Iceweb, Inc - Series B convertible preferred stock ($.001 par...

Iceweb, Inc - Recent Material Event

Item 1 - Consolidated Financial Statements
	Consolidated Balance Sheet at June 30, 2008 (Unaudited)
	Consolidated Statements of Operations (Unaudited) For the Three and Nine Months Ended June 30, 2008 and 2007
	Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended June 30, 2008 and 2007
	Notes to Unaudited Consolidated Financial Statements	7-18
	Item 2 - Management’s Discussion and Analysis or Plan of Operation	19-27
	Item 3 - Controls and Procedures

PART II - OTHER INFORMATION
	Item 1 - Legal Proceedings
	Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
	Item 3 - Default upon Senior Securities
	Item 4 - Submission of Matters to a Vote of Security Holders
	Item 5 - Other Information
	Item 6 - Exhibits

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PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

ICEWEB, Inc.

Consolidated Balance Sheet

June 30, 2008

(Unaudited)

CURRENT ASSETS:
Cash	$	48,344
Accounts receivable, net of allowance of $9,000		4,100,548
Inventory, net of allowance of $73,518		694,557
Other current assets		45,504
Prepaid expenses		97,668
		4,986,621

OTHER ASSETS:
Property and equipment, net		1,141,939
Deposits		61,418
Intangible assets, net of accumulated amortization of $369,589		1,221,341
Total Assets	$	7,411,319

CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	7,522,868
Notes payable		1,931,469
Deferred revenue		15,625
		9,469,962

Long-Term Liabilities
Notes payable		1,016,558
Total Liabilities		10,486,520

Stockholders’ Deficit
Preferred stock ($.001 par value; 10,000,000 shares authorized)
Series A convertible preferred stock ($.001 par value; 0 shares issued and outstanding)		—
Series B convertible preferred stock ($.001 par value; 1,253,334 shares issued and outstanding)		1,253
Common stock ($.001 par value; 1,000,000,000 shares authorized; 22,279,088 shares issued and 22,116,588, shares outstanding)		22,118
Additional paid in capital		15,092,767
Accumulated deficit		(18,178,339	)
Treasury stock, at cost, (162,500 shares)		(13,000	)

Total stockholders’ deficit		(3,075,201	)
Total liabilities and stockholders’ deficit	$	7,411,319

See accompanying notes to unaudited consolidated financial statements

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ICEWEB, Inc.

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30						Nine Months Ended June 30
	2008			2007			2008			2007
Sales	$	5,981,083		$	3,655,019		$	14,095,946		$	12,114,253
Cost of sales		5,249,906			3,176,055			12,127,796			10,652,698
Gross profit		731,177			478,964			1,968,150			1,461,555

Operating expenses:
Marketing and selling		50,208			(53,981	)		138,927			117,248
Depreciation and amortization		259,933			58,658			412,297			189,794
Research and development		121,906			—			207,636			—
General and administrative		2,369,286			764,064			5,187,547			1,938,947

Total Operating Expenses		2,801,333			768,741			5,946,407			2,245,989

Income (loss) From Operations		(2,070,156	)		(289,777	)		(3,978,257	)		(784,434	)

Other income (expenses):
Gain/(loss) from sale of assets		—			—			—			153,319
Interest income								3,266			2,446
Interest expense		(196,450	)		(103,880	)		(481,457	)		(447,816	)

Total other (expenses):		(195,768	)		(88,195	)		(478,191	)		(292,050	)
Net income (loss)	$	(2,265,924	)	$	16,903		$	(4,456,448	)	$	(1,076,484	)
Basic and diluted loss per common share	$	(0.12	)	$	(0.05	)	$	(0.28	)	$	(0.11	)
Weighted average common shares outstanding-basic and diluted		19,172,959			10,352,305			16,162,168			9,888,434

See accompanying notes to unaudited consolidated financial statements

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ICEWEB, Inc.

Consolidated Statements of Cash Flows