009                                |       |   | 2008 |   |
| Cash      flows from operating activities:                                                              |   |                                |       |   |   |   |   |   |
| Net loss                                                                                                |   | $                                   | (3,306,000 | ) |   | $ | (4,974,000 | ) |
|  Adjustments      to reconcile net loss to net cash used in operating      activities:             |   |                                |       |   |   |   |   |   |
| Depreciation and      amortization                                                                      |   |                                | 1,591,000  |   |   |   | 903,000 |   |
| Stock based      compensation                                                                           |   |                                | 329,000    |   |   |   | 1,647,000 |   |
| Provisions for      returns                                                                             |   |                                | (1,402,000 | ) |   |   | (862,000 | ) |
| Bad debt    expense                                                                                     |   |                                | 189,000    |   |   |   | 308,000 |   |
| Reserve for inventory      obsolescence                                                                 |   |                                | (370,000   | ) |   |   | 200,000 |   |
| Amortization of discount on      notes payable to related party      shareholders                       |   |                                | 175,000    |   |   |   | — |   |
| Change in fair value of      embedded derivative financial liability to related      party shareholders |   |                                | 175,000    |   |   |   | — |   |
| Change in operating assets and      liabilities:                                                        |   |                                |       |   |   |   |   |   |
| (Increase) decrease      in:                                                                            |   |                                |       |   |   |   |   |   |
| Accounts      receivable                                                                                |   |                                | (224,000   | ) |   |   | (698,000 | ) |
| Inventories                                                                                             |   |                                | 5,075,000  |   |   |   | 3,037,000 |   |
| Prepaid    inventory                                                                                    |   |                                | 54,000     |   |   |   | 188,000 |   |
| Prepaid    expenses                                                                                     |   |                                | 263,000    |   |   |   | (55,000 | ) |
| Other assets                                                                                            |   |                                | (16,000    | ) |   |   | (169,000 | ) |
| Increase (decrease)      in:                                                                            |   |                                |       |   |   |   |   |   |
| Accounts payable and other      long-term liabilities                                                   |   |                                | (3,949,000 | ) |   |   | (905,000 | ) |
| Accrued expenses and other      current liabilities                                                     |   |                                | (693,000   | ) |   |   | (678,000 | ) |
| Interest payable to related      party shareholders                                                     |   |                                | 120,000    |   |   |   | — |   |
| Deferred    revenue                                                                                     |   |                                | (111,000   | ) |   |   | (474,000 | ) |
|                                                                                                    |   |                                |       |   |   |   |   |   |
| Net      cash used in operating activities                                                              |   |                                | (2,100,000 | ) |   |   | (2,532,000 | ) |
|                                                                                                    |   |                                |       |   |   |   |   |   |
| Cash      flows from investing activities:                                                              |   |                                |       |   |   |   |   |   |
| Purchases of property and      equipment                                                                |   |                                | (87,000    | ) |   |   | (1,585,000 | ) |
|                                                                                                    |   |                                |       |   |   |   |   |   |
| Net      cash used in investing activities                                                              |   |                                | (87,000    | ) |   |   | (1,585,000 | ) |
|                                                                                                    |   |                                |       |   |   |   |   |   |
| Cash      flows from financing activities:                                                              |   |                                |       |   |   |   |   |   |
| Purchase of treasury      stock                                                                         |   |                                | (5,000     | ) |   |   | (22,000 | ) |
|                                                                                                    |   |                                |       |   |   |   |   |   |
| Net      cash used in financing activities                                                              |   |                                | (5,000     | ) |   |   | (22,000 | ) |
|                                                                                                    |   |                                |       |   |   |   |   |   |
| Net      decrease in cash and cash equivalents                                                          |   |                                | (2,192,000 | ) |   |   | (4,139,000 | ) |
| Cash      and cash equivalents – beginning of period                                              |   |                                | 4,004,000  |   |   |   | 6,730,000 |   |
| Cash      and cash equivalents – end of period                                                    |   | $                                   | 1,812,000  |   |   | $ | 2,591,000 |   |
|                                                                                                    |   |                                |       |   |   |   |   |   |
| Supplemental      disclosure of cash flow information:                                                  |   |                                |       |   |   |   |   |   |
| Cash paid for      interest                                                                             |   | $                                   | 139,000    |   |   | $ | 129,000 |   |
| Warrants issued to related      party shareholders                                                      |   | $                                   | —    |   |   | $ | 173,000 |   |

| The      accompanying notes are an integral part of these financial      statements. |
|--------------------------------------------------------------------------------------|

