Year-to-date 2010 Financial Results  

 
Year-to-date 2010 Results (USD) (unaudited)
(9 months ended September 30,) 2010 2009 CHANGE
Sales $31.2 million $27.3 million +14.2%
Gross Profit $15.4 million $11.4 million +35.1%
Gross Margin 49.3% 41.7% +18.2%
Adjusted Net Income (2)  $10.0 million $4.5 million +121.7%
Adjusted EPS (2) $0.48 $0.30 +60.0%

(1) GAAP net income and GAAP EPS (Diluted) include a $1.9 million non-cash gain related to changes in fair value of warrants for YTD 2010 of $1.9 million and $1.3 million loss YTD 2009.

Revenues for the first nine months of 2010 increased 14.2% to $31.2 million compared to $27.3 million for the first nine month of 2009. Internet advertising increased 54.6% year-over-year to $19.5 million from $7.9, representing 62.5% of total revenue. TV advertising revenues fell 18.8% during the first nine month of 2010 to $11.0 million or 35.4% of total revenues. Management expects internet advertising to account for an increasingly larger percent of total sales going forward as it focuses the majority of its resources on growing 28.com.  
 
Year-to-date 2010 Revenue Breakdown By Business Unit (USD in thousands) (unaudited)
(9 months ended September 30,) 2010 2009 CHANGE
Internet Advertisement $19,478 $12,601 +54.6%
% of Sales 62.5% 46.1%  
TV Advertisement $11,044 $13,600 -18.8%
% of Sales 35.4% 49.8%  
Bank Kiosk $396 $21 --
% of Sales 1.3%    

Cost of sales for the nine months ended September 30, 2010 was approximately $15.8 million down 0.8% from the nine months ended September 30, 2009.