All statements contained herein that are not historical facts, including but not limited to, statements regarding future operations, financial condition and liquidity, future borrowing, capital requirements, and our future development and growth plans, are based on current expectations. These statements are forward-looking in nature and involve a number of risks and uncertainties. Actual results and the timing of events may differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the headings "Risks Factors" in our Form 10-KSB for the year ended December 31, 2007 and other risk factors described herein and our reports filed and to be filed from time to time with the Commission and the cautionary note regarding "Forward-Looking Statements." The discussion and analysis below is based on the Company's unaudited consolidated financial statements for the three months and six months ended June 30, 2008 and 2007. The following should be read in conjunction with the Management's Discussion and Analysis of results of operations and financial condition included in Form 10-KSB for the year ended December 31, 2007.

Overview

We are a consumer products company focused on selling high quality household, personal care, and other products at affordable prices. In addition to our consumer products business, we operate a smaller, non-integrated business which entails the ownership and leasing of certain real estate holdings in Granby, Connecticut.

Our model for successfully bringing the products that we develop or license to market typically begins with what we refer to as a "transactional marketing" campaign, which is designed to build product and brand awareness while at the same time generating sales. Our transactional marketing campaigns are conducted in as many channels of consumer media as are viable for generating immediate sales in response to our product advertisements, including television, print, radio and the internet.

Our ultimate goal is to leverage product and brand awareness generated from transactional marketing into wholesale sales of our products to resellers, which include national retail and drugstore chains as well as home shopping channels, catalog publishers and international distributors. In addition, based on results achieved and relationships established through this channel, we have begun developing, licensing and selling products that are intended for retail distribution only, a trend we expect to continue through 2008. We currently have products placed with many of the nation's largest retail outlets, including WalMart, Target, Sears and Bed Bath and Beyond, as well the nation's major drug chains such as CVS, Walgreens and RiteAid.

Our financial results are presented in two segments: consumer products and real estate. Beginning with our acquisition of Worldwide Excellence ("WWE") in November 2005 (at which time our historical results of operation became those of WWE), and continuing through July 2006, we reported results in a direct response (or transactional) marketing segment and a real estate segment. With our acquisition of the assets of the consumer products business of Adsouth Partners, Inc. in August 2006, including the retail distribution relationships and network we acquired, we began reporting a third segment named "retail distribution."

Due to changes in the way we viewed and used transactional marketing in the latter part of 2007 and going forward, we made the decision to present transactional marketing and retail distribution as a comprehensive consumer products segment. This change arose from developments in our business and the marketplace in which we operate. We believe that our transactional marketing efforts support sales in our other channels of distribution, operating synergistically as opposed to independently. Furthermore, increasing costs of television media have made it more and more difficult to conduct profitable transactional marketing campaigns, causing us to concentrate on further developing wholesale channels of distribution where we experience lower gross margins but higher net margins. For this and other reasons, our wholesale sales, in particular to our retail store accounts, have become an increasing percentage of overall sales, which we expect will continue through 2008. Direct sales to consumers through transactional marketing remains a source of revenue as well as a very important part of our business strategy, but one that we increasingly view more as a method of advertising our consumer products and building brand awareness generally as opposed to a stand-alone segment.

In 2007, we experienced significant revenue growth, driven largely by the roll-out of new products and increased distribution to retailers. Our strategy for continued sales growth in 2008 includes the introduction of 4-6 new products in categories suitable for distribution to most of our existing retail customers as well to new major retail outlets such as office supply stores and electronic stores. In addition, our focus in the latter part of 2007, continuing in 2008, is on products with retail price points between $9.99 and $29.99, which we believe to be better positioned than higher price point products in the current economic environment. Finally, as we continue to pursue new channels of distribution, we expect continued growth in international and home shopping sales.

Critical Accounting Policies

Management's discussion and analysis of its financial position and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Our critical accounting policies are detailed in our Annual Report on Form 10-KSB for the year ended December 31, 2007.

Effects of New Accounting Pronouncements

We describe recent accounting pronouncements in Item 1 - "Condensed Consolidated Financial Statements - Notes to Condensed Consolidated Financial Statements."

RESULTS OF OPERATIONS

Three Months Ended June 30, 2008 Compared to Three Months Ended June 30, 2007.

