This report includes forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995 or by the U.S. Securities and Exchange Commission ("SEC") in its rules, regulations and releases, regarding, among other things, all statements other than statements of historical facts contained in this report, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations. The words "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "could," "target," "potential," "is likely," "will," "expect" and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2008 filed with the SEC ("Annual Report") and elsewhere in this report. In addition, our past results of operations do not necessarily indicate our future results.

Other sections of this report may include additional factors which could adversely affect our business and financial performance. Moreover, the third-party logistics services business and the battery and related power accessory supply and distribution business are highly competitive and rapidly changing. New risk factors emerge from time to time and it is not possible for us to anticipate all the relevant risks to our business, and we cannot assess the impact of all such risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ materially from those contained in any forward-looking statements. Those factors include, among others, those matters disclosed as Risk Factors in our Annual Report.

Except as otherwise required by applicable laws and regulations, we undertake no obligation to publicly update or revise any forward-looking statements or the risk factors described in our Annual Report, whether as a result of new information, future events, changed circumstances or any other reason. Neither the Private Securities Litigation Reform Act of 1995 nor Section 27A of the Securities Act of 1933 provides any protection to us for statements made in this report. You should not rely upon forward-looking statements as predictions of future events or performance. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Overview

The second quarter of 2009 continued to be a challenging one for us. The recession continues to impact our business as revenues were down 7% compared to the comparable 2008 period. On the other hand, there were a number of positive developments in the quarter:

• Gross profit margin increased 2.7% from 15.1% in the first half of 2008 to 17.8% in the first half of 2009.

• Although we reported a net operating loss of $39,000, in the first half of 2009 compared to net operating income of $2.2 million in the first half of 2008, the loss was attributable to settlement expenses of $2.5 million incurred in the first quarter of 2009. These charges relate to the settlement agreement that we entered into with Randy Hardin (our former CEO) in connection with his resignation and with the agreement we entered into with our principal independent sourcing agent in connection with the termination of our relationship with him. As reflected in the table below, excluding settlement charges, our operating income was approximately $2.5 million, an increase of approximately $0.3 million over net operating income for the first half of 2008.

• On the balance sheet, inventory levels were reduced by $7.0 million in the first half of 2009, in line with our commitment to reduce inventory levels from the high levels in the fourth quarter of 2008. We continue to focus on effectively conserving resources, improving efficiencies and increasing inventory turnover.

Reconciliation of GAAP Operating Income and Income (Loss) Before Provision for Income Taxes to Non-GAAP Operating Income and Income (Loss) Before Provision for Income Taxes (Unaudited)

The following table reconciles Operating Income and Income (loss before provision for income taxes, as reported in accordance with U.S. Generally Accepted Accounting Principals ("GAAP"), to non-GAAP operating income and Income
(loss) before provision for income taxes. We believe that non-GAAP operating income, which is generally operating income less costs related to settlement agreements, more accurately reflects our operating efficiency. Non-GAAP operating income and income (loss) before provision for income taxes, are non-GAAP financial measures and should not be considered an alternative to, or more meaningful than, net income prepared on a GAAP basis. Additionally, non-GAAP operating income and income (loss) before provision for income taxes may not be comparable to similar metrics used by others in our industry.

                                                       Financial Summary (Non-GAAP)
                                                               (unaudited)
                                       Three Months Ended June 30,        Six Months Ended June 30,
                                     -------------------------------    -----------------------------
                                          2009              2008             2009            2008
                                     ---------------    ------------    --------------    -----------
Operating income (loss) and
income (loss) before provision
for income taxes as reported:
Operating expenses                   $     3,786,800    $  3,470,952    $    7,421,691    $ 6,771,113
Settlement expenses                                -               -         2,529,345              -
                                     -- ------------    -- ---------    -- -----------    - ---------
Total operating expenses                   3,786,800       3,470,952         9,951,036      6,771,113

Operating income (loss)                    1,167,653       1,044,267           (38,819 )    2,218,164
Other income (expense), net                 (233,246 )      (246,754 )        (480,796 )     (501,069 )
                                     -- ------------    -- ---------    -- -----------    - ---------
Income (loss) before provision
for income taxes                             934,407         797,513          (519,615 )    1,717,095

