TheStreet.com, Inc. Reports Second and Third Quarter 2009 Results, Estimates Certain Fourth Quarter 2009 Results and Restates Certain Prior Period Results

TheStreet.com, Inc. (Nasdaq: TSCM; http://www.thestreet.com), a leading digital financial media company, today reported financial results for the second and third quarters of 2009 and estimates of certain fourth quarter results. The Company also reported a restatement of certain items of its previously reported results for 2008 as a result of its earlier announced review of accounting matters related to a non-core subsidiary, Promotions.com – which the Company divested in December 2009.

"We are pleased to have concluded the review of accounting in our former Promotions.com subsidiary and to resume reporting our results, as we have been enjoying favorable trends in the Company’s remaining businesses for the past couple of quarters,” said Daryl Otte, the Company’s Chief Executive Officer. "Bookings in our paid services have seen double-digit percentage increases in the second half of 2009 as compared to the prior year period, after having been down in the first half. As bookings are the precursor to higher paid services revenue, this positions us well for 2010. In addition to our strong bookings performance since mid-year, we are pleased that our subscriber counts have risen each quarter after March 2009.

"Our marketing services business excluding the divested Promotions.com subsidiary also is experiencing favorable trends. The large year-over-year revenue decline we witnessed in the first quarter, flattened in each of the second and third quarters, and our fourth quarter results exceeded the prior year results, for the first time in five quarters.

"During the past year, we have concentrated on strengthening our management team, reducing costs and honing our strategic focus. In December, we enhanced our paid services team through the acquisition of Kikucall, Inc., an online subscription marketing firm, and sold the Promotions.com subsidiary in order to sharpen our focus on our core businesses of providing financial information services to paid subscribers and through ad-supported platforms. We also hired a new Chief Information Officer this month and General Counsel last June.

"We note that our bottom line will benefit from the divestiture of the Promotions.com subsidiary, which provided a negative contribution of $2.2 million in the first 9 months of 2009 and a negative contribution of $2.2 million in fiscal 2008.

"We are excited to be starting 2010 with all of our businesses showing good momentum, having a strong balance sheet – with over $82 million of Cash⁽¹⁾ and marketable securities and no debt at year-end 2009 – and generating positive Adjusted EBITDA⁽²⁾. We intend to continue refining and improving our product offerings and to enhance our leading position in the online financial media space. We believe that 2010 will be a year of many opportunities for us and look forward to re-engaging with our investors and reporting on our progress,” Mr. Otte concluded.

Financial Highlights of Second and Third Quarter 2009

Note – as discussed below, the Company will restate certain items of its consolidated financial statements for the year ended December 31, 2008 and the quarters within such fiscal year. The 2008 period results discussed below reflect the impact of the anticipated restatement. Please see unaudited tables attached to this press release for description of previously reported 2008 period results, anticipated adjustments in connection with the restatement and anticipated restated results.

The Company recorded revenue of $15.0 million in the second quarter of 2009, a reduction of 19% as compared to a restated $18.4 million in the second quarter of 2008. Operating expenses in the second quarter of 2009 were $15.2 million, a reduction of 14% as compared to a restated $17.6 million in the prior year period. The Company had net income of $0.3 million in the second quarter of 2009, as compared to a restated net income of $1.1 million in the prior year period. The Company reported basic and diluted net income per share attributable to common stockholders of $0.01 and $0.01, respectively, in the second quarter of 2009, as compared with a restated $0.03 and $0.03, respectively, in the prior year period. Adjusted EBITDA for the second quarter of 2009 was $2.0 million, as compared to a restated $3.3 million for the prior year period.

The Company recorded revenue of $15.2 million in the third quarter of 2009, a reduction of 11% as compared to a restated $17.0 million in the third quarter of 2008. Operating expenses in the third quarter of 2009 were $16.9 million, a reduction of 6% as compared to a restated $18.0 million in the prior year period. The Company had a net loss of $(1.4) million in the third quarter of 2009, as compared to a restated net loss of $(0.7) million in the prior year period. The Company reported basic and diluted net loss per share attributable to common stockholders of $(0.05) and $(0.05), respectively, in the third quarter of 2009, as compared with a restated $(0.03) and $(0.03), respectively, in the prior year period. Adjusted EBITDA for the third quarter of 2009 was $1.7 million, as compared to a restated $1.5 million for the prior year period.

As previously disclosed, the Company sold its Promotions.com subsidiary in December 2009. Attached to this press release are schedules that describe the impact of the Promotions.com subsidiary on the Company’s quarterly consolidated results since January 2008.

Certain Estimated Results for Fourth Quarter 2009

The Company also announced certain estimated results for the quarter ended December 31, 2009, as follows:

• The Company expects its paid services revenue will be in the range of $9.5-$9.7 million, as compared to $9.9 million in the prior year period, with the decline primarily reflecting the year-over-year decline in paid services bookings experienced in the first half of the year. The Company expects its paid services bookings will increase from the prior year period by approximately 10%-13%. (The restatement of certain 2008 period results will not affect the Company’s paid services revenue.)
• The Company expects its marketing services revenue, including the Promotions.com subsidiary through its divestiture in December 2009, will be in the range of $6.7-$6.9 million, as compared to a restated $7.5 million in the prior year period.
• The Company expects its marketing services revenue, excluding the Promotions.com subsidiary, will be in the range of $5.5-$5.6 million, as compared to $5.3 million in the prior year period. (The restatement of certain 2008 period results will not affect the Company’s marketing services revenue, excluding the Promotions.com subsidiary.)
• The Company expects its balance of Cash and marketable securities at December 31, 2009 will be approximately $82.7 million, an increase of $6.3 million from December 31, 2008. The increase primarily reflects the Company’s operating cash flow, together with the receipt of $1.0 million in cash from the sale of the Promotions.com subsidiary, offset in part by (i) cash payments totaling $5.5 million in connection with (a) the acquisition of Kikucall, (b) fees to professional advisors in connection with the acquisition of Kikucall and divestiture of the Promotions.com subsidiary and (c) expenses incurred in connection with the Review described below; and (ii) payment of $3.6 million in dividends. The Company had no debt at December 31, 2009.

