From time to time, we may publish forward-looking statements relative to such matters as anticipated financial results, business prospects, technological developments and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements appearing earlier in this report. All statements other than statements of historical fact included in this report are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, the following: our current liquidity needs, as described in our periodic reports; changes in the economy; our inability to raise additional capital; our involvement in potential litigation; volatility of our stock price; the variability and timing of business opportunities; changes in accounting policies and practices; the effect of internal organizational changes; adverse state and federal regulation and legislation; and the occurrence of extraordinary or catastrophic events and terrorist acts. These factors and others involve certain risks and uncertainties that could cause actual results or events to differ materially from management's views and expectations. Inclusion of any information or statement in this report does not necessarily imply that such information or statement is material. We do not undertake any obligation to release publicly revised or updated forward-looking information, and such information included in this report is based on information currently available and may not be reliable after this date.

At March 31, 2009 and December 31, 2008, the Company had current assets of $1,576,407 and $1,799,604; current liabilities of $4,499,736 and $4,527,706; and a working capital deficit of $2,923,329 and $2,728,102, respectively. The Company incurred a loss of $786,310 during the three months ended March 31, 2009, which included depreciation and amortization of $333,449 and amortization of non-cash stock compensation of $176,831.

The Company will continue to require substantial working capital until sales develop to the level required to support operations. The current level of overhead is approximately $170,000 per month and manufacturing costs total approximately $240,000 per month. The Company is continually analyzing its current costs and is attempting to make additional cost reductions where possible. Sales of product amounted to $1,608,158 during the first quarter of 2009. This sales level represents a substantial improvement from prior periods but will require additional increases to support the current level of operations. We estimate that sales will develop to the level necessary to be at or near cash flow break-even by the beginning of the third quarter of 2009. Based on this time-frame, the Company would need from $375,000 to $1,375,000 to meet its minimum requirements, including operating cash short-falls and completing a globally compliant manufacturing plant. The Company expects to continue to make private placements of its common stock or to borrow additional funds as needed.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties. Also see Note 5 to the condensed consolidated financial statements.

On October 30, 2007, our wholly-owned subsidiary, Enlyten, Inc., filed a lawsuit against The Gatorade Company and PepsiCo, Inc. (collectively referred to as Gatorade) in the State of New York Supreme Court, County of Erie. The Complaint alleges that Gatorade has tortiously interfered with Enlyten's contractual agreement with the Buffalo Bills and with Enlyten's business relationships with various third parties including other NFL teams, in an attempt to wrongfully restrain trade. Enlyten is represented by Michael B. Powers of the law firm of Phillips Lytle, LLP in Buffalo, New York. The alleged interference has severely limited our ability to market and sell the SPORT STRIP. The case is still in the early stages of discovery. On December 4, 2008, the Company was forced to bring a motion to compel discovery from the defendants and, on February 24, 2009, the Court ordered the defendant to produce discovery within 60 days.

During the three months ended March 31, 2009, we had product sales of $1,608,158 and revenues from license fees, royalties and services of $58,750, a total of $1,666,908. There were product sales of $97,441 and revenue from license fees, royalties and services of $18,750, a total of $116,191 in the corresponding 2008 period. Revenues have increased substantially from the prior year as a result of the actions discussed in the Notes to the condensed consolidated financial statements.

                               COSTS AND EXPENSES

Costs and expenses are as follows for the three months ended March 31, 2009 and
2008:

                                                  2009         2008
                                               ----------   ----------

Cost of product sold and manufacturing costs   $1,249,411   $  429,718
General and administrative expense                439,821      815,843
Marketing and selling expense                     157,502      471,865
Non-cash compensation expense                     176,831    1,053,805
Depreciation and amortization expense             333,449      365,463
Research and development expense                   36,127       71,579
                                               ----------   ----------
                                               $2,393,141   $3,208,273
                                               ==========   ==========

Cost of product sold and manufacturing costs amounted to 78% of product sales in 2009 and 441% of product sales in 2008. The Company had under-absorbed manufacturing costs of approximately $401,000 at March 31, 2008 based on projected levels of operations. Sales will need to continue to increase to absorb all of the manufacturing costs at the current size of operation.

General and administrative expenses ("G&A") decreased to $439,821 in the three months ended March 31, 2009, from $815,843 in the 2009 period. The decrease of $376,022 (46%) in G&A is the result of decreases at all levels of the Company, including corporate overhead and the G&A costs at the manufacturing operation, which were reduced $311,955.

Selling and marketing costs ("SMC") are $157,502 in the three months ended March 31, 2009, as compared to $471,865 in the 2008 period. SMC decreased $314,363 in the 2009 period as compared to the 2008 period. SMC costs are down from the year earlier period, primarily due to the elimination of endorsements and sponsorship fees as a result of re-directing our marketing efforts toward distributors rather than direct sales to customers and elimination of the New York office. The 2009 amount includes $89,701 in commissions and royalties, which vary with sales, that were only nominal amounts in 2008. Accordingly, the decrease in previous costs was actually $404,064.

Non-cash compensation expense was $176,831 in 2009 and $1,053,805 in 2008 and includes the amortization of stock grants and amortization of the intrinsic value of stock options to employees, consultants and spokespersons over the relevant service periods to both employees and as a part of endorsement contracts. The decline is primarily the result of expensing the balance on expired options in the 2008 period.

Depreciation and amortization expense decreased from $365,463 in 2008 to $333,449 in 2009, primarily due to the impairment of the client list in June of 2008. The client list amortization was included in the 2008 period, but not in the 2009 period.

Research and development ("R&D") costs amounted to $36,127 in 2009 and $71,579 in 2008. These include contract services, supplies, materials and analytical testing costs incurred for new products to be developed by the Company.

Interest expense increased from $3,154 in 2008 to $69,270 in 2009 as a result of the increase in debt after the end of the March 2008 quarter.