Mattersight 8-K/A Consolidated Statements of Operations

Exhibit 99.1

MATTERSIGHT CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except per share data)

		For the						For the
		Three Months Ended						Twelve Months Ended
		Dec. 31, 2013			Dec. 31, 2012			Dec. 31, 2013			Dec. 31, 2012
Revenue:
Behavioral Analytics revenue		$	8,938		$	8,343		$	33,005		$	32,138
Other revenue			233			285			1,206			1,314
Total services revenue			9,171			8,628			34,211			33,452
Reimbursed expenses			96			97			283			411
Total revenue			9,267			8,725			34,494			33,863
Operating expenses:
Cost of Behavioral Analytics revenue			2,181			3,245			10,139			12,208
Cost of other revenue			100			156			617			702
Cost of services			2,281			3,401			10,756			12,910
Reimbursed expenses			96			97			283			411
Total cost of revenue, exclusive of depreciation and amortization shown below:			2,377			3,498			11,039			13,321
Sales, marketing and development			5,258			6,571			21,760			23,142
General and administrative			2,157			2,341			8,782			8,255
Severance and related costs			—			—			154			693
Depreciation			764			915			3,450			3,419
Amortization of intangibles			(77	)		17			66			81
Total operating expenses			10,479			13,342			45,251			48,911
Operating loss			(1,212	)		(4,617	)		(10,757	)		(15,048	)
Interest and other expense, net			(346	)		(81	)		(659	)		(384	)
Loss from continuing operations before income taxes			(1,558	)		(4,698	)		(11,416	)		(15,432	)
Income tax benefit (provision)			15			(8	)		244			(38	)
Loss from continuing operations			(1,543	)		(4,706	)		(11,172	)		(15,470	)
Income from discontinued operations, net of tax			—			21			—			249
Net loss			(1,543	)		(4,685	)		(11,172	)		(15,221	)
Series B Stock fair value over stated value			—			—			—			(69	)
Dividends related to Series B Stock			(148	)		(147	)		(589	)		(591	)
Net loss available to Common Stock holders		$	(1,691	)	$	(4,832	)	$	(11,761	)	$	(15,881	)
Per share of Common Stock:
Basic loss from continuing operations		$	(0.10	)	$	(0.30	)	$	(0.70	)	$	(1.01	)
Basic income from discontinued operations		$	—		$	—		$	—		$	0.02
Basic net loss available to Common Stock holders		$	(0.10	)	$	(0.30	)	$	(0.70	)	$	(0.99	)
Per share of Common Stock:
Diluted loss from continuing operations		$	(0.10	)	$	(0.30	)	$	(0.70	)	$	(1.01	)
Diluted income from discontinued operations		$	—		$	—		$	—		$	0.02
Diluted net loss available to Common Stock holders		$	(0.10	)	$	(0.30	)	$	(0.70	)	$	(0.99	)
Shares used to calculate basic net loss per share			17,342			16,223			16,722			16,002
Shares used to calculate diluted net loss per share			17,342			16,223			16,722			16,002
Stock-based compensation, primarily restricted stock, is included in individual line items above:
Cost of Behavioral Analytics revenue		$	59		$	2		$	267		$	16
Sales, marketing and development			342			530			3,436			2,308
General and administrative	��		219			349			1,872			1,405
Severance and related costs			—			—			29			268

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MATTERSIGHT CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited and in thousands)

	For the						For the
	Three Months Ended						Twelve Months Ended
	Dec. 31,			Dec. 31,			Dec. 31,			Dec. 31,
	2013			2012			2013			2012
Net loss	$	(1,543	)	$	(4,685	)	$	(11,172	)	$	(15,221	)
Other comprehensive loss:
Effect of currency translation		6			2			6			(1	)
Comprehensive net loss	$	(1,537	)	$	(4,683	)	$	(11,166	)	$	(15,222	)

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MATTERSIGHT CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except share and per share data)