The Company notes that the above estimates for the quarter ended December 31, 2009 are preliminary, and may be subject to change.

Summary of Results of Accounting Review

The Company previously announced that it had identified an issue relating to its recording of certain revenue of its Promotions.com subsidiary, which the Company had acquired in August 2007 (and which, as noted above, the Company subsequently has sold) and that, as a result, the Audit Committee of the Company’s Board of Directors (the "Audit Committee”) engaged outside counsel, Skadden, Arps, Slate, Meagher & Flom LLP, and accounting experts, AlixPartners LLP, and conducted an independent review of accounting matters related to the Promotions.com subsidiary (the "Review”). As a result of the Review, the Audit Committee concluded that, due to certain inaccuracies in the previously issued consolidated financial statements as of and for the year ended December 31, 2008 and the fiscal quarters within such fiscal year, respectively (collectively, the "2008 Periods”), such consolidated financial statements no longer should be relied upon. The Company will restate its consolidated financial statements for the year ended December 31, 2008 and anticipates filing, on or before February 8, 2010, a Form 10-K/A for the year ended December 31, 2008, which shall contain certain revised results for the quarters within such fiscal year. The Company also anticipates revising certain amounts in its consolidated financial statements for the quarter ended March 31, 2009 related to this matter, including a reduction of revenue of approximately $0.5 million, a reduction of expense of approximately $0.1 million, and an increase in each of operating loss and net loss of approximately $0.4 million.

A summary of the anticipated restated financials are attached to this press release. The restatement will not affect the Company’s previously reported cash, cash equivalents, restricted cash and marketable securities. The restatement will make adjustments to correct errors related to the timing of recognition of revenue within the Promotions.com subsidiary and make adjustments to revenue and expense related to transactions with certain third parties involving the Promotions.com subsidiary, in which the Company contracted both to provide services to, and receive services from, such third parties. The adjustments will result in reduced revenue in certain quarters, and increased revenue in other quarters, as compared to results previously reported; reduced expense in certain quarters, as compared to results previously reported; and reduced net income (or increased net loss) in certain quarters, and reduced net loss in other quarters, as compared to results previously reported. Moreover, as a result of the restatement, certain revenue previously reported within 2008 Periods will be deferred and recognized in 2009.

Certain inaccuracies identified in the Review affected the Company’s previously reported consolidated financial statements for the year ended December 31, 2007 ("FY’07”), and quarters ended September 30, 2007 ("Q3’07”) and December 31, 2007 ("Q4’07”) (collectively, the "2007 Periods”), however the Company concluded that such errors were not material to the Company’s consolidated financial statements for the 2007 Periods and therefore such consolidated financial statements will not be restated. The Company provides disclosure below of the impact of the errors identified in the Review on such consolidated financial statements: (i) revenue (all of which was recorded in the Company’s interactive marketing services within the Company’s marketing services) was overstated by approximately $0.8 million, $0.1 million and $0.8 million, respectively, in Q3’07, Q4’07 and FY’07, respectively; (ii) operating expense was overstated by approximately $0.03 million, $0.04 million and $0.07 million, respectively, in Q3’07, Q4’07 and FY’07, respectively; and (iii) each of operating income, net income and EBITDA was overstated by approximately $0.7 million, $0.03 million and $0.8 million, respectively, in Q3’07, Q4’07 and FY’07, respectively. The errors did not affect the Company’s previously reported cash flows from operating activities, cash flows from investing activities or cash flows from financing activities for the 2007 Periods.

As previously reported, the Company had received from Nasdaq an exception allowing the Company to regain compliance by February 8, 2010, with the Nasdaq listing rule that requires the filing of all required periodic financial reports with the Securities and Exchange Commission. The Company anticipates regaining compliance with that Nasdaq listing rule on or before February 8, 2010.

TheStreet.com will conduct a conference call Monday, January 25, 2010, at 4:30 p.m. EST to discuss these preliminary results. To participate in the call, dial (866) 730-5767 (domestic) or (857) 350-1591 (international). The passcode for the call is 88920700.

To access the Web cast of the call please visit:

http://www.thestreet.com/investor-relations/index.html?detailInclude=IROL-IRhome

(Due to its length, this URL may need to be copied/pasted into your Internet browser’s address field. Remove the extra space if one exists.)

About TheStreet.com

TheStreet.com is a leading digital financial media company. The Company’s network includes the following properties: TheStreet.com, RealMoney.com, Stockpickr.com, BankingMyWay.com, MainStreet.com, and Rate-Watch.com. For more information and to get stock quotes and business news, visit http://www.thestreet.com.

⁽¹⁾ "Cash” includes cash, cash equivalents and restricted cash.

