Interim Results

Share Name	Share Symbol	Market	Type	Share ISIN	Share Description
Burst Med Reg S	LSE:BRST	London	Ordinary Share		COM SHS USD0.01 (REGS)

Industry Sector	Turnover	Profit	EPS - Basic	PE Ratio	Market Cap
	0	0		N/A	0

RNS Number:7127D
Burst Media Corporation
12 September 2007

12 September 2007

Burst Media Corporation

Results for the six months ended 30 June 2007

Burst Media Corporation ("Burst" or "the Company"), the international online
advertising services and technology business, announces its results for the six
months ended 30 June 2007.

Financial Summary

* Total revenue increased 17% to $13.3 million (2006: $11.4 million)

* Gross profit was $6.6 million (2006: $5.2 million)

* Gross margin was 49% (2006: 46%)

* Net income was $0.3 million (2006: net loss of $0.5 million)

* Adjusted net income(1) was $1.1 million (2006: $1.6 million)

* Adjusted EBITDA(1) was $1.0 million (2006: $1.2 million)

* Cash at 30 June 2007 was $11.6 million (30 June 2006: $12.7 million)

(1) See Reconciliation of Net income (loss) to Adjusted net income and Adjusted
EBITDA on page 3 of this Press Release.

Operational Summary

* Restructured the Senior Management Team with a new Chief Financial
Officer, Chief Marketing Officer and Managing Director of the Burst Network.

* Launched the Burst Publisher Account Center ("BPAC") that provides Burst's
publishers with custom reporting capabilities powered by an intuitive user
interface.

* Released robust enhancements to Burst's AdConductor OptimizerTM that are
designed to automatically optimize campaign performance based on several
distinct types of consumer actions in response to ads viewed online.

* Reduced payment terms from 90 days to 45 days, effective from 1 July 2007.

* Introduced an assortment of targeting products and service offerings to
advertisers for its two Networks (Burst Network and Burst Direct).

* Burst AdConductor's first branded network went live, known as "the Reed
Partner Network."

Forward Looking Guidance

* Higher than anticipated ad campaign cancellations were experienced by
Burst Network since the 30 July 2007 trading update

* Strong growth expected from Burst Direct and Burst AdConductor

* Group financial performance for the year ended 31 December 2007 is likely
to be below current market expectations. Management's estimates for the year
ending 31 December 2007 are as follows:

* Total revenue: $28.5 million to $29.5 million

* Adjusted EBITDA(1): $2.4 million to $2.7 million

* Cash balance at 31 December 2007 expected to be between $11.2 to $11.5
million

(1) See Reconciliation of Net income (loss) to Adjusted net income and Adjusted
EBITDA on page 3 of this Press Release.

Summary

Commenting on the interim results, Jarvis Coffin, Chief Executive, said,
"Significant changes have been implemented by the Board over the past six
months, including the reorganization of the management team, investment in the
different technology platforms, the supply of new product offerings to
advertisers and provision of better terms and conditions to our publishers. We
now provide three distinct and separate product offerings, which allow us to
fulfill all of our customers' advertising needs.

Increased competition from merger and acquisition activity has made it essential
for the Company to continue its investment strategy in people, publishers and
its technology. While the higher than anticipated cancellations will cause the
Burst Network revenue growth rates for the full year to be below management's
expectations, the Board anticipates that the Company will realize triple digit
growth rates in its revenue from its two emerging businesses, Burst Direct and
Burst AdConductor.

The Board regrets having to lower estimates for the year ended 31 December 2007,
but remains optimistic about the opportunities the online advertising market
offers us as it continues to grow and develop. Burst maintains a well
established position in its core markets and the Board believes that it has
built a differentiated offering in the marketplace to realize long term
success."

