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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Burst Med Reg S | LSE:BRST | London | Ordinary Share | COM SHS USD0.01 (REGS) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 31.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
TIDMBRST
RNS Number : 5745Z
Burst Media Corporation
24 September 2009
24 September 2009
Burst Media Corporation
Results for the six-month period ended 30 June 2009
Burst Media Corporation ("Burst" or the "Company"), the international online
advertising services and technology business, announces its results for the
six-month period ended 30 June 2009.
Financial Summary
+--------+-------------------------+-------------+
| * | Total revenue |
| | was $12.1 |
| | million (2008: |
| | $13.4 million) |
+--------+---------------------------------------+
| | | Media |
| | - | revenue |
| | | was |
| | | $10.8 |
| | | million |
| | | (2008: |
| | | $10.7 |
| | | million) |
+--------+-------------------------+-------------+
| | | adConductor |
| | - | revenue was |
| | | $1.3 |
| | | million |
| | | (2008: $2.7 |
| | | million) |
+--------+-------------------------+-------------+
| * | Gross profit |
| | was $5.8 |
| | million (2008: |
| | $6.3 million) |
+--------+---------------------------------------+
| * | Gross |
| | profit margin |
| | was 48% (2008: |
| | 47%) |
+--------+---------------------------------------+
| * | Net loss was |
| | $0.7 million |
| | (2008: $0.4 |
| | million) |
+--------+---------------------------------------+
| * | Adjusted net |
| | loss (1) was |
| | $0.6 million |
| | (2008: $0.2 |
| | million) |
+--------+---------------------------------------+
| * | Adjusted |
| | LBITDA(1) was |
| | $0.6 million |
| | (2008: $0.2 |
| | million) |
+--------+---------------------------------------+
| | | The |
| | - | Company |
| | | was |
| | | EBITDA |
| | | positive |
| | | in the |
| | | second |
| | | quarter |
+--------+-------------------------+-------------+
| * | Cash at 30 June |
| | 2009 was $9.4 |
| | million (2008: |
| | $11.1 million) |
+--------+-------------------------+-------------+
(1) See Reconciliation of Net Loss to Adjusted Net Income (Loss) and Adjusted
EBITDA (LBITDA) below.
Operational Summary
+-----------------------+-----------------------------------------------------------------------------------+
| * | Successful Vertical Network strategy introduced in 2008 has led to substantial |
| | growth in development of Custom Networks for brand advertisers. |
+-----------------------+-----------------------------------------------------------------------------------+
| * | Key vertical channels, the Moms Network and the Technology Network, were enhanced |
| | within the Burst Network by developing sub-channel opportunities within each |
| | (e.g. Expecting Moms and Web Developers). |
+-----------------------+-----------------------------------------------------------------------------------+
| * | Re-launched Burst Media web site. |
+-----------------------+-----------------------------------------------------------------------------------+
| * | Further progress on implementing Cost Per Action ("CPA") program for Burst |
| | Direct, which now accounts for 30% of Direct revenue. |
+-----------------------+-----------------------------------------------------------------------------------+
| * | Implemented premium, third party "Feed" program that gives Burst Direct access to |
| | advertising campaigns from other networks and third parties for the benefit of |
| | Burst publishers. |
+-----------------------+-----------------------------------------------------------------------------------+
| * | Four new customers for adConductor, including scientific and medical publisher, |
| | Wolters Kluwer. |
+-----------------------+-----------------------------------------------------------------------------------+
Forward Looking Guidance
+-----------------------+-----------------------------------------------------------------------------------+
| * | Improved performance in Q2 has continued into Q3. Year-over-year growth in media |
| | sales from Network and Direct remains positive. |
+-----------------------+-----------------------------------------------------------------------------------+
| * | Visibility into Q4 remains somewhat uncertain but consensus is building for an |
| | improving advertising environment. |
+-----------------------+-----------------------------------------------------------------------------------+
| * | The Board is confident that expectations of financial performance for the year |
| | ending 31 December 2009 remain achievable. |
+-----------------------+-----------------------------------------------------------------------------------+
Subsequent Event
+-----------------------+-----------------------------------------------------------------------------------+
| * | The Company has signed a letter of intent to purchase substantially all of the |
| | business and assets of Giant Realm, a video game advertising network. The |
| | acquisition is subject to the completion of due diligence and the satisfaction of |
| | certain conditions, expected by mid-October 2009. |
+-----------------------+-----------------------------------------------------------------------------------+
Commenting, Jarvis Coffin, Chief Executive, said:
"The global economic recession severely impacted the Company's performance in
the first quarter of 2009 as marketers put a firm hold on advertising.
Fortunately for the Company, Burst Direct's performance advertising business
softened the blow somewhat during that period. By March, there were visible
signs of recovery for the Burst Network, and this accelerated in the following
month when the Network achieved a number of sales records.
"During the second quarter advertisers were vigorously attempting to overcome
the poor trading environment and Burst's media businesses benefited with a
combined increase of 23% over the second quarter of 2008 that counterbalanced
the poor sales performance in the first quarter. Given its long sales cycle, our
adConductor business was not able to respond as quickly and we are not expecting
its performance to improve materially over the remainder of the year. Despite
the absence of the TACODA business during the period, the balance of
adConductor's portfolio grew 70% year-over-year, and included the addition of
notable new customers.
"Overall, Burst's brand and performance advertising sales strategy led to
positive results for its key media businesses in the first half despite a
difficult trading environment. Management believes that as the economy recovers
the positive results will continue, and we look forward to the balance of 2009.
Our focus is on continuing to differentiate our media sales proposition and
firmly establishing ourselves as leading ad network builders and experts in the
Long Tail of the Internet."
Reconciliation of Net Loss to Adjusted Net Income (Loss)(1) and Adjusted EBITDA
(LBITDA)(1)
(in thousands, except share amounts)
+--------------------------------+-------------+--------+-------------+--------+----------+
| | Six Months Ended | | Year |
| | | | Ended |
+--------------------------------+------------------------------------+--------+----------+
| | June | | June | | December |
| | 30 | | 30 | | 31 |
+--------------------------------+-------------+--------+-------------+--------+----------+
| | 2009 | | 2008 | | 2008 |
+--------------------------------+-------------+--------+-------------+--------+----------+
| | (Unaudited) | | (Unaudited) | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Net | $(745) | | $ | | $ |
| loss | | | (399) | | (274) |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Adjustments: | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Strategic | 47 | | 212 | | 283 |
| review | | | | | |
| expenses | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Equity-based | 159 | | 23 | | 192 |
| compensation | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Adjusted | (539) | | (164) | | 201 |
| net | | | | | |
| income | | | | | |
| (loss)(1) | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Adjustments: | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Interest | (40) | | (145) | | (239) |
| income | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Provision | (246) | | (151) | | 73 |
| for | | | | | |
| income | | | | | |
| tax | | | | | |
| expense | | | | | |
| (benefit) | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Depreciation | 227 | | 225 | | 466 |
| and | | | | | |
| amortization | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Adjusted | $(598) | | $ | | $ |
| EBITDA | | | (235) | | 501 |
| (LBITDA)(1) | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
| Adjusted | (5%) | | (2%) | | 2% |
| EBITDA | | | | | |
| (LBITDA)(1) | | | | | |
| as % of | | | | | |
| revenue | | | | | |
+--------------------------------+-------------+--------+-------------+--------+----------+
(1) "Adjusted net income (loss)" (net income (loss) excluding, strategic review
expenses and equity-based compensation) and "Adjusted EBITDA (LBITDA)" (Adjusted
net income (loss) before interest income, income taxes expense (benefit),
depreciation and amortization) are non-U.S.GAAP financial measures. The Company
believes Adjusted net income (loss) and Adjusted EBITDA (LBITDA) provide
meaningful insight into the Company's ongoing economic performance and therefore
uses both metrics internally to assist in evaluating and managing the Company's
operations.