⁽²⁾ To supplement the Company’s financial statements presented in accordance with generally accepted accounting principles ("GAAP”), TheStreet.com, Inc. uses non-GAAP measures of certain components of financial performance, including "EBITDA”, "Adjusted EBITDA” and "free cash flow.” EBITDA is adjusted from results based on GAAP to exclude interest, taxes, depreciation and amortization. This non-GAAP measure is provided to enhance investors’ overall understanding of the Company’s current financial performance and its prospects for the future. Specifically, the Company believes that the non-GAAP EBITDA results are an important indicator of the operational strength of the Company’s business and provide an indication of the Company’s ability to service debt and fund capital expenditures. EBITDA eliminates the uneven effect of considerable amounts of noncash depreciation of tangible assets and amortization of certain intangible assets that were recognized in business combinations. Adjusted EBITDA further eliminates the impact of noncash stock compensation and impairment expenses, as well as other non-standard one-time charges. A limitation of these measures, however, is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company’s businesses. Management evaluates the investments in such tangible and intangible assets through other financial measures, such as capital expenditure budgets and investment spending levels. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measure included in this press release has been reconciled to the nearest GAAP measure.

All statements contained in this press release other than statements of historical facts are deemed forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, including those described in the Company’s filings with the Securities and Exchange Commission, that could cause actual results to differ materially from those reflected in the forward-looking statements. All forward-looking statements contained herein are made as of the date of this press release. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results or occurrences. The Company disclaims any obligation to update these forward-looking statements, whether as a result of new information, future developments or otherwise.

Note regarding financial statements attached to this press release:

You are referred to the Company's prior filings with the Securities and Exchange Commission, including without limitation the Company's annual report on Form 10-K for the year ended December 31, 2008 and quarterly reports on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008 and September 30, 2008 (collectively, the "2008 Reports"). The financial statements attached to this press release related to the 2008 fiscal year and the quarters contained therein should be read in the context of the Company's prior disclosures in the 2008 Reports, including without limitation the notes to financial statements contained therein, except to the extent that any such information is being restated herein.

THESTREET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
		Unaudited
		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2009				2009
Revenue:
Paid services		$	9,373,672			$	28,310,049
Marketing services			5,861,931				15,418,258
Total revenue			15,235,603				43,728,307
Operating expense:
Cost of services			7,156,120				22,666,527
Sales and marketing			3,005,218				8,768,054
General and administrative			5,266,804				13,129,465
Intangible asset impairment			-				24,137,069
Depreciation and amortization			1,348,806				4,027,253
Restructuring expense			169,692				2,728,502
Total operating expense			16,946,640				75,456,870
Operating loss			(1,711,037	)			(31,728,563	)
Net interest income			186,342				775,896
Gain on sales of marketable securities			34,684				295,430
Other income			-				153,677
Loss from continuing operations before income taxes			(1,490,011	)			(30,503,560	)
Benefit (provision) for income taxes			53,222				(16,283,105	)
Loss from continuing operations			(1,436,789	)			(46,786,665	)
Discontinued operations:
Loss on disposal of discontinued operations			1,846				10,453
Loss from discontinued operations			1,846				10,453
Net loss			(1,438,635	)			(46,797,118	)
Preferred stock cash dividends			96,424				289,272
Net loss attributable to common stockholders		$	(1,535,059	)		$	(47,086,390	)
Basic net loss per share:
Loss from continuing operations		$	(0.05	)		$	(1.53	)
Loss on disposal of discontinued operations			(0.00	)			(0.00	)
Net loss			(0.05	)			(1.53	)
Preferred stock dividends			(0.00	)			(0.01	)
Net loss attributable to common stockholders		$	(0.05	)		$	(1.54	)
Diluted net loss per share:
Loss from continuing operations		$	(0.05	)		$	(1.53	)
Loss on disposal of discontinued operations			(0.00	)			(0.00	)
Net loss			(0.05	)			(1.53	)
Preferred stock dividends			(0.00	)			(0.01	)
Net loss attributable to common stockholders		$	(0.05	)		$	(1.54	)
Weighted average basic shares outstanding			30,606,216				30,574,361
Weighted average diluted shares outstanding			30,606,216				30,574,361
Adjusted EBITDA
Net loss		$	(1,438,635	)		$	(46,797,118	)
Interest			(186,342	)			(775,896	)
Gain on sales of marketable securities			(34,684	)			(295,430	)
(Benefit) provision for income taxes			(53,222	)			16,283,105
Depreciation & amortization			1,348,806				4,027,253
EBITDA			(364,077	)			(27,558,086	)
Other income			-				(153,677	)
Intangible asset impairment			-				24,137,069
Restructuring and other charge			169,692				2,728,502
Costs of review of Promotions.com accounting			1,307,778				1,307,778
Noncash compensation			573,221				2,158,815
Adjusted EBITDA		$	1,686,614			$	2,620,401

THESTREET.COM, INC.
CONSOLIDATED BALANCE SHEET
		Unaudited
ASSETS		September 30, 2009
Current Assets:
Cash and cash equivalents		$	60,486,534
Restricted cash			500,000
Marketable securities			2,816,411
Accounts receivable, net of allowance for doubtful
accounts of $129,918			5,508,175
Other receivables			268,841
Prepaid expenses and other current assets			1,817,184
Current assets held for sale			3,089,853
Total current assets			74,486,998
Property and equipment, net of accumulated depreciation
and amortization of $12,557,033			8,011,657
Marketable securities			17,461,005
Long term investment			555,000
Other assets			77,710
Goodwill			20,181,000
Other intangibles, net			8,003,942
Restricted cash			1,660,371
Noncurrent assets held for sale			1,976,751
Total assets		$	132,414,434
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	2,078,814
Accrued expenses			5,791,362
Deferred revenue			16,918,187
Other current liabilities			181,431
Current liabilities of discontinued operations			223,204
Current liabilities held for sale			1,983,055
Total current liabilities			27,176,053
Other liabilities			885,447
Noncurrent liabilities held for sale			14,521
Total liabilities			28,076,021
Stockholders' Equity:
Preferred stock; $0.01 par value; 10,000,000 shares
authorized; 5,500 shares issued and 5,500 shares
outstanding; the aggregate liquidation preference totals $55,000,000			55
Common stock; $0.01 par value; 100,000,000 shares
authorized; 36,598,461 shares issued and 30,516,727
shares outstanding			365,985
Additional paid-in capital			270,621,024
Accumulated other comprehensive income			389,777
Treasury stock at cost; 6,081,734 shares			(10,411,952	)
Accumulated deficit			(156,626,476	)
Total stockholders' equity			104,338,413
Total liabilities and stockholders' equity		$	132,414,434

