**Exhibit99.1**

 

****

 

**FINAL**

 

Bidz.com Announces FinancialResults for the Second Quarter 2010

 

·                  Approximately $9.7 million in cash, $29.8 million inpositive working capital and zero debt

 

·                  Reduced customer acquisition costs by 29.1% to $39 per newbuyer, and average selling price per order increased 10% to $198

 

·                  Announced completion of 2.2 million share buyback

 

·                  Both David Zinberg and Marina Zinberg terminated their10b5-1 Plans

 

·                  Announced dismissal of State Court derivative case andmotions to dismiss the federal derivative and Federal securities fraud cases

 

CULVER CITY, Calif., August 9,2010 — Bidz.com (NASDAQ: BIDZ), a leading online retailer of jewelry,announced results for the second quarter ended June 30, 2010.

 

Net revenues for the second quarterof 2010 were $25.7 million, compared with $26.9 million reported in the secondquarter of 2009. During the quarter, the Company reported B2B sales of $1.9million, compared with $471 thousand of sales in the prior year period; theCompany’s business continues to be impacted by the ongoing economic weakness,as well as an overall decline in demand for jewelry. Additionally, at the endof the second quarter, the Company had approximately $2.1 million in salesorders from its layaway plan, which the Company expects to book as revenues inthe third and fourth quarter when the products are paid for in full by thecustomers and shipped. The Company’s domestic and international sales forthe second quarter 2010 represented 57.4% and 42.6%, respectively, comparedwith 65.7% and 34.3%, respectively, in 2009.

 

David Zinberg, Chief ExecutiveOfficer, added, “We are working hard to continue to build awareness andvisibility of all three of our sites, Bidz, Buyz and Modnique. Additionally, weare starting to see more demand for our brands internationally, and we are nowseeing improvements in many markets around the world. Canada, Australia, SaudiArabia and Spain are among our top international markets. Furthermore, we arecontinuing to see many of our key operating metrics show signs of continuedprogress and stabilization.”

 

In the second quarter, the Companyalso saw improvement in many of its key revenue metrics. During the quarter,the average selling price per order increased 10.0% to $198 from $180; averageitems sold per transaction increased 15.0% to 4.0 items and the Company’sacquisition cost per new buyer decreased by 29.1% to $39 from $55. The Companybelieves this is an important statistic and reflective of its increased focuson managing the ROI on its marketing spend.

 

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| ** **                               | ** ** | **Three Months  Ended June 30,** | ** ** |
|------------------------------------------|------------|---------------------------------------|------------|
| **Auction Metrics**                      | ** ** | **2010**                              | ** ** | **2009** | ** ** | **% Change** | ** ** |
| Number  of new buyers                    |       | 34,264                                |       | 38,577 |   | -11.2 | % |
| Average  selling price per order (gross) |       | $                                     | 198        |   | $ | 180 |   | 10.0 | % |
| Average orders  per day                  |       | 1,460                                 |       | 1,712 |   | -14.7 | % |
| Average  items sold per day              |       | 5,840                                 |       | 5,956 |   | -1.9 | % |
| Average  items sold per transaction      |       | 4.0                                   |       | 3.5 |   | 15.0 | % |
| Acquisition  cost per new buyer          |       | $                                     | 39         |   | $ | 55 |   | -29.1 | % |
| Gross  Margin $ per average order   |       | $                                     | 48         |   | $ | 55 |   | -13.0 | % |

 

In the second quarter of 2010,gross profit was approximately $6.2 million, compared with $8.2 million in thesecond quarter of 2009. Gross margin in the second quarter of 2010 was 24.0%compared with 30.6% in the same period of 2009. The decrease in gross profit asa percentage of sales was primarily due to the Company’s free shippingpromotions, and lower gross margins from B2B sales.

 

General and administrative expensesfor the second quarter 2010 were $5.4 million, compared to $4.6 million inthe prior year period. The increase in general and administrative expenses wasdue to higher overall administrative expenses, as well as additional expensesto operate Modnique.com. Sales and marketing expenses for the second quarter2010 were $1.4 million, compared with $2.1 million, in the prior year period.Sales and marketing expense as a percentage of net revenue decreased to 5.6%from 7.9% in the prior year period. Sales and marketing expense were reduced inorder to keep marketing return on investment in line with the company’sinternal ROI goals.

 

Total operating expenses in thesecond quarter 2010 were $7.0 million, compared with $6.9 million in the prioryear period. Loss from operations for the second quarter of 2010 was $883,000,compared to a profit from operations of $1.3 million in the second quarter of2009.