----

TABLE OF CONTENTS

B

----

TABLE OF CONTENTS

|                                                                                                                                                                                                                                                                                                                                |   | Three      Months Ended |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|
|                                                                                                                                                                                                                                                                                                                                |   | June      30,           |
|                                                                                                                                                                                                                                                                                                                                |   | 2009                    |   | 2008 |
| Net      loss                                                                                                                                                                                                                                                                                                                       |   | $                       | (186,000 | ) |   | $ | (2,036,000 | ) |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Preferred      stock dividends                                                                                                                                                                                                                                                                                                      |   |                    | — |   |   |   | (11,000 | ) |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Net      loss available to common shareholders                                                                                                                                                                                                                                                                                      |   | $                       | (186,000 | ) |   | $ | (2,047,000 | ) |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Weighted      average common shares outstanding (basic)                                                                                                                                                                                                                                                                             |   |                    | 13,843,985 |   |   |   | 13,269,123 |   |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Options and warrants(1)(2)                                                                                                                                                                                                                                                                                                          |   |                    | — |   |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Preferred stock and      subordinated notes(1)                                                                                                                                                                                                                                                                                      |   |                    | — |   |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Restricted stock and deferred      stock awards(1)                                                                                                                                                                                                                                                                                  |   |                    | — |   |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Weighted      average common shares outstanding (diluted)                                                                                                                                                                                                                                                                           |   |                    | 13,843,985 |   |   |   | 13,269,123 |   |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| (1)        For the three months ended June 30, 2009 and 2008, the Company had      weighted average shares of the following potentially dilutive securities      that were excluded:                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Options      and warrants                                                                                                                                                                                                                                                                                                           |   |                    | — |   |   |   | 4 |   |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Preferred      stock and subordinated notes                                                                                                                                                                                                                                                                                         |   |                    | 821,918 |   |   |   | 571 |   |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| Restricted      stock and deferred stock awards                                                                                                                                                                                                                                                                                     |   |                    | 269,642 |   |   |   | 1,067,057 |   |
|                                                                                                                                                                                                                                                                                                                                |   |                    |   |   |   |   |   |   |
| (2)   Under      the treasury-stock method, the Company excluded all options and warrants      from the computation of weighted average shares outstanding as a result of      the exercise price of the options and warrants being greater than the      average market price of the Company’s Common  Stock. |

----

TABLEOF CONTENTS
|                                                                                                                                                                                                                                                                                                                                    |   | Six      Months Ended |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|
|                                                                                                                                                                                                                                                                                                                                    |   | June      30,         |
|                                                                                                                                                                                                                                                                                                                                    |   | 2009                  |   | 2008 |
| Net      loss                                                                                                                                                                                                                                                                                                                           |   | $                     | (3,306,000 | ) |   | $ | (4,974,000 | ) |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Preferred      stock dividends                                                                                                                                                                                                                                                                                                          |   |                  | — |   |   |   | (22,000 | ) |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Net      loss available to common shareholders                                                                                                                                                                                                                                                                                          |   | $                     | (3,306,000 | ) |   | $ | (4,996,000 | ) |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Weighted      average common shares outstanding (basic)                                                                                                                                                                                                                                                                                 |   |                  | 13,838,363 |   |   |   | 13,259,059 |   |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Options and warrants(1)(2)                                                                                                                                                                                                                                                                                                              |   |                  | — |   |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Preferred stock and      subordinated notes(1)                                                                                                                                                                                                                                                                                          |   |                  | — |   |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Restricted stock and deferred      stock awards(1)                                                                                                                                                                                                                                                                                      |   |                  | — |   |   |   | — |   |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Weighted      average common shares outstanding (diluted)                                                                                                                                                                                                                                                                               |   |                  | 13,838,363 |   |   |   | 13,259,059 |   |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| (1)        For the six months ended June 30, 2009 and 2008, respectively, the Company      had weighted average shares of the following potentially dilutive      securities that were excluded:                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Options      and warrants                                                                                                                                                                                                                                                                                                               |   |                  | — |   |   |   | 88 |   |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Preferred      stock and subordinated notes                                                                                                                                                                                                                                                                                             |   |                  | 821,918 |   |   |   | 571 |   |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| Restricted      stock and deferred stock awards                                                                                                                                                                                                                                                                                         |   |                  | 275,222 |   |   |   | 1,061,915 |   |
|                                                                                                                                                                                                                                                                                                                                    |   |                  |   |   |   |   |   |   |
| (2)        Under the treasury-stock method, the Company excluded all options and      warrants from the computation of weighted average shares outstanding as a      result of the exercise price of the options and warrants being      greater than the average market price of the Company’s Common      Stock. |