THESTREET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
		Unaudited
		For the Three Months Ended June 30,					For the Six Months Ended June 30,
		2009					2009
Revenue:
Paid services		$	9,428,936				$	18,936,377
Marketing services			5,563,305					9,556,326
Total revenue			14,992,241					28,492,703
Operating expense:
Cost of services			7,264,697					15,510,407
Sales and marketing			2,785,929					5,762,836
General and administrative			3,320,983					7,862,661
Intangible asset impairment			-					24,137,069
Depreciation and amortization			1,207,710					2,678,447
Restructuring expense			574,281					2,558,810
Total operating expense			15,153,600					58,510,230
Operating loss			(161,359	)				(30,017,527	)
Net interest income			359,417					589,554
Gain on sales of marketable securities			260,746					260,746
Other income			-					153,677
Income (loss) from continuing operations before income taxes			458,804					(29,013,550	)
Provision for income taxes			109,250					16,336,327
Income (loss) from continuing operations			349,554					(45,349,877	)
Discontinued operations:
Loss on disposal of discontinued operations			9,532					8,607
Loss from discontinued operations			9,532					8,607
Net income (loss)			340,022					(45,358,484	)
Preferred stock cash dividends			96,424					192,848
Net income (loss) attributable to common stockholders		$	243,598				$	(45,551,332	)
Basic net income (loss) per share:
Income (loss) from continuing operations		$	0.01				$	(1.48	)
Loss on disposal of discontinued operations			(0.00	)				(0.00	)
Net income (loss)			0.01					(1.48	)
Preferred stock dividends			(0.00	)				(0.01	)
Net income (loss) attributable to common stockholders			0.01				$	(1.49	)
Diluted net income (loss) per share:
Income (loss) from continuing operations		$	0.01				$	(1.48	)
Loss on disposal of discontinued operations			(0.00	)				(0.00	)
Net income (loss)			0.01					(1.48	)
Preferred stock dividends			(0.00	)				(0.01	)
Net income (loss) attributable to common stockholders		$	0.01				$	(1.49	)
Weighted average basic shares outstanding			30,620,349					30,558,170
Weighted average diluted shares outstanding			30,620,349					30,558,170
Adjusted EBITDA
Net income (loss)		$	340,022				$	(45,358,484	)
Interest			(359,417	)				(589,554	)
Gain on sales of marketable securities			(260,746	)				(260,746	)
Provision for income taxes			109,250					16,336,327
Depreciation & amortization			1,207,710					2,678,447
EBITDA			1,036,819					(27,194,010	)
Other income			-					(153,677	)
Intangible asset impairment			-					24,137,069
Restructuring and other charge			574,281					2,558,810
Noncash compensation			341,981					1,585,594
Adjusted EBITDA		$	1,953,081				$	933,786

THESTREET.COM, INC.
CONSOLIDATED BALANCE SHEET
		Unaudited
ASSETS		June 30, 2009
Current Assets:
Cash and cash equivalents		$	63,411,600
Restricted cash			500,000
Marketable securities			799,031
Accounts receivable, net of allowance for doubtful
accounts of $100,436			5,090,863
Other receivables			495,954
Prepaid expenses and other current assets			2,174,219
Current assets held for sale			2,557,445
Total current assets			75,029,112
Property and equipment, net of accumulated depreciation
and amortization of $11,671,141			8,547,244
Marketable Securities			15,692,510
Long term investment			555,000
Other assets			81,610
Goodwill			20,181,000
Other intangibles, net			8,359,945
Restricted cash			1,660,371
Noncurrent assets held for sale			2,122,494
Total assets		$	132,229,286
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable		$	1,786,259
Accrued expenses			5,247,683
Deferred revenue			16,285,222
Other current liabilities			132,300
Current liabilities of discontinued operations			231,955
Current liabilities held for sale			2,185,932
Total current liabilities			25,869,351
Other Liabilities			541,532
Noncurrent liabilities held for sale			17,083
Total liabilities			26,427,966
Stockholders' Equity:
Preferred stock; $0.01 par value; 10,000,000 shares
authorized; 5,500 shares issued and 5,500 shares
outstanding; the aggregate liquidation preference totals $55,000,000			55
Common stock; $0.01 par value; 100,000,000 shares
authorized; 36,598,461 shares issued and 30,620,942
shares outstanding			365,985
Additional paid-in capital			270,955,796
Accumulated other comprehensive income			(202,104	)
Treasury stock at cost; 5,977,519 shares			(10,130,571	)
Accumulated deficit			(155,187,841	)
Total stockholders' equity			105,801,320
Total liabilities and stockholders' equity		$	132,229,286