Any statements in this press release about future expectations, plans, and
prospects for the Company, including statements about the estimated revenue of
the Company, and other statements containing the words "estimates", "believes",
"anticipates", "plans", "expects", "will", and similar expressions, constitute
forward-looking statements. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various important
factors, including the unpredictable nature of our rapidly evolving market and
fluctuations in our business; the effects of competition; any adverse changes in
our customers' business, and other factors discussed in our latest annual report
and other filings. In addition, the forward-looking statements included in this
press release represent our views as of 24 September 2009. We anticipate that
subsequent events and developments may cause our views to change. However, while
we may elect to update these forward-looking statements at some point in the
future, we specifically disclaim any obligation to do so except insofar as may
be required of the Company by the AIM Rules. These forward-looking statements
should not be relied upon as representing our views as of any date subsequent to
24 September 2009.
A copy of this interim report will be circulated to all registered shareholders
of the Company and copies will be available for members of the public by
submitting a request to the Company's Registered Office or on the Company's
website at www.burstmedia.com.
Enquiries:
+-------------+--------------+
| Burst | |
| Media | |
| Corporation | |
+-------------+--------------+
| Jarvis | +1 |
| Coffin, | 781-852-5271 |
| Chief | |
| Executive | |
| Officer | |
| Steven | |
| Hill, | |
| Chief | |
| Financial | |
| Officer | |
+-------------+--------------+
| | |
+-------------+--------------+
| Hudson | |
| Sandler | |
+-------------+--------------+
| Nick | +44 |
| Lyon / | (0) 20 |
| Hugo | 7796 4133 |
| Jenkins | |
+-------------+--------------+
| | |
+-------------+--------------+
| Altium | |
+-------------+--------------+
| Tim | +44 |
| Richardson | (0) 20 |
| / Paul | 7484 4040 |
| Chamberlain | |
+-------------+--------------+
Chairman's Statement
Trading Review
As announced in its trading update on 16 July 2009, the Company completed the
half-year in line with management's expectations despite operating in a very
challenging trading environment. As anticipated, the Company was impacted by the
general slowdown in ad spend in the first quarter; however, trading improved
significantly in the second quarter.
Shareholders have been kept fully apprised of the Company's efforts over the
past two and a half years to launch its performance advertising business, Burst
Direct, whilst repositioning its Burst Network business towards brand
advertising sales that web publishers desire. The Company began to see
significant progress in both businesses at this time last year, leading to a
steady increase in the combined number and quality of orders. The Board believes
that the momentum achieved a year ago helped sustain the Company's performance
in the second half of 2008 despite a rapidly slowing ad economy. However, a
motivated sales force with well-differentiated products was not enough to escape
the downward pull of the economic crisis that was in full force by the start of
2009.
Recovery occurred for the Company's media businesses in the second quarter when
these two businesses, combined, recorded a 23% increase in sales over the same
period the year before. Both businesses recorded double-digit growth in
contributing to this performance, which was especially notable in the case of
the Network, which has aimed to maintain its pricing as it reshapes its
business.
Despite some new business successes in the first half, the Board expects that
the recovery of the adConductor business will be delayed until media companies
recommence investing in proprietary ad network businesses.
Some uncertainty remains about overall economic trends; however, the Company's
improved trading performance during the second quarter has continued into the
third quarter and the Board is confident that the Company is well positioned to
achieve its goals for the year.
Indicative Approaches
During the first half of 2009 the Board received a number of unsolicited
indications of interest to acquire the Company. The Board fully considered each
such approach. However, as it has previously stated, the Board does not believe
that optimal value can be obtained for shareholders by selling the Company at a
time when the ad industry remains in the bottom part of its business cycle, and
when Burst is demonstrating an ability to grow with, and even ahead of, a
recovery. This, plus the Company's many strong customer relationships,
substantial audience reach, valuable technology platform, and strong balance
sheet led the Board to conclude that these indications of interest were
opportunistic and unreflective of the value of the Company's business and
prospects. The Board unanimously rejected each approach and appropriate
announcements were made to this effect.
The Board emphasises that it is not in ongoing discussions with any third party
in relation to a potential acquisition of the Company.
Growth Opportunities
Burst continues to have a strong cash position with no debt. The Board remains
focused on the ongoing development of the Company and believes that
opportunities exist for the Company to take advantage of its relative strength
to add critical mass to its businesses and to generate shareholder value. In
that regard, the Company has announced a letter of intent to acquire the
business and assets of Giant Realm, a leading games network in the U.S., which
is discussed in further detail in the Chief Executive's review.
The Company continues to actively look at investments, including potential
acquisitions in the US, the UK and Europe that enhance Burst's core businesses.
Intention to Repurchase Shares
The Board recognises that the Company's shares are illiquid and that some
shareholders expressed interest in the Company investigating the indicative
approach announced by Cyberplex Inc. on 30 July 2009 to acquire the Company at
12pence per share. To address this, the Board has resolved that the Company will
make additional on-market purchases of Burst shares up to an aggregate market
value of $500,000. This is intended to return capital which is deemed by the
Board to be surplus to the Company's current requirements and to provide Burst
shareholders with an amount of liquidity. Such repurchases will be undertaken in
accordance with the terms announced by the Company on 5 May 2009, except that
the Company will repurchase shares at a price of up to 12 pence per share.
For the avoidance of doubt, the Company will not repurchase any Burst shares
from members of the Board. Certain directors of the Company are also intending
to purchase Burst shares.
The Company confirms that there is currently no unpublished price sensitive
information. It should be noted that the City Code on Takeovers and Mergers does
not apply to the Company.
Outlook
The Board is optimistic about the Company's ability to profit from the recovery
of the broader advertising market.
David Hanger
Non-Executive Chairman
24 September 2009
Chief Executive's Review
Burst has three ways to serve independent web publishers: 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 web sites and ad networks manage their ad operations
(adConductor).
Online Reach
Ad networks serve campaigns across a wide variety of sites that represent
Internet traffic measured by "unique visitors." In the U.S. in June 2009, Burst
reached 114 million unique monthly Internet visitors (June 2008: 84 million)
according to comScore MediaMetrix. This placed Burst as the 23rd largest
advertising supported Internet property in the U.S. in June 2009.
