While a well-established forward supply chain exists for the procurement of assets, most manufacturers, retailers, corporations and government agencies have not made significant investments in the reverse supply chain process. The reverse supply chain addresses the redeployment and remarketing of wholesale, surplus and salvage assets. These assets generally consist of retail customer returns, overstock products and end-of-life goods from both the corporate and government sectors. According to D.F. Blumberg Associates, Inc., a research and consulting firm, the estimated reverse logistics market in North America will grow from approximately $38.5 billion in 2004 to over $63.1 billion in 2008.

Traditional methods of surplus asset disposition include ad-hoc, negotiated direct sales, utilization of individual brokers or sales agents and live on-site auctions. A significant number of professional buyers seek wholesale, surplus and salvage assets. They include online and offline retailers, convenience and discount stores, value-added resellers such as refurbishers and scrap recyclers, import and export firms and small businesses. Traditionally, these buyers have had limited access to large sellers of surplus assets, relying instead on their own network of industry contacts and fixed-site auctioneers to locate, evaluate and purchase specific items of interest.

The Internet has emerged as a global medium enabling millions of people worldwide to share information, communicate and conduct business electronically. International Data Corporation, a provider of global IT research and advice, estimates global business-to-business, or B2B, e-commerce will increase at a compound annual growth rate of 27.9% between 2004 and 2009 from $2,176 billion to $7,446 billion.

The Company has integrated value-added services into its solution to simplify the sale process for sellers and improve the utility of its marketplaces for buyers. Unlike other online auction sites on which sellers post information on the auction website and deal directly with the buyer to complete a sale, the Company manages each step of the transaction. The Company performs all required pre-sale value-added services such as receiving and lotting of the merchandise and implementing marketing strategies. After an online auction transaction is executed, the Company performs all required post-sale value-added services such as payment collection, settlement and reporting. The Company believes these services contribute significantly to an enhanced selling price and a higher level of confidence for its buyers. Additionally, the Company improves compliance with the various policies, regulations and sale restrictions of its corporate and government sellers.

The Company offers value-added services to sellers in three areas: sales and marketing, logistics and settlement and customer support. The Company uses a variety of both online and traditional marketing methods to promote its seller\\\'s merchandise and generate interest in each auction. The Company photographs and uploads digital images of the merchandise to be sold and combine the images in a relevant format. In order to increase the realized sales value, the Company also researches, collects and uses supplemental product information to enhance product descriptions. The Company provides standard and optional logistics services designed to support the receipt, handling, transportation and tracking of merchandise offered through its marketplace

In June 2004, the Company launched www.goWholesale.com, a wholesale industry portal supported by advertising and search services. goWholesale.com provides buyers of wholesale, surplus or salvage goods with tools to search for goods on the Internet and provides an avenue for manufacturers, drop shippers, distributors, importers and wholesalers to reach professional buyers. goWholesale.com also provides a single online destination for buyers to find specific products for resale and related business services.

Cost of goods sold (excluding amortization) increased $0.9 million, or 19.2%, to $5.6 million for the year ended September 30, 2005 from $4.7 million for the year ended September 30, 2004.

Technology and operations expenses increased $1.2 million, or 8.5%, to $15.4 million for the year ended September 30, 2005 from $14.2 million for the year ended September 30, 2004.

Interest expense and other income, net remained constant at $0.6 million for the years ended September 30, 2005 and September 30, 2004.

Net income decreased $1.2 million, or 21.8%, to $4.1 million for the year ended September 30, 2005 from $5.3 million for the year ended September 30, 2004.