THESTREET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
		Unaudited												Unaudited												Unaudited												Unaudited												Unaudited
		For the Three Months Ended March 31, 2008												For the Three Months Ended June 30, 2008												For the Three Months Ended September 30, 2008												For the Three Months Ended December 31, 2008												For the Year Ended December 31, 2008
		As Filed				Adjustment				As Restated				As Filed				Adjustment				As Restated				As Filed				Adjustment				As Restated				As Filed				Adjustment				As Restated				As Filed				Adjustment				As Restated
Net revenue:
Paid services		$	10,759,469			$	-			$	10,759,469			$	10,289,939			$	-			$	10,289,939			$	10,244,212			$	-			$	10,244,212			$	9,892,368			$	-			$	9,892,368			$	41,185,988			$	-			$	41,185,988
Marketing services			8,188,516				(955,959	)			7,232,557				9,398,992				(1,285,110	)			8,113,882				6,478,367				326,058				6,804,425				6,648,568				862,613				7,511,181				30,714,443				(1,052,398	)			29,662,045
Total net revenue			18,947,985				(955,959	)			17,992,026				19,688,931				(1,285,110	)			18,403,821				16,722,579				326,058				17,048,637				16,540,936				862,613				17,403,549				71,900,431				(1,052,398	)			70,848,033
Operating expense:
Cost of services			7,656,127				(45,439	)			7,610,688				8,366,156				(45,439	)			8,320,717				8,405,002				(45,439	)			8,359,563				7,777,480				(83,671	)			7,693,809				32,204,765				(219,987	)			31,984,778
Sales and marketing			3,763,595				-				3,763,595				3,630,394				-				3,630,394				3,550,363				-				3,550,363				3,318,847				-				3,318,847				14,263,199				-				14,263,199
General and administrative			4,355,545				-				4,355,545				4,078,822				-				4,078,822				4,589,851				-				4,589,851				4,538,020				(41,000	)			4,497,020				17,562,238				(41,000	)			17,521,238
Intangible asset impairment			-				-				-				-				-				-				-				-				-				2,325,481				-				2,325,481				2,325,481				-				2,325,481
Depreciation and amortization			1,263,604				-				1,263,604				1,584,780				-				1,584,780				1,481,670				-				1,481,670				1,564,132				-				1,564,132				5,894,186				-				5,894,186
Total operating expense			17,038,871				(45,439	)			16,993,432				17,660,152				(45,439	)			17,614,713				18,026,886				(45,439	)			17,981,447				19,523,960				(124,671	)			19,399,289				72,249,869				(260,987	)			71,988,882
Operating income (loss)			1,909,114				(910,520	)			998,594				2,028,779				(1,239,671	)			789,108				(1,304,307	)			371,496				(932,811	)			(2,983,024	)			987,284				(1,995,740	)			(349,438	)			(791,410	)			(1,140,848	)
Net interest income			686,194				-				686,194				400,243				-				400,243				345,675				-				345,675				141,640				-				141,640				1,573,752				-				1,573,752
Gain on sale of marketable security			-				-				-				-				-				-				-				-				-				120,937				-				120,937				120,937				-				120,937
Income (loss) from continuing operations before income taxes			2,595,308				(910,520	)			1,684,788				2,429,022				(1,239,671	)			1,189,351				(958,632	)			371,496				(587,136	)			(2,720,447	)			987,284				(1,733,163	)			1,345,251				(791,410	)			553,841
(Provision) benefit for income taxes			(145,928	)			-				(145,928	)			(125,693	)							(125,693	)			(106,364	)			-				(106,364	)			375,945				-				375,945				(2,040	)			-				(2,040	)
Income (loss) from continuing operations			2,449,380				(910,520	)			1,538,860				2,303,329				(1,239,671	)			1,063,658				(1,064,996	)			371,496				(693,500	)			(2,344,502	)			987,284				(1,357,218	)			1,343,211				(791,410	)			551,801
Discontinued operations:
Loss on disposal of discontinued operations			2,731				-				2,731				2,085				-				2,085				3,079				-				3,079				117				-				117				8,012				-				8,012
Loss from discontinued operations			2,731				-				2,731				2,085				-				2,085				3,079				-				3,079				117				-				117				8,012				-				8,012