Non-GAAP measures to exclude
settlement expenses from
operating expenses:
Settlement expenses                                -               -         2,529,345              -
                                     -- ------------    -- ---------    -- -----------    - ---------
Non-GAAP operating income            $     1,167,653    $  1,044,267    $    2,490,526    $ 2,218,164
                                     -- ------------    -- ---------    -- -----------    - ---------
Non-GAAP income before provision
for income taxes                     $       934,407    $    797,513    $    2,009,730    $ 1,717,095
                                     -- ------------    -- ---------    -- -----------    - ---------

Results of Operations

The following table compares our statement of operations data for the three and six months ended June 30, 2009 and 2008. The trends suggested by this table may not be indicative of future operating results, which will depend on various factors including the nature of revenues (sales of batteries and other power accessory products versus logistics or value added services) and the relative mix of products sold (batteries versus other power supply products), which can vary from quarter to quarter, as well as the state of the general economy. In addition, our operating results in future periods may also be affected by acquisitions.

                        Three months ended June 30,                    Six months ended June 30,
                 ------------------------------------------    ------------------------------------------
                        2009                   2008                   2009                   2008
                 -------------------    -------------------    -------------------    -------------------
                  Amount    Percent      Amount    Percent      Amount    Percent      Amount    Percent
                 --------   --------    --------   --------    --------   --------    --------   --------
                                                  (dollars in thousands)
Net sales        $ 27,947      100.0 %  $ 30,200      100.0 %  $ 55,636      100.0 %  $ 59,724      100.0 %
Cost of sales      22,993       82.3 %    25,685       85.0 %    45,724       82.2 %    50,735       84.9 %
                 - ------   -- -----    - ------   -- -----    - ------   -- -----    - ------   -- -----
Gross profit        4,954       17.7 %     4,515       15.0 %     9,912       17.8 %     8,989       15.1 %
                 - ------   -- -----    - ------   -- -----    - ------   -- -----    - ------   -- -----
Operating
expenses            3,787       13.5 %     3,471       11.5 %     7,422       13.3 %     6,771       11.3 %
Settlement
expenses                -          -           -          -       2,529        4.5 %         -          -
                 - ------   -- -----    - ------   -- -----    - ------   -- -----    - ------   -- -----
Total
operating
expenses            3,787       13.5 %     3,471       11.5 %     9,951       17.9 %     6,771       11.3 %
                 - ------   -- -----    - ------   -- -----    - ------   -- -----    - ------   -- -----
Operating
income (loss)       1,168        4.2 %     1,044        3.5 %       (39 )     (0.1 %)    2,218        3.7 %
Interest
expense, net         (233 )     (0.8 %)     (247 )     (0.8 %)     (481 )     (0.9 %)     (502 )     (0.8 %)
Interest
income                  -          -           1          -           -          -           1          -
                 - ------   -- -----    - ------   -- -----    - ------   -- -----    - ------   -- -----
Income (loss)
before
provision for
income taxes          934        3.3 %       798        2.6 %      (520 )     (0.9 %)    1,717        2.9 %
Provision for
income taxes         (322 )     (1.2 %)     (327 )     (1.1 %)     (618 )     (1.1 %)     (690 )     (1.2 %)
                 - ------   -- -----    - ------   -- -----    - ------   -- -----    - ------   -- -----
Net income
(loss)           $    612        2.2 %  $    471        1.6 %  $ (1,138 )     (2.0 %) $  1,027        1.7 %
                 - ------   -- -----    - ------   -- -----    - ------   -- -----    - ------   -- -----

For the three month period ended June 30, 2009, we had net sales of $27.9 million compared to $30.2 million for 2008, a decrease of $2.3 million or 7.5%. Net sales to Broadview Security, Inc. (formerly Brinks Home Security, Inc.) and its authorized dealers were $12.9 million compared to $13.5 million in 2008, a decrease of 3.8%.Net sales to customers other than Broadview Security and its authorized dealers decreased to $15.0 million in 2009 from $16.7 million in 2008, or 10.4%. These decreases are principally due to lower sales volume, which we attribute to general economic conditions.

