Nevada
(State
or other jurisdiction of incorporation or organization)
|
85-0206668
(IRS
Employer Identification No.)
|
2490
East Sunset Road, Suite 100
Las
Vegas, Nevada
(Address
of principal executive offices)
|
89120
(Zip
Code)
|
Large
accelerated filer o
|
Accelerated
filer o
|
|
Non-accelerated
filer o
|
(do
not check if a smaller reporting company)
|
Smaller
reporting company þ
|
Page
|
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PART
I
FINANCIAL
INFORMATION
|
|||
Item
1.
|
Financial
Statements
|
||
Condensed
Consolidated Balance Sheets as of March 31, 2010 (unaudited) and September
30, 2009
|
3
|
||
Unaudited
Condensed Consolidated Statements of Operations
|
|||
for
the Three and Six Months Ended March 31, 2010 and 2009
|
4
|
||
Unaudited
Condensed Consolidated Statements of Cash Flows
|
|||
for
the Six Months Ended March 31, 2010 and 2009
|
5
|
||
Notes
to Unaudited Condensed Consolidated Financial Statements
|
6
|
||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
15
|
|
Item
4.
|
Controls
and Procedures
|
25
|
|
PART
II
|
|||
OTHER
INFORMATION
|
|||
Item
1.
|
Legal
Proceedings
|
26
|
|
Item
1A.
|
Risk
Factors
|
27
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
27
|
|
Item
6.
|
Exhibits
|
27
|
|
Signatures
|
28
|
March
31.
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Cash
and cash equivalents
|
$ | 5,467,114 | $ | 7,568,030 | ||||
Certificates
of deposit
|
300,000 | 100,000 | ||||||
Accounts
receivable, net
|
1,254,770 | 1,478,183 | ||||||
Prepaid
expenses and other current assets
|
493,798 | 326,442 | ||||||
Income
taxes receivable
|
- | 1,490,835 | ||||||
Total
current assets
|
7,515,682 | 10,963,490 | ||||||
Accounts
receivable, long term portion, net
|
505,496 | 1,039,403 | ||||||
Property
and equipment, net
|
519,327 | 615,906 | ||||||
Deposits
and other assets
|
87,327 | 81,212 | ||||||
Intangible
assets, net
|
2,240,183 | 2,336,714 | ||||||
Total
assets
|
$ | 10,868,015 | $ | 15,036,725 | ||||
Liabilities
and Stockholders' Equity
|
||||||||
Liabilities:
|
||||||||
Accounts
payable
|
$ | 735,082 | $ | 549,681 | ||||
Accrued
liabilities
|
995,445 | 1,092,811 | ||||||
Current
portion of capital lease obligation
|
60,549 | 69,612 | ||||||
Total
current liabilities
|
1,791,076 | 1,712,104 | ||||||
Long
term portion of capital lease obligation
|
68,068 | 117,073 | ||||||
Total
liabilities
|
1,859,144 | 1,829,177 | ||||||
Commitments
and contingencies
|
||||||||
Stockholders'
equity:
|
||||||||
Series
E convertible preferred stock, $0.001 par value, 200,000 shares
authorized, 127,840 issued and outstanding, liquidation preference
$38,202
|
10,866 | 10,866 | ||||||
Common
stock, $0.001 par value, 100,000,000 shares authorized, 6,106,433 and
6,133,433 shares issued, 6,063,918 and 6,104,327 shares outstanding
at March 31, 2010 and September 30, 2009,
respectively
|
6,106 | 6,133 | ||||||
Treasury
stock (42,515 and 29,106 shares carried at cost at March 31, 2010 and
September 30, 2009, respectively)
|
(70,923 | ) | (45,041 | ) | ||||
Paid
in capital
|
20,407,741 | 20,280,377 | ||||||
Accumulated
deficit
|
(11,344,919 | ) | (7,044,787 | ) | ||||
Total
stockholders' equity
|
9,008,871 | 13,207,548 | ||||||
Total
liabilities and stockholders' equity
|
$ | 10,868,015 | $ | 15,036,725 |
Three Months Ended March
31,
|