Net income (loss)			2,446,649				(910,520	)			1,536,129				2,301,244				(1,239,671	)			1,061,573				(1,068,075	)			371,496				(696,579	)			(2,344,619	)			987,284				(1,357,335	)			1,335,199				(791,410	)			543,789
Preferred stock cash dividends			96,424				-				96,424				96,424				-				96,424				96,424				-				96,424				96,424				-				96,424				385,696				-				385,696
Net income (loss) attributable to common stockholders		$	2,350,225			$	(910,520	)		$	1,439,705			$	2,204,820			$	(1,239,671	)		$	965,149			$	(1,164,499	)		$	371,496			$	(793,003	)		$	(2,441,043	)		$	987,284			$	(1,453,759	)		$	949,503			$	(791,410	)		$	158,093
Basic net income (loss) per share:
Income (loss) from continuing operations		$	0.08							$	0.05			$	0.07							$	0.03			$	(0.04	)						$	(0.03	)		$	(0.08	)						$	(0.05	)		$	0.04							$	0.02
Loss on disposal of discontinued operations			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)
Net income (loss)			0.08								0.05				0.07								0.03				(0.04	)							(0.03	)			(0.08	)							(0.05	)			0.04								0.02
Preferred stock dividends			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.01	)							(0.01	)
Net income (loss) attributable to common stockholders		$	0.08							$	0.05			$	0.07							$	0.03			$	(0.04	)						$	(0.03	)		$	(0.08	)						$	(0.05	)		$	0.03							$	0.01
Diluted net income (loss) per share:
Income (loss) from continuing operations		$	0.07							$	0.04			$	0.07							$	0.03			$	(0.04	)						$	(0.03	)		$	(0.08	)						$	(0.05	)		$	0.04							$	0.02
Loss on disposal of discontinued operations			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)
Net income (loss)			0.07								0.04				0.07								0.03				(0.04	)							(0.03	)			(0.08	)							(0.05	)			0.04								0.02
Preferred stock dividends			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.01	)							(0.01	)
Net income (loss) attributable to common stockholders		$	0.07							$	0.04			$	0.07							$	0.03			$	(0.04	)						$	(0.03	)		$	(0.08	)						$	(0.05	)		$	0.03							$	0.01
Weighted average basic shares outstanding			30,392,980								30,392,980				30,452,497								30,452,497				30,482,949								30,482,949				30,381,156								30,381,156				30,427,421								30,427,421
Weighted average diluted shares outstanding			34,615,221								34,615,221				34,597,480								34,597,480				30,482,949								30,482,949				30,381,156								30,381,156				30,835,131								30,835,131
Adjusted EBITDA
Net income (loss)		$	2,446,649			$	(910,520	)		$	1,536,129			$	2,301,244			$	(1,239,671	)		$	1,061,573			$	(1,068,075	)		$	371,496			$	(696,579	)		$	(2,344,619	)		$	987,284			$	(1,357,335	)		$	1,335,199			$	(791,410	)		$	543,789
Net interest income			(686,194	)			-				(686,194	)			(400,243	)			-				(400,243	)			(345,675	)			-				(345,675	)			(141,640	)			-				(141,640	)			(1,573,752	)			-				(1,573,752	)
Gain on sale of marketable security			-				-				-				-				-				-				-				-				-				(120,937	)			-				(120,937	)			(120,937	)			-				(120,937	)
(Provision) benefit for income taxes			145,928				-				145,928				125,693				-				125,693				106,364				-				106,364				(375,945	)			-				(375,945	)			2,040				-				2,040
Depreciation & amortization			1,263,604				-				1,263,604				1,584,780				-				1,584,780				1,481,670				-				1,481,670				1,564,132				-				1,564,132				5,894,186				-				5,894,186
EBITDA			3,169,987				(910,520	)			2,259,467				3,611,474				(1,239,671	)			2,371,803				174,284				371,496				545,780				(1,419,009	)			987,284				(431,725	)			5,536,736				(791,410	)			4,745,326
Intangible asset impairment			-				-				-				-				-				-				-				-				-				2,325,481				-				2,325,481				2,325,481				-				2,325,481
Noncash compensation			701,097				-				701,097				952,035				-				952,035				986,076				-				986,076				897,877				-				897,877				3,537,086				-				3,537,086
Adjusted EBITDA		$	3,871,084			$	(910,520	)		$	2,960,564			$	4,563,509			$	(1,239,671	)		$	3,323,838			$	1,160,360			$	371,496			$	1,531,856			$	1,804,349			$	987,284			$	2,791,633			$	11,399,303			$	(791,410	)		$	10,607,893