 

Net loss for the second quarter of2010 was approximately $653,000, or $0.03 per fully diluted share, on 21.8million weighted average shares outstanding, compared to net income of$693,000, or $0.03 per fully diluted share, on 22.9 million weighted averageshares outstanding in the same period of 2009.

 

During the second quarter 2010, theCompany recorded an income tax benefit of $230,000, compared with an income taxexpense of $626,000 in the prior year period, with an effective tax rate of26.1% and 46.7%, respectively. The income tax benefit in the second quarter wasadversely affected, and lower than expected, due to additional paid-in-capitalpool (“APIC Pool”) shortfalls related to stock based compensation.

 

Lawrence Kong, Chief FinancialOfficer, commented, “If the regular tax rate was applied we would have recordedan EPS loss of $(0.02) in the second quarter. Also, we aggressively reducedinventories by $5.7 million from year-end, which contributed to a verysignificant increase in net cash from operations of $12.2 million for the sixmonths period ended June 30, 2010. We also substantially increased ourcash balance from year-end of $1.1 million, to $9.7 million in the secondquarter 2010. We are confident that these aggressive liquidity steps willposition us well for the future.”

 

As of June 30, 2010, prior tothe share repurchase discussed below. the Company had approximately $9.7million in cash. Additionally, the Company had $29.8 million in positive 

 

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working capital and no long-termdebt. The Company believes thatcash and cash equivalents currently on hand and cash flows from operations willbe sufficient to continue its operations and to pursue its growth strategy forthe foreseeable future.

 

Under the existing sharerepurchase program implemented in June 2007, a total of $33.5 million hadbeen authorized for repurchases, and to date, a total of 5.6 million shareshave been repurchased for $20.8 million. Following the recently announcedcompletion of a 2.2 million share repurchase, the Companyhas approximately $12.7 million still authorized for additional sharerepurchases in open market transactions, subject to market conditions, share priceand other considerations.

 

The Company has been informed that both David Zinberg and Marina Zinberg have terminated their 10b5-1 Plans on July 27, 2010pursuant to the terms of their Plans.

 

**Business Outlook/Guidance**

 

The Company is introducing new revenueguidance for the third quarter of 2010 of $24-$25 million and gross profitmargin of approximately 26-28%. The Company expects EBITDA to be approximatelybreakeven in the third quarter and be profitable in the fourth quarter.

 

**Investor Conference Call**

 

Bidz.com’s quarterly earningsconference call is scheduled to begin later today (August 9, 2010) at 1:30 p.m.,Pacific Time. The call will be open to all interested investors through a liveaudio Web broadcast via the Internet on the investor relations section of theCompany’s website at http://investors.bidz.com/.

 

For those unable to participateduring the live broadcast, the webcast will be archived for 90 days and areplay will be available beginning Monday, August 9, 2010 at 7:30 p.m.ET through August 23, 2010 at 12:00 a.m. ET. To access the replay,dial 800-406-7325 (U.S.) or 303-590-3030 (International), and use passcode: 4285987.

 

**About Bidz.com**

 

Bidz.com, founded in 1998, is aleading online retailer of jewelry. Bidz offers its products through a liveauction format as well as a fixed price online retail store, Buyz.com. Bidz.com’sauctions are also available in Arabic, German and Spanish. To learn more aboutBidz.com visit its website at www.bidz.com. Bidz also operates Modnique, adivision of Bidz.com, an exclusive private sale shopping site for members-only,offering authentic premium brand name merchandise. Modnique offers its membersexclusive access to 24-72 hour sales events on designer apparel, accessories,shoes, and houseware and much more at price points up to 85% below traditionalretail prices. To learn more about Modnique visit its website atwww.modnique.com.

 

**Safe Harbor Statement**

 

This press release includes forwardlooking statements about the Company’s estimated revenue and earnings withinthe meaning of the Private Securities Litigation Reform Act of 1995. Allstatements other than statements of historical facts contained in this release,including statements regarding the Company’s future financial position,business strategy and plans and objectives of management for future operations,are forward looking statements. The words “believe,” “may,” “will,” “estimate,”“continue,” “anticipate,” “intend,” “expect,” and similar expressions, as theyrelate to the Company, are intended to identify forward looking statements. Wehave based these forward-looking statements largely on current expectations and

 

