##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarterly period ended June 30, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the transition period from  to
 Commission File Number: 000-50989
 LOCAL.COM CORPORATION
  Delaware
    
    33-0849123(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 One Technology Drive, Building G
Irvine, CA 92618
 (949) 784-0800
 Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
 þ o
  o o þ
 o þ
 Number of shares outstanding at August 1, 2007:
    
    Common:
    
    14,146,556Preferred:
    
    0




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##### 



LOCAL.COM CORPORATION
TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Balance Sheets as of June 30, 2007 (Unaudited) and December 31, 2006
    
    
    3Condensed Statements of Operations for the three and six months ended June 30, 2007 and 2006 (Unaudited)
    
    
    4Condensed Statements of Comprehensive Income (Loss) for the three and six months ended
June 30, 2007 and 2006 (Unaudited)
    
    
    5Condensed Statements of Cash Flows for the six months ended June 30, 2007 and 2006 (Unaudited)
    
    
    6Notes to Condensed Financial Statements (Unaudited)
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4T.
    
    Controls and Procedures
    
    
    23PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    24Item 1A.
    
    Risk Factors
    
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3.
    
    Defaults Upon Senior Securities
    
    
    24Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    24Item 5.
    
    Other Information
    
    
    24Item 6.
    
    Exhibits
    
    
    24EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 LOCAL.COM CORPORATION
 
 CONDENSED BALANCE SHEETS
  June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    6,726
    
    
    $
    3,264Restricted cash
    
    
    29
    
    
    
    41Marketable securities
    
    
    1,984
    
    
    
    1,972Accounts receivable, net of allowances of $10 and $9, respectively
    
    
    3,133
    
    
    
    2,091Prepaid financing costs
    
    
    880
    
    
    
    Prepaid expenses and other current assets
    
    
    177
    
    
    
    302Total current assets
    
    
    12,929
    
    
    
    7,670Property and equipment, net
    
    
    1,799
    
    
    
    2,028Intangible assets, net
    
    
    2,764
    
    
    
    2,813Goodwill
    
    
    12,213
    
    
    
    12,213Long-term restricted cash
    
    
    96
    
    
    
    125Deposits
    
    
    33
    
    
    
    42Total assets
    
    $
    29,834
    
    
    $
    24,891LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    3,786
    
    
    $
    2,851Accrued compensation
    
    
    388
    
    
    
    328Deferred rent
    
    
    370
    
    
    
    432Other accrued liabilities
    
    
    420
    
    
    
    374Notes payable
    
    
    
    
    
    
    63Deferred revenue
    
    
    217
    
    
    
    245Total current liabilities
    
    
    5,181
    
    
    
    4,293Long-term senior secured convertible notes, net of debt discount of $5,689
    
    
    2,311
    
    
    
    Total liabilities
    
    
    7,492
    
    
    
    4,293Commitments and contingenciesStockholders equity:Convertible preferred stock, $0.00001 par value; 10,000,000 shares authorized;
none issued and outstanding for all periods presented
    
    
    
    
    
    
    Common stock, $0.00001 par value; 30,000,000 shares authorized;
9,408,884 and 9,297,502 issued and outstanding, respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    59,627
    
    
    
    51,657Accumulated comprehensive loss
    
    
    (16
    )
    
    
    (27
    )Accumulated deficit
    
    
    (37,269
    )
    
    
    (31,032
    )Stockholders equity
    
    
    22,342
    
    
    
    20,598Total liabilities and stockholders equity
    
    $
    29,834
    
    
    $
    24,891
  3




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##### Table of Contents



LOCAL.COM CORPORATION
 
 CONDENSED STATEMENTS OF OPERATIONS
   Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    5,098
    
    
    $
    3,374
    
    
    $
    9,979
    
    
    $
    6,525Operating expenses:Search serving
    
    
    961
    
    
    
    1,381
    
    
    
    1,767
    
    
    
    2,961Sales and marketing
    
    
    4,701
    
    
    
    3,146
    
    
    
    9,400
    
    
    
    5,614General and administrative
    
    
    1,178
    
    
    
    1,549
    
    
    
    2,510
    
    
    
    3,352Research and development
    
    
    551
    
    
    
    618
    
    
    
