INX 8-K Restatement of Previously Issued Financial Statements

Exhibit 99.1

Restatement of Previously Issued Financial Statements

Subsequent to the issuance of the unaudited interim condensed consolidated financial statements as of and for the three-month periods ended March 31, 2009 and 2008, the Company determined that those condensed consolidated financial statements contained (1) a computational error related to the services revenue accrual for the three months ended March 31, 2009 and (2) a classification error related to our floor plan financing.  The computational error resulted in the overstatement of services revenue by $208, overstatement of selling, general and administrative expenses by $21 for the impact on sales commission expense, and an overstatement of income tax expense by $1 for the impact on the Texas Margin Tax accrual.  Overall the computational error understated net loss from continuing operations and net loss as originally reported by $186 or $0.02 per share.  The classification error related to amounts payable under our floor plan financing arrangements with a third party financing company that is not a supplier.  The floor plan financing balances were previously classified as trade accounts payable, and the related cash flows were reported as operating cash flows.  The presentation of these non-interest bearing balances has been corrected and separately classified as “Floor Plan Financing,” on the Balance Sheet and the related cash flows have been reclassified as financing cash flows.  The classification error had no effect on the previously reported Statements of Operations.

The following is a summary of the impact of the restatement as of and for the three-month period ended March 31, 2009 on unaudited condensed consolidated financial statements (amounts are presented in thousands except share and per share amounts).

Condensed Consolidated Statement of Operations for the three months ended March 31, 2009:

	As Previously Reported			Adjustment			As Restated
Revenue:
Products	$	44,566					$	44,566
Services		12,975		$	(208	)		12,767
Total revenue		57,541						57,333
Cost of products and services:
Products		36,122						36,122
Services		8,934						8,934
Total cost of products and services		45,056						45,056
Gross profit		12,485						12,277
Selling, general and administrative expenses		12,736			(21	)		12,715
Operating(loss		(251	)					(438	)
Interest and other income ,net		12						12
Loss from continuing operations before income taxes		(239	)					(426	)
Income tax expense		51			(1	)		50
Net lossfrom continuing operations		(290	)					(476	)
Loss from discontinued operations, net of income taxes		(39	)					(39	)
Net loss	$	(329	)	$	(186	)	$	(515	)
Net loss per share:
Basic:
Loss from continuing operations	$	(0.03	)	$	(0.02	)	$	(0.05	)
Loss from discontinued operations, net of income taxes		(0.01	)					(0.01	)
Net lossper share	$	(0.04	)	$	(0.02	)	$	(0.06	)
Diluted:
Lossfrom continuing operations	$	(0.03	)	$	(0.02	)	$	(0.05	)
Loss from discontinued operations, net of income taxes		(0.01	)					(0.01	)
Net lossper share	$	(0.04	)	$	(0.02	)	$	(0.06	)
Shares used in computing net loss per share:
Basic		8,706,210						8,706,210
Diluted		8,706,210						8,706,210

Condensed Consolidated Balance Sheet at March 31, 2009:

	As Previously Reported			Adjustment			As Restated
Current Assets:
Cash and cash equivalents	$	8,681					$	8,681
Accounts receivable		46,710		$	(208	)		46,502
Inventory, net		2,745						2,745
Other current assets		1,562						1,562
Total current assets		59,698						59,490
Property and equipment		4,998						4,998
Goodwill		12,751						12,751
Intangible and other assets, net of accumulated amortization		1,667						1,667
Total assets	$	79,114		$	(208	)	$	78,906
Current Liabilities:
Notes payable	$	84					$	84
Current portion of capital lease obligations		191						191
Accounts payable		36,620		$	(31,512	)		5,108
Floor plan financing		—			31,512			31,512
Accrued expenses		6,885			(21	)		6,864
Other current liabilities		783			(1	)		782
Total current liabilities		44,563						44,541
Long-term Liabilities:
Long-term portion of capital lease obligations		308						308
Other long-term liabilities		317						317
Total long-term liabilities		625						625
Stockholders’ Equity:
Common stock		88						88
Additional paid-in capital		51,350						51,350
Accumulated deficit		(17,512	)		(186	)		(17,698	)
Total stockholders’ equity		33,926						33,740
Total liabilities and stockholders’ equity	$	79,114		$	(208	)	$	78,906

Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2009:

	As Previously Reported			Adjustment			As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(329	)	$	(186	)	$	(515	)
Adjustments to reconcile net loss to net cash used in operating activities:
Net loss from discontinued operations		39						39
Depreciation and amortization		727						727
Share-based compensation expense for employee stock options, stock grants,     and employee stock purchase plan		580						580
Loss on retirement of assets		22						22
Bad debt expense		(5	)					(5	)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		6,161			208			6,369
Inventory		(339	)					(339	)
Accounts payable		(8,552	)		8,490			(62	)
Other assets and liabilities		(487	)		(22	)		(509	)
Net cash used in operating activities		(2,183	)					6,307
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Select, Inc. purchase price adjustments		—						—
Capital expenditures		(125	)					(125	)
Net cash used in investing activities		(125	)					(125	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under  floor plan financing, net		—			(8,490	)		(8,490	)
Proceeds from issuance of common stock under employee stock purchase plan		167						167
Purchase of common stock		(66	)					(66	)
Purchase of treasury stock resulting from grantee election		(22	)					(22	)
Payments on notes payable and capital lease obligations		(27	)					(27	)
Net cash provided by (used in) financing activities		52						(8,438	)
NETDECREASE IN CASH AND CASH EQUIVALENTS		(2,256	)					(2,256	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		10,937						10,937
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	8,681		$	—		$	8,681

Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2008:

	As Previously Reported			Adjustment			As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,011					$	1,011
Adjustments to reconcile net income to net cash used in operating activities:
Net loss from discontinued operations		(4	)					(4	)
Depreciation and amortization		520						520
Share-based compensation expense for employee stock options, stock grants,     and employee stock purchase plan		312						312
Loss on retirement of assets		15						15
Bad debt expense		(45	)					(45	)
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		(119	)					(119	)
Inventory		(167	)					(167	)
Accounts payable		(1,746	)	$	1,826			80
Other assets and liabilities		144						144
Net cash used in operating activities		(79	)					1,747
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Select, Inc. purchase price adjustments		(54	)					(54	)
Capital expenditures		(563	)					(563	)
Net cash used in investing activities		(617	)					(617	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under floor plan financing, net		—			(1,826	)		(1,826	)
Proceeds from issuance of common stock under employee stock purchase plan		—						—
Proceeds from other short-term borrowings		251						251
Exercise of stock options		403						403
Excess tax benefits from stock option exercises		601						601
Purchase of common stock		(1,536	)					(1,536	)
Purchase of treasury stock resulting from grantee election		(3	)					(3	)
Payments on notes payable and capital lease obligations		(124	)					(124	)
Net cash used in financing activities		(408	)					(2,234	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(1,104	)					(1,104	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		9,340						9,340
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	8,236		$	—		$	8,236

The Company determined that the consolidated financial statements as of and for the three years ended December 31, 2008, 2007, and 2006 contained a classification error related to our floor plan financing arrangement.  The classification error related to amounts payable under our floor plan financing arrangements with a third party financing company that is not a supplier.  The floor plan financing balances were previously classified as trade accounts payable, and the related cash flows were reported as operating cash flows.  The presentation of these non-interest bearing balances has been corrected and separately classified as “Floor Plan Financing,” on the Balance Sheet and the related cash flows have been reclassified as financing cash flows.  The classification error had no effect on the previously reported Statements of Operations.

The following is a summary of the impact of the restatement on consolidated financial statements as of and for the three years ended December 31, 2008, 2007, and 2006 (amounts are presented in thousands except share and per share amounts).

Consolidated Balance Sheet at December 31, 2008:

	As Previously Reported		Adjustment			As Restated
Accounts payable	$	45,172	$	(40,002	)	$	5,170
Floor plan financing		—		40,002			40,002

Consolidated Balance Sheet at December 31, 2007:

	As Previously Reported		Adjustment			As Restated
Accounts payable	$	37,233	$	(32,519	)	$	4,714
Floor plan financing		—		32,519			32,519

Consolidated Statement of Cash Flows for the year ended December 31, 2008:

	As Previously Reported		Adjustment			As Restated
Accounts payable	$	7,939	$	(7,483	)	$	456
Net cash provided by (used in) continuing operations		6,303		(7,483	)		(1,180	)
Net cash provided by (used in) operating activities		6,321		(7,483	)		(1,162	)
Borrowings under floor plan financing, net		—		7,483			7,483
Net cash provided by financing activities of continuing operations		1,597		7,483			9,080
Net cash provided by financing activities		1,597		7,483			9,080

Consolidated Statement of Cash Flows for the year ended December 31, 2007:

	As Previously Reported		Adjustment			As Restated
Accounts payable	$	1,653	$	(6,528	)	$	(4,875	)
Net cash provided by (used in) continuing operations		9,997		(6,528	)		3,469
Net cash provided by (used in) operating activities		10,025		(6,528	)		3,497
Borrowings under floor plan financing, net		—		6,528			6,528
Net cash provided by financing activities of continuing operations		3,104		6,528			9,632
Net cash provided by financing activities		3,104		6,528			9,632

Consolidated Statement of Cash Flows for the year ended December 31, 2006:

	As Previously Reported			Adjustment			As Restated
Accounts payable	$	14,981		$	(15,978	)	$	(997	)
Net cash used in continuing operations		(26	)		(15,978	)		(16,004	)
Net cash used in operating activities		(710	)		(15,978	)		(16,688	)
Borrowings under floor plan financing, net		—			15,978			15,978
Net cash provided by financing activities of continuing operations		2,515			15,978			18,493
Net cash provided by financing activities		2,514			15,978			18,492