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projections about future events andfinancial trends that we believe may affect the Company’s financial condition,results of operations, business strategy and financial needs. Risks anduncertainties include that our common stock is subject to short selling andtrading, and prices of our stock may be volatile; that we are subject to “prank”bidding; that we may face increasing costs to acquire new customers; theability of the Company to attract customers to its website and offer attractiveproducts; the ability to maintain profit levels while expanding internationalsales; the ability to detect fraud if we fail to maintain an effective systemof internal controls; the ability to maintain our website, electronic dataprocessing systems, and systems hardware; the ability to forecast accuratelynet revenue and plan for expenses; that we do not have a guaranteed supply ofjewelry products and that we have a heavy concentration of inventory purchasedfrom our top two suppliers; the ability to protect our intellectual propertyrights; and potential litigation and government enforcement actions that mayresult from our prior securities offerings. Please refer to Bidz.com’s reportsand filings with the Securities and Exchange Commission for a furtherdiscussion of these risks and uncertainties. Readers are cautioned not to placeundue reliance on forward-looking statements, which speak only as of the datethey are made. Bidz.com undertakes no obligation to update publicly anyforward-looking statements to reflect new information, events or circumstancesafter the date they were made or to reflect the occurrence of unanticipatedevents.

 

IRContact:Addo Communications, Inc.Andrew Greenebaum, 310-829-5400andrewg@addocommunications.com

 

Tables to follow

 

##

 

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**Bidz.com, Inc.**

**Condensed BalanceSheets (Unaudited)**

 

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

 
| ** **                                                                                                                                                                       | ** ** | **December 31,** | ** ** | **June 30,** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------------|------------|
| ** **                                                                                                                                                                       | ** ** | **2009**              | ** ** | **2010**          | ** ** |
| ** **                                                                                                                                                                       | ** ** | **(Revised)**         | ** ** | ** **        | ** ** |
| **Assets**                                                                                                                                                                       |       |                  |       |              |       |
| Current assets:                                                                                                                                                                  |       |                  |       |              |       |
| Cash                                                                                                                                                                             |       | $                     | 1,121      |              | $          | 9,711 |   |
| Accounts receivable                                                                                                                                                              |       | 447                   |       | 982               |       |
| Inventories, net of reserves of  $1,767 and $1,578 at December 31, 2009 and June 30, 2010,  respectively                                                               |       | 40,961                |       | 35,435            |       |
| Other receivable (includes related  party amounts of $179 and $274 at December 31, 2009 and June 30,  2010, respectively)                                              |       | 1,454                 |       | 1,815             |       |
| Current deferred tax assets                                                                                                                                                      |       | 1,400                 |       | 1,790             |       |
| Other current assets                                                                                                                                                             |       | 2,960                 |       | 579               |       |
| Total current assets                                                                                                                                                             |       | 48,343                |       | 50,312            |       |
| Long term deferred tax asset                                                                                                                                                     |       | 663                   |       | 976               |       |
| Property and equipment, net                                                                                                                                                      |       | 1,202                 |       | 918               |       |
| Intangible asset                                                                                                                                                                 |       | 240                   |       | 237               |       |
| Deposits                                                                                                                                                                         |       | 157                   |       | 157               |       |
| Total assets                                                                                                                                                                     |       | $                     | 50,605     |              | $          | 52,600 |   |
|                                                                                                                                                                             |       |                  |       |              |       |
| **Liabilities and  Stockholders’ Equity**                                                                                                                                   |       |                  |       |              |       |
| Current liabilities:                                                                                                                                                             |       |                  |       |              |       |
| Revolving credit line                                                                                                                                                            |       | $                     | 2,898      |              | $          | — |   |
| Accounts payable (includes related  party amounts of $1,513 and $2,642 at December 31, 2009 and  June 30, 2010, respectively)                                          |       | 12,159                |       | 16,551            |       |
| Accrued expenses                                                                                                                                                                 |       | 2,291                 |       | 2,697             |       |
| Deferred revenue                                                                                                                                                                 |       | 632                   |       | 1,242             |       |
| Total current liabilities                                                                                                                                                        |       | 17,980                |       | 20,490            |       |
|                                                                                                                                                                             |       |                  |       |              |       |
| Commitments and contingencies                                                                                                                                                    |       |                  |       |              |       |
|                                                                                                                                                                             |       |                  |       |              |       |
| Stockholders’ equity:                                                                                                                                                       |       |                  |       |              |       |
| Preferred stock: par value $0.001;  authorized 4,000,000 shares; none issued and outstanding at December 31,  2009 and June 30, 2010, respectively                     |       | —                |       | —            |       |
| Common stock: par value $0.001;  authorized 100,000,000 shares; issued and outstanding 22,114,257 and  21,816,814 at December 31, 2009 and June 30, 2010, respectively |       | 22                    |       | 22                |       |
| Additional paid in capital                                                                                                                                                       |       | 19,857                |       | 20,139            |       |
| Shares held in treasury, at cost;  0 and 20,137 shares at December 31, 2009 and June 30, 2010,  respectively                                                           |       | —                |       | (33               | )          |
| Accumulated earnings                                                                                                                                                             |       | 12,746                |       | 11,982            |       |
| Total stockholders’ equity                                                                                                                                                  |       | 32,625                |       | 32,110            |       |
| ** **                                                                                                                                                                       |       | $                     | 50,605     |              | $          | 52,600 |   |