    1,251
    
    
    
    1,569Amortization of intangibles
    
    
    244
    
    
    
    237
    
    
    
    481
    
    
    
    473Total operating expenses
    
    
    7,635
    
    
    
    6,931
    
    
    
    15,409
    
    
    
    13,969Operating loss
    
    
    (2,537
    )
    
    
    (3,557
    )
    
    
    (5,430
    )
    
    
    (7,444
    )Interest and other income (expense), net
    
    
    (614
    )
    
    
    83
    
    
    
    (806
    )
    
    
    188Loss before income taxes
    
    
    (3,151
    )
    
    
    (3,474
    )
    
    
    (6,236
    )
    
    
    (7,256
    )Provision for income taxes
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    2Net loss
    
    $
    (3,151
    )
    
    $
    (3,475
    )
    
    $
    (6,237
    )
    
    $
    (7,258
    )Per share data:Basic net loss per share
    
    $
    (0.34
    )
    
    $
    (0.38
    )
    
    $
    (0.67
    )
    
    $
    (0.79
    )Diluted net loss per share
    
    $
    (0.34
    )
    
    $
    (0.38
    )
    
    $
    (0.67
    )
    
    $
    (0.79
    )Basic weighted average shares outstanding
    
    
    9,325,817
    
    
    
    9,233,601
    
    
    
    9,312,125
    
    
    
    9,222,385Diluted weighted average shares outstanding
    
    
    9,325,817
    
    
    
    9,233,601
    
    
    
    9,312,125
    
    
    
    9,222,385
  4




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LOCAL.COM CORPORATION
 
 CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
   Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net loss
    
    $
    (3,151
    )
    
    $
    (3,475
    )
    
    $
    (6,237
    )
    
    $
    (7,258
    )Other comprehensive income (loss):Foreign currency translation adjustments
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    11Net unrealized gain (loss) on marketable securities
    
    
    5
    
    
    
    18
    
    
    
    11
    
    
    
    40Total comprehensive loss
    
    $
    (3,146
    )
    
    $
    (3,441
    )
    
    $
    (6,226
    )
    
    $
    (7,207
    )Supplemental comprehensive income (loss) information:Unrealized holding gains (losses) arising during period
    
    $
    5
    
    
    $
    23
    
    
    $
    11
    
    
    $
    61Reclassification adjustment for losses included in net loss
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (21
    )Net unrealized gain (loss) on marketable securities
    
    $
    5
    
    
    $
    18
    
    
    $
    11
    
    
    $
    40
  5




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##### Table of Contents



LOCAL.COM
CORPORATION
 
 CONDENSED STATEMENTS OF CASH FLOWS
 Six months endedJune 30,2007
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (6,237
    )
    
    $
    (7,258
    )Adjustments to reconcile net loss to cash used in operating activities:Depreciation and amortization
    
    
    1,025
    
    
    
    1,043Provision for doubtful accounts
    
    
    9
    
    
    
    (15
    )Non-cash stock based compensation
    
    
    836
    
    
    
    1,581Non-cash interest income
    
    
    
    
    
    
    (5
    )Non-cash interest expense
    
    
    612
    
    
    
    Realized loss on marketable securities
    
    
    
    
    
    
    21Changes in operating assets and liabilities:Accounts receivable
    
    
    (1,051
    )
    
    
    (704
    )Prepaid expenses and other
    
    
    (369
    )
    
    
    46Accounts payable and accrued liabilities
    
    
    979
    
    
    
    (3
    )Deferred revenue
    
    
    (28
    )
    
    
    24Net cash used in operating activities
    
    
    (4,224
    )
    
    
    (5,270
    )Cash flows from investing activities:Capital expenditures
    
    
    (315
    )
    
    
    (173
    )Proceeds from sales of marketable securities
    
    
    
    
    
    
    5,378Increase in restricted cash
    
    
    41
    
    
    
    10Acquisition, net of cash returned
    
    
    
    
    
    
    232Net cash (used in) provided by investing activities
    
    
    (274
    )
    
    
    5,447Cash flows from financing activities:Proceeds from issuance of senior secured convertible notes
    
    
    8,000
    
    
    
    Proceeds from issuance of common stock from exercise of options
    
    
    14
    
    
    