Reconciliation of Net income (loss) to Adjusted net income(1) and Adjusted
EBITDA(1)

Six Months Ended Year Ended
June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Unaudited)

Net income (loss).............................................. $ 271 $ (470) $ 208

Adjustments:

Restructuring charges......................................... 735 - -

Equity-based compensation 103 2,064 2,584

Adjusted net income (1)....................................... 1,109 1,594 2,792

Adjustments:

Interest income............................................... (308) (213) (520)

Provision for income tax expense (benefit).................... 8 (233) (70)

Depreciation and amortization................................. 174 78 212

Adjusted EBITDA (1)........................................... $ 983 $ 1,226 $ 2,414

Adjusted EBITDA(1) as percentage of revenue.................. 7% 11% 10%

(1) "Adjusted net income" (earnings excluding restructuring charges and
equity-based compensation) and "Adjusted EBITDA" (Adjusted net income before
interest income, taxes, depreciation and amortization) are non-U.S.GAAP
financial measures. The Company believes Adjusted net income and Adjusted
EBITDA provide meaningful insight into the Company's ongoing economic
performance and therefore uses both Adjusted net income and Adjusted EBITDA
internally to assist in evaluating and managing the Company's operations.

Enquiries:

Burst Media Corporation Tel: +1 781-852-5481

Jarvis Coffin, Chief Executive Officer

Susan Villare, Chief Financial Officer

Hudson Sandler Tel: +44 (0) 20 7796 4133

Nick Lyon / James White

Chairman's Statement

The period under review has been a busy six months for Burst Media following the
operational difficulties encountered during its expansion in 2006. The Board is
disappointed to report that since the 30 July trading statement, a number of ad
campaigns within the Burst Network have been cancelled, principally as a result
of customer budget constraints. Consequently, market expectations for the year
ended 31 December 2007 are unlikely to be met. However, the Board continues to
believe that the results of the restructuring and the changes that have been
implemented in the first half of 2007 will provide the appropriate
infrastructure, expertise and resources to capitalize on the opportunities we
have identified in the Internet advertising market.

The opportunities for Burst to participate in the Internet market are extensive.
The emerging businesses, Burst Direct and Burst AdConductor, saw rapid growth in
the first half of 2007 and attracted many new customers. Our legacy Burst
Network business was relatively flat in the first half of 2007 as it adapted to
several months of internal change and continued to struggle with higher than
anticipated ad campaign cancellations in late July and August of 2007. While
the Board has lowered its expectations for the 2007 fiscal year due to a
shortfall in revenue within the Burst Network, we believe that we have a strong
new management team in place and a robust market at our feet, which will allow
us to achieve the long term goals set forth for the Company.

David Hanger

Non-Executive Chairman

12 September 2007

Chief Executive's Review

Burst has three ways to serve independent web publishers - with transparent
brand advertising representation (Burst Network), performance-based advertising
to fill unsold inventory (Burst Direct) and a robust technology platform to help
large and small sites manage their ad operations (Burst AdConductor).

Online Reach

Ad networks serve campaigns across a wide variety of sites that represent
Internet traffic measured by individual visitors to a site, or "unique
visitors." In the U.S., Burst reached 74 million unique monthly Internet
visitors in June 2007 as compared to 63 million unique monthly visitors in June
2006, according to comScore MediaMetrix. This placed Burst as the 21st largest
Internet property in the U.S. in June 2007.

Burst reached 12 million unique monthly Internet visitors in the U.K. in June
2007, as compared to 7 million in June 2006, according to comScore MediaMetrix.
This placed Burst as the 19th largest Internet property in the U.K. in June
2007.

Historical data relating to unique visitors in the U.S. have been restated to
exclude a fast growing Ad Conductor client that had previously been included in
reported reach totals.

Burst Network

Burst Network marked its 11th year of operations in January 2007. The Company's
core product offering gives advertisers targeted access to tens of millions of
monthly unique visitors. Advertisers are guaranteed full disclosure as to which
premium niche web sites their advertisements will appear. There were
approximately 4,200 premium web sites as of 30 June 2007 as compared to 3,700 as
of 30 June 2006. The advertisers can target by content, behaviour,
demographics, geography and time of day. The inventory of available advertising
impressions for Burst Network was 28 billion for the six months ended 30 June
2007 as compared to 27 billion for the same period in 2006.

Revenue from the Burst Network grew 3% to $11.4 million compared to $11.1
million for the comparable period in 2006. The revenue growth from the Burst
Network was below management's expectations due to a combination of higher than
expected staff turnover within the sales force following management changes
announced at the start of the year and the loss of some key ad campaigns.
Notable Burst Network advertisers in the first half of 2007 included AT&T, Ford
Motor Company, Monster Worldwide and Procter & Gamble.