 

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**Bidz.com, Inc.**

**CondensedStatements of Income (Operations) (Unaudited)**

 

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

 
| ** **                                                                                                                                                                                                                                  | ** ** | **Three Months  Ended June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------|------------|-------------------------------------|------------|
| ** **                                                                                                                                                                                                                                  | ** ** | **2009**                              | ** ** | **2010**                            | ** ** | **2009** | ** ** | **2010** | ** ** |
| ** **                                                                                                                                                                                                                                  | ** ** | **(Revised)**                         | ** ** | ** **                          | ** ** | **(Revised)** | ** ** | ** ** | ** ** |
| Net revenue:                                                                                                                                                                                                                                |       |                                  |       |                                |       |   |   |   |   |
| Merchandise sales                                                                                                                                                                                                                           | ** ** | **$**                                 | 26,388     | ** **                          | **$**      | 23,704 | ** ** | **$** | 57,278 | ** ** | **$** | 50,172 | ** ** |
| Wholesale merchandise sales  (includes related party amounts of $471 and $1,341 for the three months ended  June 30, 2009 and 2010, respectively, and $677 and $2,538 for six months  ended June 30, 2009 and 2010, respectively) |       | 471                                   |       | 1,941                               |       | 677 |   | 3,588 |   |
| Other revenue                                                                                                                                                                                                                               |       | 86                                    |       | 77                                  |       | 166 |   | 151 |   |
|                                                                                                                                                                                                                                        |       | 26,945                                |       | 25,722                              |       | 58,121 |   | 53,911 |   |
| Cost of revenue                                                                                                                                                                                                                             |       | 18,710                                |       | 19,560                              |       | 39,701 |   | 40,560 |   |
| Gross Profit                                                                                                                                                                                                                                |       | 8,235                                 |       | 6,162                               |       | 18,420 |   | 13,351 |   |
| Operating expenses:                                                                                                                                                                                                                         |       |                                  |       |                                |       |   |   |   |   |
| General and administrative                                                                                                                                                                                                                  |       | 4,593                                 |       | 5,425                               |       | 9,395 |   | 10,837 |   |
| Sales and marketing                                                                                                                                                                                                                         |       | 2,127                                 |       | 1,446                               |       | 4,732 |   | 3,033 |   |
| Depreciation and amortization                                                                                                                                                                                                               |       | 193                                   |       | 174                                 |       | 373 |   | 389 |   |
| Total operating expenses                                                                                                                                                                                                                    |       | 6,913                                 |       | 7,045                               |       | 14,500 |   | 14,259 |   |
| Income (loss) from operations                                                                                                                                                                                                               |       | 1,322                                 |       | (883                                | )          | 3,920 |   | (908 | ) |
| Other income - interest income                                                                                                                                                                                                              |       | —                                |       | —                              |       | 2 |   | — |   |
| Other expense - interest (expense)                                                                                                                                                                                                          |       | (3                                    | )          | —                              |       | (14 | ) | (11 | ) |
| Income (loss) before income tax  expense                                                                                                                                                                                                    |       | 1,319                                 |       | (883                                | )          | 3,908 |   | (919 | ) |
| Income tax expense (benefit)                                                                                                                                                                                                                |       | 626                                   |       | (230                                | )          | 1,708 |   | (155 | ) |
| Net income (loss)                                                                                                                                                                                                                           | ** ** | **$**                                 | 693        | ** **                          | **$**      | (653 | ) | **$** | 2,200 | ** ** | **$** | (764 | ) |
|                                                                                                                                                                                                                                        |       |                                  |       |                                |       |   |   |   |   |
| Net income (loss) per share  available to common shareholders - basic                                                                                                                                                                       | ** ** | **$**                                 | 0.03       | ** **                          | **$**      | (0.03 | ) | **$** | 0.10 | ** ** | **$** | (0.03 | ) |
| Net income (loss) per share  available to common shareholders - diluted                                                                                                                                                                     | ** ** | **$**                                 | 0.03       | ** **                          | **$**      | (0.03 | ) | **$** | 0.10 | ** ** | **$** | (0.03 | ) |
| Weighted average number of shares  outstanding - basic                                                                                                                                                                                      |       | 22,936,808                            |       | 21,839,212                          |       | 22,879,979 |   | 21,893,981 |   |
| Weighted average number of shares  outstanding - diluted                                                                                                                                                                                    |       | 22,936,808                            |       | 21,839,212                          |       | 22,879,979 |   | 21,893,981 |   |

