| [X]                  | Quarterly      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of      1934  |
|----------------------|----------------------------------------------------------------------------------------------------|
|                 |                                                                                               |
|                 | For      the quarterly period ended September 30, 2008                                             |
|                 | OR                                                                                                 |
| [   ] | Transition      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of      1934 |
|                 |                                                                                               |

| DELAWARE                                      | 75-2626358            |
|-----------------------------------------------|-----------------------|
| (State      or other jurisdiction             | (I.R.S.      Employer |
| Of      incorporation or organization)        | Identification        |
|                                          | No.)                  |
|                                          |                  |
| THE      MDI BUILDING                         |                  |
| 10226      SAN PEDRO AVENUE                   |                  |
| SAN      ANTONIO, TEXAS                       | 78216                 |
| (Address      of principal executive offices) | (Zip      Code)       |

|                         |   |                   |   |                       |   |                            |
|------------------------------|--------|------------------------|--------|----------------------------|--------|---------------------------------|
| Large      accelerated filer |   | Accelerated      filer |   | Non-accelerated      filer |   | Smaller      reporting companyx |
|                         |   |                   |   |                       |   |                            |

----

----

|                                                                                                                                                                                                                                                                                     |   | September      30,2008 |   | December      31, 2007 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|------------------------|
| ASSETS                                                                                                                                                                                                                                                                                   |   | (unaudited)            |   | (audited)              |
| Current      Assets:                                                                                                                                                                                                                                                                     |   |                   |   |                   |
| Cash      and cash equivalents                                                                                                                                                                                                                                                           | $      | 688                    | $      | 1,374                  |
| Certificate      of deposit – restricted                                                                                                                                                                                                                                           |   | 2,000                  |   | -                      |
| Restricted      cash                                                                                                                                                                                                                                                                     |   | 77                     |   | 455                    |
| Trade      accounts receivable, net                                                                                                                                                                                                                                                      |   | 3,041                  |   | 1,914                  |
| Inventories                                                                                                                                                                                                                                                                              |   | 342                    |   | 318                    |
| Prepaid      expenses and other current assets                                                                                                                                                                                                                                           |   | 1,402                  |   | 247                    |
| Note      receivable – related party                                                                                                                                                                                                                                               |   | 986                    |   | 986                    |
| Total      current assets                                                                                                                                                                                                                                                                |   | 8,536                  |   | 5,294                  |
| Property      and Equipment, net                                                                                                                                                                                                                                                         |   | 8,701                  |   | 8,382                  |
| Other      Assets:                                                                                                                                                                                                                                                                       |   |                   |   |                   |
| Goodwill                                                                                                                                                                                                                                                                                 |   | 7,855                  |   | 7,971                  |
| Other      intangible assets                                                                                                                                                                                                                                                             |   | 1,087                  |   | 1,260                  |
| Other      assets                                                                                                                                                                                                                                                                        |   | 472                    |   | 608                    |
| Total      assets                                                                                                                                                                                                                                                                        | $      | 26,651                 | $      | 23,515                 |
|                                                                                                                                                                                                                                                                                     |   |                   |   |                   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                          |   |                   |   |                   |
| Current      Liabilities:                                                                                                                                                                                                                                                                |   |                   |   |                   |
| Bank      line of credit                                                                                                                                                                                                                                                                 | $      | 2,123                  | $      | 355                    |
| Short-term      line of credit                                                                                                                                                                                                                                                           |   | 2,899                  |   | -                      |
| Accounts      payable                                                                                                                                                                                                                                                                    |   | 1,840                  |   | 879                    |
| Accounts      payable – contractors                                                                                                                                                                                                                                                |   | 1,039                  |   | 1,472                  |
| Accrued      expenses                                                                                                                                                                                                                                                                    |   | 711                    |   | 736                    |
| Accrued      compensation                                                                                                                                                                                                                                                                |   | 391                    |   | 564                    |
| Other      current liabilities                                                                                                                                                                                                                                                           |   | 516                    |   | 472                    |
| Deferred      revenue                                                                                                                                                                                                                                                                    |   | 264                    |   | 408                    |
| Total      current liabilities                                                                                                                                                                                                                                                           |   | 9,783                  |   | 4,886                  |
| Long-Term      Liabilities                                                                                                                                                                                                                                                               |   |                   |   |                   |
| Note      payable                                                                                                                                                                                                                                                                        |   | 5,500                  |   | 5,500                  |
| Other      long-term liabilities                                                                                                                                                                                                                                                         |   | 166                    |   | 224                    |
|                                                                                                                                                                                                                                                                                     |   |                   |   |                   |
| Total      Liabilities                                                                                                                                                                                                                                                                   |   | 15,449                 |   | 10,610                 |
| Commitments      and Contingencies                                                                                                                                                                                                                                                       |   |                   |   |                   |
| Stockholders’      Equity:                                                                                                                                                                                                                                                         |   |                   |   |                   |
| Preferred      stock, $5 par value, issuable in series; 2,000,000 shares authorized;      Series A, LIBOR+2% cumulative convertible; 195,351 shares authorized and      issued; including unpaid dividends of $69 and $45 at September 30, 2008      and December 31, 2007, respectively |   | 1,046                  |   | 1,022                  |
| Common      stock, $0.01 par value; 100,000,000 shares authorized; 35,634,385 and      37,106,302 issued at  September 30, 2008 and December 31, 2007,      respectively                                                                                                       |   | 356                    |   | 371                    |
| Additional      paid-in-capital                                                                                                                                                                                                                                                          |   | 146,612                |   | 148,657                |
| Stock      subscription receivable                                                                                                                                                                                                                                                       |   | -                      |   | (2,600)                |
| Accumulated      deficit                                                                                                                                                                                                                                                                 |   | (136,812)              |   | (134,545)              |
| Total      stockholders’ equity                                                                                                                                                                                                                                                    |   | 11,202                 |   | 12,905                 |
| Total      liabilities and stockholders’ equity                                                                                                                                                                                                                                    | $      | 26,651                 | $      | 23,515                 |