Burst Direct

The goal of Burst Direct, which was launched in May 2006, is to provide Burst
with a business solution for publishers devoted to filling their unsold display
advertising inventory, and to serve the needs of direct response advertisers
seeking large audiences at cost effective, run-of-network rates. Burst Direct
offers millions of impressions through over a thousand member publishers and
through the direct procurement of guaranteed inventory from industry partners.
Direct marketing campaigns are aggressively managed to maximize the performance
of each campaign by employing advanced optimization technology powered by
Burst's AdConductor platform.

Burst Direct experienced significant growth in revenue to $0.6 million for the
first half of 2007 from $35,000 in the first half of 2006. Revenue from Burst
Direct was in line with management's expectations. For the second half of 2007,
we will continue to focus on refining the Burst Direct model with new
initiatives for acquiring inventory and improving the Company's sales processes.

Burst Direct was associated with approximately 3,800 websites as of 30 June 2007
as compared to 1,800 as of 30 June 2006.

Burst AdConductor

Burst AdConductor is Burst's ad serving platform. This proven technology is
built upon more than 11 years of experience in building and running premium ad
networks. Burst AdConductor offers publishers a one-stop solution that
integrates sales, campaign management and financial business processes in order
to serve the ad placement needs of large and multi-site web publishers. The two
products offered by the Burst AdConductor business are Desktop, which enables
small to medium size independent web publishers to manage their own advertising
placement, and Enterprise, which supports large multi-site publishers and
independent ad networks with a complete ad management system.

Revenues for the Burst AdConductor business were $1.3 million for the first half
of 2007, which represents growth of over 300% from the comparable period in
2006. Revenue from Burst AdConductor was ahead of management's expectations
with significant wins and contract renewals, including Reed Business
Information, Winstar Interactive Media, TACODA and ten additional new and
renewal Desktop contracts.

We have made several enhancements to our Burst AdConductor platform in 2007
including:

* Developed an Application Programming Interface (API) to allow customers to
use their existing internal user interfaces;

* Released world class publisher reporting interface known as the Burst
Publisher Account Center or "BPAC"; and

* Introduced enhanced technology to automate the optimization of
performance-based ad campaigns.

Outlook

On 30 July 2007, Burst announced that it expected the Company's financial
performance for the year ended 31 December 2007 to be in line with market
expectations. However, following a review of its current operational
performance, the Company has concluded that the financial performance of the
Company for the year ended 31 December 2007 is likely to be below current market
expectations, primarily as a result of higher than anticipated ad campaign
cancellations within the Burst Network.

Whilst the pipeline for the Burst Network remains strong, losses in connection
with various key ad campaigns occurred in July and August 2007. The Board
believes that the changes and investments that were implemented in the first
half of 2007 will benefit the business in the longer term and estimates revenue
from the Burst Network will increase 5% to 9% for the 2007 fiscal year as
compared to the prior year.

Slightly offsetting the softness in revenue growth for the Burst Network
business in 2007 is projected triple digit revenue growth for its two emerging
businesses, Burst Direct and Burst AdConductor, as compared to the prior year.
The Company expects 2007 results for Burst Direct will be reflective of the
rapid growth in this sector of the market. Lastly, the Company continues to
invest aggressively in the Burst AdConductor platform technology and the
pipeline for this business is strong for the fourth quarter of 2007.

The Board estimates that total revenue for the year ended 31 December 2007 will
be between $28.5 million and $29.5 million, which represents growth of 21% to
26%, respectively, as compared to the prior year. The Adjusted EBITDA(1) for
the same period will be between $2.4 million and $2.7 million, which is flat or
up 12%, respectively, as compared to the prior year. The cash balance at 30
June 2007 was $11.6 million and management projects a cash balance of between
$11.2 million and $11.5 million at 31 December 2007.

(1) See Reconciliation of Net income (loss) to Adjusted net income and Adjusted
EBITDA on page 3 of this Press Release.

The online advertising market is dynamic and continues to grow rapidly. There
were a number of high profile corporate transactions in the advertising network
sector in the first half of the year with significant investments made by
industry leaders such as Google, Yahoo! and Microsoft. Numerous other
announcements by companies in the U.S. (Scripps Networks and ESPN Networks) and
the U.K. (Sky Media and Orange) have signalled the industry's support for the ad
network model, which is especially well-designed to grow advertising inventory
quickly and target internet users.