    174Proceeds from issuance of common stock from exercise of warrants
    
    
    7
    
    
    
    38Proceeds from swing-sale profits
    
    
    5
    
    
    
    Payment of notes payable
    
    
    (63
    )
    
    
    (70
    )Payment of financing related costs
    
    
    (3
    )
    
    
    (3
    )Net cash provided by financing activities
    
    
    7,960
    
    
    
    139Effect of currency changes on cash
    
    
    
    
    
    
    11Net increase in cash and cash equivalents
    
    
    3,462
    
    
    
    327Cash and cash equivalents, beginning of period
    
    
    3,264
    
    
    
    1,075Cash and cash equivalents, end of period
    
    $
    6,726
    
    
    $
    1,402Supplemental cash flow information:Interest paid
    
    $
    134
    
    
    $
    3Income taxes paid
    
    $
    1
    
    
    $
    2Non-cash investing and financing transactions:Debt discount related to issuance of senior secured convertible notes
    
    $
    6,221Warrants issued for financing costs
    
    $
    458Common stock issued for asset purchase
    
    $
    431
  6




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##### Table of Contents



LOCAL.COM CORPORATION
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
  1. Basis of presentation
   2. Significant accounting policies
 Principles of consolidation
  Intangible assets
     Goodwill
 Goodwill and Other Intangible Assets
 7




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##### Table of Contents



Web site development costs and computer software developed for internal use
 Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use Accounting for Web Site Development Costs
 Stock-based compensation
 Share-Based Payment Accounting for Stock-Based Compensation
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Sales and marketing
    
    $
    93
    
    
    $
    199
    
    
    $
    213
    
    
    $
    370General and administrative
    
    
    200
    
    
    
    391
    
    
    
    492
    
    
    
    1,062Research and development
    
    
    53
    
    
    
    76
    
    
    
    132
    
    
    
    149Total stock-based compensation expense
    
    $
    346
    
    
    $
    666
    
    
    $
    837
    
    
    $
    1,581Basic and diluted net compensation
expense per share
    
    $
    0.04
    
    
    $
    0.07
    
    
    $
    0.09
    
    
    $
    0.17
  Three months ended
    
    Six months endedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Risk-free interest rate
    
    
    4.70
    %
    
    
    4.95
    %
    
    
    4.78
    %
    
    
    4.71
    %Expected lives (in years)
    
    
    7.0
    
    
    
    6.1
    
    
    
    7.0
    
    
    
    6.0Expected dividend yield
    
    None
    
    None
    
    None
    
    NoneExpected volatility
    
    
    100.00
    %
    
    
    122.94
    %
    
    
    100.00
    %
    
    
    124.48
    %
 Net income (loss) per share
 Earnings per Share
  8




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Numerator:Net loss
    
    $
    (3,151
    )
    
    $
    (3,475
    )
    
    $
    (6,238
    )
    
    $
    (7,258
    )Denominator:Denominator for basic
calculation weighted average
shares
    
    
    9,326
    
    
    
    9,234
    
    
    
    9,312
    
    
    
    9,222Dilutive common stock equivalents:Senior secured convertible notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Denominator for diluted
calculation weighted average
shares
    
    
    9,326
    
    
    
    9,234
    
    
    
    9,312
    
    
    
    9,222Net loss per share:Basic net loss per share
    
    $
    (0.34
    )
    
    $
    (0.38
    )
    
    $
    (0.67
    )
    
    $
    (0.79
    )Diluted net loss per share
    
    $
    (0.34
    )
    
    $
    (0.38
    )
    
    $
    (0.67
    )
    
    $
    (0.79
    )
 New accounting pronouncements
 The Fair
Value Option for Financial Assets and Financial Liabilities
 9




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##### Table of Contents



3. Composition of certain balance sheet and statement of operations captions
  June 30,
    
    
    December 31,2007
    
    
    2006Furniture and fixtures
    
    $
    202
    
    
    $
    201Office equipment
    
    
    119
    
    
    
    91Computer equipment
    
    
    1,778
    
    
    
    1,750Computer software
    
    
    1,732
    
    
    
    1,473Leasehold improvements
    
    
    583
    
    
    
    5834,414
    
    
    