----

TABLE OF CONTENTS
|                              |   | Number      of Shares |     |   | Weighted      Average Exercise      Price |   |
|-----------------------------------|--------|-----------------------|----------|--------|-------------------------------------------|--------|
| Balance      at December 31, 2008 |   |                  | 354,856  |   |                                      | $      | 9.83 |   |
| Options granted                   |   |                  | —  |   |                                      | $      | — |   |
| Options    cancelled              |   |                  | (149,596 | )      |                                      | $      | 9.42 |   |
| Options    exercised              |   |                  | —  |   |                                      | $      | — |   |
| Balance      at June 30, 2009     |   |                  | 205,260  |   |                                      | $      | 9.66 |   |
|                              |   |                  |     |   |                                      |   |   |   |
| Vested      at December 31, 2008  |   |                  | 317,064  |   |                                      | $      | 10.32 |   |
|                              |   |                  |     |   |                                      |   |   |   |
| Vested      at June 30, 2009      |   |                  | 148,760  |   |                                      | $      | 10.93 |   |

|                                                           |   | Restricted        |    |   | Deferred      Stock |   |
|----------------------------------------------------------------|--------|-------------------|---------|--------|---------------------|--------|
|                                                           |   | Stock      Awards |    |   | Unit      Awards    |   |
| Balance      at December 31, 2008                              |   |              | 6,750   |   |                |   | 286,175 |   |
| Shares/Units      granted                                      |   |              | 9,187   |   |                |   | — |   |
| Shares/Units      forfeited                                    |   |              | — |   |                |   | (9,330 | ) |
| Shares/Units restriction      lapses                           |   |              | (6,750  | )      |                |   | (18,338 | ) |
| Balance      at June 30, 2009                                  |   |              | 9,187   |   |                |   | 258,507 |   |
|                                                           |   |              |    |   |                |   |   |   |
| Weighted      average grant date fair value per share          |   | $                 | 0.90    |   |                | $      | 7.12 |   |
|                                                           |   |              |    |   |                |   |   |   |
| Aggregate      grant date fair value                           |   | $                 | 8,268   |   |                | $      | 1,840,570 |   |
|                                                           |   |              |    |   |                |   |   |   |
| Weighted      average vesting service period of shares granted |   | 12      Months    |    |   | 12-36      Months   |   |
|                                                           |   |              |    |   |                |   |   |   |
| Number      of shares/units vested at June 30, 2009            |   |              | — |   |                |   | 227,863 |   |
|                                                           |   |              |    |   |                |   |   |   |
| Number      of shares/units unvested at June 30, 2009          |   |              | 9,187   |   |                |   | 30,644 |   |

----

TABLE OF CONTENTS

|                          |   | (Unaudited)June      30, 2009 |   |
|-------------------------------|--------|-------------------------------|--------|
| Risk-free      interest rate  |   |                          | 1.11   | % |
| Expected      life (in years) |   |                          | 2.06   |   |
| Dividend      yield           |   |                          | 0.00   | % |
| Expected      volatility      |   |                          | 98.74  | % |