Six Months Ended March 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
revenues
|
$ | 2,165,653 | $ | 3,548,275 | $ | 4,643,100 | $ | 8,557,789 | ||||||||
Cost
of services
|
1,022,339 | 1,466,882 | 1,851,152 | 3,067,532 | ||||||||||||
Gross
profit
|
1,143,314 | 2,081,393 | 2,791,948 | 5,490,257 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
General
and administrative expenses
|
3,138,052 | 4,054,354 | 7,099,942 | 8,313,381 | ||||||||||||
Impairment
of goodwill
|
- | 4,350,042 | - | 4,350,042 | ||||||||||||
Impairment
of intangible assets
|
- | 3,516,068 | - | 3,516,068 | ||||||||||||
Sales
and marketing expenses
|
90,054 | 713,326 | 261,111 | 2,285,385 | ||||||||||||
Total
operating expenses
|
3,228,106 | 12,633,790 | 7,361,053 | 18,464,876 | ||||||||||||
Operating
loss
|
(2,084,792 | ) | (10,552,397 | ) | (4,569,105 | ) | (12,974,619 | ) | ||||||||
Other
income (expense):
|
||||||||||||||||
Interest
income, net
|
3,608 | 6,159 | 10,518 | 19,919 | ||||||||||||
Other
income (expense)
|
(22,693 | ) | 3,458,220 | 27,307 | 7,263,998 | |||||||||||
Total
other income (expense)
|
(19,085 | ) | 3,464,379 | 37,825 | 7,283,917 | |||||||||||
Loss
before income taxes
|
(2,103,877 | ) | (7,088,018 | ) | (4,531,280 | ) | (5,690,702 | ) | ||||||||
Income
tax provision (benefit)
|
(330,357 | ) | 6,790,410 | (231,026 | ) | 7,243,287 | ||||||||||
Loss
from continuing operations
|
(1,773,520 | ) | (13,878,428 | ) | (4,300,254 | ) | (12,933,989 | ) | ||||||||
Discontinued
operations
|
||||||||||||||||
Income
(loss) from discontinued component, including disposal
costs
|
- | (8,309,685 | ) | 1,725 | (8,400,806 | ) | ||||||||||
Income
tax provision (benefit)
|
- | (3,104,498 | ) | 644 | (3,138,541 | ) | ||||||||||
Income
(loss) from discontinued operations
|
- | (5,205,187 | ) | 1,081 | (5,262,265 | ) | ||||||||||
Net
loss
|
$ | (1,773,520 | ) | $ | (19,083,615 | ) | $ | (4,299,173 | ) | $ | (18,196,254 | ) | ||||
Earnings
per share - basic and diluted:
|
||||||||||||||||
Loss
from continuing operations
|
$ | (0.30 | ) | $ | (2.32 | ) | $ | (0.72 | ) | $ | (2.15 | ) | ||||
Discontinued
operations
|
- | (0.87 | ) | - | (0.88 | ) | ||||||||||
Net
loss
|
$ | (0.30 | ) | $ | (3.19 | ) | $ | (0.72 | ) | $ | (3.03 | ) | ||||
Weighted
average common shares outstanding:
|
||||||||||||||||
Basic
|
5,996,526 | 5,983,490 | 5,995,939 | 6,010,521 | ||||||||||||
Diluted
|
5,996,526 | 5,983,490 | 5,995,939 | 6,010,521 |
Six
Months ended
|
||||||||
March 31,
|
||||||||
2010
|
2009
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
loss
|
$ | (4,299,173 | ) | $ | (18,196,254 | ) | ||
Adjustments
to reconcile net income (loss) to net cash used in operating
activities:
|
||||||||
Depreciation
and amortization
|
443,853 | 1,902,347 | ||||||
Non-cash
stock compensation expense
|
7,205 | 45,882 | ||||||
Amortization
of deferred stock compensation
|
120,131 | (132,367 | ) | |||||
Deferred
income taxes
|
- | 3,705,525 | ||||||
Provision
for uncollectible accounts
|
648,561 | 836,873 | ||||||
Non-cash
impairment of goodwill and intangibles
|
- | 16,111,494 | ||||||
Gain
on sale of customer list
|
- | (2,815,952 | ) | |||||
Gain
on sale of internet domain name
|
- | (3,805,778 | ) | |||||
Gain
on amendment of directory services contract
|
- | (642,268 | ) | |||||
Loss
on disposal of property and equipment
|
