Common use of SELECTED FINANCIAL INFORMATION Clause in Contracts

SELECTED FINANCIAL INFORMATION. Comparison of the year ended December 31, 2006 to the year ended December 31, 2005. The following data summarizes the Borrower’s statements of operations for the years ended December 31, 2005 and 2006. The information presented below was derived from audited financial information. Year Ended December 31, Statement of Operations Data 2005 2006 Revenue $ 1,525,892 $ 926,021 Costs and operating expenses Costs of sales 735,836 515,150 General and administrative 2,139,973 1,973,253 Non-cash stock compensation 1,765,889 846,253 Impairment of fixed assets 25,000 — Depreciation and amortization 41,760 22,254 Total costs and expenses 4,508,458 3,356,910 Net operating (loss) (3,270,066 ) (2,430,889 ) Other income (expense) Non-cash interest expense (30,400 ) (195,002 ) Non-cash financing expense 87,500 (98,274 ) Interest expense (49,726 ) (83,369 ) Net (loss) (3,350,192 ) (2,807,534 ) Class A Preferred stock dividend (53,387 ) (50,000 ) Net (loss) attributable to common stockholders $ (3,403,579 ) $ (2,857,534 ) Comparison of the six months ended June 30, 2007 to six months ended June 30, 2006. The following table summarizes the results of the Borrower’s operations for the six months ended June 30, 2006 and 2007. The information presented below and in the following discussion was derived from unaudited financial information. In the opinion of the Borrower’s management, the unaudited financial statements include all adjustments, consisting only of normal, recurring adjustments that management considers necessary for a fair statement of the results of that period. The Borrower’s historical results are not necessarily indicative of the results to be expected in any future period. Six Months Ended June 30, Statement of Operations Data 2006 2007 Revenue $ 516,552 $ 433,944 Costs and operating expenses Costs of sales 264,275 318,100 General and administrative 1,276,687 716,087 Non-cash stock compensation 391,111 319,084 Depreciation and amortization 12,096 22,927 Total costs and expenses 1,944,169 1,376,198 Net operating (loss) (1,427,617 ) (942,254 ) Other income (expense) Gain on settlement of A/P — 32,713 Non-cash interest expense (195,002 ) — Non-cash financing expense (30,125 ) (43,757 ) Interest expense (31,347 ) (99,806 ) Net (loss) (1,684,091 ) (1,053,104 ) Class A Preferred stock dividend (25,000 ) (30,000 ) Net (loss) attributable to common stockholders $ (1,709,091 ) $ (1,083,104 ) The Borrower will make its full audited and unaudited financial statements available to the Lender upon the Lender’s written request. The Borrower’s historical results are not necessarily indicative of the results to be expected in any future period.

SELECTED FINANCIAL INFORMATION. Comparison of The following selected financial data has been derived from the year ended December 31, 2006 to Borrower’s audited financial statements for the year two fiscal years ended December 31, 2005. The following data summarizes the Borrower’s , and from its reviewed financial statements of operations for the years nine months ended September 30, 2006 and its un-reviewed Borrower prepared financial statements for the three months ended December 31, 2005 and 2006. The information presented below was derived from audited financial information. Year Ended December 31, Statement of Operations Data 2005 2006 Revenue $ 1,525,892 $ 926,021 Costs and operating expenses Costs of sales 735,836 515,150 General and administrative 2,139,973 1,973,253 Non-cash stock compensation 1,765,889 846,253 Impairment of fixed assets 25,000 — Depreciation and amortization 41,760 22,254 Total costs and expenses 4,508,458 3,356,910 Net operating (loss) (3,270,066 ) (2,430,889 ) Other income (expense) Non-cash interest expense (30,400 ) (195,002 ) Non-cash financing expense 87,500 (98,274 ) Interest expense (49,726 ) (83,369 ) Net (loss) (3,350,192 ) (2,807,534 ) Class A Preferred stock dividend (53,387 ) (50,000 ) Net (loss) attributable to common stockholders $ (3,403,579 ) $ (2,857,534 ) Comparison of the six months ended June 30, 2007 to six months ended June 30, 2006. The following table summarizes the results of the Borrower’s operations for the six months ended June 30, 2006 and 2007. The information presented below and in the following discussion was derived from unaudited financial information. In the opinion of the Borrower’s management, the unaudited financial statements include all adjustments, consisting only of normal, recurring adjustments that management considers necessary for a fair statement of the results of that period. The Borrower’s historical results are not necessarily indicative of the results to be expected in any future period. Six Months Ended June 30, Statement of Operations Data 2006 2007 Revenue $ 516,552 $ 433,944 Costs and operating expenses Costs of sales 264,275 318,100 General and administrative 1,276,687 716,087 Non-cash stock compensation 391,111 319,084 Depreciation and amortization 12,096 22,927 Total costs and expenses 1,944,169 1,376,198 Net operating (loss) (1,427,617 ) (942,254 ) Other income (expense) Gain on settlement of A/P — 32,713 Non-cash interest expense (195,002 ) — Non-cash financing expense (30,125 ) (43,757 ) Interest expense (31,347 ) (99,806 ) Net (loss) (1,684,091 ) (1,053,104 ) Class A Preferred stock dividend (25,000 ) (30,000 ) Net (loss) attributable to common stockholders $ (1,709,091 ) $ (1,083,104 ) The Borrower will make its full audited and unaudited financial statements available to the Lender upon the Lender’s his written request. The Borrower’s historical results are not necessarily indicative of the results to be expected in any future period.. Information contained in this document is proprietary and not to be disclosed without written permission from IPtimize, Inc. 0000 X. Xxxxxx St, Ste. 200; Denver, CO 80222 000-000-0000 (Main) 000-000-0000 (Fax) 2004 Audited 2005 Audited 2006 Unaudited 1 Statement of Operations Data Operating income 288,700 790,056 410,872 Operating expenses Non-cash Stock Compensation 901,229 1,865,889 871,779 Impairment of Fixed Assets 0 25,000 0 General and administrative 1,552,102 2,157,873 1,561,620 Depreciation & Amortization 39,528 41,760 22,254 Net Operating (Loss) (2,966,901) (3,300,466) (2,044,781) Other Income (Expense) Interest Expense (28,103) (49,726) (344,306) Net income (loss) (2,995,004 (3,350,192) (2,389,087) Weighted average shares outstanding 16,877,757 15,021,955 Net income (loss) per share (0.18) (0.22) Balance Sheet Data—At Period End Cash and equivalents 89,250 23,078 (7,565) Current assets 264,610 130,740 89,272 Fixed assets 132,945 66,185 46,556 Other assets 4,021 10,321 349,103 Total assets 490,826 230,324 477,366 Current liabilities 1,797,553 1,216,091 2,293,733 Long term debt 43,613 17,601 17,601 Total liabilities 1,841,166 1,233,692 2,311,334 Total stockholders’ equity (deficit) (1,350,340) (1,003,368) (1,833,968) Total liabilities and equity 490,826 230,324 477,366 ___________________________ 1 Comprised of reviewed statements for the nine months ended September 30, 2006 and un-reviewed company prepared statements for the year ended December 31, 2006