In June 2009 Burst reached 11 million unique monthly Internet visitors in the
U.K. (June 2008 11 million), according to comScore MediaMetrix. This placed
Burst as the 24thth largest advertising supported Internet property in the U.K.
in June 2009.
Business Review
The advertising business almost always suffers collateral damage during periods
of economic weakness and the latest recession, which primarily impacted the
credit markets, is no exception. The Internet advertising business suffered a
serious contraction in the first quarter and reports indicating a recovery have
been inconsistent through the first half.
Media Business
Combined revenues from the Company's two media businesses, Burst Network and
Burst Direct, in the first half of 2009 were $10.8 million, (2008: $10.7
million). The general slowdown in ad spending that began in the last quarter of
2008 significantly impacted the Company's media businesses in the first quarter
of the current year. However, in the second quarter, as negative economic
factors began to abate, the Company achieved a 23% year-over-year growth in
combined Network and Direct revenue resulting in a first half performance
similar to the same period in 2008.
Burst Network continues to make advances as a vehicle for brand advertisers. The
Company's largest 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 on. There were
approximately 4,700 premium web sites in the Burst Network as of both 30 June
2009 and 2008. The advertisers can target by content, behaviour, demographics,
geography and time of day. The inventory of available advertising impressions
for Burst Network was 33 billion for the six months ended 30 June 2009 (2008: 30
billion).
The successful introduction of 12 vertical networks in 2008 became a springboard
for the development of "custom networks" for advertisers in 2009. In the first
half of 2009, advertisers moved rapidly beyond Burst Network's off-the-shelf
vertical packages to request custom packages of web sites designed exclusively
to help them reach their unique audiences. Burst developed its adConductor
technology from the beginning to facilitate these kinds of custom opportunities,
so it has been able to support and encourage the growing pipeline of requests.
So far this year, the Network sales team has proposed over 300 custom network
packages, which have begun to dominate traditional, run of network business as a
share of total orders and revenues.
Custom network packages from brand advertisers are typically small higher priced
programs. This has been the biggest change to the Burst Network's advertising
sales profile. As advertisers gain confidence with our ability to reach their
target audiences and successfully deliver their messages across numerous niche
web sites, management believes the size and number of the ad programs will grow.
Sales force staffing in the Burst Network remained stable in the first half and
the Company believes it now benefits from a seasoned team with strong customer
relationships in all the geographic markets it serves.
Burst Direct's progress in the direct response, performance advertising segment
of the market has been substantially enhanced by its Cost Per Action (CPA)
program, begun in the second half of last year. CPA was particularly
advantageous in the first quarter of 2009 as a way to keep customers engaged
when the shrinking economy was having its most profound effect on advertising
budgets. Through the first half, CPA revenue grew from $43,000 in 2008 to over
$800,000 in 2009.
Also contributing to Burst Direct's growth in the first half was the "Feed"
business. After several months of testing, the Company has established
relationships with key third-party ad networks and exchanges. These
relationships give Burst Direct access to advertising that it can direct to web
sites represented by both Burst Direct and Burst Network and to other customers
of its adConductor Inventory Exchange on a shared revenue or purchased inventory
basis.
While the Burst Direct business has grown substantially in the first half of
2009, management believes growth could be far better with stronger Cost Per
Thousand ("CPM") results. Management expects that as the advertising economy
strengthens over the second half of 2009, Direct's CPM business will join the
CPA and "Feed" businesses as drivers of this high growth media business.
Burst Direct was associated with approximately 2,900 websites as of 30 June 2009
(30 June 2008: 4,100)(2). This decline in the number of web sites was due to
inactivation of sites not sending sufficient traffic to the network to warrant a
continued relationship. Additionally, through its purchased inventory program
Burst Direct secures additional inventory from 44 strategic suppliers to support
the performance requirements of its clients' campaigns.
adConductor
adConductor provides customers with comprehensive, cutting-edge tools for the
management of complex ad networks. The business commenced the first quarter of
2009 with three new customer wins, including Wolters Kluwer, and added a fourth
in the second quarter. Despite this adConductor business slowed towards the end
of the first half. Management believes, that this is a result of customers and
prospects, affected by the poor advertising economy, postponing decisions about
implementing the sort of proprietary ad networks that adConductor would enable
for them.
This added to the year-over-year absence of the TACODA business that was
cancelled after AOL acquired the company in 2007, resulted in first half
adConductor revenue of $1.3 million (2008: $2.7 million). That said, revenue
from adConductor customers other than TACODA increased year-over-year by 70%,
which management believes signals ability for the business to return to higher
growth patterns as broader economic conditions improve.
During the first half of 2009, we have continued to make substantial investments
in the adConductor technology platform, focused on significantly enhancing its
user interfaces. Some of those improvements have been introduced to customers
and we expect additional launches in the second half.
(2) Inclusive of approximately 1,900 and 2,000 web sites that are in both Burst
Network and Burst Direct as of 30 June 2009 and 2008, respectively.
Marketing
Taking advantage of a trade communications environment that is noticeably
quieter, the Company has invested in advertising and public relations to support
its image and awareness in the U.S. market. The Company purchased a total of ten
weeks of advertising over the course of the first half of 2009, targeting
advertisers, online media planning professionals, and ad management technology
buyers. The Company's PR efforts resulted in over 1,300 mentions in the press
and its media blog, covering Internet related issues, is regularly picked-up and
featured elsewhere online, including the Huffington Post, the largest news blog
on the Internet.These efforts are continuing in the second half of 2009.
The Company re-launched its corporate web site in the first half, a significant
undertaking completed entirely in-house. The new web site, www.burstmedia.com,
showcases the Company's deep roots in the Long Tail of the Internet, where it is
an acknowledged leader at representing and supporting vertical niche content and
the audiences it serves.
Giant Realm
On 11 September 2009, the Company entered into a letter of intent to purchase
the business and assets of Giant Realm, Inc., for a consideration of $2.1
million in cash and the issue to the vendors of 2.5 million new Burst common
shares. Giant Realm is one of the largest video game networks in the U.S. with
exclusive relationships with a number of well-known, high traffic game
enthusiast web sites. Giant Realm's traffic is focused on the valuable, but hard
to reach, 18-34 year old male demographic. As part of the acquisition Burst will
be acquiring Giant Realm's proprietary video and content management technology
that has application to all of Burst's publisher relationships. If completed,
the acquisition of Giant Realm is expected to add revenue and scale to Burst and
enhance earnings in the year ending 31 December 2010.The acquisition is subject
to due diligence and the satisfaction of certain conditions and is expected to
close by mid-October. Further announcements will be made in due course.
Outlook
The shadow of recession still hangs over the Internet advertising sector making
visibility difficult. Advertisers are reluctant to commit to advance purchases
greater than two or three months and withhold orders until very near deadlines.
Management believes these conditions will persist until the weight of an
uncertain global economy is lifted.