Cost of sales

For the three month period ended June 30, 2009, our cost of sales decreased to $23.0 million compared to $25.7 million for 2008, a decrease of $2.7 million, or 10.5%. Cost of sales as a percentage of sales decreased to 82.3% compared to 85.0% for 2008 as a result of a greater sales volume on certain higher-margin products, reduced volatility on raw material costs and improved efficiencies across our supply chain, offset by a decrease in sales to Broadview Security and its authorized dealers.

Operating expenses

For the three month period ended June 30, 2009, our operating expenses, consisting of selling, general and administrative expenses as well as depreciation and amortization expenses, increased by approximately $0.3 million, or 9.1%, compared to the second quarter of 2008. Of this increase, $0.2 million is attributable to operating expenses for Monarch and $0.1 million is attributable to increased marketing expenses.

Operating income

For the three month period ended June 30, 2009, our operating income increased by approximately $0.125 million, or 11.8%, compared to the second quarter of 2008, reflecting the increase in our gross profit offset by the increase in our operating expenses.

Interest expense

Our interest expense for both the 2009 and 2008 periods totaled approximately $0.2 million The average outstanding loan balance on the line of credit for the 2009 and 2008 periods was $14.5 million and $11.5 million, respectively, and the weighted average interest rates for the two periods was 4.45% and 5.34%, respectively.

Income before provision for income taxes

For the three month period ended June 30, 2009, our income before provision for income taxes increased by approximately $0.1 million, or 17.2%, compared to the second quarter of 2008, reflecting the increase in our gross profit offset by the increase in our operating expenses.

Income taxes

Our provision for income taxes for both the 2009 and 2008 periods was approximately $0.3 million, reflecting an effective tax rate of 34.5% and 41.0% for the three month periods ended June 30, 2009 and 2008, respectively.

For the six months ended June 30, 2009 and 2008

For the six month period ended June 30, 2009, we had net sales of $55.6 million compared to $59.7 million for 2008, a decrease of $4.1 million, or 6.8%. Net sales to Broadview Security and its authorized dealers were $25.5 million compared to $27.0 million in 2008, a decrease of 5.7%. Net sales to customers other than Broadview Security and its authorized dealers decreased to $30.2 million in 2009 from $32.7 million in 2008, or 7.6%. These decreases are principally due to lower sales volume, which we attribute to general economic conditions.

Cost of sales

For the six month period ended June 30, 2009, our cost of sales decreased to $45.7 million compared to $50.7 million for 2008, a decrease of $5.0 million, or 9.9%. Cost of sales as a percentage of sales decreased to 82.2% compared to 84.9% for 2008 as a result of greater sales volume on certain higher-margin products, reduced volatility on raw material costs and improved efficiencies across our supply chain, offset by a decrease in sales to Broadview Security and its authorized dealers.

Operating expenses

For the six month period ended June 30, 2009, our operating expenses, consisting of selling, general and administrative expenses as well as depreciation and amortization expenses, increased by approximately $0.6 million, or 9.6%, compared to the second quarter of 2008. Increased operating expenses include $0.5 million attributable to operating expenses for Monarch, of which $0.1 million is depreciation and amortization expense. Increased costs other than Monarch

Settlement expenses

In the first quarter of 2009, we entered into a settlement agreement with our former chief executive officer relating to his resignation as an officer and director and we entered into an agreement with our former principal independent sourcing agent cancelling our relationship with such agent. The total amount due under both agreements is $3.1 million. Of this amount, $0.5 million of the settlement with the sourcing agent was applied to an existing payable balance related to prior year inventory purchases, an aggregate of $2.5 million was expensed as settlement expense in the first quarter of 2009 and an aggregate of $0.1 million will be expensed as interest over the term of the agreements. The payments due to the former chief executive officer are payable over a two-year period beginning in January 2009 and the payments to the former sourcing agent are due over a three-year period beginning in March 2009. Except for the imputed interest expense, which will be amortized over the respective terms of the agreements, we do not expect to incur any additional costs in connection with these agreements.