----

TABLE OF CONTENTS

|                                                                          |   | As      reported |         |        |   | As      Adjusted |
|-------------------------------------------------------------------------------|--------|------------------|--------------|-------------|--------|------------------|
|                                                                          |   | March      31,   |         | Adjustments |   | March      31,   |
| BALANCE      SHEET (Unaudited)                                                |   | 2009             |         | (1)         |   |             | 2009 |   |
| Assets                                                                        |   |             |         |        |   |             |   |   |   |   |   |   |
| Current      assets:                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Cash      and cash equivalents                                                |   | $                | 2,003,000    |        |   | $                |   |   |   | $ | 2,003,000 |   |
| Accounts      receivable — net of allowance for doubtful accounts       |   |             | 3,402,000    |        |   |             |   |   |   |   | 3,402,000 |   |
| Inventories,      net                                                         |   |             | 20,835,000   |        |   |             |   |   |   |   | 20,835,000 |   |
| Prepaid      inventory                                                        |   |             | 83,000       |        |   |             |   |   |   |   | 83,000 |   |
| Prepaid      expenses                                                         |   |             | 345,000      |        |   |             |   |   |   |   | 345,000 |   |
| Other      current assets                                                     |   |             | 376,000      |        |   |             |   |   |   |   | 376,000 |   |
| Total      current assets                                                     |   |             | 27,044,000   |        |   |             |   |   |   |   | 27,044,000 |   |
|                                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Property      and equipment, net                                              |   |             | 5,342,000    |        |   |             |   |   |   |   | 5,342,000 |   |
|                                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Other      assets                                                             |   |             | 181,000      |        |   |             |   |   |   |   | 181,000 |   |
|                                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Total      assets                                                             |   | $                | 32,567,000   |        |   | $                |   |   |   | $ | 32,567,000 |   |
|                                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Liabilities      and stockholders equity                                      |   |             |         |        |   |             |   |   |   |   |   |   |
| Current      liabilities:                                                     |   |             |         |        |   |             |   |   |   |   |   |   |
| Accounts      payable                                                         |   | $                | 6,303,000    |        |   | $                |   |   |   | $ | 6,303,000 |   |
| Allowance      for sales returns                                              |   |             | 3,073,000    |        |   |             |   |   |   |   | 3,073,000 |   |
| Accrued      expenses and other current liabilities                           |   |             | 982,000      |        |   |             |   |   |   |   | 982,000 |   |
| Deferred      revenue                                                         |   |             | 3,461,000    |        |   |             |   |   |   |   | 3,461,000 |   |
| Total      current liabilities                                                |   |             | 13,819,000   |        |   |             |   |   |   |   | 13,819,000 |   |
|                                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Notes      payable to related party shareholders                              |   |             | 3,000,000    |        |   |             | (789,000 | ) |   |   | 2,211,000 |   |
| Embedded      derivative financial liability to related party    shareholders |   |             | —      |        |   |             | 146,000 |   |   |   | 146,000 |   |
| Interest      payable to related party shareholders                           |   |             | 165,000      |        |   |             |   |   |   |   | 165,000 |   |
|                                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Total      liabilities                                                        |   |             | 16,984,000   |        |   |             | (643,000 | ) |   |   | 16,341,000 |   |
|                                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Stockholders’      equity:                                              |   |             |         |        |   |             |   |   |   |   |   |   |
| Common      stock                                                             |   |             | 138,000      |        |   |             |   |   |   |   | 138,000 |   |
| Treasury stock                                                                |   |             | (1,617,000   | )           |   |             |   |   |   |   | (1,617,000 | ) |
| Additional      paid-in capital                                               |   |             | 163,924,000  |        |   |             |   |   |   |   | 163,924,000 |   |
| Accumulated      deficit                                                      |   |             | (146,862,000 | )           |   |             | 643,000 |   |   |   | (146,219,000 | ) |
|                                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Total      stockholders’ equity                                         |   |             | 15,583,000   |        |   |             | 643,000 |   |   |   | 16,226,000 |   |
|                                                                          |   |             |         |        |   |             |   |   |   |   |   |   |
| Total      liabilities and stockholders’ equity                         |   | $                | 32,567,000   |        |   | $                | — |   |   | $ | 32,567,000 |   |

----

| (1) | These      adjustments include (i) a reduction in the carrying value of the notes      payable to related party shareholders of $877,000 in the form of a      discount, which represents additional non-cash interest expense to be      amortized over the remaining maturity life, (ii) the recognition of an      embedded derivative financial liability to related party shareholders of      $98,000 and (iii) the cumulative effect of a change in accounting      principle as a result of the adoption of EITF 07-05 on January 1, 2009 of      $779,000 as a reduction in accumulated deficit.  These      adjustments were offset by (iv) the amortization of the discount on notes      payable to related party shareholders of $88,000 and (v) an increase in      the fair value of the embedded derivative financial liability of $48,000,      which both represent an incremental interest expense to related party      shareholders of $136,000 for the three months ended March 31,      2009. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