The addition of some of the Internet's leading brands to the ad network space
implies substantially increased levels of competition as well as increased
spending by advertisers within the category. We believe Burst is well-positioned
today to benefit from both effects. Its AdConductor technology platform is
designed specifically to meet the needs of ad networks. The combined reach of
Burst's media sales units, Burst Network and Burst Direct, places it within the
top 20 online properties in the U.S. and the U.K. with product solutions that
cater to both brand and direct response advertisers.

Increased competition will place a premium on attracting and retaining good
people, maintaining robust publisher relationships and sustaining a strong
market presence with clear, well-differentiated offerings. Burst is well
positioned with its experience, resources and its technology to achieve the
current financial guidance provided for 2007.

Jarvis Coffin

Chief Executive Officer

12 September 2007

UHY LLP CERTIFIED PUBLIC ACCOUNTANTS

INDEPENDENT ACCOUNTANT'S REPORT

To the Board of Directors and Stockholders

Burst Media Corporation and Subsidiary

We have reviewed the consolidated balance sheets of Burst Media Corporation and
Subsidiary as of June 30, 2007 and 2006, and the related consolidated statements
of operations and cash flows for the six-month periods ended June 30, 2007 and
2006. These financial statements are the responsibility of the company's
management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with accounting principles generally accepted in the United States of
America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Burst Media Corporation and Subsidiary as of December 31, 2006, and the related
consolidated statements of operations, stockholder'/members' equity/(deficit)
and comprehensive income (not presented herein), and cash flows for the year
then ended; and in our report dated March 29, 2007, we expressed an unqualified
opinion on those consolidated financial statements.

Albany, New York

August 10, 2007

UHY LLP is an independent member of Urbach Hacker Young International Limited

Burst Media Corporation and Subsidiary

Consolidated Balance Sheets
(in thousands, except share amounts)

June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
ASSETS

CURRENT ASSETS

Cash and cash equivalents.................................... $ 11,569 $ 12,701 $ 13,012

Accounts receivable, less allowance for
doubtful accounts of $74, $200 and $220,
respectively................................................. 7,145 4,730 5,565
Prepaid expenses and other current assets.................... 532 479 380
Total current assets......................................... 19,246 17,910 18,957

PROPERTY AND EQUIPMENT, NET.................................. 812 653 747

OTHER ASSETS................................................. 645 529 623
$ 20,703 $ 19,092 $ 20,327

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITITES

Due to independent web publishers............................ $ 3,712 $ 3,610 $ 3,500
Other current liabilities.................................... 615 939 996

Total current liabilities.................................... 4,327 4,549 4,496

OTHER LONG TERM LIABILITIES.................................. 86 13 56
Total liabilities............................................ 4,413 4,562 4,552

STOCKHOLDERS' EQUITY
Common stock, $0.01 par value: 150,000,000
shares authorized; 83,028,562 shares issued
and outstanding at June 30, 2007, 82,928,562
shares issued and outstanding at June 30, 2006
and December 31, 2006........................................ 830 829 829
Additional paid-in capital................................... 25,335 24,525 25,092
Accumulated deficit.......................................... (9,875) (10,824) (10,146)
Total stockholders' equity................................... 16,290 14,530 15,775

$ 20,703 $ 19,092 $ 20,327

See notes to consolidated interim financial statements

Burst Media Corporation and Subsidiary

Consolidated Statements of Operations
(in thousands, except share amounts)

Six Months Ended Year Ended
June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Audited)

Revenue....................................................... $ 13,299 $ 11,381 $ 23,477
Cost of revenue............................................... 6,746 6,160 12,251
Gross profit.................................................. 6,553 5,221 11,226

Operating expenses
Sales and marketing........................................... 3,120 2,446 5,309
General and administrative.................................... 1,694 1,054 2,360
Technology and product development............................ 1,047 668 1,514
Restructuring charges......................................... 735 - -
Equity-based compensation............................... 103 2,064 2,584
Total operating expenses...................................... 6,699 6,232 11,767

Loss from operations.......................................... (146) (1,011) (541)

Other income
Interest income............................................... 308 213 520
Other income.................................................. 117 95 159
Total other income............................................ 425 308 679

Net income (loss) before provision for income
tax expense (benefit)......................................... 279 (703) 138

Provision for income tax expense (benefit).................... 8 (233) (70)

