Princeton Review (REVU) 8-K The Princeton Review Reports 2007 Operating Results

Exhibit 99.2

THE PRINCETON REVIEW, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share data)

	As Previously Issued						As Restated
	December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005
ASSETS:
Current assets:
Cash and cash equivalents	$	10,822		$	8,002		$	10,822		$	8,002
Accounts receivable		31,531			22,493			31,531			22,493
Accounts receivable-related parties		124			1,591			124			1,591
Other receivables		1,999			813			1,999			813
Inventory		2,950			2,798			2,950			2,798
Prepaid expenses		1,653			2,229			1,653			2,229
Other current assets		2,612			1,307			2,612			1,307
Other current assets related to discontinued operations		181			—			181			—
Total current assets		51,872			39,233			51,872			39,233
Furniture, fixtures, equipment and software development, net		18,340			16,155			18,340			16,155
Goodwill		31,006			31,506			31,006			31,506
Investment in affiliates		1,639			1,938			1,639			1,938
Other intangibles, net		11,527			13,371			11,527			13,371
Other assets		1,744			3,168			1,744			3,168
Other assets related to discontinued operations		1,980			—			1,980			—
Total assets	$	118,108		$	105,371		$	118,108		$	105,371
LIABILITIES & STOCKHOLDERS’ EQUITY:
Current liabilities:
Line of credit	$	3,000		$	—		$	3,000		$	—
Accounts payable		15,220			10,449			15,220			10,449
Accrued expenses		11,277			10,826			11,277			10,826
Current maturities of long-term debt		1,369			1,530			1,369			1,530
Deferred income		20,672			16,548			20,672			16,548
Current liabilities related to discontinued operations		2,541			—			2,541			—
Total current liabilities		54,079			39,353			54,079			39,353
Deferred rent		2,558			2,327			2,558			2,327
Long-term debt		14,127			2,845			14,127			2,845
Deferred tax liability		—			—			3,703			3,037
Fair value of derivatives and warrant		181			393			181			393
Series B-1 Preferred Stock		6,000			10,000			6,000			10,000
Common stock		276			276			276			276
Additional paid-in capital		117,082			116,279			117,082			116,279
Accumulated deficit		(75,871	)		(65,823	)		(79,574	)		(68,860	)
Accumulated other comprehensive loss		(324	)		(279	)		(324	)		(279	)
Total stockholders’ equity		41,163			50,453			37,460			47,416
Total liabilities and stockholders’ equity	$	118,108		$	105,371		$	118,108		$	105,371

THE PRINCETON REVIEW, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)

	Years Ended						Years Ended
	December 31,						December 31,
	As Previously Issued (1)						As Reissued
	2006			2005			2006			2005
Revenue
Test Preparation Services	$	90,418		$	93,808		$	90,418		$	93,808
SES		6,798			—			6,798			—
K-12 Services		37,965			31,931			37,965			31,931
Total revenue		135,181			125,739			135,181			125,739
Cost of revenue
Test Preparation Services		30,861			28,686			30,861			28,686
SES		3,722			—			3,722			—
K-12 Services		23,365			17,681			23,365			17,681
Total cost of revenue		57,948			46,367			57,948			46,367
Gross Profit		77,233			79,372			77,233			79,372
Operating expenses
Selling, general and administrative expenses		85,990			83,507			85,990			83,507
Impairment of investment		300			—			300			—
Total operating expenses		86,290			83,507			86,290			83,507
Income (loss) from continuing operations		(9,057	)		(4,135	)		(9,057	)		(4,135	)
Interest income (expense)		(649	)		(347	)		(649	)		(347	)
Other income (expense)		(34	)		2,420			(34	)		2,420
Income (loss) before income taxes		(9,740	)		(2,062	)		(9,740	)		(2,062	)
(Provision) benefit for income taxes		(153	)		—			(671	)		(672	)
Net income (loss) from continuing operations		(9,893	)		(2,062	)		(10,411	)		(2,734	)
Discontinued operations
Income (loss) from discontinued operations		362			(123	)		362			(123	)
Gain from disposal of discontinued operations		—			—			—			—
(Provision) benefit for income taxes		—			—			(148	)		—
Income (loss) from discontinued operations		362			(123	)		214			(123	)
Net income (loss)		(9,531	)		(2,185	)		(10,197	)		(2,857	)
Dividends and accretion on Series C and B-1 Preferred Stock		(517	)		(2,443	)		(517	)		(2,443	)
Income (loss) attributed to common stockholders	$	(10,048	)	$	(4,628	)	$	(10,714	)	$	(5,300	)
Earnings (loss) per share
Basic and Diluted
Income (loss) from continuing operations	$	(0.37	)	$	(0.16	)	$	(0.40	)	$	(0.19	)
Income (loss) from discontinued operations	$	0.01		$	(0.01	)	$	0.01		$	(0.00	)
Income (loss) attributed to common shareholders	$	(0.36	)	$	(0.17	)	$	(0.39	)	$	(0.19	)
Weighted average shares used in computing income (loss) per share
Basic		27,578			27,570			27,578			27,570
Diluted		27,578			27,570			27,578			27,570

(1) In February 2007 the Company completed its sale of certain assets of the Company’s Admissions Services Division. All 10-Qs filed in 2007 have been restated reflecting this transaction as discontinued operations.