EX-99.2 4 knowledgestorm9mos.htm UNAUDITED FINANCIAL STATEMENTS OF KNOWLEDGESTORM, INC. knowledgestorm9mos.htm
 

Exhibit 99.2
KnowledgeStorm, Inc.

BALANCE SHEET
(Unaudited)
 
   
September 30, 2007
 
ASSETS
   
Current assets
     
Cash and cash equivalents
  $ 216,704  
Prepaid license and services
    158,581  
Accounts receivable, net of allowance for doubtful accounts of $255,758 at September 30, 2007
    2,242,935  
         
Total current assets
    2,618,220  
         
Property and equipment, net
    806,577  
         
Other assets
    39,361  
         
Total assets
  $ 3,464,158  
         
LIABILITIES AND STOCKHOLDERS' DEFICIT
       
         
Current liabilities
       
Accounts payable
  $ 330,724  
Accrued expenses
    709,470  
Current maturities of debt
    194,214  
Line of credit
    1,900,000  
Deferred revenue
    2,338,294  
         
Total current liabilities
    5,472,702  
         
Other long-term liabilities
    257,892  
         
Long-term loan payable
    125,000  
         
Redeemable stock
       
Redeemable convertible preferred stock Series A, $0.001 par value; $26,016,197 liquidation
value; 35,000,000 shares authorized; 32,069,654 shares issued and outstanding at September 30, 2007
    25,985,314  
         
Stockholders' deficit
       
Common stock; $0.001 par value; 70,000,000 shares authorized; 561,151 shares issued and
outstanding at September 30, 2007
    561  
Additional paid-in capital
    6,335,945  
Accumulated deficit
    (34,713,256 )
         
Total stockholders' deficit
    (28,376,750 )
         
Total liabilities and stockholders' deficit
  $ 3,464,158  

 
The accompanying notes are an integral part of these financial statements.

- 2 -

Exhibit 99.2

KnowledgeStorm, Inc.

STATEMENTS OF OPERATIONS
(Unaudited)
 
   
For the Nine Months Ended
 
   
September 30, 2007
   
September 30, 2006
 
             
Revenues
  $ 13,303,904     $ 13,549,458  
                 
Operating expenses
               
Marketing and advertising
    1,970,727       1,741,680  
Depreciation
    271,129       289,915  
Salaries and benefits
    9,472,040       9,496,180  
General and administration
    2,394,531       2,103,891  
      14,108,427       13,631,666  
                 
Operating loss
    (804,523 )     (82,208 )
                 
Other income (expense)
               
Interest income
    -       20,178  
Interest expense
    (131,142 )     (66,816 )
      (131,142 )     (46,638 )
                 
Net loss before income tax expense
    (935,665 )     (128,846 )
                 
Income tax expense
    -       -  
                 
Net loss
  $ (935,665 )   $ (128,846 )
 
 
 
The accompanying notes are an integral part of these financial statements.
 

Exhibit 99.2
KnowledgeStorm, Inc.

STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Unaudited)

 
   
Common Stock
                   
   
Shares
   
Amount
   
Additional Paid-in Capital
   
Accumulated Deficit
   
Total Equity
 
                               
Balance December 31, 2006
    556,027     $ 556     $ 6,327,589     $ (32,655,833 )   $ (26,327,688 )
                                         
Series A preferred stock dividends ($0.046664 per share)
                            (1,121,758 )     (1,121,758 )
Share-based compensation
                    7,242               7,242  
Stock options exercised
    5,124       5       1,114               1,119  
Net loss
                            (935,665 )     (935,665 )
                                         
Balance September 30, 2007
    561,151     $ 561     $ 6,335,945     $ (34,713,256 )   $ (28,376,750 )
 


The accompanying notes are an integral part of these financial statements.

 
- 4 -

Exhibit 99.2
 
KnowledgeStorm, Inc.

STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
For the Nine Months Ended
 
   
September 30, 2007
   
September 30, 2006
 
Cash flows used in operating activities:
           
Net loss
  $ (935,665 )   $ (128,846 )
Adjustments to reconcile net loss to net cash used in operating activities:
               
Depreciation and amortization expense
    271,129       289,915  
Share-based compensation
    7,242       -  
Decrease (increase) in:
               
Restricted cash
    -       -  
Accounts receivable
    242,755       705,499  
Prepaid expenses
    81,887       104,758  
Other assets
    8,071       (16,680 )
Increase (decrease) in:
               
Accounts payable
    (400,781 )     9,153  
Accrued expenses
    (96,904 )     (286,481 )
Deferred revenue
    88,970       (1,149,813 )
Other liabilities
    55,655       23,430  
                 
Net cash used in operating activities
    (677,641 )     (449,065 )
                 
Cash flows used in investing activities:
               
Purchases of property and equipment
    (53,992 )     (430,955 )
                 
Net cash used in investing activities
    (53,992 )     (430,955 )
                 
Cash flows from financing activities:
               
Proceeds from issuance of common stock
    1,119       15,569  
Proceeds from sale of series A preferred stock,net of issuance costs
    -       -  
Proceeds from issuance of loan payable
    -       500,000  
Repayments of loan payable
    (148,158 )     (66,980 )
Proceeds from line of credit
    750,000       -  
                 
Net cash provided by financing activities
    602,961       448,589  
                 
Net increase (decrease) in cash and cash equivalents
    (128,672 )     (431,431 )
                 
Cash and cash equivalents at beginning of year
    345,376       1,131,034  
                 
Cash and cash equivalents at end of period
  $ 216,704     $ 699,603  
                 
Supplemental disclosure of noncash activities
               
Cash paid for interest
  $ 131,142     $ 66,816  
 
 
The accompanying notes are an integral part of these financial statements.


Exhibit 99.2
 
KnowledgeStorm, Inc.

NOTES TO FINANCIAL STATEMENTS

September 30, 2007
(Unaudited)


NOTE A – UNAUDITED INTERIM FINANCIAL INFORMATION

The accompanying interim balance sheet as of September 30, 2007, and the statements of operations and cash flows for the nine months ended September 30, 2007 and 2006, and the statement of stockholders' deficit for the nine months ended September 30, 2007 are unaudited.  These unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim information and with Article 10 of Regulation S-X.  In the opinion of the Company's management, the unaudited interim financial statements have been prepared on the same basis as the audited financial statements and include all adjustments consisting of normal recurring adjustments necessary for the fair presentation of the Company's financial position at September 30, 2007 and its results of operations and cash flows for the nine months ended September 30, 2007 and 2006.  The results of operations for the nine months ended September 30, 2007 are not necessarily indicative of the results to be expected for any other interim period or any fiscal year.
 
These unaudited interim financial statements should be read in conjuction with the audited financial statements for KnowledgeStorm, Inc. filed as Exhibit 99.1 of the Current Report on Form 8-K/A of TechTarget, Inc. dated January 22, 2008.