Despite the uncertainty, the Company feels extremely positive about its current
prospects, particularly within its media businesses. The media sales groups
achieved good results in the second quarter and, allowing for some seasonality,
that trend has continued into the third quarter. The Burst Network, especially,
has experienced a long awaited renewal around its core brand value proposition.
Direct is buoyed by the take-off of its new products, CPA and third-party Feeds.
On 11 September 2009, the Company entered into a letter of intent to purchase
the business and assets of Giant Realm, Inc., for a consideration of $2.1
million in cash and the issue to the vendors of 2.5 million new Burst common
shares. Giant Realm is one of the largest video game networks in the U.S. with
exclusive relationships with a number of well-known, high traffic game
enthusiast web sites. Giant Realm's traffic is focused on the valuable, but hard
to reach, 18-34 year old male demographic. As part of the acquisition Burst will
be acquiring Giant Realm's proprietary video and content management technology
that has application to all of Burst's publisher relationships. The acquisition
is subject to due diligence and formal documentation and is expected to close by
mid-October.
The Company looks forward to executing its plan under the improving economic
circumstances anticipated in the second half of the year. Full year results are
anticipated to be in line with expectations.
Jarvis Coffin
Chief Executive Officer
24 September 2009
Burst Media Corporation and Subsidiary
Consolidated Balance Sheets
(in thousands, except share amounts)
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | June | | June | | December |
| | 30, | | 30, | | 31, |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | 2009 | | 2008 | | 2008 |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | (Unaudited) | | (Unaudited) | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| ASSETS | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| CURRENT | | | | | |
| ASSETS | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Cash | $9,425 | | $11,070 | | $10,599 |
| and | | | | | |
| cash | | | | | |
| equivalents | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Accounts | | | | | |
| receivable, | | | | | |
| less | | | | | |
| allowance | | | | | |
| for | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| doubtful | | | | | |
| accounts | | | | | |
| of $174, | | | | | |
| $240 and | | | | | |
| $222, | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| respectively | 6,998 | | 6,209 | | 7,141 |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Prepaid | 1,395 | | 610 | | 927 |
| expenses | | | | | |
| and | | | | | |
| other | | | | | |
| current | | | | | |
| assets | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Total | 17,818 | | 17,889 | | 18,667 |
| current | | | | | |
| assets | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| PROPERTY | 2,148 | | 994 | | 1,638 |
| AND | | | | | |
| EQUIPMENT, | | | | | |
| NET | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| DEFERRED | ? | | 335 | | ? |
| INCOME | | | | | |
| TAXES, | | | | | |
| NET | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| OTHER | 150 | | 154 | | 152 |
| ASSETS | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | $20,116 | | $19,372 | | $20,457 |
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| LIABILITIES | | | | | |
| AND | | | | | |
| STOCKHOLDERS' | | | | | |
| EQUITY | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| CURRENT | | | | | |
| LIABILITIES | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Due | $2,989 | | $2,161 | | $2,370 |
| to | | | | | |
| publishers | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Other | 1,651 | | 992 | | 1,512 |
| current | | | | | |
| liabilities | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Total | 4,640 | | 3,153 | | 3,882 |
| current | | | | | |
| liabilities | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| OTHER | 411 | | 117 | | 175 |
| LONG | | | | | |
| TERM | | | | | |
| LIABILITIES | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Total | 5,051 | | 3,270 | | 4,057 |
| liabilities | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| STOCKHOLDERS' | | | | | |
| EQUITY | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Common | | | | | |
| stock, | | | | | |
| $0.01 | | | | | |
| par | | | | | |
| value: | | | | | |
| 150,000,000 | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| shares | | | | | |
| authorized; | | | | | |
| 70,628,562 | | | | | |
| shares at | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| June | | | | | |
| 30, | | | | | |
| 2009 | | | | | |
| and | | | | | |
| 83,028,562 | | | | | |
| shares at | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| June | 706 | | 830 | | 830 |
| 30, | | | | | |
| 2008 | | | | | |
| and | | | | | |
| December | | | | | |
| 31, 2008 | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Additional | 25,192 | | 25,485 | | 25,658 |
| paid-in | | | | | |
| capital | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Accumulated | (10,833) | | (10,213) | | (10,088) |
| deficit | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| Total | 15,065 | | 16,102 | | 16,400 |
| stockholders' | | | | | |
| equity | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
| | $20,116 | | $19,372 | | $20,457 |
| | | | | | |
+------------------------------------------+-------------+--------+-------------+--------+----------+
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 | | June | | December |
| | 30 | | 30 | | 31 |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | 2009 | | 2008 | | 2008 |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | (Unaudited) | | (Unaudited) | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Revenue | $12,100 | | $13,413 | | $27,257 |
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Cost | 6,294 | | 7,130 | | 14,258 |
| of | | | | | |
| revenue | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Gross | 5,806 | | 6,283 | | 12,999 |
| profit | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Operating | | | | | |
| expenses: | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Sales | 3,874 | | 3,676 | | 7,547 |
| and | | | | | |
| marketing | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| General | 1,665 | | 1,910 | | 3,358 |
| and | | | | | |
| administrative | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Technology | 1,337 | | 1,405 | | 2,471 |
| and | | | | | |
| product | | | | | |
| development | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Total | 6,876 | | 6,991 | | 13,376 |
| operating | | | | | |
| expenses | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Loss | (1,070) | | (708) | | (377) |
| from | | | | | |
| operations | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Other | | | | | |
| income: | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Interest | 40 | | 145 | | 239 |
| income | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Other | 39 | | 13 | | (63) |
| income | | | | | |
| (expense), | | | | | |
| net | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Total | 79 | | 158 | | 176 |
| other | | | | | |
| income | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Net | | | | | |
| loss | | | | | |
| before | | | | | |
| income | | | | | |
| tax | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| expense | (991) | | (550) | | (201) |
| (benefit) | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Income | (246) | | (151) | | 73 |
| tax | | | | | |
| expense | | | | | |
| (benefit) | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Net | $(745) | | $(399) | | $(274) |
| loss | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Basic | $0.00 | | $0.00 | | $0.00 |
| and | | | | | |
| diluted | | | | | |
| loss | | | | | |
| per | | | | | |
| share | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Weighted | | | | | |
| average | | | | | |
| shares | | | | | |
| used in | | | | | |
| calculating: | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| Basic | 73,790,993 | | 83,028,562 | | 83,028,562 |
| and | | | | | |
| fully | | | | | |
| diluted | | | | | |
| loss | | | | | |
| per | | | | | |
| share | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+--------------------------------------+-------------+--------+-------------+--------+-------------+
See notes to consolidated interim financial statements.