    4,098Less accumulated depreciation and amortization
    
    
    (2,615
    )
    
    
    (2,070
    )Property and equipment, net
    
    $
    1,799
    
    
    $
    2,028
  June 30,
    
    
    December 31,2007
    
    
    2006Developed technology
    
    $
    2,233
    
    
    
    2,233Non-compete agreements
    
    
    261
    
    
    
    261Purchased technology
    
    
    1,239
    
    
    
    1,239Patents
    
    
    431
    
    
    
    Domain name
    
    
    701
    
    
    
    7014,865
    
    
    
    4,434Less accumulated amortization
    
    
    (2,101
    )
    
    
    (1,621
    )Intangible assets, net
    
    $
    2,764
    
    
    $
    2,813
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest income
    
    $
    96
    
    
    $
    89
    
    
    $
    167
    
    
    $
    197Interest expense
    
    
    (258
    )
    
    
    (1
    )
    
    
    (361
    )
    
    
    (3
    )Interest expense  non-cash
    
    
    (452
    )
    
    
    
    
    
    
    (612
    )
    
    
    Gain on sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15Realized loss on sale of marketable
securities
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (21
    )Interest and other income (expense), net
    
    $
    (614
    )
    
    $
    83
    
    
    $
    (806
    )
    
    $
    188
 10




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##### Table of Contents



4. Operating segment information
 Disclosures about Segments of an Enterprise and Related Information
 Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue by geographic region:United States
    
    $
    4,980
    
    
    $
    3,300
    
    
    $
    9,854
    
    
    $
    6,392Europe
    
    
    118
    
    
    
    74
    
    
    
    125
    
    
    
    133Total revenue
    
    $
    5,098
    
    
    $
    3,374
    
    
    $
    9,979
    
    
    $
    6,525
 5. Stock option plans
 1999 Plan
  2000 Plan
  2004 Plan
  11




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##### Table of Contents



2005 Plan
   AggregateWeighted Average
    
    
    Intrinsic ValueShares
    
    
    Exercise Price
    
    
    (in thousands)Outstanding at December 31, 2007
    
    
    1,933,363
    
    
    $
    5.10Granted
    
    
    140,000
    
    
    
    4.18Exercised
    
    
    (5,221
    )
    
    
    2.55Cancelled
    
    
    (123,647
    )
    
    
    5.35Outstanding at June 30, 2007
    
    
    1,944,495
    
    
    $
    5.02
    
    
    $
    9,762Exercisable at June 30, 2007
    
    
    1,179,168
    
    
    $
    5.34
    
    
    $
    6,291
   12




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##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    WeightedRemaining
    
    
    Average
    
    
    
    
    
    
    AverageContractual
    
    
    Exercise
    
    
    
    
    
    
    ExerciseRange of Exercise Prices
    
    Shares
    
    
    Life
    
    
    Price
    
    
    Shares
    
    
    Price$0.40 - $1.00
    
    
    23,625
    
    
    
    0.5
    
    
    $
    0.40
    
    
    
    23,625
    
    
    $
    0.40$1.01 - $2.00
    
    
    175,000
    
    
    
    2.3
    
    
    $
    2.00
    
    
    
    175,000
    
    
    $
    2.00$2.01 - $3.00
    
    
    149,509
    
    
    
    5.1
    
    
    $
    2.25
    
    
    
    149,509
    
    
    $
    2.25$3.01 - $4.00
    
    
    803,940
    
    
    
    7.6
    
    
    $
    3.70
    
    
    
    332,107
    
    
    $
    3.84$4.01 - $5.00
    
    
    166,000
    
    
    
    8.6
    
    
    $
    4.29
    
    
    
    25,581
    
    
    $
    4.24$5.01 - $6.00
    
    
    139,777
    
    
    
    7.2
    
    
    $
    5.67
    
    
    
    104,149
    
    
    $
    5.71$6.01 - $7.00
    
    
    114,064
    
    
    
    8.3
    
    
    $
    6.37
    
    
    
    86,989
    
    
    $
    6.38$7.01 - $8.00
    
    
    185,500
    
    
    
    8.1
    
    
    $
    7.52
    
    
    