74,271 | 37,943 | ||||||
Changes
in assets and liabilities:
|
||||||||
Accounts
receivable
|
108,760 | 2,174,384 | ||||||
Prepaid
expenses and other current assets
|
(167,356 | ) | (24,965 | ) | ||||
Deposits
and other assets
|
(6,114 | ) | 1,835 | |||||
Accounts
payable
|
185,400 | (585,918 | ) | |||||
Accrued
liabilities
|
(98,325 | ) | 93,603 | |||||
Income
taxes receivable and payable
|
1,490,835 | 396,460 | ||||||
Net
cash used in operating activities
|
(1,491,952 | ) | (897,156 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds
from sale of internet domain name
|
- | 3,850,000 | ||||||
Proceeds
from sale of customer list
|
- | 2,783,097 | ||||||
Proceeds
from amendment of directory services contract
|
- | 642,268 | ||||||
Expenditures
for intangible assets
|
(268,693 | ) | (339,372 | ) | ||||
Investment
in CD's and other securities
|
(200,000 | ) | - | |||||
Purchases
of equipment
|
(56,321 | ) | (65,104 | ) | ||||
Net
cash provided by (used in) investing activities
|
(525,014 | ) | 6,870,889 | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Principal
repayments on capital lease obligations
|
(58,068 | ) | (35,561 | ) | ||||
Purchase
of treasury stock
|
(25,882 | ) | (487,480 | ) | ||||
Net
cash used in financing activities
|
(83,950 | ) | (523,041 | ) | ||||
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
(2,100,916 | ) | 5,450,692 | |||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
7,568,030 | 4,639,787 | ||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$ | 5,467,114 | $ | 10,090,479 | ||||
Supplemental
cash flow disclosures:
|
||||||||
Noncash
financing and investing activities:
|
||||||||
Accrued
and unpaid dividends
|
$ | 958 | $ | 958 | ||||
Interest
paid
|
$ | 3,777 | $ | 5,997 | ||||
Income
tax paid (received)
|
$ | (1,721,217 | ) | $ | 1,960 |
March
31,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
Receivables,
current, net:
|
||||||||
Accounts
receivable, current
|
$ | 2,798,302 | $ | 3,776,966 | ||||
Less:
Allowance for doubtful accounts
|
(1,543,532 | ) | (2,298,783 | ) | ||||
$ | 1,254,770 | $ | 1,478,183 | |||||
Receivables,
long term, net:
|
||||||||
Accounts
receivable, long term
|
$ | 1,019,541 | $ | 1,581,946 | ||||
Less:
Allowance for doubtful accounts
|
(514,045 | ) | (542,543 | ) | ||||
$ | 505,496 | $ | 1,039,403 | |||||
Total
receivables, net:
|
||||||||
Gross
receivables
|
$ | 3,817,843 | $ | 5,358,912 | ||||
Allowance
for doubtful accounts
|
(2,057,577 | ) | (2,841,326 | ) | ||||
$ | 1,760,266 | $ | 2,517,586 |
March
31,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
Property
and equipment, net:
|
||||||||
Leasehold
improvements
|
$ | 239,271 | $ | 235,056 | ||||
Furnishings
and fixtures
|
336,067 | 336,067 | ||||||
Office,
computer equipment and other
|
704,390 | 692,317 | ||||||
1,279,728 | 1,263,440 | |||||||
Less:
Accumulated depreciation
|
(760,401 | ) | (647,534 | ) | ||||
$ | 519,327 | $ | 615,906 |
March
31,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
Intangible
assets, net:
|
||||||||
Domain
name and marketing related intangibles
|
$ | 1,509,600 | $ | 6,699,600 | ||||
Non-compete
agreements
|
- | 3,465,000 | ||||||
Website
and technology related intangibles
|
1,898,493 | 4,678,970 | ||||||
3,408,093 | 14,843,570 | |||||||
Less: Accumulated
amortization
|
(1,167,910 | ) | (12,506,856 | ) | ||||