Net income (loss)............................................. $ 271 $ (470) $ 208

Basic earnings (loss) per share............................... $ 0.00 $ (0.01) $ 0.00
Diluted earnings (loss) per share............................. $ 0.00 $ (0.01) $ 0.00

Shares used in calculating:
Basic earnings per share...................................... 82,964,474 71,270,133 73,350,634
Diluted earnings per share.................................... 83,043,526 71,270,133 73,498,934

See notes to consolidated interim financial statements

Burst Media Corporation and Subsidiary

Consolidated Statements of Cash Flows
(in thousands, except share amounts)

Six Months Ended Year Ended
June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)........................................... $ 271 $ (470) $ 208

Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities:
Depreciation and amortization............................... 174 78 212
Deferred income taxes....................................... (21) (311) (409)
Provision for doubtful accounts............................. 69 - 34
Equity-based compensation................................... 103 2,064 2,584
Non-cash restructuring charge............................... 128 - -
Deferred rent............................................... 33 2 47
Changes in:
Accounts receivable......................................... (1,649) 607 (263)
Prepaid expenses and other current assets................... (152) (191) (92)
Other assets................................................ - (4) (4)
Due to independent web publishers........................... 212 (367) (478)
Other current liabilities................................... (381) (5) 54
Net cash (used in) provided by operating
activities............................................... (1,213) 1,403 1,893

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment......................... (239) (506) (731)
Cost of acquiring trademarks and other properties........... - (26) (26)
Repayments of note receivable from member................... - 34 34
Net cash used in investing activities....................... (239) (498) (723)

CASH FLOWS FROM FINANCING ACTIVITES

Proceeds from stock option exercises........................ 11 597 645
Proceeds from issuance of common stock, net of
offering costs.............................................. - 3,318 3,318
Proceeds from Series C units preference settlement.......... - 421 421
Repayment of capital lease obligation....................... (2) (2) (4)
Net cash provided by financing activities................... 9 4,334 4,380

NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS............................................ (1,443) 5,239 5,550
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD......................................... 13,012 7,462 7,462
CASH AND CASH EQUIVALENTS, END OF
PERIOD...................................................... $ 11,569 $ 12,701 $ 13,012

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

During the six months ended June 30, 2007 and June 30, 2006 and for the year
ended December 31, 2006, the Company paid cash in the amounts of $0, $1, and $1
for interest expense, respectively and $78, $78, and $381, respectively for
income taxes.

NON-CASH FINANCING ACTIVITIES

The Company issued 63,745,150 common shares in exchange for the Series A, B and
C membership units upon conversion to a C Corporation during the year ended
December 31, 2006.

The Company issued 14,235,664 common shares in settlement of a Series C
membership unit holders' preference during the year ended December 31, 2006.

See notes to consolidated interim financial statements

Burst Media Corporation and Subsidiary

Notes to Consolidated Interim Financial Statements (unaudited)
(in thousands except share amounts)

1. Description of the Company and Significant Accounting Policies

Description of the Company

Burst Media Corporation ("Burst" or "the Company") together with its subsidiary
is a provider of comprehensive Internet advertising solutions focused on
supporting the interests of specialty content independent web publishers and
advertisers. The Company delivers advertising campaigns for its customers
through a network of approximately 6,200 web sites. The Company has advertising
servers in three locations in the U.S. (Massachusetts, Virginia and Colorado)
and one location in Europe (Amsterdam). The corporate headquarters is located in
Burlington, Massachusetts. The Company's wholly-owned subsidiary, BURST! Media
UK Limited, was incorporated in the United Kingdom as a private limited company
in 2005.

Basis of Presentation

These financial statements have been prepared, without audit, pursuant to
Accounting Principles Board Opinion No. 28, "Interim Financial Reporting."
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles in the United States of America have been or omitted pursuant to such
rules and regulations. These financial statements should be read in conjunction
with the Company's annual report for the year ended December 31, 2006.

The consolidated financial statements include the accounts of BURST! Media UK
Limited, the Company's wholly-owned subsidiary. All significant intercompany
balances and transactions have been eliminated.

Reclassifications

Certain previously reported amounts have been reclassified to conform to the
current period presentation.