TABLE OF CONTENTS
|                                                |   | As      reported  |       |        |   | As      Adjusted  |
|-----------------------------------------------------|--------|-------------------|------------|-------------|--------|-------------------|
|                                                |   | Three      months |       |        |   | Three      months |
|                                                |   | Ended             |       |        |   | Ended             |
| STATEMENT      OF OPERATIONS                        |   | March      31,    |       | Adjustments |   | March      31,    |
| (Unaudited)                                         |   | 2009              |       | (2)         |   |              | 2009 |   |
| Operating      loss                                 |   | $                 | (2,806,000 | )           |   | $                 |   |   |   | $ | (2,806,000 | ) |
|                                                |   |              |       |        |   |              |   |   |   |   |   |   |
| Interest      income                                |   |              | 5,000      |        |   |              |   |   |   |   | 5,000 |   |
| Interest      expense to related party shareholders |   |              | —    |        |   |              | (238,000 | ) |   |   | (238,000 | ) |
| Interest      expense                               |   |              | (183,000   | )           |   |              | 102,000 |   |   |   | (81,000 | ) |
|                                                |   |              |       |        |   |              |   |   |   |   |   |   |
| Net      loss                                       |   | $                 | (2,984,000 | )           |   | $                 | (136,000 | ) |   | $ | (3,120,000 | ) |
|                                                |   |              |       |        |   |              |   |   |   |   |   |   |
| Basic      and diluted net loss per common share    |   | $                 | (0.22      | )           |   |              |   |   |   | $ | (0.23 | ) |
|                                                |   |              |       |        |   |              |   |   |   |   |   |   |
| Weighted      average common shares outstanding     |   |              |       |        |   |              |   |   |   |   |   |   |
| (basic      and diluted)                            |   |              | 13,832,679 |        |   |              |   |   |   |   | 13,832,679 |   |

| (2) | These      adjustments include (i) the amortization of the discount on notes payable      to related party shareholders of $88,000 and (ii) an increase in the fair      value of the embedded derivative financial liability of $48,000, which      both represent an incremental interest expense to related party      shareholders of $136,000 for the three months ended March 31,      2009.  Furthermore, the Company reclassified (iii) $59,000      relating to accrued and unpaid interest expense to related party      shareholders and (iv) $43,000 relating to amortization expense in      connection with warrants issued to certain related  parties. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                     |   | (Unaudited)   |      |   |              |    |      |
|--------------------------------------------------------------------------|--------|---------------|-----------|--------|-------------------|---------|-----------|
|                                                                     |   | June      30, |      |   | December      31, |    |
|                                                                     |   | 2009          |      |   | 2008              |    |
| Notes      payable to related party shareholders                         |   | $        | 3,000,000 |   |              | $  | 3,000,000 |   |
| Unamortized      discount on notes payable to related party shareholders |   |          | (702,000  | )      |              |    | —   |   |
|                                                                     |   |          |      |   |              |    |      |   |
| Total      notes payable to related party shareholders, net              |   | $             | 2,298,000 |   |              | $       | 3,000,000 |   |

|                                                                                                          |   | (Unaudited)             |
|---------------------------------------------------------------------------------------------------------------|--------|-------------------------|
|                                                                                                          |   | Three      Months Ended |
|                                                                                                          |   | June      30, 2009      |
| Interest      expense to related party shareholders                                                           |   | $                  | 61,000 |   |
| Amortization      of discount on notes payable to related party shareholders                                  |   |                    | 87,000 |   |
| Appreciation      in fair value of embedded derivative financial liability to related party      shareholders |   |                    | 127,000 |   |
|                                                                                                          |   |                    |   |   |
| Total      interest expense to related party shareholders                                                     |   | $                       | 275,000 |   |

|                                                                                                          |   | (Unaudited)           |
|---------------------------------------------------------------------------------------------------------------|--------|-----------------------|
|                                                                                                          |   | Six      Months Ended |
|                                                                                                          |   | June      30, 2009    |
| Interest      expense to related party shareholders                                                           |   | $                | 120,000 |   |
| Amortization      of discount on notes payable to related party shareholders                                  |   |                  | 175,000 |   |
| Appreciation      in fair value of embedded derivative financial liability to related party      shareholders |   |                  | 175,000 |   |
|                                                                                                          |   |                  |   |   |
| Total      interest expense to related party shareholders                                                     |   | $                     | 470,000 |   |