THESTREET.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
		Unaudited													Unaudited												Unaudited												Unaudited												Unaudited												Unaudited												Unaudited
		For the Three Months Ended March 31, 2008													For the Three Months Ended June 30, 2008												For the Three Months Ended September 30, 2008												For the Three Months Ended December 31, 2008												For the Three Months Ended March 31, 2009												For the Three Months Ended June 30, 2009												For the Three Months Ended September 30, 2009
		As Restated					Promotions. com (1)				Excluding Promotions. com (1)				As Restated				Promotions. com (1)				Excluding Promotions. com (1)				As Restated				Promotions. com (1)				Excluding Promotions. com (1)				As Restated				Promotions. com (1)				Excluding Promotions. com (1)				As Filed				Promotions. com (1)				Excluding Promotions. com (1)				As Reported				Promotions. com (1)				Excluding Promotions. com (1)				As Reported				Promotions. com (1)				Excluding Promotions. com (1)
Revenue:
Paid services		$	10,759,469				$	93			$	10,759,376			$	10,289,939			$	93			$	10,289,846			$	10,244,212			$	62			$	10,244,150			$	9,892,368			$	399			$	9,891,969			$	9,507,441			$	99			$	9,507,342			$	9,428,936			$	-			$	9,428,936			$	9,373,672			$	-			$	9,373,672
Marketing services			7,232,557					1,269,812				5,962,745				8,113,882				1,736,031				6,377,851				6,804,425				1,367,792				5,436,633				7,511,181				2,161,878				5,349,303				4,519,423				1,355,598				3,163,825				5,563,305				995,590				4,567,715				5,861,931				1,557,974				4,303,957
Total revenue			17,992,026					1,269,905				16,722,121				18,403,821				1,736,124				16,667,697				17,048,637				1,367,854				15,680,783				17,403,549				2,162,277				15,241,272				14,026,864				1,355,697				12,671,167				14,992,241				995,590				13,996,651				15,235,603				1,557,974				13,677,629
Operating expense:
Cost of services			7,610,688					1,363,783				6,246,905				8,320,717				1,704,955				6,615,762				8,359,563				1,708,133				6,651,430				7,693,809				1,296,651				6,397,158				8,251,217				973,999				7,277,218				7,264,697				1,076,817				6,187,880				7,156,120				1,192,077				5,964,043
Sales and marketing			3,763,595					145,006				3,618,589				3,630,394				116,789				3,513,605				3,550,363				142,379				3,407,984				3,318,847				206,425				3,112,422				2,976,907				239,634				2,737,273				2,785,929				248,806				2,537,123				3,005,218				203,769				2,801,449
General and administrative			4,355,545					548,819				3,806,726				4,078,822				514,829				3,563,993				4,589,851				536,548				4,053,303				4,497,020				460,379				4,036,641				4,663,678				799,202				3,864,476				3,320,983				387,475				2,933,508				5,266,804				556,600				4,710,204
Intangible asset impairment			-					-				-				-				-				-				-				-				-				2,325,481				-				2,325,481				24,137,069				-				24,137,069				-				-				-				-				-				-
Depreciation and amortization			1,263,604					-				1,263,604				1,584,780				-				1,584,780				1,481,670				-				1,481,670				1,564,132				-				1,564,132				1,470,737				-				1,470,737				1,207,710				-				1,207,710				1,348,806				-				1,348,806
Restructuring expense			-					-				-				-				-				-				-				-				-				-				-				-				2,360,267				-				2,360,267				574,281				-				574,281				169,692				-				169,692
Total operating expense			16,993,432					2,057,608				14,935,824				17,614,713				2,336,573				15,278,140				17,981,447				2,387,060				15,594,387				19,399,289				1,963,455				17,435,834				43,859,875				2,012,835				41,847,040				15,153,600				1,713,098				13,440,502				16,946,640				1,952,446				14,994,194
Operating income (loss)			998,594					(787,703	)			1,786,297				789,108				(600,449	)			1,389,557				(932,811	)			(1,019,206	)			86,395				(1,995,740	)			198,822				(2,194,562	)			(29,833,011	)			(657,138	)			(29,175,873	)			(161,359	)			(717,508	)			556,149				(1,711,037	)			(394,472	)			(1,316,565	)
Net interest income			686,194					-				686,194				400,243				-				400,243				345,675				-				345,675				141,640				-				141,640				230,137				-				230,137				359,417				-				359,417				186,342				-				186,342
Gain on sales of marketable securities			-					-				-				-				-				-				-				-				-				120,937				-				120,937				-				-				-				260,746				-				260,746				34,684				-				34,684
Other income			-					-				-				-				-				-				-				-				-				-				-				-				153,677				-				153,677				-				-				-				-				-				-
Income (loss) from continuing operations before income taxes			1,684,788					(787,703	)			2,472,491				1,189,351				(600,449	)			1,789,800				(587,136	)			(1,019,206	)			432,070				(1,733,163	)			198,822				(1,931,985	)			(29,449,197	)			(657,138	)			(28,792,059	)			458,804				(717,508	)			1,176,312				(1,490,011	)			(394,472	)			(1,095,539	)
(Provision) benefit for income taxes			(145,928	)				-				(145,928	)			(125,693	)			-				(125,693	)			(106,364	)			-				(106,364	)			375,945				-				375,945				(16,227,077	)			-				(16,227,077	)			(109,250	)			-				(109,250	)			53,222				-				53,222
Income (loss) from continuing operations			1,538,860					(787,703	)			2,326,563				1,063,658				(600,449	)			1,664,107				(693,500	)			(1,019,206	)			325,706				(1,357,218	)			198,822				(1,556,040	)			(45,676,274	)			(657,138	)			(45,019,136	)			349,554				(717,508	)			1,067,062				(1,436,789	)			(394,472	)			(1,042,317	)
Discontinued operations:
Loss (income) on disposal of discontinued operations			2,731					-				2,731				2,085				-				2,085				3,079				-				3,079				117				-				117				(925	)			-				(925	)			9,532				-				9,532				1,846				-				1,846
Loss from discontinued operations			2,731					-				2,731				2,085				-				2,085				3,079				-				3,079				117				-				117				(925	)			-				(925	)			9,532				-				9,532				1,846				-				1,846
Net income (loss)			1,536,129					(787,703	)			2,323,832				1,061,573				(600,449	)			1,662,022				(696,579	)			(1,019,206	)			322,627				(1,357,335	)			198,822				(1,556,157	)			(45,675,349	)			(657,138	)			(45,018,211	)			340,022				(717,508	)			1,057,530				(1,438,635	)			(394,472	)			(1,044,163	)
Preferred stock cash dividends			96,424					-				96,424				96,424				-				96,424				96,424				-				96,424				96,424				-				96,424				96,424				-				96,424				96,424				-				96,424				96,424				-				96,424