$ | 2,240,183 | $ | 2,336,714 |
March
31,
|
September
30,
|
|||||||
2010
|
2009
|
|||||||
Accrued
liabilities:
|
||||||||
Deferred
revenue
|
$ | 122,249 | $ | 148,916 | ||||
Accrued
payroll and bonuses
|
116,727 | 289,944 | ||||||
Accruals
under revenue sharing agreements
|
170,663 | 314,754 | ||||||
Accrued
expenses - other
|
585,806 | 339,197 | ||||||
$ | 995,445 | $ | 1,092,811 |
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||
Average
|
Average
|
Average
|
Aggregate
|
|||||||||||||||||
Number
of
|
Exercise
|
Fair
|
Remaining
|
Intrinsic
|
||||||||||||||||
Shares
|
Price
|
Value
|
Contractual Life
|
Value
|
||||||||||||||||
Outstanding
at September 30, 2009
|
330,000 | |||||||||||||||||||
Granted
at market price
|
250,000 | $ | 1.95 | n/m | ||||||||||||||||
Exercised
|
- | - | ||||||||||||||||||
Forfeited
|
(280,000 | ) | $ | 1.92 | ||||||||||||||||
Outstanding
at December 31, 2009
|
300,000 | $ | 1.45 | 8.6 | $ | - | ||||||||||||||
Exercisable
|
97,917 | $ | 1.45 | 8.6 | $ | - |
Exercisable
|
Unexercisable
|
Total
|
||||||||||||||||||||||
Weighted
|
Weighted
|
Weighted
|
||||||||||||||||||||||
Number
|
Average
|
Number
|
Average
|
Number
|
Average
|
|||||||||||||||||||
Range of Exercise Prices
|
Outstanding
|
Exercise Price
|
Outstanding
|
Exercise Price
|
Outstanding
|
Exercise Price
|
||||||||||||||||||
Less
than $2.00 per share
|
97,917 | $ | 1.45 | 202,083 | 1.45 | 300,000 | $ | 1.45 |
Outstanding
(unvested) at September 30, 2009
|
106,425 | |||
Granted
|
- | |||
Forfeited
|
(27,000 | ) | ||
Vested
|
(12,000 | ) | ||
Outstanding
(unvested) at March 31, 2010
|
67,425 |
Three Months Ended March
31,
|
Six Months Ended March 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
loss from continuing operations
|
$ | (1,773,520 | ) | $ | (13,878,428 | ) | $ | (4,300,254 | ) | $ | (12,933,989 | ) | ||||
Less:
preferred stock dividends
|
(479 | ) | (479 | ) | (958 | ) | (958 | ) | ||||||||
Net
loss from continuing operations applicable to common stock
|
(1,773,999 | ) | (13,878,907 | ) | (4,301,212 | ) | (12,934,947 | ) | ||||||||
Income
(loss) from discontinued operations
|
- | (5,205,187 | ) | 1,081 | (5,262,265 | ) | ||||||||||
Net
loss applicable to common stock
|
$ | (1,773,999 | ) | $ | (19,084,094 | ) | $ | (4,300,131 | ) | $ | (18,197,212 | ) | ||||
Basic
weighted average common shares outstanding:
|
5,996,526 | 5,983,490 | 5,995,939 | 6,010,521 | ||||||||||||
Add
incremental shares for:
|
||||||||||||||||
Unvested
restricted stock
|
- | - | - | - | ||||||||||||
Series
E convertible preferred stock
|
- | - | - | - | ||||||||||||
Stock
options
|
- | - | - | - | ||||||||||||
Diluted
weighted average common shares outstanding:
|
5,996,526 | 5,983,490 | 5,995,939 | 6,010,521 | ||||||||||||
Earnings
per share - basic and diluted:
|
||||||||||||||||
Loss
from continuing operations
|
$ | (0.30 | ) | $ | (2.32 | ) | $ | (0.72 | ) | $ | (2.15 | ) | ||||
Discontinued
operations
|
- | (0.87 | ) | - | (0.88 | ) | ||||||||||
Net
loss
|
$ | (0.30 | ) | $ | (3.19 | ) | $ | (0.72 | ) | $ | (3.03 | ) |
Three Months Ended March
31,
|
Six Months Ended March 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Options
to purchase shares of common stock
|
300,000 | 540,217 | 425,683 | 476,064 | ||||||||||||
Series
E convertible preferred stock
|