Burst Media Corporation and Subsidiary
Statements of Stockholders' Equity
(in thousands, except share amounts)
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
| | Common stock | | Additional | | Accumulated | | Total |
| | | | | | | | stockholders' |
| | | | paid-in | | | | |
+-----------------------+--------------------------------+--------+------------+--------+-------------+--------+---------------+
| | Shares | | Amount | | capital | | deficit | | equity |
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
| Balance | 83,028,562 | | $830 | | $25,466 | | $(9,814) | | $16,482 |
| at | | | | | | | | | |
| December | | | | | | | | | |
| 31, 2007 | | | | | | | | | |
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
| Net | - | | - | | - | | (274) | | (274) |
| loss | | | | | | | | | |
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
| Amortization | | | - | | 192 | | - | | 192 |
| of | - | | | | | | | | |
| equity-based | | | | | | | | | |
| compensation | | | | | | | | | |
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
| Balance | 83,028,562 | | 830 | | 25,658 | | (10,088) | | 16,400 |
| at | | | | | | | | | |
| December | | | | | | | | | |
| 31, 2008 | | | | | | | | | |
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
| Net | - | | - | | - | | (745) | | (745) |
| loss | | | | | | | | | |
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
| Repurchase | (12,400,000) | | (124) | | (625) | | - | | (749) |
| and | | | | | | | | | |
| cancellation | | | | | | | | | |
| of | | | | | | | | | |
| common stock | | | | | | | | | |
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
| Amortization | - | | - | | 159 | | - | | 159 |
| of | | | | | | | | | |
| equity-based | | | | | | | | | |
| | | | | | | | | | |
| compensation | | | | | | | | | |
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
| Balance | 70,628,562 | | $ | | $25,192 | | $(10,833) | | $ |
| at June | | | 706 | | | | | | 15,065 |
| 30, | | | | | | | | | |
| 2009 | | | | | | | | | |
| (unaudited) | | | | | | | | | |
+-----------------------+--------------+--------+--------+--------+------------+--------+-------------+--------+---------------+
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 | | June | | December |
| | 30, | | 30, | | 31, |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| | 2009 | | 2008 | | 2008 |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| | (Unaudited) | | (Unaudited) | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| CASH | | | | | |
| FLOWS | | | | | |
| FROM | | | | | |
| OPERATING | | | | | |
| ACTIVITIES | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Net | $(745) | | $(399) | | $(274) |
| loss. | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Adjustments | | | | | |
| to | | | | | |
| reconcile | | | | | |
| net loss to | | | | | |
| net | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| cash | | | | | |
| provided | | | | | |
| by (used | | | | | |
| in) | | | | | |
| operating | | | | | |
| activities: | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Depreciation | 227 | | 225 | | 466 |
| and | | | | | |
| amortization | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Deferred | (263) | | (40) | | 280 |
| income | | | | | |
| taxes | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Equity-based | 159 | | 23 | | 192 |
| compensation | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Unrealized | 3 | | | | 83 |
| foreign | | | | | |
| currency | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Provision | 32 | | 60 | | 26 |
| for bad | | | | | |
| debts | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Deferred | 3 | | 13 | | 22 |
| rent | | | | | |
| expense | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Changes | | | | | |
| in: | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Accounts | 108 | | (417) | | (1,398) |
| receivable | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Prepaid | 28 | | (148) | | (401) |
| expenses | | | | | |
| and | | | | | |
| other | | | | | |
| current | | | | | |
| assets | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Other | ? | | 62 | | 4 |
| assets | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Due | 619 | | (293) | | (84) |
| to | | | | | |
| publishers | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Other | 139 | | (212) | | 308 |
| current | | | | | |
| liabilities | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Net | | | | | |
| cash | | | | | |
| provided | | | | | |
| by (used | | | | | |
| in) | | | | | |
| operating | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| activities | 310 | | (1,126) | | (776) |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| CASH | | | | | |
| FLOWS | | | | | |
| FROM | | | | | |
| INVESTING | | | | | |
| ACTIVITIES | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Purchases | (735) | | (387) | | (1,270) |
| of | | | | | |
| property | | | | | |
| and | | | | | |
| equipment | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Return | ? | | ? | | 62 |
| of | | | | | |
| escrow | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Net | (735) | | (387) | | (1,208) |
| cash | | | | | |
| used | | | | | |
| in | | | | | |
| investing | | | | | |
| activities | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| CASH | | | | | |
| FLOWS | | | | | |
| FROM | | | | | |
| FINANCING | | | | | |
| ACTIVITIES | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Repurchase | (749) | | ? | | ? |
| common | | | | | |
| stock | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| Net | (749) | | ? | | ? |
| cash | | | | | |
| used | | | | | |
| in | | | | | |
| financing | | | | | |
| activities | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| NET DECREASE | | | | | |
| IN CASH AND | | | | | |
| CASH | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| EQUIVALENTS | (1,174) | | (1,513) | | (1,984) |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| CASH | | | | | |
| AND | | | | | |
| CASH | | | | | |
| EQUIVALENTS, | | | | | |
| BEGINNING | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| OF | 10,599 | | 12,583 | | 12,583 |
| PERIOD | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| CASH | | | | | |
| AND | | | | | |
| CASH | | | | | |
| EQUIVALENTS, | | | | | |
| END OF | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
| PERIOD | $9,425 | | $11,070 | | $10,599 |
| | | | | | |
+---------------------------------------------------------+-------------+--------+-------------+--------+----------+
+--------------------------+--------+--------+--------+--------+--------+
| SUPPLEMENTAL | | | | | |
| DISCLOSURE | | | | | |
| OF CASH | | | | | |
+--------------------------+--------+--------+--------+--------+--------+
| FLOW | | | | | |
| INFORMATION | | | | | |
+--------------------------+--------+--------+--------+--------+--------+
| Cash | $24 | | $ | | $ |
| paid | | | 64 | | 67 |
| for | | | | | |
| income | | | | | |
| taxes | | | | | |
+--------------------------+--------+--------+--------+--------+--------+
See notes to consolidated interim financial statements.
Burst Media Corporation and Subsidiary
Notes to Consolidated Interim Financial Statements (unaudited)
(in thousands except share amounts and web sites)
1. Description of the Company and Significant Accounting Policies
Description of the Company
Burst Media Corporation together with its subsidiary ("Burst" or "the Company")
is a provider of comprehensive Internet advertising solutions focused on
supporting the interests of specialty content web publishers and advertisers.
The Company delivers advertising campaigns for its customers through a network
of approximately 5,700 specialty content web sites at June 30, 2009. The Company
has advertising servers in three locations in the U.S. (Massachusetts, Virginia,
and Colorado) and one location in Europe (Amsterdam).
The Company's products and services utilize adConductor(TM), a comprehensive ad
management solution, developed by the Company. adConductor is a leading partner
for media companies to connect marketers with audiences and grow their business
beyond existing boundaries. adConductor offers online media properties with an
end-to-end ad network building and management solution that provides a
consolidated system to manage web sites and affiliates. The Company provides its
adConductor technology to customers as an application service provider.
The corporate headquarters is located in Burlington, Massachusetts. The
Company's wholly-owned subsidiary, BURST! Media UK Limited, was organized 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 note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
in the United States of America have been 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, 2008.
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 in consolidation.
Reclassifications
Certain previously reported amounts have been reclassified to conform to the
current period presentation.
Foreign Currency
The financial accounts of BURST! Media UK Limited are measured using the local
currency as its functional currency. The assets and liabilities of this
subsidiary are 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. The cumulative effects of translating the functional
currency into U.S. dollars are insignificant at June 30, 2009, June 30, 2008 and
December 31 2008.