 

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**Bidz.com, Inc.**

**CondensedStatements of Cash Flows (Unaudited)**

 

*(in thousands)*

 
| ** **                                                                                        | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------------------------------------------------------------------------------------------|------------|-------------------------------------|------------|
| ** **                                                                                        | ** ** | **2009**                            | ** ** | **2010** | ** ** |
| ** **                                                                                        | ** ** | **(Revised)**                       | ** ** | ** ** | ** ** |
| **Cash flows  provided by (used for) operating activities:**                                      |       |                                |       |   |   |
| Net income (loss)                                                                                 |       | $                                   | 2,200      |   | $ | (764 | ) |
|                                                                                              |       |                                |       |   |   |
| **Adjustments to  reconcile net income (loss) to net cash****provided by operating  activities:** |       |                                |       |   |   |
| Depreciation and amortization                                                                     |       | 373                                 |       | 389 |   |
| Change in inventory reserve                                                                       |       | 635                                 |       | (189 | ) |
| Stock-based compensation                                                                          |       | 395                                 |       | 515 |   |
| **Changes in assets  and liabilities:**                                                           |       |                                |       |   |   |
| **(Increase)  decrease in assets:**                                                               |       |                                |       |   |   |
| Accounts receivable                                                                               |       | 289                                 |       | (535 | ) |
| Inventories                                                                                       |       | (2,894                              | )          | 5,715 |   |
| Other receivable                                                                                  |       | (575                                | )          | (361 | ) |
| Current deferred tax assets                                                                       |       | 71                                  |       | (390 | ) |
| Other current assets                                                                              |       | (25                                 | )          | 2,381 |   |
| **Increase  (decrease) in liabilities:**                                                          |       |                                |       |   |   |
| Accounts payable                                                                                  |       | 1,324                               |       | 4,392 |   |
| Accrued expenses                                                                                  |       | (648                                | )          | 406 |   |
| Deferred revenue                                                                                  |       | (79                                 | )          | 610 |   |
| Net cash provided by operating  activities                                                        |       | 1,066                               |       | 12,169 |   |
|                                                                                              |       |                                |       |   |   |
| **Cash flows used  for investing activities:**                                                    |       |                                |       |   |   |
| Capital expenditures                                                                              |       | (164                                | )          | (102 | ) |
| Net cash used for investing  activities                                                           |       | (164                                | )          | (102 | ) |
| **Cash flows used  for financing activities:**                                                    |       |                                |       |   |   |
| Revolving credit line                                                                             |       | —                              |       | (2,898 | ) |
| Long term deferred tax assets, net                                                                |       | (179                                | )          | (313 | ) |
| Repurchase of common stock from  net vesting of restricted shares                                 |       | —                              |       | (131 | ) |
| Tax benefit from stock based  compensation                                                        |       | (70                                 | )          | — |   |
| Purchase of treasury shares                                                                       |       | (3,576                              | )          | (135 | ) |
| Net cash used for financing  activities                                                           |       | (3,825                              | )          | (3,477 | ) |
|                                                                                              |       |                                |       |   |   |
| **Net increase  (decrease) in cash**                                                              |       | (2,923                              | )          | 8,590 |   |
| **Cash, beginning  of period**                                                                    |       | 4,456                               |       | 1,121 |   |
| **Cash, end of  period**                                                                          |       | $                                   | 1,533      |   | $ | 9,711 |   |
|                                                                                              |       |                                |       |   |   |
| **Supplemental  disclosure of cash flow information:**                                            |       |                                |       |   |   |
| Interest paid                                                                                     |       | $                                   | 14         |   | $ | 11 |   |
| Income taxes paid                                                                                 |       | $                                   | 2,000      |   | $ | — |   |
| **Supplemental  disclosure of non-cash investing and****financing activities:**                   |       |                                |       |   |   |
| Retirement of treasury shares                                                                     |       | $                                   | 2,478      |   | $ | 102 |   |

 

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