Re-incorporation and Initial Public Offering

The Company was originally organized in January 1996 as a New York Limited
Liability Company (Burst LLC). On April 10, 2006, the Company was
re-incorporated under the laws of the State of Maryland. The re-incorporation
changed the form of the entity from a Limited Liability Company (LLC) to a C
Corporation. The Company acquired 100% of the assets and liabilities of the
Burst LLC in exchange for all of the Company's outstanding capital stock
(equivalent to 63,745,150 shares of $0.01 par value common stock), which was
thereupon distributed to the members of Burst LLC on a pro rata basis in
connection with its dissolution on April 11, 2006. The exchange was recorded at
the Company's historical carrying value on the date of conversion.

On April 21, 2006, the Company issued 3.5 million new shares of common stock on
the AIM market of the London Stock Exchange at $1.47 per share, generating $3.3
million in net proceeds. The issue costs (legal, commissions and other)
totalled $1.8 million in cash. In addition, the Company issued 14,235,664
shares of Common stock as part of the Series C Members' preference settlement.
The stock trades on the AIM market under the symbol "BRST".

Prior to the Company's Initial Public Offering ("IPO") on April 21, 2006, the
operations of Burst LLC were governed by its amended and restated operating
agreement dated January 31, 2000. The amended and restated operating agreement
provided for the issuance of membership units that entitled each series of
membership units to certain rights and obligations.

Use of Estimates

The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reported periods. Actual results could differ from those
estimates.

Revenue Recognition

Advertising

Revenues are primarily generated by delivering its customers' advertising
impressions or "click-throughs" for agreed upon fees to specified third-party
publishers comprising Burst's network. Customer advertising campaign agreements
are generally short term in nature (less than 60 days) and revenue is recognized
as campaigns are delivered, which is typically based upon the number of
impressions or click-throughs delivered.

Additionally, the Company incurs expenses relating to third-party publishers,
which have contracted with the Company to be part of its network, as advertising
campaigns are delivered. The Company records its obligation to its network
publishers based upon a contractually determined percentage of revenue in each
advertising campaign and these expenses are classified as cost of revenues in
the accompanying consolidated statements of operations.

AdConductorTM Licensing Revenue

All of the Company's products and services are enabled by the Company's
proprietary suite of software products, AdConductor. The Company licenses its
AdConductor technology to customers as an Application Services Provider. The
Company contracts with its customers for contractually determined minimum fees
based upon projected usage. Amounts due from customers are periodically
adjusted to actual usage in the event usage exceeds the minimum fees due.
Revenue from software licensing agreements are recognized when the software is
delivered, there is persuasive evidence of an arrangement, the fee is fixed and
determinable and collection is reasonably assured.

Income Taxes

Income taxes are provided for the effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to the differences between the basis of certain assets and
liabilities for financial and income tax reporting. Deferred taxes are
classified as current or non current depending on the classification of the
assets and liabilities to which they relate. Deferred taxes arising from
temporary differences that are not related to an asset or liability are
classified as current or non current depending on the periods in which the
temporary differences are expected to reverse.

Effective January 1, 2007, the Company adopted Financial Accounting Standards
Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes, "FIN
48". FIN 48 clarifies the accounting for uncertainty in income taxes recognized
in an enterprise's financial statements in accordance with SFAS No. 109,
Accounting for Income Taxes. FIN 48 also prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
each tax position taken or expected to be taken in a tax return. The adoption of
FIN 48 did not have a material impact on the Company's financial statements.

Earnings per Share

In accordance with SFAS No. 128, "Earnings Per Share," basic net income (loss)
per share is computed by dividing net income (loss) by the weighted average
number of shares of Common stock outstanding during the period. Diluted earnings
(loss) per share is computed by dividing net income (loss) by the shares used in
the calculation of basic earnings (loss) per share plus the dilutive effect of
Common stock equivalents, such as stock options, using the treasury stock
method. Common stock equivalents are excluded from the computation of diluted
earnings (loss) per share if their effect is antidilutive.

2. Restructuring

On February 26, 2007, William Davlin, the former Chief Financial Officer and
Robert Hanna, the former Senior Vice President of Sales, announced their
resignations from the Company to pursue other interests. Both Mr. Davlin and Mr.
Hanna were co-founders that were instrumental in building the Company over the
past 11 years. They remain on the Board, without compensation, as
Non-Executive Directors.