The Company also conducts certain transactions denominated in foreign
currencies. Included in other income (expense), net were realized foreign
currency gains (losses) of $22, $3 and ($12), for the six month periods ended
June 30, 2009 and 2008 and for the year ended December 31, 2008, respectively.
Also included in other income (expense), net were unrealized foreign currency
gains (losses) of $3, ($2) and ($82), for the six-month periods ended June 30,
2009 and 2008 and for the year ended December 31, 2008, respectively.
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 the Company's advertising networks. 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 web
publishers, which have contracted with the Company to be part of its networks,
as advertising campaigns are delivered. The Company records its obligation to
web publishers based upon a contractually determined percentage of revenue in
each advertising campaign and these expenses are classified as cost of revenues.
AdConductor(TM) Application Revenue
All of the Company's products and services are enabled by the Company's
proprietary suite of software products. The Company provides its adConductor
technology to customers as an application service provider. The Company
contracts with its customers for minimum fees based upon projected usage.
Amounts due from customers are based on actual usage in the event usage exceeds
the minimum fees due. Revenue from adConductor application agreements is
recognized on a subscription basis rateably over the term of the customer
contract.
Internal Use Software Development Costs
Included in property and equipment are certain costs related to computer
software developed or obtained for internal use are capitalized in accordance
with American Institute of Certified Public Accountants Statement of Position
No. 98-1, "Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use." The Company amortizes internal use software costs over their
estimated useful lives, which typically range from two to five years. The
Company capitalized software developments costs of $602, $151, and $954 for the
six month periods ended June 30, 2009, 2008 and for the year ended December 31,
2008, respectively. There was no amortization expense related to internal use
software development costs for the six month periods ended June 30, 2009 and
2008 and for the year ended December 31, 2008 as the product has not yet been
placed in service.
Equity-Based Compensation
The Company accounts for stock-based compensation in accordance with SFAS No.
123(R), "Share-Based Payment." Under the fair value recognition provisions of
this statement, share-based compensation cost is measured at the grant date
based on the fair value of the award and is recognized as expense over the
applicable vesting period of the stock award (generally four years) using the
straight-line method
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 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.
Earnings per Share
In accordance with SFAS No. 128, "Earnings Per Share," basic net loss per share
is computed by dividing net loss by the weighted average number of shares of
common stock outstanding during the period. Diluted loss per share is computed
by dividing net loss by the shares used in the calculation of basic 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 net loss per share if their effect is
antidilutive.
2. Repurchase of Common Stock
On January 20, 2009, the Board of Directors authorized the Company to repurchase
and cancel common stock ("Burst shares") with an aggregate market value of up to
approximately $500,000. On January 21, 2009 the Company purchased and cancelled
a total of 9,800,000 Burst Shares at a price of 3.6 pence (approximately
US$0.05) per share at a total cost of $507,000. Upon repurchase, all Burst
shares were immediately cancelled.
On April 29, 2009, the Board of Directors authorized the Company to repurchase
and cancel Burst shares with an aggregate market value of up to approximately
$500,000. On May 6, 2009, the Company purchased and cancelled a total of
2,600,000 Burst Shares at a price of 5.9 pence (approximately US$0.09) per share
at a total cost of $241,000. Upon repurchase, all Burst shares were immediately
cancelled.
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 date of the
Company's initial public offering in 2006. These option grants included
conversion of former promissory options that were provided to individuals prior
to the Company's incorporation as a C Corporation. 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 five 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 fair value of options in both Plans, including
the effect of estimated forfeitures, is recognized over the options' vesting
periods.
Stock option activity for the six month periods ended June 30 2009 and 2008 and
for the year ended December 31, 2008 is summarized as follows:
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
| | Six months ended | | Six months ended | | Year ended |
+----------------------------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | June 30, 2009 | | June 30, 2008 | | December 31, 2008 |
+----------------------------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | (Unaudited) | | (Unaudited) | | |
+----------------------------+--------------------------------+--------+--------------------------------+--------+---------------------------------+
| | Number | | Weighted | | Number | | Weighted | | Number | | Weighted |
| | | | Average | | of | | Average | | of | | Average |
| | of | | Exercise | | Shares | | Exercise | | Shares | | Exercise |
| | Shares | | Price | | | | Price | | | | Price |
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
| Beginning | 3,306,705 | | $0.51 | | 3,434,705 | | $0.59 | | 3,434,705 | | $0.59 |
| balance | | | | | | | | | | | |
| outstanding | | | | | | | | | | | |
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
| Granted | 1,367,750 | | $0.11 | | 840,000 | | $0.16 | | 965,000 | | $0.15 |
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
| Cancelled/expired | (217,500) | | $0.38 | | (653,500) | | $0.47 | | (1,093,000) | | $0.43 |
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
| Ending | 4,456,955 | | $0.40 | | 3,621,205 | | $0.51 | | 3,306,705 | | $0.51 |
| balance | | | | | | | | | | | |
| outstanding | | | | | | | | | | | |
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
| | | | | | | | | | | | |
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
| Options | 1,161,256 | | $0.72 | | 822,701 | | $0.76 | | 520,327 | | $0.95 |
| exercisable | | | | | | | | | | | |
| at year end | | | | | | | | | | | |
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
| Options | 4,782,441 | | | | 5,878,941 | | | | 5,953,941 | | |
| available | | | | | | | | | | | |
| for grant | | | | | | | | | | | |
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
| Weighted | 7.3 | | | | 6.7 | | | | 6.8 | | |
| average | | | | | | | | | | | |
| remaining | | | | | | | | | | | |
| contractual | | | | | | | | | | | |
| life | | | | | | | | | | | |
+----------------------------+------------+--------+----------+--------+------------+--------+----------+--------+-------------+--------+----------+
There were no remaining options available for future grants under the IPO Plan
at June 30, 2009, June 30, 2008 and December 31, 2009. The weighted average
grant date fair value of options granted during the six month periods ended June
30, 2009 and 2008 and during the year ended December 31, 2009 were $0.07, $0.09
and $0.09, respectively.
New shares of Common stock are issued as required to meet option exercises.
There were no options exercised during the six-month periods ended June 30, 2009
and 2008 or during the year ended December 31, 2008. The aggregate intrinsic
value of options outstanding at June 30, 2009 and June 30, 2008 were $1 and $5,
respectively. There were no options outstanding with an aggregate intrinsic
value at December 31, 2008.