127,840 | 127,840 | 127,840 | 127,840 | ||||||||||||
Shares
of non-vested restricted stock
|
67,425 | 158,425 | 80,999 | 188,589 | ||||||||||||
495,265 | 826,482 | 634,522 | 792,493 |
Payments Due by Fiscal Year
|
||||||||||||||||||||||||||||
Total
|
2010
|
2011
|
2012
|
2013
|
2014
|
Thereafter
|
||||||||||||||||||||||
Operating
lease commitments
|
$ | 1,098,774 | $ | 273,848 | $ | 430,875 | $ | 315,331 | $ | 78,720 | $ | - | $ | - | ||||||||||||||
Noncanceleable service contracts
|
1,482,820 | 620,709 | 721,111 | 141,000 | - | - | - | |||||||||||||||||||||
$ | 2,581,594 | $ | 894,557 | $ | 1,151,986 | $ | 456,331 | $ | 78,720 | $ | - | $ | - |
2010
|
$ | 32,071 | ||
2011
|
64,143 | |||
2012
|
37,417 | |||
2013
|
- | |||
2014
|
- | |||
Thereafter
|
- | |||
Total
minimum lease payments
|
133,631 | |||
Less
imputed interest
|
(5,014 | ) | ||
Present
value of minimum lease payments
|
128,617 | |||
Less:
current maturities of capital lease obligations
|
60,549 | |||
Noncurrent
maturities of capital lease obligations
|
$ | 68,068 |
Six Months Ended March 31, 2010
|
||||||||||||||||
Directory Services
|
Direct Sales -
Customer
Acquisition
Services
|
Unallocated
|
Consolidated
|
|||||||||||||
Net
revenues
|
$ | 2,209,340 | $ | 2,433,760 | $ | - | $ | 4,643,100 | ||||||||
Cost
of services
|
184,797 | 1,666,356 | - | 1,851,153 | ||||||||||||
Gross
profit
|
2,024,543 | 767,404 | - | 2,791,947 | ||||||||||||
Operating
expenses
|
- | - | 7,361,053 | 7,361,053 | ||||||||||||
Operating
income (loss)
|
2,024,543 | 767,404 | (7,361,053 | ) | (4,569,106 | ) | ||||||||||
Other
income (expense)
|
- | - | 37,825 | 37,825 | ||||||||||||
Income
(loss) before income taxes and discontinued operations
|
$ | 2,024,543 | $ | 767,404 | $ | (7,323,228 | ) | $ | (4,531,281 | ) |
Six Months Ended March 31, 2009
|
||||||||||||||||
Directory Services
|
Direct Sales -
Customer
Acquisition
Services
|
Unallocated
|
Consolidated
|
|||||||||||||
Net
revenues
|
$ | 6,863,243 | $ | 1,694,546 | $ | - | $ | 8,557,789 | ||||||||
Cost
of services
|
2,127,690 | 939,842 | - | 3,067,532 | ||||||||||||
Gross
profit
|
4,735,553 | 754,704 | - | 5,490,257 | ||||||||||||
Operating
expenses
|
- | - | 18,464,876 | 18,464,876 | ||||||||||||
Operating
income (loss)
|
4,735,553 | 754,704 | (18,464,876 | ) | (12,974,619 | ) | ||||||||||
Other
income (expense)
|
- | - | 7,283,917 | 7,283,917 | ||||||||||||
Income
(loss) before income taxes and discontinued operations
|
$ | 4,735,553 | $ | 754,704 | $ | (11,180,959 | ) | $ | (5,690,702 | ) |
March 31, 2010
|
||||||||||||
Directory Services
|
Direct Sales -
Customer
Acquisition
Services
|
Total
|
||||||||||
Accounts
receivable, net - short term
|
$ | 1,208,835 | $ | 45,935 | $ | 1,254,770 | ||||||
Accounts
receivable, net - long term
|
505,496 | - | 505,496 | |||||||||
Total
accounts receivable, net
|
$ | 1,714,331 | $ | 45,935 | $ | 1,760,266 |
September 30, 2009
|
||||||||||||
Directory Services
|
Direct Sales -
Customer
Acquisition
Services
|
Total
|
||||||||||
Accounts
receivable, net - short term
|
$ | 1,442,037 | $ | 36,146 | $ | 1,478,183 | ||||||
Accounts
receivable, net - long term
|
1,039,403 | - | 1,039,403 | |||||||||
Total
accounts receivable, net
|
$ | 2,481,440 | $ | 36,146 | $ | 2,517,586 |
|
§
|
Website
URL acquisition services whereby we obtain website address names on behalf