----

|                                                       |   | Three      months ended September 30, |
|------------------------------------------------------------|--------|---------------------------------------|
|                                                       |   | 2008                                  |   | 2007 |
| Net      sales                                             | $      | 5,336                                 | $ | 1,843 |
| Cost      of sales                                         |   | 3,069                                 |   | 761 |
| Gross      profit                                          |   | 2,267                                 |   | 1,082 |
| Other      operating costs:                                |   |                                  |   |   |
| Selling,      general and administrative                   |   | 2,008                                 |   | 2,513 |
| Depreciation      and amortization                         |   | 197                                   |   | 31 |
|                                                       |   | 2,205                                 |   | 2,544 |
| Operating      income (loss)                               |   | 62                                    |   | (1,462) |
| Other      income (expense):                               |   |                                  |   |   |
| Interest      income (expense), net                        |   | (79)                                  |   | 28 |
| Gain      (loss) on sale or disposal of assets             |   | -                                     |   | 489 |
| Other,      net                                            |   | 16                                    |   | - |
|                                                       |   | (63)                                  |   | 517 |
|                                                       |   |                                  |   |   |
| Income      (loss) before income taxes                     |   | (1)                                   |   | (945) |
| Income      taxes                                          |   | (2)                                   |   | (1) |
| Net      income (loss)                                     |   | (3)                                   |   | (946) |
| Dividend      requirements on preferred stock              |   | (9)                                   |   | (8) |
| Net      loss allocable to common stockholders             | $      | (12)                                  | $ | (954) |
| Basic      and diluted loss per share from:                |   |                                  |   |   |
| Continuing      operations                                 | $      | (0.00)                                | $ | (0.03) |
| Discontinued      operations                               |   | -                                     |   | - |
| Basic      and diluted loss per share                      | $      | (0.00)                                | $ | (0.03) |
|                                                       |   |                                  |   |   |
| Basic      and diluted weighted average shares outstanding |   | 36,602,127                            |   | 32,100,254 |
|                                                       |   |                                  |   |   |
|                                                       |   |                                  |   |   |