Revenues and Gross Profit

Consumer Products

The following table summarizes our changes in net revenues and gross profit from
the sale of consumer products (in thousands) for the periods indicated:

                                           Three months ended June, 30
                                    Q2          Q2               Change
                                   2008        2007          $            %
                 Net revenue      $ 9,404     $ 8,437     $    967         11 %
                 Cost of sales      5,030       2,698        2,332         86 %
                 Gross profit     $ 4,374     $ 5,739     $ (1,365 )     (24) %
                 Gross profit %       47%         68%

Net Revenues

Net revenues from consumer product sales for the three months ended June 30, 2008 ("Q2 2008") was approximately $9.4 million, an increase of $0.9 million, or 11%, compared to net revenue for the three months ended June 30, 2007 ("Q2 2007") of approximately $8.4 million. The increase in revenues during Q2 2008 was attributable to: (i) the 2008 product launches of MyPlace and SteamBuddy, which contributed $6.1 million in revenues, and (ii) an increase in revenues of $1.1 million from the 2007 product launch of EZ Foldz. This increase was partially offset by a $4.5 million decrease in sales of Hercules Hook, due to the maturity of this product and a reduction in its marketing campaign.

Gross Profit

Gross profit in Q2 2008 was approximately $4.3 million, which represents a decrease of $1.4 million, or 24%, compared to gross profit of $5.7 million in Q2 2007. The decrease in gross profit in Q2 2008 was due to a decrease in gross margin percentage, partially offset by an increase in net revenues. The gross margin was 47% in Q2 2008, compared to 68% in Q2 2007. The decrease in gross margin percent in Q2 2008 was due to an increase in the mix of revenues from our retail distribution customers, which inherently carry a lower gross margin. In addition, due to the bankruptcy of one of our third party fulfillment centers in Q4 2007, we incurred higher fulfillment costs beginning in the fourth quarter of 2007 and continuing through the first five months of 2008.

Real Estate

Revenue was approximately $0.2 million in both Q2 2008 and Q2 2007. There has been no change in the occupancy of the office building we own and operate in East Granby, Connecticut.

Operating Expenses

The following table summarizes our changes in operating expenses (in thousands)
for the periods indicated:

                                                    Three months ended June, 30
                                              Q2          Q2              Change
                                             2008        2007         $            %
         Selling                            $ 2,699     $ 3,509     $ (810 )     (23) %

         General and administrative:
         Consumer products                      818       1,008       (190 )     (19) %
         Real estate                            113         104          9         9  %
         Corporate expenses                     768         595        173        29  %
         Total general and administrative     1,699       1,707         (8 )      (0) %

Selling Expenses

Consumer Products

Selling expenses in Q2 2008 were approximately $2.7 million, a decrease of $0.8 million, or 23%, compared to selling expenses in Q2 2007 of approximately $3.5 million. The decrease in 2008 was primarily due to a $1.3 million reduction in the Hercules Hook and ZorbEEZ marketing campaigns, offset by an increase of $0.9 million in the advertising campaign for a new product Steam Buddy. Selling expense as a percent of revenue decreased to 29% in Q2 2008 from 42% in Q2 2007. The decrease in selling expense as a percentage of revenue was due to an increase in the mix of revenues from our retail distribution customers, which inherently carry lower selling expenses as a percentage of revenue. The primary component of selling expense is the cost of media advertising, which consists of TV, internet and print. Media expense in Q2 2008 was approximately $1.2 million, which represents a decrease of $0.5 million, compared to media expenses of $1.7 million in Q2 2007. The net decrease in Q2 2008 was due the decrease in media spending on Hercules Hook, offset by the launch of SteamBuddy in 2008. We monitor our media spending in relation to consumer acceptance of the product and their willingness to purchase it from our retail distribution customers. In addition to the decrease in the amount of media time that we purchased, our media costs were also affected by an increase in media rates charged by TV stations in Q2 2008 compared to Q2 2007.

General and Administrative Expenses

General and administrative expenses in Q2 2008 and Q2 2007 were approximately $1.7 million, in both periods.

Interest Expense

Interest expense in Q2 2008 was $0.2 million compared to interest expense of $0.3 million in Q2 2007. The $0.1 million decrease in interest expense was primarily due to a reduction in the principal balance of our 10% secured convertible debt.

We have recorded a 100% valuation allowance against our current year tax loss and prior years net operating loss carry forwards based on the criteria contained in FAS 109 of the realized value of these deferred tax assets.
Notwithstanding management's view of future profitability, in determining whether or not a valuation allowance is necessary, forecasts of future taxable income are generally not considered sufficient evidence to outweigh a history of losses.

Six Months Ended June 30, 2008 Compared to Six Months Ended June 30, 2007.

