08-03-2006 company confidential pg 1 board of directors meeting 08-03-2006
TRANSCRIPT
08-03-2006Company Confidential Pg 1
Board of Directors Meeting 08-03-2006Board of Directors Meeting 08-03-2006
08-03-2006Company Confidential Pg 2
AgendaCall to Order DRK
Minutes Approval DRK
Administration Issues DRK IRS Update Charles Smith Update Marketing VP Resignation Election of President Recapitalization Update
Financial Metrics DRK/SG Balance Sheet 6-30.2006 Income Statement 2006 Metrics – Operations
CEO Report GF State of the Company Business Plan Review Operations Review Forecast
Old Business DRKNext Board Meeting DRKAdjournment DRK
08-03-2006Company Confidential Pg 3
Balance Sheet 6-30-2006Unaudited Balance Sheet 6.30.2006
6/30/2006
ASSETSCash 0 Accounts Receivable 543,493 Other Assets 141,884 Fixed Assets 133,350
TOTAL ASSETS 818,728
LIABILITIES & EQUITYLiabilitiesAccounts Payable 894,673 Payroll Related Liabilities
Payroll Taxes Payable - Current 72,724 Payroll Taxes Payable (pre Q4 2005) 662,373 IRS P&I 230,000 State W/H Payroll Taxes Payable (current) 78,712 State W/H Payroll Taxes Payable (pre Q4 2005) 44,130 Accrued Payroll 484,425 Accrued Commissions 261,388 Benefits Payable 52,298 Accrued Bonus 77,000
Total Payroll Related Liabilities 1,963,050 Notes Payable
Don Kuykendall - Short Term 470,000 Don Kuykendall - Long Term 280,000 David Hoppmann - Long Term 260,000 Andree Buckley 57,338 Jeff Van 170,428 George & Meredith Friedman 30,000 Kuykendall, Hoppmann, Friedman 124,670
Total Notes Payable 1,392,435 Capital Lease Obligations 98,071 Other Liabilities 174,785 Deferred Revenue 1,474,963
Total Liabilities 5,997,977 Equity
Common Stock 100 Additional Paid-In Capital 16,000 Retained Earnings (4,916,177) Net Income (279,173)
Total Equity (5,179,250) TOTAL LIABILITIES & EQUITY 818,727
08-03-2006Company Confidential Pg 4
Income Statement Trend
Jan Feb Mar April May June Jan - Jun 06
Revenue
Publishing 228,237 236,053 249,120 272,672 277,236 274,236 1,537,554
Custom Intelligence 190,013 255,879 254,879 260,712 270,316 233,476 1,465,276
Other 35,468 1,615 1,764 - 449 - 39,297
Total Revenue 453,718 493,547 505,763 533,385 548,002 507,712 3,042,127
Expense
Personnel 366,268 410,789 456,308 466,416 443,869 392,011 2,535,660
Ecommerce 4,976 11,347 5,528 5,358 5,405 4,970 37,584
Travel 18,994 (2,905) 16,425 25,075 9,585 697 67,871
Facilities 81,864 80,864 79,864 77,864 75,864 76,864 473,182
Equipment 10,459 8,138 7,045 4,936 3,292 6,215 40,084
Marketing 1,959 2,984 663 (573) 69 83 5,184
Depreciation 10,802 10,198 10,450 9,155 8,553 7,244 56,401
Interest 4,735 5,172 4,716 3,946 3,252 2,742 24,562
Other 15,585 10,898 13,357 14,738 12,596 13,598 80,772
Total Expense 515,641 537,484 594,355 606,916 562,484 504,422 3,321,300
Net Income/ (Loss) (61,923) (43,937) (88,592) (73,531) (14,482) 3,290 (279,173)
HDCT* 70 70 75 78 79 72
* Includes International, UA, IT contractors, Mike Parks, etc.