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 | | June | | December |
| | 30 | | 30 | | 31 |
+------------+-------------+--------+-------------+--------+----------+
| | 2009 | | 2008 | | 2008 |
+------------+-------------+--------+-------------+--------+----------+
| | (Unaudited) | | (Unaudited) | | |
+------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| Expected | 0% | | 0% | | 0% |
| dividend | | | | | |
| yield | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| Expected | 10% | | 10% | | 10% |
| forfeiture | | | | | |
| rate | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| Expected | 65% | | 60% | | 60% |
| stock | | | | | |
| price | | | | | |
| volatility | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| Risk-free | 2.53% | | 3.13% | | 3.10% |
| interest | | | | | |
| rate | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| Expected | 6.25 | | 6.25 | | 6.25 |
| option | | | | | |
| life in | | | | | |
| years | | | | | |
+------------+-------------+--------+-------------+--------+----------+
No dividend yield is expected since the Company has never paid cash dividends
and has no present intention to pay cash dividends. The expected forfeiture rate
was based on the Company's historical experience with pre-vesting option
cancellations. The expected stock price 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. The expected option
life is based on observed and expected time to post-vesting exercise and
forfeitures of options by the Company's employees.
Equity-based compensation expense for the six-month period ended June 30, 2008
and for the year ended December 31, 2008 is net of a cumulative pre-tax
adjustment, reducing the expense by $64 as a result of a change to the estimated
forfeiture rate for unvested stock option awards.
For the six month periods ended June 30, 2009 and 2008 and for the year ended
December 31, 2008, pre-tax equity-based compensation expense affected the
results of operations as follows:
+-------------------------------------+-------------+--+-------------+--+-------------+
| | Six Months Ended | | Year Ended |
+-------------------------------------+------------------------------+--+-------------+
| | June 30 | | June 30 | | December 31 |
+-------------------------------------+-------------+--+-------------+--+-------------+
| | 2009 | | 2008 | | 2008 |
+-------------------------------------+-------------+--+-------------+--+-------------+
| | (Unaudited) | | (Unaudited) | | |
+-------------------------------------+-------------+--+-------------+--+-------------+
| | | | | | |
+-------------------------------------+-------------+--+-------------+--+-------------+
| Net loss before income tax expense | $(159) | | $(23) | | $(192) |
| (benefit) | | | | | |
+-------------------------------------+-------------+--+-------------+--+-------------+
| Income tax expense (benefit) | 67 | | 10 | | 81 |
+-------------------------------------+-------------+--+-------------+--+-------------+
| Net loss | $(92) | | $(13) | | $(111) |
+-------------------------------------+-------------+--+-------------+--+-------------+
| | | | | | |
+-------------------------------------+-------------+--+-------------+--+-------------+
| Basic and fully diluted loss per | $0.00 | | $0.00 | | $0.00 |
| share | | | | | |
+-------------------------------------+-------------+--+-------------+--+-------------+
At June 30, 2009, June 30, 2008 and December 31, 2008, unrecognized compensation
costs relating to unvested equity-based compensation was $363,000, $568,000 and
$432,000, respectively. The Company expects to recognize the cost of these
unvested awards over a weighted-average period of 2.1 years.
The following summarizes the categorization of equity-based compensation
expense for the six-month periods ended June 30, 2009 and 2008 and for the year
ended December 31, 2008:
+----------------+-------------+--------+-------------+--------+----------+
| | Six Months Ended | | Year |
| | | | Ended |
+----------------+------------------------------------+--------+----------+
| | June | | June | | December |
| | 30 | | 30 | | 31 |
+----------------+-------------+--------+-------------+--------+----------+
| | 2009 | | 2008 | | 2008 |
+----------------+-------------+--------+-------------+--------+----------+
| | (Unaudited) | | (Unaudited) | | |
+----------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+----------------+-------------+--------+-------------+--------+----------+
| Sales | $38 | | $4 | | $54 |
| and | | | | | |
| marketing | | | | | |
+----------------+-------------+--------+-------------+--------+----------+
| General | 62 | | 3 | | 67 |
| and | | | | | |
| administrative | | | | | |
+----------------+-------------+--------+-------------+--------+----------+
| Technology | 59 | | 16 | | 71 |
| and | | | | | |
| product | | | | | |
| development | | | | | |
+----------------+-------------+--------+-------------+--------+----------+
| Total | $159 | | $23 | | $192 |
+----------------+-------------+--------+-------------+--------+----------+
4. Loss Per Share
Basic and diluted loss per share were calculated as follows:
+----------------------+-------------+--------+-------------+--------+-------------+
| | Six Months Ended | | Year |
| | | | Ended |
+----------------------+------------------------------------+--------+-------------+
| | June | | June | | December |
| | 30 | | 30 | | 31 |
+----------------------+-------------+--------+-------------+--------+-------------+
| | 2009 | | 2008 | | 2008 |
+----------------------+-------------+--------+-------------+--------+-------------+
| | (Unaudited) | | (Unaudited) | | |
+----------------------+-------------+--------+-------------+--------+-------------+
| Numerator: | | | | | |
+----------------------+-------------+--------+-------------+--------+-------------+
| Net | $(745) | | $(399) | | $(274) |
| loss | | | | | |
| used | | | | | |
| in | | | | | |
| calculating | | | | | |
| basic | | | | | |
| and diluted | | | | | |
| loss per | | | | | |
| share | | | | | |
+----------------------+-------------+--------+-------------+--------+-------------+
| | | | | | |
+----------------------+-------------+--------+-------------+--------+-------------+
| Denominator: | | | | | |
+----------------------+-------------+--------+-------------+--------+-------------+
| Weighted | | | 83,028,562 | | 83,028,562 |
| average | 73,790,993 | | | | |
| number | | | | | |
| of | | | | | |
| common | | | | | |
| Shares | | | | | |
| outstanding | | | | | |
+----------------------+-------------+--------+-------------+--------+-------------+
| Effect | - | | - | | - |
| of | | | | | |
| dilutive | | | | | |
| securities | | | | | |
| - stock | | | | | |
| options | | | | | |
+----------------------+-------------+--------+-------------+--------+-------------+
| Shares | | | | | 83,028,562 |
| used | 73,790.993 | | 83,028,562 | | |
| in | | | | | |
| calculating | | | | | |
| fully | | | | | |
| diluted | | | | | |
| loss per | | | | | |
| share | | | | | |
+----------------------+-------------+--------+-------------+--------+-------------+
Antidilutive stock options outstanding were 4,456,955, 3,621,205 and 3,306,705
at June 30, 2009, June 30, 2008 and December 31, 2008, respectively.
5. Commitments and Contingencies
In January 2009, the Company terminated its financial advisory and investment
banking services agreement with Portico Capital Securities ("Portico"). Portico
had been hired in December 2007 to evaluate strategic alternatives. The
agreement with Portico provides that should the Company execute a definitive
agreement, within twelve months of the termination date, to sell the Company,
the Company would be required to pay a transaction fee to Portico of $1 million
plus an escalating transaction fee for any transaction value received above $45
million.