Revenues and Gross Profit

Consumer Products

The following table summarizes our changes in net revenues and gross profit from
the sale of consumer products (in thousands) for the periods indicated:

                                            Six months ended June, 30
                                   YTD          YTD               Change
                                   2008         2007          $            %
                Net revenue      $ 17,525     $ 21,102     $ (3,577 )     (17) %
                Cost of sales       8,440        6,683        1,757        26  %
                Gross profit     $  9,085     $ 14,419     $ (5,334 )     (37) %
                Gross profit %        52%          68%

Net revenues from consumer product sales for the six months ended June 30, 2008 ("2008") was approximately $17.5 million, a decrease of $3.6 million, or 17%, compared to net revenue for the six months ended June 30, 2007 ("2007") of approximately $21.1 million. The decrease in revenues in 2008 was attributable to a $12.2 million decrease in sales of Hercules Hook, due to the maturity of this product and a reduction in its marketing campaign. This reduction was partially offset by: (i) the 2008 product launches of MyPlace and SteamBuddy, which contributed $7.4 million in revenues, and (ii) an increase in revenues of $3.2 million from the 2007 product launches of ZorbEEZ and EZ Foldz.

Gross Profit

Gross profit in 2008 was approximately $9.1 million, which represents a decrease of $5.3 million, or 37%, compared to gross profit of $14.4 million in 2007. The decrease in gross profit in 2008 was due to both a decrease in net revenues and a decrease in gross margin percentage. The gross margin was 52% in 2008, compared to 68% in 2007. The decrease in gross margin in 2008 was due to an increase in the mix of revenues from our retail distribution customers, which inherently carry a lower gross margin. In addition, due to the bankruptcy of one of our third party fulfillment centers, we incurred higher fulfillment costs beginning in the fourth quarter of 2007 and continuing through the first five months of 2008.

Real Estate

Revenue was approximately $0.3 million in both 2008 and 2007. There has been no change in the occupancy of the office building we own and operate in East Granby, Connecticut.

Operating Expenses

The following table summarizes our changes in operating expenses (in thousands)
for the periods indicated:

                                                         Six months ended
                                                             June, 30
                                             YTD         YTD              Change
                                            2008        2007          $             %
        Selling                            $ 6,624     $ 9,638     $ (3,014 )     (31) %

        General and administrative:
        Consumer products                    1,704       1,869         (165 )      (9) %
        Real estate                            221         209           12         6  %
        Corporate expenses                   1,784       1,237          547        44  %
        Total general and administrative     3,709       3,315          394        12  %

Selling Expenses

Consumer Products

Selling expenses in 2008 were approximately $6.6 million, a decrease of $3.0 million, or 31%, compared to selling expenses in 2007 of approximately $9.6 million. The decrease in 2008 was primarily due to a $3.1 million reduction in the Hercules Hook marketing campaign, offset by an increase of: (i) $1.4 million in the marketing for a new product, Steam Buddy, and (ii) $0.7 million in the marketing campaign for ZorbEEZ, which was launched in 2007. Selling expense as a percent of revenue decreased to 38% in 2008 from 46% in 2007. The decrease in selling expense as a percentage of revenue was due to an increase in the mix of revenues from our retail distribution customers, which inherently carry lower selling expenses as a percentage of revenue. The primary component of selling expense is the cost of media advertising, which consists of TV, Internet and print. We monitor our media spending in relation to consumer acceptance of the product and their willingness to purchase it from our retail distribution customers. In addition to the decrease in the amount of media time that we purchased, our media costs were also affected by an increase in media rates charged by TV stations in 2008 compared to 2007.

General and Administrative Expenses

General and administrative expenses in 2008 were approximately $3.7 million, an increase of $0.4 million, or 12%, compared to approximately $3.3 million in 2007. The increase in 2008 was due to an increase in corporate expenses. Corporate expenses consist primarily of the costs of being a public company and the costs attributable to new business development. The increase in corporate expenses in 2008 consists of an additional: (i) $0.2 million of allocated employment costs of executive officers and other employees whose services are directly related to the management of the public company and new business development and (ii) $230,000 of severance expenses and accelerated vesting of stock options in connection with the separation agreement with us and our former President who resigned on March 15, 2008.

Interest Expense

Interest expense in 2008 was $0.5 million compared to interest expense of $0.7 million in 2007. The $0.2 million decrease in interest expense was primarily due to a reduction in the principal balance of our 10% secured convertible debt.