08-03-2006Company Confidential Pg 5
June & July (Annualized) Sales Summary
Monthly Metrics:June
Individual Revenue Annualized - New: $122,329.40Individual Revenue - Renewal: $112,885.05Institutional Sales - New: $5,685.00Institutional Sales - Upsell: $100.00Institutional Sales - Renewal: $61,005.00Global Vantage $10,000.00Executive Briefings - Onetime New: $25,000.00Public Policy Revenue - New: $60,000.00Public Policy Revenue - Renewal: $141,000.00International Revenue - New: $190,000.00International Revenue - Renew: $24,000.00Protective Intelligence Revenue - New: $20,775.00Protective Intelligence Revenue - Renewal: $66,000.00Refunds/Adjustments: ($20,215.30)
Total MTD $818,564.15 Subtotal for New and Upsell Only $433,889.40
July$404,254.08$94,313.05$10,450.00$1,850.00
$30,375.00$60,000.00$6,000.00$7,500.00
$0.00$307,500.00
$0.00$14,500.00
$0.00($14,009.65)
$922,732.48$812,054.08
08-03-2006Company Confidential Pg 6
Summary Sales Trend – Annualized $K
1) Annualized Value 2) Ann Proj calculation uses Oct-Jul (closed months only)
SALES CATEGORY Oct 05After 7 Oct Nov 05 Dec 05 Jan 06 Feb 06 Mar 06 Apr 06 May 06 Jun 06 Jul 06
Indiv Sales Annualized - New: 82 92 93 124 92 120 104 132 122 404Indiv Sales - Renewal: 147 95 87 122 103 108 77 88 113 94Inst Sales - New: 35 75 19 5 20 20 6 10 6 10Inst Sales - Upsell: 24 0 1 11 0 1 2 1 0 2Inst Sales - Renewal: 63 41 64 55 6 68 35 16 61 30Global Vantage 0 0 0 0 33 52 24 19 10 60Exec Brief - Onetime New: 25 8 0 10 20 0 5 13 25 6Pub Pol Sales - New: 123 68 5 0 78 0 119 140 60 8Pub Pol Sales - Renew: 24 81 132 156 264 0 250 0 141 0Intl Sales - New: 39 142 10 25 5 0 8 5 190 308Intl Sales - Renew: 0 0 0 0 0 0 0 0 24 0Prot Intel Sales - New: 64 66 36 73 14 97 8 31 21 15Prot Intel Sales - Renew: 72 0 78 36 36 0 0 11 66 0Refunds/Adj: -30 -20 -9 -20 -11 -12 -10 -10 -20 -14Total $667 $647 $516 $598 $660 $453 $626 $455 $819 $923
Subtotal: New and Upsell Only $392 $451 $164 $249 $295 $290 $274 $350 $434 $752
GroupingsTotal Publishing $320 $283 $256 $298 $210 $304 $212 $237 $282 $527Global Vantage $0 $0 $0 $0 $33 $52 $24 $19 $10 $60Exec Briefs $25 $8 $0 $10 $20 $0 $5 $13 $25 $6Public Policy $147 $149 $137 $156 $342 $0 $369 $140 $201 $8International $39 $142 $10 $25 $5 $0 $8 $5 $214 $308Protective Intel $136 $66 $114 $109 $50 $97 $8 $41 $87 $15Total $667 $647 $516 $598 $660 $453 $626 $455 $819 $923
Annual Projection $7,637Renewal Business Pcnt 38%New Business Pcnt 62%
08-03-2006Company Confidential Pg 7
Publishing: Renewals
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
Renew # 56.7% 62.5% 67.4% 49.4% 64.3% 61.1% 57.0% 62.1% 70.7% 82.9% 64.4% 81.0%
Renew $ 54.0% 55.4% 65.6% 46.8% 59.3% 58.5% 56.3% 58.1% 75.7% 82.8% 61.9% 75.1%
Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July
08-03-2006Company Confidential Pg 8
Publishing: Annualized Sales Trend 2006 - $K
Notes/Assumptions: All months are cumulative (YTD) annualized values.
Indiv sales: refunds subtracted from new sales.
Inst sales include all renewals not just Jul expirations.
Inst sales are group subscriptions only.
Individual
$0
$500
$1000
$1500
$2000
New $105 $186 $294 $390 $516 $627 $1027
Renew $122 $224 $332 $409 $496 $604 $699
Total $226 $410 $626 $799 $1012 $1231 $1726
Jan Feb Mar Apr May Jun Jul
Institutional
$0
$50
$100
$150
$200
$250
$300
$350
$400
New $3 $22 $33 $39 $49 $55 $65
Renew $66 $73 $142 $179 $196 $257 $289
Total $69 $95 $176 $218 $245 $312 $355
Jan Feb Mar Apr May Jun Jul
Combined
$0
$500
$1000
$1500
$2000
$2500
New $107 $208 $328 $429 $565 $682 $1093
Renew $188 $298 $474 $587 $692 $862 $988
Total $295 $506 $802 $1016 $1257 $1543 $2081
Jan Feb Mar Apr May Jun Jul
08-03-2006Company Confidential Pg 9
Hits: Total of all objects (text, image, frame) on a viewed page.
Visit: Guests may visit your site and read multiple articles, it is 1 site visit and 1 for each article visited. Visits to multiple articles are non-cumulative.
View: Number of times a page is viewed. Printing increases the views of a given page. Pages embedded in other pages (podcast e.g.) are additional views.
Publishing: Web Activity Apr-Jul Executive Dashboard
Traffic Analysis Apr May Jun Jul Visitor Analysis Apr May Jun Jul
Total Visits 162,369 196,168 206,578 390,638 Total unique visitors 49,476 52,813 54723 120,908
Total MBsTrans 156,957 206,834 214,084 448,852 Total new visitors 22,498 25,768 25747 67,597
Avg visits per day 5,412 6,328 6,886 12,601 Total repeat visitors 30,398 30,840 33319 66,112
Avg pgs viewed/visit 6 6 6 6 Avg unique visitors/day 3,405 3,660 3935 7,311
Avg pgs viewed/day 34,221 38,156 40,820 79,127 Avg new visitors/day 750 831 858 2,181
Highest Vol time of day 13:00-14:00 10:00-11:00 15:00-16:00 10:00-11:00 Avg repeat visitors/day 2,721 2,901 3159 5,373
Highest Vol day of wk Weds Tues Thurs Monday Avg length of visit 5:33 5:09 5:00 5:05
Highest Vol day Weds Apr 5 Tues May 30 Thurs Jun 8 Mon Jul 17 Leading visitor profile 060404=fcst 060522-milrate060522-milrate060522-milrate
08-03-2006Company Confidential Pg 10
Web StatisticsWeb Statistics
Unique VisitorsNumber of distinct visitors who visited your site. (If you visited the site four times inthe month, you would count as one unique visitor).