As part of their severance agreements, Mr. Davlin and Mr. Hanna each received
lump sum payments of $299 and reimbursement for legal services. In connection
with this restructuring, the Company recorded severance and legal fees of
approximately $607 during the six months ended June 30, 2007. Both Mr. Davlin
and Mr. Hanna had 110,000 options outstanding as of their separation date at a
strike price of $1.46 that were immediately vested on February 26, 2007 and
expired unexercised on May 26, 2007. The Company recorded an additional
restructuring charge of $128 associated with the acceleration of the options
outstanding as of their separation date during the six months ended June 30,
2007.

As of June 30, 2007, Mr. Davlin and Mr. Hanna owned 5,274,583 shares and
10,305,860 shares respectively of the Company's Common stock, representing
approximately 6.4% and 12.4% of the total outstanding shares of the Company.

3. Equity-Based Compensation

The Company has two stock option plans. The first is known as the "IPO Plan".
Under the IPO Plan, employees were granted certain options as of the IPO date.
These option grants included conversion of former promissory options that were
provided to individuals under the former LLC structure. The second Plan is the
Burst Media Corporation 2006 Stock Option Plan (the "2006 Plan"). The 2006 Plan
was established on April 11, 2006. Both Plans were designed to encourage select
key employees, consultants and non-employee Directors of the Company to have a
vested interest in the future growth and performance of the Company.

Under the IPO Plan, stock option grants have various vesting schedules typically
over a 5 year contractual term. Options under the 2006 Plan generally vest
annually over a four year term and have a 10 year contractual term. Both plans
generally require an employee to remain continuously employed at the Company for
vesting to occur.

The estimated grant date fair value of options in both Plans is recognized over
the options' vesting periods, net of estimated forfeitures.

The fair value of the stock option grants awarded was estimated as of the date
of grant using a Black-Scholes option valuation model that used the following
assumptions:

Six Months Ended Year Ended
June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Audited)

Expected stock price volatility..................................... 60% 65% 65%

Risk-free interest rate............................................. 4.54-4.96% 4.50-5.85% 4.50-5.85%

Expected dividend yield............................................. 0% 0% 0%

Expected option life in years....................................... 6.25 5.00 5.00

The expected volatility is based on a review of the Company's historical
volatility and a review of peer companies' volatility coupled with future
expectations of movement in the Company's stock price over the period
commensurate with the expected life of the options. The risk-free interest rate
is derived from U.S. Treasury discount notes with maturities comparable to the
remaining expected life of the options. No dividend yield is expected since the
Company has never paid cash dividends and has no present intention to pay cash
dividends. The expected life is based on observed and expected time to
post-vesting exercise and forfeitures of options by the Company's employees.
The expected forfeiture rate is based on historical experience with pre-vesting
option cancellations.

The weighted average fair value of options outstanding was $0.29, $1.05 and
$1.04 at June 30, 2007, June 30, 2006 and December 31, 2006, respectively.

For the six months ended June 30, 2007 and 2006 and for the year ended December
31, 2006, pre-tax Equity-based compensation expense reduced the results of
operations as follows:

Six Months Ended Year Ended
June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Audited)

Effect on net income (loss):

Income before income taxes.................................... $ (103) $ (2,064) $ (2,584)

Tax effect.................................................... 36 722 904

Effect on net income (loss)................................... $ (67) $ (1,342) $ (1,680)

Basic earnings per share...................................... $ 0.00 $ (0.02) $ (0.02)

Fully diluted earnings per share.............................. $ 0.00 $ (0.02) $ (0.02)

The following summarizes the categorization of equity-based compensation expense
included in Equity-based compensation in the accompanying Consolidated
Statements of Operations:

Six Months Ended Year Ended
June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Audited)

Cost of revenue............................................... $ 2 $ 1 $ 5

Sales and marketing........................................... 68 844 926

General and administrative.................................... 35 819 1,183

Technology and product development............................ (2) 400 470

Total......................................................... $ 103 $ 2,064 $ 2,584

Equity-based compensation expense for the six months ended June 30, 2007 is net
of a cumulative pre-tax adjustment, reducing the expense by $164, as a result of
a change to the estimated forfeiture rate for prior periods unvested stock
option awards.