----

TABLE OF CONTENTS
|                                               |   | June      30, 2009 |    |   | Quoted      Prices inActive      Marketsfor      IdenticalAssets(Level      1) |   |    | Significant      OtherObservableInputs(Level      2) |   |   | SignificantUnobservableInputs(Level      3) |   |
|----------------------------------------------------|--------|--------------------|---------|--------|--------------------------------------------------------------------------------|--------|---------|------------------------------------------------------|--------|--------|---------------------------------------------|--------|
| Liabilities:                                       |   |               |    |   |                                                                           |   |    |                                                 |   |   |                                        |   |   |   |   |   |
|                                               |   |               |    |   |                                                                           |   |    |                                                 |   |   |                                        |   |   |   |   |   |
| Embedded      conversion feature                   |   | $                  | 273,000 |   |                                                                           | $      | — |                                                 |   | $      | 273,000                                     |   |   | $ | — |   |
|                                               |   |               |    |   |                                                                           |   |    |                                                 |   |   |                                        |   |   |   |   |   |
| Total      embedded derivative financial liability |   | $                  | 273,000 |   |                                                                           | $      | — |                                                 |   | $      | 273,000                                     |   |   | $ | — |   |

----

TABLE OF CONTENTS

----

TABLE OF CONTENTS
I

|                                     |   | 2009   |   |   | 2008                    |   |
|------------------------------------------|--------|--------|--------|--------|------------------------------|--------|
|                                     |   |   |   |   | As      a % ofNet      Sales |   |   |   |   |   | As      a % ofNet      Sales  |   |
| Net      sales                           |   | $      | 19,858 |   |                         |   | 100.0 | % |   | $ | 23,334 |   |   |   | 100.0 | %  |
| Cost      of sales                       |   |   | 11,974 |   |                         |   | 60.3 |   |   |   | 14,236 |   |   |   | 61.0 |   |
| Gross profit                             |   |   | 7,884  |   |                         |   | 39.7 |   |   |   | 9,098 |   |   |   | 39.0 |   |
|                                     |   |   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and fulfillment expenses    |   |   | 4,031  |   |                         |   | 20.3 |   |   |   | 4,523 |   |   |   | 19.4 |   |
| Marketing      expenses                  |   |   | 1,763  |   |                         |   | 8.9 |   |   |   | 2,926 |   |   |   | 12.5 |   |
| General      and administrative expenses |   |   | 1,929  |   |                         |   | 9.7 |   |   |   | 3,590 |   |   |   | 15.4 |   |
| Total operating      expenses            |   |   | 7,723  |   |                         |   | 38.9 |   |   |   | 11,039 |   |   |   | 47.3 |   |
|                                     |   |   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Operating income      (loss)             |   |   | 161    |   |                         |   | 0.8 |   |   |   | (1,941 | ) |   |   | (8.3 | ) |
|                                     |   |   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense, net               |   |   | (347   | )      |                         |   | (1.7 | ) |   |   | (95 | ) |   |   | (0.4 | ) |
|                                     |   |   |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                 |   | $      | (186   | )      |                         |   | (0.9 | )% |   | $ | (2,036 | ) |   |   | (8.7 | )% |

----

TABLE OF CONTENTS
|                                                        |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Average      order size (including shipping & handling) |   | $      | 268.79 |   |   | $      | 285.14 |   |
| New      customers added during the period*                 |   |   | 38,718 |   |   |   | 45,674 |   |

----

| * | Based      on unique email addresses |
|---|--------------------------------------|