of our small business clients;
|
|
§
|
Website
development and deployment services where we create, house and manage
websites on behalf of our small business
clients;
|
|
§
|
Website
traffic and audience development services, which utilize sophisticated
search engine marketing techniques, partnerships with other websites and
other techniques to generate traffic to our customers’ websites, whether
created by us or not;
|
|
§
|
Website
analytics and performance reports that generate information for our
customers about activities on their websites and generate leads for their
businesses based on Internet
activities;
|
|
§
|
Directory
services whereby we provide both basic and enhanced directory listings for
our customers on our own directory and on partner directories;
and
|
|
§
|
Business
listing syndication whereby we provide for our customers a single point to
publish their information on the top directories, create their point of
presence in the search results of the major search engines, and broadcast
their latest “happenings” on the most popular social networking
destinations.
|
|
·
|
We
shut-down our Philippines-based call
center;
|
|
·
|
We
discontinued our classified
business;
|
|
·
|
We
sold a portion of our customer list associated with our directory services
business;
|
|
·
|
We
sold our www.yp.com
Internet domain name; and
|
|
·
|
We
experienced several management changes including turnover of our most
senior executive positions.
|
Net Revenues
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | 2,165,653 | $ | 3,548,275 | $ | (1,382,622 | ) | (39 | )% | |||||||
Six
Months Ended March 31,
|
$ | 4,643,100 | $ | 8,557,789 | $ | (3,914,689 | ) | (46 | )% |
Cost of Services
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | 1,022,339 | $ | 1,466,882 | $ | (444,543 | ) | (30 | )% | |||||||
Six
Months Ended March 31,
|
$ | 1,851,152 | $ | 3,067,532 | $ | (1,216,380 | ) | (40 | )% |
Gross Profit
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | 1,143,314 | $ | 2,081,393 | $ | (938,079 | ) | (45 | )% | |||||||
Six
Months Ended March 31,
|
$ | 2,791,948 | $ | 5,490,257 | $ | (2,698,309 | ) | (49 | )% |
Three Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
Direct
Sales -
|
||||||||
Customer
Acquisition Services -
|
||||||||
Gross
profit
|
$ | 160,291 | $ | 463,779 | ||||
Gross
margin
|
15.1 | % | 52.0 | % | ||||
Directory
services -
|
||||||||
Gross
profit
|
$ | 983,023 | $ | 1,617,614 | ||||
Gross
margin
|
89.2 | % | 60.9 | % |
Six
Months Ended March 31,
|
||||||||
2010
|
2009
|
|||||||
Direct
Sales -
|
||||||||
Customer
Acquisition Services -
|
||||||||
Gross
profit
|
$ | 767,404 | $ | 754,704 | ||||
Gross
margin
|
31.5 | % | 44.5 | % | ||||
Directory
services -
|
||||||||
Gross
profit
|
$ | 2,024,543 | $ | 4,735,553 | ||||
Gross
margin
|
91.6 | % | 69.0 | % |
General and Administrative
Expenses
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | 3,138,052 | $ | 4,054,354 | $ | (916,302 | ) | (23 | )% | |||||||
Six
Months Ended March 31,
|
$ | 7,099,942 | $ | 8,313,381 | $ | (1,213,439 | ) | (15 | )% |
Q2 2010
|
Q1 2010
|
Q4 2009
|
Q3 2009
|
Q2 2009
|
Q1 2009
|
|||||||||||||||||||
Compensation
for employees, leased
employees, officers and directors
|
$ | 1,352,108 | $ | 2,241,198 | $ | 2,054,709 | $ | 2,392,081 | $ | 2,311,056 | $ | 2,508,836 | ||||||||||||