	December 31,			December 31,
	2013			2012
ASSETS:
Current Assets:
Cash and cash equivalents	$	13,392		$	14,419
Receivables (net of allowances of $12 and $12)		2,384			2,568
Prepaid expenses		3,576			4,359
Other current assets		427			305
Total current assets		19,779			21,651
Equipment and leasehold improvements, net		5,158			4,727
Goodwill		972			972
Intangibles, net		409			236
Other long-term assets		4,431			3,776
Total assets	$	30,749		$	31,362
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current Liabilities:
Short-term debt	$	—		$	3,703
Accounts payable		752			781
Accrued compensation and related costs		1,844			1,335
Unearned revenue		7,215			5,853
Other current liabilities		4,098			2,889
Total current liabilities		13,909			14,561
Long-term unearned revenue		2,866			2,374
Other long-term liabilities		1,607			1,231
Total liabilities		18,382			18,166
Series B Stock, $0.01 par value; 5,000,000 shares authorized and designated; 1,649,122 and 1,649,201 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively, with a liquidation preference of $9,294 and $8,705 at December 31, 2013 and December 31, 2012, respectively		8,411			8,411
Stockholders’ Equity:
Preferred stock, $0.01 par value; 35,000,000 shares authorized; none issued and outstanding		—			—
Common Stock, $0.01 par value; 50,000,000 shares authorized; 20,465,984 and 18,407,848 shares issued at December 31, 2013, and December 31, 2012, respectively; and 18,886,966 and 17,114,880 outstanding at December 31, 2013 and December 31, 2012, respectively		205			184
Additional paid-in capital		228,038			216,667
Accumulated deficit		(212,172	)		(201,000	)
Treasury stock, at cost, 1,579,018 and 1,292,968 shares at December 31, 2013 and December 31, 2012, respectively		(8,082	)		(7,027	)
Accumulated other comprehensive loss		(4,033	)		(4,039	)
Total stockholders’ equity		3,956			4,785
Total liabilities and stockholders’ equity	$	30,749		$	31,362

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MATTERSIGHT CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)

	For the
	Twelve Months Ended
	December 31, 2013			December 31, 2012
Cash Flows from Operating Activities:
Net loss	$	(11,172	)	$	(15,221	)
Less: net income from discontinued operations		—			249
Net loss from continuing operations		(11,172	)		(15,470	)
Adjustments to reconcile net loss from continuing operations to net cash provided by (used in) operating activities:
Depreciation and amortization		3,516			3,500
Stock-based compensation		5,575			3,729
Severance and related costs		29			268
Change in fair value of warrant liability		125			—
Other		2			2
Changes in assets and liabilities:
Receivables		184			(27	)
Prepaid expenses		739			1,879
Other assets		(112	)		(50	)
Accounts payable		(29	)		(31	)
Accrued compensation and related costs		509			(47	)
Unearned revenue		1,854			(4,592	)
Other liabilities		330			(177	)
Total adjustments		12,722			4,454
Net cash provided by (used in) continuing operations		1,550			(11,016	)
Net cash provided by discontinued operations		—			24
Net cash provided by (used in) operating activities		1,550			(10,992	)
Cash Flows from Investing Activities:
Capital expenditures and other		(1,233	)		(2,081	)
Patents and trademarks		(239	)		(79	)
Net cash used in continuing investing activities		(1,472	)		(2,160	)
Net cash used in discontinued investing activities		—			—
Net cash used in investing activities		(1,472	)		(2,160	)
Cash Flows from Financing Activities:
Proceeds from issuance of Common Stock, net		5,621			—
Proceeds from line of credit		2,400			3,691
Repayments from line of credit		(6,096	)		—
Principal payments under capital lease obligations		(2,117	)		(2,311	)
Acquisition of treasury stock		(1,055	)		(1,136	)
Proceeds from stock compensation and employee stock purchase plans, net		138			802
Proceeds from issuance of stock warrants		4			—
Fees from issuance of Common Stock		—			(49	)
Decrease in restricted cash		—			1,500
Purchase of shares of Series B Stock		—			(3,743	)
Payment of Series B Stock dividends		—			(595	)
Net cash used in continuing financing activities		(1,105	)		(1,841	)
Net cash used in discontinued financing activities		—			—
Net cash used in financing activities		(1,105	)		(1,841	)
Effect of exchange rate changes on cash and cash equivalents by continuing operations		—			4
Effect of exchange rate changes on cash and cash equivalentsby discontinued operations		—			—
Effect of exchange rate changes on cash and cash equivalents		—			4
Decrease in cash and cash equivalents		(1,027	)		(14,989	)
Cash and cash equivalents, beginning of period		14,419			29,408
Cash and cash equivalents of continuing operations, end of period	$	13,392		$	14,419

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	For the
	Twelve Months Ended
	December 31, 2013		December 31, 2012
Non-Cash Investing and Financing Transactions:
Capital lease obligations incurred	$	2,973	$	1,793
Capital equipment purchased on credit		2,973		1,793
Fair value of warrants classified as liability		785		—
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	403	$	371

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MATTERSIGHT CORPORATION

CALCULATION OF ADJUSTED EARNINGS MEASURE

(Unaudited and in thousands)

	For the						For the
	Three Months Ended						Twelve Months Ended
	Dec. 31, 2013			Dec. 31, 2012			Dec. 31, 2013			Dec. 31, 2012
GAAP — Operating loss	$	(1,212	)	$	(4,617	)	$	(10,757	)	$	(15,048	)
Add back (reduce) the effect of:
Stock-based compensation		620			881			5,575			3,729
Severance and related costs		—			—			154			693
Depreciation and amortization		687			932			3,516			3,500
Adjusted earnings measure — earnings (loss)	$	95		$	(2,804	)	$	(1,512	)	$	(7,126	)

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