----

|                                                       |   | Nine      months ended September 30, |
|------------------------------------------------------------|--------|--------------------------------------|
|                                                       |   | 2008                                 |   | 2007 |
| Net      sales                                             | $      | 12,136                               | $ | 5,949 |
| Cost      of sales                                         |   | 6,770                                |   | 2,686 |
| Gross      profit                                          |   | 5,366                                |   | 3,263 |
| Other      operating costs:                                |   |                                 |   |   |
| Selling,      general and administrative                   |   | 6,831                                |   | 7,312 |
| Depreciation      and amortization                         |   | 610                                  |   | 89 |
|                                                       |   | 7,441                                |   | 7,401 |
| Operating      loss                                        |   | (2,075)                              |   | (4,138) |
| Other      income (expense):                               |   |                                 |   |   |
| Interest      income (expense), net                        |   | (229)                                |   | 7 |
| Gain      (loss) on sale or disposal of assets             |   | 11                                   |   | 484 |
| Other,      net                                            |   | 53                                   |   | (29) |
|                                                       |   | (165)                                |   | 462 |
|                                                       |   |                                 |   |   |
| Loss      before income taxes                              |   | (2,240)                              |   | (3,676) |
| Income      taxes                                          |   | (3)                                  |   | (2) |
| Net      loss                                              |   | (2,243)                              |   | (3,678) |
| Dividend      requirements on preferred stock              |   | (24)                                 |   | (25) |
| Net      loss allocable to common stockholders             | $      | (2,267)                              | $ | (3,703) |
| Basic      and diluted loss per share from:                |   |                                 |   |   |
| Continuing      operations                                 | $      | (0.06)                               | $ | (0.12) |
| Discontinued      operations                               |   | -                                    |   | - |
| Basic      and diluted loss per share                      | $      | (0.06)                               | $ | (0.12) |
|                                                       |   |                                 |   |   |
| Basic      and diluted weighted average shares outstanding |   | 36,998,843                           |   | 29,767,250 |
|                                                       |   |                                 |   |   |
|                                                       |   |                                 |   |   |