Net income (loss) attributable to common stockholders		$	1,439,705				$	(787,703	)		$	2,227,408			$	965,149			$	(600,449	)		$	1,565,598			$	(793,003	)		$	(1,019,206	)		$	226,203			$	(1,453,759	)		$	198,822			$	(1,652,581	)		$	(45,771,773	)		$	(657,138	)		$	(45,114,635	)		$	243,598			$	(717,508	)		$	961,106			$	(1,535,059	)		$	(394,472	)		$	(1,140,587	)
Basic net income (loss) per share:
Income (loss) from continuing operations		$	0.05								$	0.07			$	0.03							$	0.05			$	(0.03	)						$	0.01			$	(0.05	)						$	(0.05	)		$	(1.50	)						$	(1.48	)		$	0.01							$	0.03			$	(0.05	)						$	(0.04	)
Loss on disposal of discontinued operations			(0.00	)								(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			0.00								0.00				(0.00	)							(0.00	)			(0.00	)							(0.00	)
Net income (loss)			0.05									0.07				0.03								0.05				(0.03	)							0.01				(0.05	)							(0.05	)			(1.50	)							(1.48	)			0.01								0.03				(0.05	)							(0.04	)
Preferred stock dividends			(0.00	)								(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)
Net income (loss) attributable to common stockholders		$	0.05								$	0.07			$	0.03							$	0.05			$	(0.03	)						$	0.01			$	(0.05	)						$	(0.05	)		$	(1.50	)						$	(1.48	)		$	0.01							$	0.03			$	(0.05	)						$	(0.04	)
Diluted net income (loss) per share:
Income (loss) from continuing operations		$	0.04								$	0.06			$	0.03							$	0.05			$	(0.03	)						$	0.01			$	(0.05	)						$	(0.05	)		$	(1.50	)						$	(1.48	)		$	0.01							$	0.03			$	(0.05	)						$	(0.04	)
Loss on disposal of discontinued operations			(0.00	)								(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			0.00								0.00				(0.00	)							(0.00	)	#		(0.00	)							(0.00	)
Net income (loss)			0.04									0.06				0.03								0.05				(0.03	)							0.01				(0.05	)							(0.05	)			(1.50	)							(1.48	)			0.01								0.03				(0.05	)							(0.04	)
Preferred stock dividends			(0.00	)								(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)			(0.00	)							(0.00	)
Net income (loss) attributable to common stockholders		$	0.04								$	0.06			$	0.03							$	0.05			$	(0.03	)						$	0.01			$	(0.05	)						$	(0.05	)		$	(1.50	)						$	(1.48	)		$	0.01							$	0.03			$	(0.05	)						$	(0.04	)
Weighted average basic shares outstanding			30,392,980									30,392,980				30,452,497								30,452,497				30,482,949								30,482,949				30,381,156								30,381,156				30,495,300								30,495,300				30,620,349								30,620,349				30,606,216								30,606,216
Weighted average diluted shares outstanding			34,615,221									34,615,221				34,597,480								34,597,480				30,482,949								30,482,949				30,381,156								30,381,156				30,495,300								30,495,300				30,620,349								30,620,349				30,606,216								30,606,216
Adjusted EBITDA
Net income (loss)		$	1,536,129				$	787,703			$	2,323,832			$	1,061,573			$	600,449			$	1,662,022			$	(696,579	)		$	1,019,206			$	322,627			$	(1,357,335	)		$	(198,822	)		$	(1,556,157	)		$	(45,675,349	)		$	657,138			$	(45,018,211	)		$	340,022			$	717,508			$	1,057,530			$	(1,438,635	)		$	394,472			$	(1,044,163	)
Interest			(686,194	)				-				(686,194	)			(400,243	)			-				(400,243	)			(345,675	)			-				(345,675	)			(141,640	)			-				(141,640	)			(230,137	)			-				(230,137	)			(359,417	)			-				(359,417	)			(186,342	)			-				(186,342	)
Gain on sales of marketable securities			-					-				-				-				-				-				-				-				-				(120,937	)			-				(120,937	)			-				-				-				(260,746	)			-				(260,746	)			(34,684	)			-				(34,684	)
Provision (benefit) for income taxes			145,928					-				145,928				125,693				-				125,693				106,364				-				106,364				(375,945	)			-				(375,945	)			16,227,077				-				16,227,077				109,250				-				109,250				(53,222	)			-				(53,222	)
Depreciation & amortization			1,263,604					-				1,263,604				1,584,780				-				1,584,780				1,481,670				-				1,481,670				1,564,132				-				1,564,132				1,470,737				-				1,470,737				1,207,710				-				1,207,710				1,348,806				-				1,348,806
EBITDA			2,259,467					787,703				3,047,170				2,371,803				600,449				2,972,252				545,780				1,019,206				1,564,986				(431,725	)			(198,822	)			(630,547	)			(28,207,672	)			657,138				(27,550,534	)			1,036,819				717,508				1,754,327				(364,077	)			394,472				30,395
Other income			-					-				-				-				-				-				-				-				-				-				-				-				(153,677	)			-				(153,677	)			-				-				-				-				-				-
Intangible asset impairment			-					-				-				-				-				-				-				-				-				2,325,481				-				2,325,481				24,137,069				-				24,137,069				-				-				-				-				-				-
Restructuring expense			-					-				-				-				-				-				-				-				-				-				-				-				2,360,267				-				2,360,267				574,281				-				574,281				169,692				-				169,692
Costs of review of Promotions.com accounting			-					-				-				-				-				-				-				-				-				-				-				-				-				-				-				-				-				-				1,307,778				-				1,307,778
Noncash compensation			701,097					(7,063	)			694,034				952,035				(11,563	)			940,472				986,076				(13,610	)			972,466				897,877				(11,696	)			886,181				1,243,613				(4,986	)			1,238,627				341,981				(3,546	)			338,435				573,221				(3,585	)			569,636
Adjusted EBITDA		$	2,960,564				$	780,640			$	3,741,204			$	3,323,838			$	588,886			$	3,912,724			$	1,531,856			$	1,005,596			$	2,537,452			$	2,791,633			$	(210,518	)		$	2,581,115			$	(620,400	)		$	652,152			$	31,752			$	1,953,081			$	713,962			$	2,667,043			$	1,686,614			$	390,887			$	2,077,501
(1) The above information with respect to Promotions.com is presented as a non-GAAP measure for illustrative purposes regarding the disposition of the Company's Promotions.com subsidiary and is not meant to represent a reflection of the operating activities of the Promotions.com subsidiary as if it was on a fully stand-alone basis.
Promotions.com was a legal subsidiary of the Company whose activities were a part of the combined results of the Company. Historically, Promotions.com was not considered an operating segment as management did not measure its results separately nor did management maintain separate discrete financial information including cash flows for its activities.
The column "Excluding Promotions.com" gives effect to the disposition of the Promotions.com subsidiary as if such disposition had taken place on the first day of such respective period.