Provision for Income Taxes

We have recorded a 100% valuation allowance against our current year tax loss and prior years net operating loss carry forwards based on the criteria contained in FAS 109 of the realized value of these deferred tax assets.
Notwithstanding management's view of future profitability, in determining whether or not a valuation allowance is necessary, forecasts of future taxable income are generally not considered sufficient evidence to outweigh a history of losses.

Liquidity and Capital Resources

Our business requires sufficient capital to cover the costs of product development, production of marketing materials, the purchase of transactional advertising media (such as television, internet, print and radio), and the purchase of product inventory. While a large component of our cash requirements are often associated with advertising media, the terms we receive and the relatively quick return on that investment in the form of product sales associated with those expenditures does not typically result in liquidity constraints. Our biggest capital commitment is the purchase of inventory for sales to our retail chain customers and transactional marketing customers.

In June 2007, we entered into a Loan and Security Agreement (the "BFI Agreement") with BFI Business Finance ("Lender"). Pursuant to the BFI Agreement, Lender will loan us up to the lesser of (i) $5,000,000 or (ii) the Borrowing Base. The "Borrowing Base" is defined as (i) 85% of the gross face amount of the eligible accounts receivable of our Adsouth Marketing, LLC subsidiary ("ASM"), plus (ii) 30% of the current market cost of raw materials and finished goods that constitute ASM's eligible inventory, not to exceed the lesser of $700,000 or 50% of the eligible accounts receivable borrowing base. We have guaranteed ASM's obligations under the BFI Agreement. As of June 30, 2008, the balance of the line of credit was $4.0 million, which was approximately 95% of the maximum amount available under the Borrowing Base.

Loans extended pursuant to the BFI Agreement bear interest at a rate per annum of 2.0% above the greater of the prime rate as reported in the western edition of the Wall Street Journal from time to time but never less than 6.5%. Interest is payable monthly in arrears and we are required to pay at least $7,500 a month in interest regardless of the amounts outstanding under the BFI Agreement at any particular time. We are required to pay an annual loan fee equal to 1% of the maximum amount of the credit line. The BFI Agreement has a term of 12 months expiring in June 2009 and thereafter shall automatically renew for successive 12 month periods (each a "Renewal Term") so long as neither we nor Lender delivers written notice of its intention to terminate the BFI Agreement.

As of June 30, 2008, we had a working capital deficit of $2.4 million. Based on our anticipated growth, we believe that our cash requirements will increase. We require significant, up-front cash disbursements to operate our business, most notably in connection with the purchase of product inventory. Our current working capital resources, comprised of our present cash resources and bank lines of credit will be insufficient to fund additional growth of our operations over the next 12 months. We will seek to fund additional growth with increases to our credit line by using our receivables and inventory as collateral, and by seeking alternate debt or equity financing. We will also seek to renegotiate the terms of our 10% secured convertible notes. Our failure to raise the necessary additional capital resources or to renegotiate the terms of our debt could affect our ability to generate revenue and could require us to scale down some of our operations.

Net cash used by operations in 2008 was $1.7 million, as compared to $1.1 million used in 2007. The $0.6 million increase in the use of cash in 2008 was due to a decrease in earnings of $2.6 million, net of adjustments for non-cash-items, offset by: (i) an inventory decrease in 2008 of $0.8 million compared to a decrease of $0.2 million in 2007, and (ii) a decrease in accounts payable of $0.3 million in 2008, compared to an increase of $0.8 million in 2007.

Cash used by investing activities was insignificant for both 2008 and 2007 periods.

Net cash provided by financing activities was $2.2 million in 2008 as compared to $1.3 million used in 2007. The $0.9 million increase in 2008 was a result of a larger use of our credit line in 2008 as compared to the factoring agreements utilized in 2007.

The table below summarizes aggregate maturities of future minimum note and lease payments under non-cancelable operating and capital leases as of June 30, 2008 (in thousands).

                                              Less than        1-3        4-5       After 5
      Contractual Obligations    Total         1 Year         Years      Years       Years
      Total Debt (1)            $ 10,353     $     5,771     $ 2,961     $  239     $  1,382
      Operating Leases               877             323         496         58            -
      Total                     $ 11,230     $     6,094     $ 3,457     $  297     $  1,382

(1) We have presented the outstanding balance of $4.0 million on our line of credit at June 30, 2008, as due within one year in order to conform to the classification in the accompanying Consolidated Financial Statements.

Off Balance Sheet Arrangements

None.