    112,886
    
    
    $
    7.54$8.01 - $10.00
    
    
    70,000
    
    
    
    7.9
    
    
    $
    9.17
    
    
    
    66,666
    
    
    $
    9.19$10.01 - $16.59
    
    
    117,080
    
    
    
    7.0
    
    
    $
    15.58
    
    
    
    102,656
    
    
    $
    15.571,944,495
    
    
    
    7.0
    
    
    $
    5.02
    
    
    
    1,179,168
    
    
    $
    5.34
 6. Warrants
  Weight AverageShares
    
    
    Exercise PriceOutstanding at December 31, 2006
    
    
    1,043,664
    
    
    $
    9.11Issued
    
    
    1,735,324
    
    
    
    5.23Exercised
    
    
    (1,850
    )
    
    
    3.86Expired
    
    
    (3,125
    )
    
    
    4.00Outstanding at June 30, 2007
    
    
    2,774,013
    
    
    $
    6.69Exercisable at June 30, 2007
    
    
    1,181,973
    
    
    $
    8.66
  Warrants Outstanding
    
    
    Warrants ExercisableWeightedAverage
    
    
    Weighted
    
    
    
    
    
    
    WeightedRemaining
    
    
    Average
    
    
    
    
    
    
    AverageContractual
    
    
    Exercise
    
    
    
    
    
    
    ExerciseRange of Exercise Prices
    
    Shares
    
    
    Life
    
    
    Price
    
    
    Shares
    
    
    Price$3.00 - $3.99
    
    
    400,950
    
    
    
    1.2
    
    
    $
    3.59
    
    
    
    400,950
    
    
    $
    3.59$4.00 - $4.99
    
    
    1,010,251
    
    
    
    4.1
    
    
    $
    4.70
    
    
    
    214,231
    
    
    $
    4.27$5.00 - $5.99
    
    
    867,662
    
    
    
    4.7
    
    
    
    5.63
    
    
    
    71,642
    
    
    $
    5.63$8.00 - $9.99
    
    
    15,000
    
    
    
    0.3
    
    
    $
    8.00
    
    
    
    15,000
    
    
    $
    8.00$10.00 - $19.99
    
    
    315,750
    
    
    
    2.3
    
    
    $
    10.00
    
    
    
    315,750
    
    
    $
    10.00$20.00 - $25.53
    
    
    164,400
    
    
    
    2.5
    
    
    $
    25.53
    
    
    
    164,400
    
    
    $
    25.532,774,013
    
    
    
    3.5
    
    
    $
    6.69
    
    
    
    1,181,973
    
    
    $
    8.66
 13




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##### Table of Contents



7. Atlocal asset purchase
  Methods and Apparatus of Indexing
Web Pages of a Web Site for Geographical Searchine Based on User Location
 8. Subsequent events
 PremierGuide acquisition
  Senior secured convertible notes
    Warrant exercises
  Private placement
  14




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15




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 This Quarterly Report on Form 10-Q or certain information included or incorporated by reference in
this report, contains or may contain forward-looking statements that involve risks, uncertainties
and assumptions. All statements, other than statements of historical fact, are statements that
could be deemed forward- looking statements within the meaning of the federal securities laws.
In addition, important factors to consider in evaluating such forward-looking statements include
changes or developments in social, economic, market, legal or regulatory circumstances, changes in
our business or growth strategy or an inability to execute our strategy due to changes in our
industry or the economy generally, the emergence of new or growing competitors, the actions or
omissions of third parties, including customers, competitors and governmental authorities, and
various other factors, including those described or referred to in Item 1A of this Quarterly
Report. Should any one or more of these risks or uncertainties materialize, or the underlying
estimates or assumptions prove incorrect, our actual results could differ materially from those
expressed in the forward-looking statements and there can be no assurance that the forward-looking
statements contained in this report will in fact occur.
 The following discussion and analysis of our financial condition and results of operations should
be read in conjunction with the attached condensed consolidated financial statements and related
notes thereto, and with the audited consolidated financial statements and related notes thereto as
of December 31, 2006 and for the year ended December 31, 2006 included in our Annual Report on Form
10-K filed with the Securities and Exchange Commission on March 16, 2007.
 Overview
    Stock-based compensation
 Share-Based Payment, Accounting for Stock-Based Compensation
 16