New Visitors:Number of visitors who visited your site for the first time ever this month. (If youvisited the site once last month and once this month, you would NOT becounted as a new visitor.
Repeat Visitors:
Number of visitors this month who had been to your site sometime before.
Definitions:
Visitor Profile
0
20000
40000
60000
80000
100000
120000
140000
Oct Nov Dec Jan Feb Mar Apr May June July
Unique New Repeat
Visits
050000
100000150000200000250000300000350000400000450000
Oct Nov Dec Jan Feb Mar Apr May June July
Free Trials: Sign Ups & Conversion Trend
0
50
100
150
200
250
300
350
400
0%
10%
20%
30%
40%
50%
60%
70%
80%
Sign ups 159 212 267 250 320 178 98 165 307
Conversions 99 112 104 103 184 102 41 59 142
Conv Rate 62% 53% 39% 41% 58% 57% 42% 36% 46%
Nov Dec Jan Feb Mar Apr May June July
08-03-2006Company Confidential Pg 11
Individual Publishing: Subscription Trends
Premium Qtr & Direct
0
50
100
150
200
250
300
350
Premium Other 0 1 16 119 159 196 212 206 219 235 240 246 258 297 324
4/20 4/27 5/4 5/11 5/17 5/25 5/31 6/8 6/15 6/22 6/29 7/6 7/13 7/20 7/27
Premium Annual
2000
3000
4000
5000
6000
7000
8000
9000
10000
Premium Annual 8390 8406 8395 8328 8283 8262 8531 8660 8655 8645 8638 8618 8463 8904 9070
4/20 4/27 5/4 5/11 5/17 5/25 5/31 6/8 6/15 6/22 6/29 7/6 7/13 7/20 7/27
Total Premium Subscriptions
0
2000
4000
6000
8000
10000
12000
Premium Total 9218 9264 9319 9343 9338 9345 9620 9712 9686 9677 9695 9678 9543 10183 10508
4/20 4/27 5/4 5/11 5/17 5/25 5/31 6/8 6/15 6/22 6/29 7/6 7/13 7/20 7/27
Premium Monthly
0
200
400
600
800
1000
1200
Premium Monthly 828 857 908 896 896 887 877 846 812 797 817 814 822 982 1114
4/20 4/27 5/4 5/11 5/17 5/25 5/31 6/8 6/15 6/22 6/29 7/6 7/13 7/20 7/27
08-03-2006Company Confidential Pg 12
Individual Publishing: Free List Subscriber Trend
Notes:Subscribers to each of these free reports are not unique, i.e. a subscriberto all three reports is included once in each product category. For this reason, total freelist subscriptions does not equal the sum of the three.
Change Calculation(Beginning and End Point):
GIR PPI TIB17-Apr 76177 18454 20104
27-Jul 78756 23600 26058.
Delta 2579 5146 5954
Delta % 3.4% 27.9% 29.6%
GIR
70000
72000
74000
76000
78000
800004/
17/2
006
4/21
/200
64/
25/2
006
4/29
/200
65/
3/20
065/
7/20
065/
11/2
006
5/15
/200
65/
19/2
006
5/23
/200
65/
27/2
006
5/31
/200
66/
4/20
066/
8/20
066/
12/2
006
6/16
/200
66/
20/2
006
6/24
/200
66/
28/2
006
7/2/
2006
7/6/
2006
7/10
/200
67/
14/2
006
7/18
/200
67/
22/2
006
7/26
/200
6
TIB
19500
20500
21500
22500
23500
24500
25500
26500
27500
4/17
/200
64/
21/2
006
4/25
/200
64/
29/2
006
5/3/
2006
5/7/
2006
5/11
/200
65/
15/2
006
5/19
/200
65/
23/2
006
5/27
/200
65/
31/2
006
6/4/
2006
6/8/
2006
6/12
/200
66/
16/2
006
6/20
/200
66/
24/2
006
6/28
/200
67/
2/20
067/
6/20
067/
10/2
006
7/14
/200
67/
18/2
006
7/22
/200
67/
26/2
006
PPI
18000
19000
20000
21000
22000
23000
24000
4/17
/200
64/
21/2
006
4/25
/200
64/
29/2
006
5/3/
2006
5/7/
2006
5/11
/200
65/
15/2
006
5/19
/200
65/
23/2
006
5/27
/200
65/
31/2
006
6/4/
2006
6/8/
2006
6/12
/200
66/
16/2
006
6/20
/200
66/
24/2
006
6/28
/200
67/
2/20
067/
6/20
067/
10/2
006
7/14
/200
67/
18/2
006
7/22
/200
67/
26/2
006
Covers 4/17/06 – 7/27/06 (Approx 14 weeks).