----

|                                                                                  |   | Nine      months ended September 30, |
|---------------------------------------------------------------------------------------|--------|--------------------------------------|
|                                                                                  |   | 2008                                 |   | 2007 |
| Operating      Activities:                                                            |   |                                 |   |   |
| Net      loss                                                                         | $      | (2,243)                              | $ | (3,678) |
| Adjustments      to reconcile net loss to net cash used in operating      activities: |   |                                 |   |   |
| (Gain)      loss on sale or disposal of assets                                        |   | (11)                                 |   | (484) |
| Amortization      of deferred loan costs                                              |   | 43                                   |   | - |
| Non-cash      stock compensation                                                      |   | 332                                  |   | 354 |
| Services      rendered for warrants issued                                            |   | -                                    |   | 134 |
| Services      rendered for stock issued                                               |   | 208                                  |   | - |
| Rent      forgiveness for warrants issued                                             |   | -                                    |   | 46 |
| Non-cash      interest income on note receivable – related party                |   | (63)                                 |   | - |
| Depreciation      and amortization                                                    |   | 610                                  |   | 89 |
| Provision      for losses on accounts receivable                                      |   | 58                                   |   | 144 |
| Loss      on early collection of notes receivable                                     |   | -                                    |   | 29 |
| Changes      in operating assets and liabilities, net of dispositions:                |   |                                 |   |   |
| Trade      accounts receivable                                                        |   | (1,185)                              |   | 97 |
| Inventories                                                                           |   | (24)                                 |   | 254 |
| Prepaid      and other assets                                                         |   | (999)                                |   | 103 |
| Accounts      payable – trade                                                   |   | 961                                  |   | (878) |
| Accounts      payable – contractors                                             |   | (433)                                |   | - |
| Accrued      and other liabilities                                                    |   | (416)                                |   | 121 |
| Net      cash provided (used) in operating activities                                 |   | (3,162)                              |   | (3,669) |
|                                                                                  |   |                                 |   |   |
| Investing      Activities:                                                            |   |                                 |   |   |
| Purchases      of property and equipment                                              |   | (640)                                |   | (101) |
| Changes      in restricted cash                                                       |   | (1,622)                              |   | - |
| Proceeds      from sale of assets                                                     |   | 11                                   |   | 100 |
| Net      cash provided by (used) in investing activities                              |   | (2,251)                              |   | (1) |
|                                                                                  |   |                                 |   |   |
| Financing      Activities:                                                            |   |                                 |   |   |
| Issuance      of common stock                                                         |   | -                                    |   | 5,450 |
| Borrowings      on short term debt                                                    |   | 60                                   |   | - |
| Exercise      of stock options                                                        |   | -                                    |   | 5 |
| Borrowings      from line of credit, net                                              |   | 1,768                                |   | - |
| Advances      on short-term line of credit                                            |   | 2,899                                |   | - |
| Net      proceeds from (repayment of) factoring payable                               |   | -                                    |   | (268) |
| Net      cash provided by financing activities                                        |   | 4,727                                |   | 5,187 |
| Net      increase (decrease) in unrestricted cash and cash    equivalents             |   | (686)                                |   | 1,517 |
| Unrestricted      cash and cash equivalents, beginning of period                      |   | 1,374                                |   | 452 |
| Unrestricted      cash and cash equivalents, end of period                            | $      | 688                                  | $ | 1,969 |
|                                                                                  |   |                                 |   |   |
| Non      cash Investing and Financing Activities:                                     |   |                                 |   |   |
| Subscription      receivable for shares of common stock                               | $      | -                                    | $ | 2,600 |
| Cancellation      of common stock and subscription receivable                         |   | (2,600)                              |   | - |
| Non      cash change in goodwill                                                      |   | 116                                  |   | - |
| Stock      acquisition costs for warrants issued                                      |   | -                                    |   | 78 |
| Note      receivable issued in sale of assets                                         |   | -                                    |   | 400 |
|                                                                                  |   |                                 |   |   |
| Supplemental      cash flow information:                                              |   |                                 |   |   |
| Cash      paid during the year for:                                                   |   |                                 |   |   |
| Interest                                                                              | $      | 353                                  | $ | 49 |
| Income      taxes                                                                     | $      | -                                    | $ | - |

----

|                         | September      30,2008 |   | September      30,2007 |
|------------------------------|------------------------|--------|------------------------|
| Expected      life in years  | 2.5      - 2.9         |   | 2.5                    |
| Expected      volatility     | 92%      - 103%        |   | 89%                    |
| Risk-free      interest rate | 1.9      – 2.9   |   | 4.8                    |

----

| Cash                                      | $            1,102 |
|-------------------------------------------|--------------------------------------------------------------------------------|
| Accounts      receivable                  | 750                                                                            |
| Note      receivable                      | 986                                                                            |
| Land                                      | 778                                                                            |
| Building                                  | 7,067                                                                          |
| Net      property and equipment           | 377                                                                            |
| Other      current and non-current assets | 207                                                                            |
| Intangible      assets                    |                                                                           |
| -      trade name                         | 66                                                                             |
| -      backlog                            | 369                                                                            |
| -      customer relationships             | 1,015                                                                          |
| Goodwill                                  | 3,242                                                                          |
| Total      assets acquired                | 15,959                                                                         |
| Payables      and accrued expenses        | (3,277)                                                                        |
| Long-term      liabilities                | (5,555)                                                                        |
| Net      assets acquired                  | $            7,127 |

|                                           |   | Nine      months ended  |
|------------------------------------------------|--------|-------------------------|
|                                           |   | September      30, 2007 |
|                                           |   |                    |
| Revenue                                        | $      | 10,049                  |
| Loss      from operations                      |   | (3,836)                 |
| Net      loss allocable to common stockholders |   | (3,786)                 |
| Income      per share:                         |   |                    |
| Basic                                          | $      | (0.11)                  |
| Diluted                                        | $      | (0.11)                  |
|                                           |   |                    |

