CMKG.. 11/04/10 DD 10Q..
‘mktg, inc.’
Condensed Consolidated Balance Sheets
September 30, 2010 (Unaudited) and March 31, 2010
September 30, 2010 March 31, 2010
Assets
Current assets:
Cash and cash equivalents $ 3,636,216 $ 663,786
Accounts receivable, net of allowance for doubtful accounts of $306,000 at September 30, 2010 and $288,000 at March 31, 2010 13,283,380 9,043,506
Unbilled contracts in progress 1,473,163 740,540
Deferred contract costs 2,695,549 1,235,967
Prepaid expenses and other current assets 166,989 611,947
Total current assets 21,255,297 12,295,746
Property and equipment, net 1,894,486 2,115,506
Restricted cash 500,000 –
Goodwill 10,052,232 10,052,232
Intangible assets - net 1,084,627 1,245,469
Other assets 477,053 485,078
Total assets $ 35,263,695 $ 26,194,031
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 997,231 $ 2,158,687
Accrued compensation 1,368,194 431,614
Accrued job costs 2,763,229 3,190,782
Other accrued liabilities 1,699,004 2,002,427
Deferred revenue 16,483,388 8,365,407
Total current liabilities 23,311,046 16,148,917
Deferred rent 1,540,548 1,622,953
Senior secured notes payable 1,661,137 1,514,340
Warrant derivative liability 2,420,172 849,211
Put option derivative 6,153 110,940
Total liabilities 28,939,056 20,246,361
Commitments and contingencies
Redeemable Series D Convertible Participating Preferred Stock, $2,891,252 redemption and liquidation value, par value $1.00: 2,500,000 designated, 2,500,000 issued and outstanding at September 30, 2010 and March 31, 2010, respectively 1,751,924 1,503,589
Stockholders’ equity:
Class A convertible preferred stock, par value $.001; authorized 650,000 shares; none issued and outstanding — —
Class B convertible preferred stock, par value $.001; authorized 700,000 shares; none issued and outstanding — —
Preferred stock, undesignated; authorized 3,650,000 shares; none issued and outstanding — —
Common stock, par value $.001; authorized 25,000,000 shares; 8,610,288 shares issued and outstanding at September 30, 2010 and 8,613,288 shares issued and outstanding at and March 31, 2010 8,610 8,613
Additional paid-in capital 14,090,859 13,806,871
Accumulated deficit (9,499,999 ) (9,351,126 )
Treasury stock at cost, 37,160 shares at September 30, 2010 and 19,189 shares at March 31, 2010 (26,755 ) (20,277 )
Total stockholders’ equity 4,572,715 4,444,081
Total liabilities and stockholders’ equity $ 35,263,695 $ 26,194,031
See notes to unaudited condensed consolidated financial statements.
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‘mktg, inc.’
Condensed Consolidated Statements of Operations
Three and Six Months Ended September 30, 2010 and 2009
(Unaudited)
Three Months Ended
September 30, Six Months Ended
September 30,
2010 2009 2010 2009
Sales $ 28,556,087 $ 17,867,383 $ 57,692,875 $ 37,686,487
Operating expenses:
Reimbursable program costs and expenses 6,099,942 3,666,976 11,580,696 7,761,900
Outside production and other program expenses 13,289,303 6,718,994 28,788,656 14,264,397
Compensation expense 6,148,564 6,782,928 11,833,295 13,326,602
General and administrative expenses 1,803,282 1,775,093 3,585,701 3,340,632
Total operating expenses 27,341,091 18,943,991 55,788,348 38,693,531
Operating income (loss) 1,214,996 (1,076,608 ) 1,904,527 (1,007,044 )
Interest expense, net (176,523 ) (5,559 ) (338,891 ) (22,836 )
Fair value adjustments to compound embedded derivatives (1,652,404 ) — (1,466,174 ) —
Income (loss) before provision for income taxes (613,931 ) (1,082,167 ) 99,462 (1,029,880 )
Provision for income taxes — — — —
Net income (loss) $ (613,931 ) $ (1,082,167 ) $ 99,462 $ (1,029,880 )
Basic earnings (loss) per share $ (.07 ) $ (.14 ) $ .01 $ (.15 )
Diluted earnings (loss) per share $ (.07 ) $ (.14 ) $ .01 $ (.15 )
Weighted average number of common shares outstanding:
Basic 9,367,603 7,606,145 9,457,508 7,057,175
Diluted 9,367,603 7,606,145 17,227,061 7,057,175