PFSweb, Inc. Company▲			PFSW Ticker▲			Q1 2008 Earnings Call Event Type▲			May 13, 2008 Date▲

We believed that by delivering on our stated goals, including significant improvements to the eCOST.com business, as well as signing new clients to our Services business, all of which have been done, that we would see the stock react positively. Obviously, this hasn’t occurred, and in fact we’ve seen a slight decline in our share price during this period.

This has left our Board and management to believe that there are other underlying reasons that’s depressing our stock. Over the past year and recently we spent long hours gaining the advice of our trusted advisors on this matter. We consulted with our IR firm, KCSA Strategic Communication, and others and have been offered several plausible scenarios.

These include one, obviously the market’s very rough right now for micro and small cap stocks; secondly, that we don’t have enough awareness within the investment community; and third, that the pending de-listing notice that has been delivered to us by NASDAQ and trading as a penny stock deters or prevents many new institutional investors from taking a position in our company.

We considered each of these scenarios very carefully as we developed our IR plan for 2007 and then again in 2008. The most obvious one to attack first after the financial fundamental improvement was the lack of awareness of our company and its story to Wall Street.

As such, as we have gone on numerous road shows over the past year and participated in multiple one-on-one conference calls with institutional investors and with sell-side analysts as scheduled by KCSA. A recurring message that we received was that our stock price and pending de-listing was a deterrent that had to be considered.

Further, we’ve learned that the ways and means of Wall Street are oftentimes not well understood by the general public. The notice of de-listing, while having no correlation to the strength and profitability of our business, has the effect with some individuals of painting us into a picture of firms with pending or potential operational struggles or financial difficulties.

These characteristics could be no farther from the truth for PFSweb as we believe we remain financially, operationally and competitively strong. Unfortunately though, this situation can create a cloud of uncertainty and misunderstanding, particularly as we compete for new clients.

While we have assured them that the de-listing has no correlation to the strength of our business, it’s just simply not a conversation that we want to continually have with clients when everything else is going so well.

We have had shareholder approval getting our Board discretion to execute the reverse split for almost two years. We’ve been holding off on doing a reverse stock split with the feeling that perhaps we would start seeing results from the increased awareness we were creating through the road show and IR activity that we did in 2007 and also from the improved financial performance that the company has turned in over the last year. As I stated earlier, clearly this hasn’t happened.

Given the continued under-performance of our shares and the steady improvement of our financial results and more and more client inquiries about the de-listing, our Board decided last week that a reverse split was the best option available to in effect lift the cloud of uncertainty surrounding the de-listing notice.

So at our last meeting, the Board authorized a 1-for-4.7 reverse stock split. Now believe me when I say that this decision came only after careful deliberation and careful consideration of the potential risks and rewards of this course of action. We do understand that there are pros and cons, but after careful evaluation we believe that the pros outweigh the cons in this scenario.

We expect that this action, once implemented, will overcome the challenges associated with trading below the dollar share price and that we’ll be able to move ahead once again with our strategy to