----

----

|                         |   | Physical      Security |   | General      Contracting |   |  FAS |   | Non-segment |   |  Total |
|------------------------------|--------|------------------------|--------|--------------------------|--------|-----------|--------|-------------|--------|-------------|
|                         |   |                   |   |                     |   |      |   |        |   |        |
| Revenues                     | $      | 2,707                  | $      | 786                      | $      | 1,843     | $      | -           | $      | 5,336       |
| Operating      income (loss) |   | (80)                   |   | 10                       |   | 132       |   | -           |   | 62          |
| Interest      expense, net   |   | -                      |   | -                        |   | -         |   | (79)        |   | (79)        |
| Other                        |   | -                      |   | -                        |   | -         |   | 14          |   | 14          |
| Net      income (loss)       |   | (80)                   |   | 10                       |   | 132       |   | (65)        | $      | (3)         |
|                         |   |                   |   |                     |   |      |   |        |   |        |

|                       |   | Physical      Security |   | General      Contracting |   |  FAS |   | Non-segment |   |  Total |
|----------------------------|--------|------------------------|--------|--------------------------|--------|-----------|--------|-------------|--------|-------------|
|                       |   |                   |   |                     |   |      |   |        |   |        |
| Revenues                   | $      | 6,080                  | $      | 1,125                    | $      | 4,931     | $      | -           | $      | 12,136      |
| Operating      loss        |   | (1,539)                |   | 9                        |   | (545)     |   | -           |   | (2,075)     |
| Interest      expense, net |   | -                      |   | -                        |   | -         |   | (229)       |   | (229)       |
| Other                      |   | -                      |   | -                        |   | -         |   | 61          |   | 61          |
| Net      income (loss)     |   | (1,539)                |   | 9                        |   | (545)     |   | (168)       | $      | (2,243)     |
|                       |   |                   |   |                     |   |      |   |        |   |        |

----

----

| ·   | SAFEnet®      Operating System – This product is an enterprise level open architecture      access control, intrusion detection and video security      software. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   |  Pointguard      Xtreme™ Security Platform - This product is the upgrade path to the very      successful Pointguard® product. It is a simplified version of our      Enterprise-Grade SAFEnet product designed to make the screens and initial      setup easier for the average user, but with the SAFEnet core to allow for      full upward migration as a user’s needsgrow. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Viewpoint™      Digital Video Recorders (DVR)- Our Viewpoint™ line of DVR’s are fully      integrated for use with the SAFEnet® Operating System and Pointguard      Xtreme™ Security Platform. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Standard      Design Products - We also sell a line of products for which we have      developed a standardized design. These “out-of-the-box” security products      include digital video recorders, video cameras, small access control      systems and related products. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c. | Services-      Our Professional Services Group (“PSG”)  provides the design,      installation, system implementation, and end user training of the      customized SAFEnet system to our clientele.  PSG provides      physical and electronic security and other related systems to our other      business lines for their projects andclients. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Enterprise      Level Solutions- utilizing our Professional Services Group (PSG) along      with channel partners such as Nortel Solutions, Assa Abloy, The SBS Group,      and Government Capital, we provide a complete turnkey solution for school      safety and security including program design, products, installation,      maintenance, training andfinancing. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Products-      We have established and staffed a call center at our headquarters to      support direct sales to school customers utilizing standard LearnSafe®      safety and security products offered in our LearnSafe® Direct Catalog and      our contract with The Cooperative Purchasing Network (“TCPN”) and Texas      Region 4 Education Service Center (“Region 4 ESC”) servicing public and      private schools, colleges, universities, cities, counties and other      government agencies in 41 states. The call center staff also supports      sales to member school districts through inter-local purchasing agreements      and our partnership with the Mexican American School Board Association      (MASBA). |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Services-      Our Professional Services Group (PSG) along with The SBS Group, The Law      Advisory Group, and National Alliance for Safe Schools provide assessment      and audit services as well as premier safety and security training      programs such as the TEACh Safety™ Curriculum to administrators, school      board members, teaching staff, and security  personnel. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Development      planning- We provide feasibility studies, programming, master planning,      and entitlement services to real estate development    clients. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Architectural/Engineering      design services- Utilizing either our in-house architectural staff or      subcontracting specialty design services, we provide a full spectrum of      design disciplines required to support the development of any project from      a design or design/build approach. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Construction      Risk Management services- We provide initial project reviews, monthly pay      application and progress reviews, and funds dispersal services to      construction lenders on hundreds of commercial  projects. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Project      and Construction Management Advisor services- We provide a full spectrum      of onsite project and construction management services for real estate      investment trusts, property developers, and other investor clients on      hundreds of projects annually throughout North, Central, and South      America. We manage projects ranging from premium residential and      condominium projects as well as resort and hotel projects to retail      centers, commercial buildings, and industrial  projects. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General      Construction services- We provide general construction or construction      management at risk services for developer clients. We are currently      performing construction management at risk on a $12 million hotel project      in San Antonio, Texas |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Fee      Development or Development Partner- We provide turn-key project delivery      on a fee or equity partnershipbasis. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