Stock option activity is summarized as follows:

Weighted Average
Exercise Price

Options

Outstanding at December 31, 2005.............................. 145,000 $ 1.19

Granted....................................................... 4,145,920 0.64

Exercised..................................................... (1,514,417) 0.43

Cancelled..................................................... (82,908) 2.10

Outstanding at June 30, 2006.................................. 2,693,595 0.75

Granted....................................................... 35,250 0.37

Exercised..................................................... - -

Cancelled..................................................... (56,143) 0.44

Outstanding at December 31, 2006.............................. 2,672,702 0.75

Granted....................................................... 1,730,000 0.47

Exercised..................................................... (100,000) 0.11

Cancelled..................................................... (358,807) 1.06

Outstanding at June 30, 2007.................................. 3,943,895 $ 0.62

There were 5,896,941 shares available for future grant under the 2006 plan at
June 30, 2007.

4. Foreign Currency

The financial accounts of BURST! Media UK Limited are measured using the local
currency as the functional currency. The assets and liabilities of this
subsidiary are generally translated into U.S. dollars at the current exchange
rates as of the balance sheet dates and revenues and expenses are translated at
average exchange rates each month. Burst also conducts certain transactions
denominated in foreign currencies.

Net foreign currency transaction gains were $90, $71 and $137 for the six months
ended June 30, 2007 and June 30, 2006 and for the year ended December 31, 2006,
respectively and are included in Other income in the accompanying consolidated
statements of operations.

5. Earnings Per Common Share

Basic and diluted earnings (loss) per share were calculated as follows:

Six Months Ended Year Ended
June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
Numerator:
Net income (loss) used in calculating basic
and diluted earnings (loss) per share............. $ 271 $ (470) $ 208

Denominator:
Weighted average number of common shares 82,964,474 71,270,133 73,350,634
outstanding.......................................
Effect of dilutive securities - stock options..... 79,052 - 148,300
Shares used in calculating diluted earnings (loss) per 83,043,526 71,270,133 73,498,934
share.............................................

Antidilutive options outstanding were 3,888,895, 2,693,595 and 868,222 at June
30, 2007, June 30, 2006 and December 31, 2006, respectively.

6. Income Taxes

Income taxes were provided for the period April 11, 2006 through June 30, 2007,
representing the period in which the Company operated as a C corporation. The
Company operated as an LLC prior to April 11, 2006. As an LLC, all earnings
were distributed to its Members and the Company was not subject to income taxes.

The components of income before income taxes and of income tax expense for the
six months ended June 30, 2007, the period April 11, 2006 through June 30, 2006
and the period April 11, 2006 through December 31, 2006 were as follows:

Six Months April 11, April 11,
Ended Through Through
June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
Net income (loss) before income tax provision (benefit):

Domestic...................................................... $ (66) $ (1,281) $ (416)
Foreign....................................................... 345 (59) (249)
$ 279 $ (1,340) $ (665)
Income tax provision (benefit):

Current:

Federal....................................................... $ 13 $ 3 $ 256

State......................................................... 16 1 83
29 4 339
Deferred:

Domestic...................................................... (31) (237) (409)

Foreign....................................................... 10 - -

(21) (237) (409)

Total income tax provision (benefit) ......................... $ 8 $ (233) $ (70)

Deferred tax assets

Deferred tax assets are comprised of the following:

June 30, June 30, December 31,
2007 2006 2006
(Unaudited) (Unaudited) (Audited)
Equity-based compensation.................................... $ 430 $ 237 $ 407

Other........................................................ - - 2

Deferred tax assets $ 430 $ 237 $ 409

In assessing the extent to which the Company's deferred tax assets may be
realized, the Company considered whether it was more likely than not that some
portion or all of the deferred tax assets would not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary differences become
deductible. In making this determination, under the applicable financial
reporting standards, the Company considered the scheduled reversal of its
deferred tax liabilities, projected future taxable income and tax planning
strategies. The Company's estimates of future taxable income take into
consideration, among other items, estimates of future income tax deductions
related to the exercise of stock options. Based upon the level of historical
taxable income and income tax liability and projections for future taxable
income over the periods in which the deferred tax assets are utilizable, it is
more likely than not that the Company will realize the benefits of its entire
deferred tax asset. In the event that actual results differ from estimates or
estimates in future periods are revised, the Company may need to establish a
valuation allowance, which could materially impact its financial position and
results of operations.

This information is provided by RNS
The company news service from the London Stock Exchange
END

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