In August 1999, Western Minerals NL, which was listed on the Australian Stock Exchange and which in June 1999 had acquired the internet rights to the Barbarellas name and trademark, divested itself of its mineral intrests and changed its name to Adultshop.com Limited.

Retail

The Company's initial entry into the adult retail market occured in January 2000 with the acquisition of the Barbarellas Group of adult stores. Since then, the Company has rebranded the majority of the stores as "adultshop.com" and invested heavily in brand awareness campaigns. The group currently consists of 17 adult stores, with 13 in Western Australia, 3 in the Northern Territory and 1 in Tasmania.

In May 2005, the Company acquired the business and operations of Video Wholesalers in New Zealand. The acquisition included 6 adult retail stores in Auckland trading under the name Video Expo and concentrating on the sale of Adult DVD's and videos.

Wholesale

In September 2000, the Company entered the adults products wholesale market with the acquisition of Calvista Australia Pty Ltd. Calvista, which has been in operation for over 20 years, operates from its head office in Melbourne, with additional warehouses in Sydney and Canberra, and is the largest wholesaler of adult products in Australia with in excess of 50% of the market.

Internet Retail - Australia and Germany

On January 25, 2000, the Company officially launched its flagship Internet retail web site in Australia, www.adultshop.com.au. The web site launch corresponded with the launch of an Australian wide multi-million dollar marketing campaign. Sales and visitors numbers have grown strongly each year since the launch and the web site is now Australia's number one visited adult retail site. Marketing of the website is managed from the groups head office in Perth with fulfilment of orders from Melbourne and Canberra.

Mail Order and DVD/Video

On August 1, 2000, the Company acquired 100% of Canberra based business, Axis, Australia's largest adult DVD, video and erotic product mail order. Axis holds exclusive Australian rights to acquire the copyright to titles from a number of leading production studios in the adult industry which are classified and reproduced for sale in the Australian market. Sales are secured via the distribution to members of regular mail order catalogues and through its web site at www.axisshop.com.

The acquisition of the business and operations of Video Wholesalers in New Zealand in May 2005, included the acuisition of the largest wholesaler of adult films under licence in New Zealand, and a small DVD/video mail order operation.

Phone Services

The introduction of the Telecommunications Bill in 1999 severely restricted the operations of this once highly profitable division. The Company, however, still operates a small adult telephone and SMS chat service and continues to lobby for changes to the law.