Operating income

For the six month period ended June 30, 2009, our operating loss was $39,000 compared to operating income of $2.2 million for the comparable 2008 period. Non-GAAP operating income, excluding settlement costs of $2.5 million, for the 2009 period was $2.5 million, a 12.3% increase over 2008.

Interest expense

Our interest expense totaled approximately $0.5 million for the six month periods ended June 30, 2009 and 2008. The average outstanding loan balance on the line of credit for the 2009 and 2008 periods was $15.4 million and $11.0 million, respectively, and the weighted average interest rates for the two periods was 4.30% and 5.47%, respectively.

Income before provision for income taxes

For the six month period ended June 30, 2009, our net loss before provision for income taxes was $0.5 million compared to income of $1.7 million for the comparable 2008 period. Non-GAAP net income before provision for income taxes was $2.0 million for the 2009 period compared to $1.7 million for the 2008 period, a 17.0% increase over 2008.

Income taxes

Our effective tax rate for the six month period ended June 30, 2009 was higher than expected as a result of recording a valuation allowance of $0.8 million on a portion of our deferred tax asset related to stock based compensation. The valuation allowance was established to reduce the deferred tax asset to the amount expected to be realized.

Liquidity and Capital Resources

We had cash and cash equivalents of approximately $0.3 million and $0.5 million at June 30, 2009 and 2008, respectively. We finance our business using cash flows from operations and our line of credit.

We have a $30 million line of credit with Compass Bank that matures on July 5, 2012, although borrowings are due on demand. The facility bears interest at the LIBOR Index Rate plus a sliding range from 1.25% to 2.50% based on quarterly covenant performance. At June 30, 2009 the interest rate was 2.31%. The line of credit is secured by accounts receivable, inventories, and equipment. The line's availability is based on a borrowing formula which allows for borrowings equal to 85% of our eligible accounts receivable and a percentage of eligible inventory. In addition, we must maintain certain financial covenants including a funded debt to EBITDA ratio and a fixed charge ratio. At June 30, 2009, approximately $14.5 million was outstanding under the line of credit and approximately $6.7 million remained available for borrowings under the line of credit based on the borrowing formula. At March 31, 2009 and at June 30, 2009, we were in default under the line of credit as a result of our failure to satisfy the funded debt to EBITDA and fixed charge ratios, which was attributable to the $2.6 million settlement expense we incurred in the first quarter of 2009 relating to the separation agreements with our former chief executive officer and independent sourcing agent. Compass Bank waived the events of default at March 31, 2009 and agreed to modify the ratios in question in a manner such that the settlement expense incurred in the first quarter of 2009 will not cause us to fail to satisfy those ratios. We have requested a waiver from Compass Bank with respect to the defaults at June 30, 2009 and are in discussion with the bank regarding modifications to the ratios.

For the six month period ended June 30, 2009, net cash provided by operating activities was approximately $0.6 million compared $1.0 provided in operating activities for the six month period ended June 30, 2008. The net cash used in operating activities is due primarily to a net loss of approximately $1.1 million, a decrease in accounts payable of approximately $7.6 million, an increase in accounts receivable of $1.6 million and a decrease of $0.2 million in prepaid expenses offset by a decrease of $7.1 million in inventories and $0.2 million in income tax receivable, accrued settlement expenses of $2.4 million, non-cash charges for depreciation, amortization, provision for bad debts and obsolete inventory, deferred taxes and stock-based compensation totaling approximately $0.7 million and an increase of approximately $0.7 million in accrued liabilities.

Cash used in investing activities for the six month period ended June 30, 2009 was approximately $23,000 compared to cash used of $319,000 for the period ended June 30, 2008. The cash used was for purchases of property and equipment as well as the purchase of the Monarch assets, offset by the change in restricted cash previously set aside for the acquisition.

We believe that cash provided by operations and cash available under our line of credit will be sufficient to meet our operational needs over the next year.