----

|                                     |                                       |                |                                       |          |                                  |   |                        |                                   |
|------------------------------------------|--------------------------------------------|---------------------|--------------------------------------------|---------------|---------------------------------------|--------|-----------------------------|----------------------------------------|
|                                     |                                       |                |                                       |          |                                  |   |                        |                                   |
|                                     | Three      months ended September 30, 2008 |                | Three      months ended September 30, 2007 |          | Three      months ended September 30, |
|                                     |  Dollars                              | %      of Net Sales |                                       |  Dollars | %      of Net Sales                   |   | Change      In Dollar Value | Percentage      Change In Dollar Value |
|                                     |                                       |                |                                       |          |                                  |   |                        |                                   |
| Net      Sales                           | $5,336                                     | 100%                |                                       | $1,843        | 100%                                  |   | $3,493                      | 190%                                   |
| Gross      profit                        | 2,267                                      | 42%                 |                                       | 1,082         | 59%                                   |   | 1,185                       | 110%                                   |
| Selling,      general and administrative | 2,008                                      | 38%                 |                                       | 2,513         | 136%                                  |   | (505)                       | -20%                                   |
| Operating      income (loss)             |  62                                   | 1%                  |                                       |  (1,462) | -79%                                  |   | 1,524                       | -104%                                  |
| Net      income (loss)                   | (3)                                        | 0%                  |                                       | (946)         | -51%                                  |   | 943                         | -100%                                  |

|                                     |                                      |                |                                                       |          |                                 |   |                        |                                   |
|------------------------------------------|-------------------------------------------|---------------------|------------------------------------------------------------|---------------|--------------------------------------|--------|-----------------------------|----------------------------------------|
|                                     |                                      |                |                                                       |          |                                 |   |                        |                                   |
|                                     | Nine      months ended September 30, 2008 |                | Nine      months ended   September 30, 2007 |          | Nine      months ended September 30, |
|                                     |  Dollars                             | %      of Net Sales |                                                       |  Dollars | %      of Net Sales                  |   | Change      In Dollar Value | Percentage      Change In Dollar Value |
|                                     |                                      |                |                                                       |          |                                 |   |                        |                                   |
| Net      Sales                           | $12,136                                   | 100%                |                                                       | $5,949        | 100%                                 |   | $6,187                      | 104%                                   |
| Gross      profit                        | 5,366                                     | 44%                 |                                                       | 3,263         | 55%                                  |   | 2,103                       | 64%                                    |
| Selling,      general and administrative | 6,831                                     | 56%                 |                                                       | 7,312         | 123%                                 |   | (481)                       | -7%                                    |
| Operating      loss                      | (2,075)                                   | -17%                |                                                       | (4,138)       | -70%                                 |   | 2,063                       | -50%                                   |
| Net      loss                            | (2,243)                                   | -18%                |                                                       | (3,678)       | -62%                                 |   | 1,435                       | -39%                                   |

----

----

----

----

| Dated:      October 30, 2008 | By:      /s/ Michael      Sweet |
|------------------------------|---------------------------------|

|   | Michael      Sweet |
|--------|--------------------|

|   | Senior      Vice President and Chief FinancialOfficer |
|--------|-------------------------------------------------------|

----