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OurPet's Company (OurPet's) began operations in 1995 with the philosophy of combining "high tech" engineering expertise related to materials and manufacturing with a "high touch" approach to pet health, behavior and nutrition, as well as pet owners themselves, to develop and market proprietary, innovative, quality, affordably priced products for improving the health, safety, comfort and enjoyment of pets. OurPet's products are not only aesthetically pleasing but also functionally beneficial to pets. OurPet's dynamic innovation and high quality enable our retail partners to upgrade their pet product offering while realizing above average sales and profits. OurPet's first product, the "Big Dog Feeder," was introduced to the market in 1995. The Big Dog Feeder provides a healthier, more comfortable feeding position for larger breed dogs. It was an instant success, achieving record sales in the Sky Mall airline magazine, and at PetsMart. Since then, OurPet's has been working to establish a strong brand identity and consumer preference for our products while developing a foundation for future growth: Revenue and Income: Revenues for 2006 increased 43.8 percent to $9,441,697 from $6,566,407 in the comparable period last year. Net income for 2006 was $560,925, compared to $254,238 for the same period in 2005 -- an improvement of 120.6 percent. EBITDA for 2006 increased 86.8 percent to $1,089,659 from $583,359 for 2005. Product Offerings: OurPet's offers approximately 300 exciting proprietary products specifically related to healthy feeding systems, interactive toys, healthy consumables and cat and dog maintenance products. OurPet's has been granted 33 U.S. patents and an additional 60 are pending. OurPet's has also obtained 24 trademarks and has another 14 pending. Through its aggressive product development efforts, OurPet's hopes to continually introduce dozens of new, exciting products each year. Marketing Channels: OurPet's has built an extensive domestic and international marketing network that allows a growing number of products to be sold at continually improving economies of scale. The company's products are marketed through pet specialty distributors and retail chains such as PetsMart and Petco, grocery chains such as Safeway, Publix and Stop-N-Shop, mass retailers such as Wal-Mart and Kmart, catalogs such as Drs. Foster & Smith, and E-commerce websites. Overseas sales in the United Kingdom, Europe, Japan, Hong Kong, Australia, etc. are through local, independent representatives/distributors. Management Informational Systems and Controls: MIS systems have been implemented and EDI capabilities have been established with key accounts. This is very important as major retailers are quickly moving toward paperless transactions , from order placement and confirmation to invoice payment. Company Expansion: Key personnel were added in Marketing, Operations and in Finance in 2006. Ground was recently broken on our 36,000 square foot warehouse expansion which will increase our Fairport Harbor, Ohio location to over 64,000 square feet. The acquisition and integration of Pet Zone products has been completed. The OurPet's Team currently consists of 21 full-time employees, 50 percent have college degrees. The company's President and Founder, Dr. Steven Tsengas, BS Engineering, MS Business/Behavioral Sciences, Ph.D. Natural Health/Nutrition, has successfully launched over half a dozen companies. Dr. Tsengas has extensive technical knowledge related to pet nutrition, behavior and geriatrics as well as advanced materials and manufacturing processes. OurPet's has a well balanced, professional team in terms of skills and experience; e.g. marketing and sales, finance, product development and manufacturing/distribution. In order to effectively handle the anticipated rapid revenue growth and achieve consistent profitability and high return-on-investment (ROI), OurPet's' dynamic organization focuses on product development, marketing and distribution and subcontracts its manufacturing operation and various other activities to strategic partners throughout the world. This strategy allows OurPet's to focus on solving problems and taking timely advantage of opportunities without developing "tunnel vision." OurPet's makes best use of expertise available throughout the world and realizes a higher ROI by making a concerted effort to not commit its limited financial resources to purchasing buildings and other capital equipment with long payback periods.