Professional
fees
|
1,023,582 | 488,993 | 336,273 | 421,700 | 411,564 | 455,832 | ||||||||||||||||||
Depreciation
and amortization
|
218,200 | 225,653 | 211,336 | 186,077 | 560,383 | 559,289 | ||||||||||||||||||
Other
general and administrative costs
|
544,162 | 1,006,046 | 451,300 | 813,124 | 771,352 | 735,070 |
Impairment
of Goodwill and Other Intangible Assets
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | - | $ | 7,866,110 | $ | (7,866,110 | ) | n/a | ||||||||
Six
Months Ended March 31,
|
$ | - | $ | 7,866,110 | $ | (7,866,110 | ) | n/a |
Sales and Marketing
Expenses
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | 90,054 | $ | 713,326 | $ | (623,272 | ) | (87 | )% | |||||||
Six
Months Ended March 31,
|
$ | 261,111 | $ | 2,285,385 | $ | (2,024,274 | ) | (89 | )% |
|
·
|
$287,000
of decreased telemarketing and other customer acquisition costs as we have
been transitioning away from marketing activities geared toward our
directory services business;
|
|
·
|
$145,000
of reduced customer acquisition costs associated with fulfillment
contracts that have been terminated or reduced in scope;
and
|
|
·
|
$191,000
of other miscellaneous cost
decreases.
|
|
·
|
$787,000
of decreased telemarketing and other customer acquisition
costs;
|
|
·
|
$983,000
of reduced customer acquisition costs associated with fulfillment
contracts that have been terminated or reduced in scope;
and
|
|
·
|
$254,000
of other miscellaneous cost
decreases.
|
Operating Loss
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | (2,084,792 | ) | $ | (10,552,397 | ) | $ | 8,467,605 | (80 | )% | ||||||
Six
Months Ended March 31,
|
$ | (4,569,105 | ) | $ | (12,974,619 | ) | $ | 8,405,514 | (65 | )% |
Total Other Income
(Expense)
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | (19,085 | ) | $ | 3,464,379 | $ | (3,483,464 | ) | (101 | )% | ||||||
Six
Months Ended March 31,
|
$ | 37,825 | $ | 7,283,917 | $ | (7,246,092 | ) | (99 | )% |
Income Tax Provision
(Benefit)
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | (330,357 | ) | $ | 6,790,410 | $ | (7,120,767 | ) | (105 | )% | ||||||
Six
Months Ended March 31,
|
$ | (231,026 | ) | $ | 7,243,287 | $ | (7,474,313 | ) | (103 | )% |
Income (Loss) from Discontinued
Operations
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | - | $ | (5,205,187 | ) | $ | 5,205,187 | (100 | )% | |||||||
Six
Months Ended March 31,
|
$ | 1,081 | $ | (5,262,265 | ) | $ | 5,263,346 | (100 | )% |
Net Loss
|
||||||||||||||||
2010
|
2009
|
Change
|
Percent
|
|||||||||||||
Three
Months Ended March 31,
|
$ | (1,773,520 | ) | $ | (19,083,615 | ) | $ | 17,310,095 | (91 | )% | ||||||
Six
Months Ended March 31,
|
$ | (4,299,173 | ) | $ | (18,196,254 | ) | $ | 13,897,081 | (76 | )% |
Payments Due by Fiscal Year
|
||||||||||||||||||||||||||||
Total
|
2010
|
2011
|
2012
|
2013
|
2014
|
Thereafter
|
||||||||||||||||||||||
Operating
lease commitments
|
$ | 1,098,774 | $ | 273,848 | $ | 430,875 | $ | 315,331 | $ | 78,720 | $ | - | $ | - | ||||||||||||||
Capital
lease commitments
|
133,631 | 32,071 | 64,143 | 37,417 | - | - | - | |||||||||||||||||||||
Noncanceleable service contracts
|
1,482,820 | 620,709 | 721,111 | 141,000 | - | - | - | |||||||||||||||||||||
$ | 2,715,225 | $ | 926,628 | $ | 1,216,129 | $ | 493,748 | $ | 78,720 | $ | - | $ | - |