6. Income Taxes
The components of net loss before income tax expense (benefit) and of income tax
expense (benefit) for the six month periods ended June 30, 2009 and 2008 and for
the year ended December 31, 2008 were as follows:
+------------+-------------+--------+-------------+--------+----------+
| | Six Months Ended | | Year |
| | | | Ended |
+------------+------------------------------------+--------+----------+
| | June | | June | | December |
| | 30 | | 30 | | 31 |
+------------+-------------+--------+-------------+--------+----------+
| | 2009 | | 2008 | | 2008 |
+------------+-------------+--------+-------------+--------+----------+
| | (Unaudited) | | (Unaudited) | | |
+------------+-------------+--------+-------------+--------+----------+
| Net | | | | | |
| loss | | | | | |
| before | | | | | |
| income | | | | | |
| tax | | | | | |
| expense | | | | | |
| (benefit): | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | $(1,004) | | $(580) | | $(235) |
| Domestic | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | 13 | | 30 | | 34 |
| Foreign | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| Net | $(991) | | $(550) | | $(201) |
| loss | | | | | |
| before | | | | | |
| income | | | | | |
| tax | | | | | |
| expense | | | | | |
| (benefit) | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| Income | | | | | |
| tax | | | | | |
| expense | | | | | |
| (benefit): | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | | | | | |
| Current: | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | $- | | $ | | $ |
| Federal | | | (109) | | (233) |
+------------+-------------+--------+-------------+--------+----------+
| | 17 | | (8) | | 33 |
| State | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | - | | 6 | | (7) |
| Foreign | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | 17 | | (111) | | (207) |
| Subtotal | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| Deferred: | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | (245) | | (40) | | 277 |
| Federal | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | (18) | | - | | 3 |
| State | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| | (263) | | (40) | | 280 |
| Subtotal | | | | | |
+------------+-------------+--------+-------------+--------+----------+
| Total | $(246) | | $ | | $ |
| income | | | (151) | | 73 |
| tax | | | | | |
| expense | | | | | |
| (benefit) | | | | | |
+------------+-------------+--------+-------------+--------+----------+
Deferred tax assets and liabilities:
Deferred tax assets and liabilities are comprised of the following:
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| | Six Months Ended | | Year Ended |
+-------------------------------------------------------+------------------------------+--+-------------+
| | June 30 | | June 30 | | December |
| | | | | | 31 |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| | 2009 | | 2008 | | 2008 |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| | (Unaudited) | | (Unaudited) | | |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| | | | | | |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Current deferred tax assets | | | | | |
| (liabilities): | | | | | |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Allowance for doubtful accounts | $73 | | $101 | | $ 94 |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Federal NOL | 454 | | - | | $- |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| State NOL | 113 | | - | | $ 53 |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Vacation accrual | 90 | | 68 | | 52 |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Unrealized foreign currency | (1) | | 1 | | 35 |
| translation | | | | | |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Net current deferred tax assets | 729 | | 170 | | 234 |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| | | | | | |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Non-current deferred tax assets | | | | | |
| (liabilities): | | | | | |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Equity-based compensation | $369 | | $326 | | $369 |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Deferred rent | 54 | | 49 | | 52 |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Internal use software development | (653) | | - | | (400) |
| costs | | | | | |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Depreciation and amortization | (51) | | (40) | | (70) |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
| Net | (281) | | 335 | | (49) |
| non-current | | | | | |
| deferred | | | | | |
| tax assets | | | | | |
| (liabilities) | | | | | |
+-------------------------------------------------------+-------------+--+-------------+--+-------------+
The net current deferred tax assets totalled $729, $170 and $234 at June 30,
2009, 2008 and December 31, 2008 are included in prepaid expenses and other
current assets. The net non-current deferred tax liabilities totalled $281 and
$49 at June 30, 2009 and December 31, 2008 are included in other long term
liabilities, while net non-current deferred tax assets totalled $335 at June 30,
2008 are included in other assets.
In assessing the realizability of the Company's deferred tax assets, 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.
7. New Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS No. 157 established a common definition for fair value to
be applied to U.S. GAAP guidance requiring use of fair value, established a
framework for measuring fair value, and expanded disclosure about such fair
value measurements. SFAS No. 157 became effective for the Company's financial
assets and liabilities on January 1, 2008. Certain provisions of SFAS No. 157
relating to the Company's nonfinancial assets and liabilities became effective
January 1, 2009. The implementation of SFAS No. 157 does not materially affect
the Company's interim financial statements.
SFAS No. 157 establishes a hierarchy for ranking the quality and reliability of
the information used to determine fair values. SFAS No. 157 requires that assets
and liabilities carried at fair value be classified and disclosed in one of the
following three categories:
+--------+--------------+
| Level | Unadjusted |
| 1 | quoted |
| | market |
| | prices in |
| | active |
| | markets |
| | for |
| | identical |
| | assets or |
| | liabilities. |
| | |
+--------+--------------+
| Level | Unadjusted |
| 2 | quoted |
| | prices in |
| | active |
| | markets |
| | for |
| | similar |
| | assets or |
| | liabilities, |
| | unadjusted |
| | quoted |
| | prices for |
| | identical or |
| | similar |
| | assets or |
| | liabilities |
| | in markets |
| | that are not |
| | active, or |
| | inputs other |
| | than quoted |
| | prices are |
| | observable |
| | for the |
| | asset or |
| | liability. |
| | |
+--------+--------------+
| Level | Unobservable |
| 3 | inputs for |
| | the asset or |
| | liability. |
| | |
+--------+--------------+
The Company endeavours to utilize the best available information in measuring
fair value. Financial assets and liabilities are classified based on the lowest
level of input that is significant to the fair value measurement. The following
methods and assumptions were used by the Company in estimating its fair value
disclosures for financial instruments:
Cash and Cash Equivalents - The carrying amount reported in the balance sheet
for cash and cash equivalents approximates its fair value due to the short-term
maturity of these instruments.
In May 2009, the FASB issued SFAS No. 165 - "Subsequent Events" ("SFAS No.
165"). SFAS No. 165 establishes the accounting for and disclosure of events that
occur after the balance sheet date but before financial statements are issued or
are available to be issued. It requires the disclosure of the date through which
an entity has evaluated subsequent events and the basis for that date, that is,
whether that date represents the date the financial statements were issued or
were available to be issued. SFAS No. 165 is effective for interim and annual
periods ending after June 15, 2009. SFAS No. 165 requires additional disclosures
only, and therefore did not have an impact on the Company's financial position,
results of operations or cash flows. We have evaluated subsequent events through
September 24, 2009, the date we have issued this interim financial information.
In June 2009, the FASB issued SFAS No. 168 - "The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles-a
replacement of FASB Statement No. 162" ("SFAS No. 168"). SFAS No. 168 replaces
SFAS No. 162 - "The Hierarchy of Generally Accepted Accounting Principles" and
identifies the sources of accounting principles and the framework for selecting
the principles used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with GAAP in the
United States. SFAS No. 168 will become effective for financial statements
issued for interim and annual periods ending after September 24, 2009. The
Company does not expect the adoption of SFAS No. 168 to have any material impact
on its financial statements.
8. Subsequent Events
On September 11, 2009 the Company signed a letter of intent to acquire, in
principle, certain of the assets of Giant Realm, Inc., an online video game
advertising network. The consideration for the acquisition, which is subject to
due diligence and the satisfaction of certain conditions, is expected to be
approximately $2.1 million in cash and 2.5 million shares of Burst common stock.
The Company expects the transaction to close by mid-October 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UOVWRKNRKUAR
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