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##### Table of Contents



Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Sales and marketing
    
    $
    93
    
    
    $
    199
    
    
    $
    213
    
    
    $
    370General and administrative
    
    
    200
    
    
    
    391
    
    
    
    492
    
    
    
    1,062Research and development
    
    
    53
    
    
    
    76
    
    
    
    132
    
    
    
    149Total stock-based compensation expense
    
    $
    346
    
    
    $
    666
    
    
    $
    837
    
    
    $
    1,581Basic and diluted net compensation
expense per share
    
    $
    0.04
    
    
    $
    0.07
    
    
    $
    0.09
    
    
    $
    0.17
 Recent Developments
 PremierGuide Acquisition
  Senior secured convertible notes
    Warrant exercises
  Private placement
  17




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##### Table of Contents



Results of Operations
  Three months ended
    
    
    Six months endedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Search serving
    
    
    18.9
    
    
    
    40.9
    
    
    
    17.7
    
    
    
    45.4Sales and marketing
    
    
    92.2
    
    
    
    93.3
    
    
    
    94.2
    
    
    
    86.0General and administrative
    
    
    23.1
    
    
    
    45.9
    
    
    
    25.2
    
    
    
    51.4Research and development
    
    
    10.8
    
    
    
    18.3
    
    
    
    12.5
    
    
    
    24.0Amortization of intangibles
    
    
    4.8
    
    
    
    7.0
    
    
    
    4.8
    
    
    
    7.3Total operating expenses
    
    
    149.8
    
    
    
    205.4
    
    
    
    154.4
    
    
    
    214.1Operating loss
    
    
    (49.8
    )
    
    
    (105.4
    )
    
    
    (54.4
    )
    
    
    (114.1
    )Interest and other income
(expense), net
    
    
    (12.0
    )
    
    
    2.4
    
    
    
    (8.1
    )
    
    
    2.9Loss before income taxes
    
    
    (61.8
    )
    
    
    (103.0
    )
    
    
    (62.5
    )
    
    
    (111.2
    )Provision (benefit) for income taxes
    
    
    0.0
    
    
    
    0.0
    
    
    
    0.0
    
    
    
    0.0Net loss
    
    
    (61.8
    )%
    
    
    (103.0
    )%
    
    
    (62.5
    )%
    
    
    (111.2
    )%
 Three months ended June 30, 2007 and 2006
 Revenue
    18




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##### Table of Contents



Search serving
  Sales and marketing
  General and administrative
  Research and development
  Amortization of intangibles
  Interest and other income (expense), net
  19




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##### Table of Contents



Provision (benefit) for income taxes
  Net loss
  Six months ended June 30, 2007 and 2006
 Revenue
     Search serving
  Sales and marketing
  General and administrative
  20




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##### Table of Contents



Research and development
  Amortization of intangibles
  Interest and other income (expense), net
  Provision for income taxes
  Net loss
  Liquidity and Capital Resources
      21




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PremierGuide Acquisition
  Senior secured convertible notes
    Warrant exercises
  Private placement
   22




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##### Table of Contents



Off-Balance Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest Rate Risk
   
 Item 4T. Controls and Procedures
 Evaluation of Controls and Procedures
    Changes in Internal Control Over Financial Reporting
  23




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
   
 Item 3. Defaults upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  
 Item 6. Exhibits.
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Principal Executive Officer Required by Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Principal Financial Officer Required by Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of Chief Executive Officer and Chief Financial
Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 24




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##### Table of Contents



SIGNATURES
  LOCAL.COM CORPORATION
 August 7, 2007Date
    /s/ Heath B. ClarkeHeath B. ClarkeChief Executive Officer (principal executive
officer) and Chairman/s/ Douglas S. NormanDouglas S. NormanChief Financial Officer (principal financial

accounting officer) and Secretary 25




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##### Table of Contents



EXHIBITS ATTACHED TO THIS REPORT
 ExhibitNumber
    
    Description31.1
    
    
    Certification of Principal Executive Officer Required by Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Principal Financial Officer Required by Rule
13a-14(a) of the Securities Exchange Act of 1934, as amended, as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    
    Certification of Chief Executive Officer and Chief Financial
Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 26