----

TABLE OF CONTENTS
|                                        |   | Three      Months Ended June 30, |   |   | Percentage           |   |
|---------------------------------------------|--------|----------------------------------|--------|--------|----------------------|--------|
| (All      data in thousands)                |   | 2009                             |   |   | 2008                 |   |   | Difference |   |
|                                        |   |                             |   |   | As      a % of       |   |   |   |   |   | As      a % of |   |   | Increase |   |
|                                        |   |                             |   |   | Net      Sales  |   |   |   |   |   | Net      Sales |   |   | (Decrease) |   |
| Operating                                   |   | $                                | 1,836  |   |                 |   | 9.3 | % |   | $ | 2,457 |   |   |   | 10.5 | % |   |   | (25.3 | )% |
| Technology                                  |   |                             | 1,470  |   |                 |   | 7.4 |   |   |   | 1,212 |   |   |   | 5.2 |   |   |   | 21.3 |   |
| E-Commerce                                  |   |                             | 725    |   |                 |   | 3.6 |   |   |   | 854 |   |   |   | 3.7 |   |   |   | (15.1 | ) |
| Total selling and fulfillment      expenses |   | $                                | 4,031  |   |                 |   | 20.3 | % |   | $ | 4,523 |   |   |   | 19.4 | % |   |   | (10.9 | )% |

----

TABLE OF CONTENTS
|                                     |   | 2009  |   |   | 2008                          |   |
|------------------------------------------|--------|------------|--------|--------|------------------------------------|--------|
|                                     |   |       |   |   | As      a % ofNet      Sales  |   |   |   |   |   | As      a % of Net      Sales  |   |
| Net      sales                           |   | $          | 39,760 |   |                               |   | 100.0 | % |   | $ | 48,579 |   |   |   | 100.0 | % |
| Cost      of sales                       |   |       | 25,101 |   |                               |   | 63.1 |   |   |   | 30,545 |   |   |   | 62.9 |   |
| Gross profit                             |   |       | 14,659 |   |                               |   | 36.9 |   |   |   | 18,034 |   |   |   | 37.1 |   |
|                                     |   |       |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and fulfillment expenses    |   |       | 8,425  |   |                               |   | 21.2 |   |   |   | 9,592 |   |   |   | 19.7 |   |
| Marketing      expenses                  |   |       | 4,780  |   |                               |   | 12.0 |   |   |   | 6,448 |   |   |   | 13.3 |   |
| General      and administrative expenses |   |       | 4,099  |   |                               |   | 10.3 |   |   |   | 6,837 |   |   |   | 14.1 |   |
| Total operating      expenses            |   |       | 17,304 |   |                               |   | 43.5 |   |   |   | 22,877 |   |   |   | 47.1 |   |
|                                     |   |       |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Operating loss                           |   |       | (2,645 | )      |                               |   | (6.7 | ) |   |   | (4,843 | ) |   |   | (10.0 | ) |
|                                     |   |       |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest      expense, net               |   |       | (661   | )      |                               |   | (1.6 | ) |   |   | (131 | ) |   |   | (0.2 | ) |
|                                     |   |       |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                 |   | $          | (3,306 | )      |                               |   | (8.3 | )% |   | $ | (4,974 | ) |   |   | (10.2 | )% |

|                                                        |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Average      order size (including shipping & handling) |   | $      | 258.88 |   |   | $      | 279.04 |   |
| New      customers added during the period*                 |   |   | 85,323 |   |   |   | 102,529 |   |

----

| * | Based      on unique emailaddresses |
|---|-------------------------------------|

----

TABLE OF CONTENTS
|                                        |   | Six      Months Ended June 30,  |   |   | Percentage      |   |
|---------------------------------------------|--------|--------------------------------------|--------|--------|----------------------|--------|
| (All      data in thousands)                |   | 2009                            |   |   | 2008            |   |   | Difference  |   |
|                                        |   |                                 |   |   | As      a % of  |   |   |   |   |   | As      a % of  |   |   | Increase  |   |
|                                        |   |                                 |   |   | Net      Sales  |   |   |   |   |   | Net      Sales  |   |   | (Decrease)  |   |
| Operating                                   |   | $                                    | 3,925  |   |                 |   | 9.9 | % |   | $ | 5,401 |   |   |   | 11.1 | % |   |   | (27.3 | )% |
| Technology                                  |   |                                 | 2,967  |   |                 |   | 7.5 |   |   |   | 2,494 |   |   |   | 5.1 |   |   |   | 19.0 |   |
| E-Commerce                                  |   |                                 | 1,533  |   |                 |   | 3.8 |   |   |   | 1,697 |   |   |   | 3.5 |   |   |   | (9.7 | ) |
| Total selling and fulfillment      expenses |   | $                                    | 8,425  |   |                 |   | 21.2 | % |   | $ | 9,592 |   |   |   | 19.7 | % |   |   | (12.2 | )% |

