Because of shareholder requests, Mr. Bird provided additional information from the Kanter International report from last year. The purpose for that report, which was outlined by the Board of Directors in December 2007 in the form of request for proposal, and which was delivered to the Company by Kanter in April 2008, was to provide a high level independent assessment of the Company's business model and potential changes for consideration. This included a review of the supply chain, distribution channels and marketing approach. Kanter's conclusions were summarized into four categories: Business Model, Finance, Brand/Marketing and Management/Oversight.

Relative to the Business Model, Kanter concluded in summary that: (a) the Company's primary value is as a marketing company, (b) the roles of selling and marketing are confused between the Company and its distributors and manufacturers, (c) the Company's organizational skill set does not include product (jewelry) design, nor is this a strength of its manufacturers, (d) the Company is overwhelmingly focused on sell-in rather than sell-through, (e) the Company does not have a clear distribution strategy and has not developed a network of strong partners, and (f) the Company has an underdeveloped international strategy and business.

In regard to Finance, the report observed that in summary: (a) the Finance function needed to provide leadership in assisting management to recognize choices, set priorities, allocate resources, manage and reconcile supply with demand, establish meaningful measurements, hold the organization accountable and take remedial actions when required, (b) the Company's inventory situation was avoidable, and the Company missed the opportunity to interpret sell-in as temporary demand, and (c) the Company's resulting heavy inventory position has placed the Company in a severely cash-constrained position.

In assessing Brand/Marketing, the report concluded that in summary: (a) while consumer awareness and preference had modestly increased over time, the Company had not yet developed a brand that would accelerate sell-through and enable wider distribution, (b) Moissanite is not an "ingredient brand," but is the brand, (c) without a compelling and emotional brand, ensuring that the brand story is consistently and effectively told in retail environments is a major challenge, (d) it is not clear that there is a definitive "owner" of the brand, (e) Moissanite is considered a "diamond simulant" or alternative by most consumers (in focus groups), (f) the Company's marketing budget was too heavily skewed towards retailer support rather than consumer brand advertising.

In regard to Management/Oversight, Kanter reported that it believed in summary: (a) the Company's challenges were the result of internal issues to a greater degree than market resistance, and (b) many of the Company's challenges were consequences of the lack of effective management, weak strategic planning and the lack of urgency to taking corrective action as the business challenges became clear.