----

TABLE OF CONTENTS

----

TABLE OF CONTENTS
|                                             |   |   |      |   | Less      Than |   |      |           |   |   |           |   |   | More      Than |    |
|--------------------------------------------------|--------|--------|-----------|--------|----------------|--------|-----------|----------------|--------|--------|----------------|--------|--------|----------------|---------|
|                                             |   | Total  |      |   | 1      Year    |   |      | 1-3      Years |   |   | 3-5      Years |   |   | 5      Years   |    |
| Marketing      and advertising                   |   | $      | 543,000   |   |           | $      | 543,000   |           |   | $      | —        |   |   | $              | — |   |   | $ | — |   |
| Operating      leases                            |   |   | 1,250,000 |   |           |   | 509,000   |           |   |   | 741,000        |   |   |           | — |   |   |   | — |   |
| Long-term      obligations                       |   |   | 3,225,000 |   |           |   | —   |           |   |   | 3,225,000      |   |   |           | — |   |   |   | — |   |
| Employment      contracts                        |   |   | 1,669,000 |   |           |   | 573,000   |           |   |   | 1,096,000      |   |   |           | — |   |   |   | — |   |
| Total      commitments and long-term obligations |   | $      | 6,687,000 |   |           | $      | 1,625,000 |           |   | $      | 5,062,000      |   |   | $              | — |   |   | $ | — |   |

I

----

TABLE OF CONTENTS
I

----

TABLE OF CONTENTS
P

I

|                                   |   | Votes  |       |   | Votes    |   |
|----------------------------------------|--------|--------|------------|--------|----------|--------|
|                                   |   | For    |       |   | Withheld |   |
| Election      of Riad Abrahams         |   |   | 11,534,767 |   |     |   | 254,880 |   |
| Election      of Mario Ciampi          |   |   | 11,469,739 |   |     |   | 319,908 |   |
| Election      of Barry Erdos           |   |   | 11,516,796 |   |     |   | 272,851 |   |
| Election      of Michael Helfand       |   |   | 11,533,864 |   |     |   | 255,783 |   |
| Election      of Ann Jackson           |   |   | 11,534,887 |   |     |   | 254,760 |   |
| Election      of Martin Miller         |   |   | 11,495,056 |   |     |   | 294,591 |   |
| Election      of Neal Moszkowski       |   |   | 11,533,327 |   |     |   | 256,320 |   |
| Election      of Melissa Payner-Gregor |   |   | 11,515,675 |   |     |   | 273,972 |   |
| Election      of Anthony Plesner       |   |   | 11,524,839 |   |     |   | 264,808 |   |
| Election      of David Wassong         |   |   | 11,521,960 |   |     |   | 267,687 |   |

I

| Exhibit      Number  |   |  Description                                                                                                                 |
|---------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
| 31.1                      |   | Certification      Pursuant to Rule 13a-14(a)/15d-14(a).                                                                          |
|                      |   |                                                                                                                              |
| 31.2                      |   | Certification      Pursuant to Rule 13a-14(a)/15d-14(a).                                                                          |
|                      |   |                                                                                                                              |
| 32.1                      |   | Certification      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002. |
|                      |   |                                                                                                                              |
| 32.2                      |   | Certification      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002. |

----

TABLE OF CONTENTS
S

|   | BLUEFLY, INC. |                                |
|--------|---------------|-------------------------------------|
|   |          |                                |   |
|   | By:           | /s/ Melissa      Payner-Gregor |   |
|   |          | Melissa      Payner-Gregor          |   |
|   |          | Chief      Executive Officer        |   |
|   |          |                                |   |

|   |   |                         |   |
|--------|--------|------------------------------|--------|
|   | By:    | /s/ Kara      B. Jenny  |   |
|   |   | Kara      B. Jenny           |   |
|   |   | Chief      Financial Officer |   |
|   |   |                         |   |

----