8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: December 12, 2007
(Date of Earliest Event Reported: December 10, 2007)

EDGEWATER TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-20971	71-0788538
(State or other jurisdiction of	(Commission File No.)	(IRS Employer Identification No.)
incorporation)

20 Harvard Mill Square
Wakefield, Massachusetts 01880

Registrant’s telephone number, including area code: (781) 246-3343

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2-(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

     This Current Report on Form 8-K/A supplies Item 9.01 Financial statements and exhibits to the Current Report of Edgewater Technology, Inc. (“Edgewater”) on Form 8-K filed with the Securities and Exchange Commission on December 12, 2007. Attached hereto are the historical financial statements of Vertical Pitch, LLC (“Vertical Pitch”) and the pro forma financial information required by Item 9.01 of Form 8-K with respect to Edgewater’s acquisition of substantially all of the assets of Vertical Pitch on December 10, 2007.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a)	Financial Statements of Business Acquired:
	Audited financial statements of Vertical Pitch, LLC for the years ended December 31, 2006 and 2005 and related Independent Auditor’s Report thereon are being filed as Exhibit 99.1 to this Form 8-K/A.
	The Unaudited Balance Sheet as of September 30, 2007, Unaudited Statements of Income and Cash Flows for the nine months ended September 30, 2007 and 2006 and Notes to Unaudited Financial Statements for Vertical Pitch, LLC are being filed as Exhibit 99.2 to this Form 8-K/A.
(b)	Pro Forma Financial Information:
	The Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2007, the Unaudited Pro Forma Consolidated Statements of Operations and Cash Flows for the year ended December 31, 2006 and for the nine months ended September 30, 2007 and the Notes to Unaudited Pro Forma Consolidated Financial Statements are being filed as Exhibit 99.3 to this Form 8-K/A.
(d)	Exhibits:
	Exhibit 23.1 — Consent of Independent Auditors
	Exhibit 99.1 — Audited financial statements of Vertical Pitch, LLC for the years ended December 31, 2006 and 2005 and related Independent Auditor’s Report
	Exhibit 99.2 — The Unaudited Balance Sheet as of September 30, 2007, Unaudited Statements of Income and Cash Flows for the nine months ended September 30, 2007 and 2006 and Notes to Unaudited Financial Statements for Vertical Pitch, LLC
	Exhibit 99.3 — The Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2007, the Unaudited Pro Forma Consolidated Statements of Operations and Cash Flows for the year ended December 31, 2006 and for the nine months ended September 30, 2007 and the Notes to Unaudited Pro Forma Consolidated Financial Statements

1

SIGNATURES:

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: February 21, 2008

EDGEWATER TECHNOLOGY, INC.
By:	/s/ Kevin R. Rhodes
Name:		Kevin R. Rhodes
Title:		Chief Financial Officer

2

EXHIBIT INDEX

Exhibit Number	Description
Exhibit 23.1	Consent of Independent Auditors
Exhibit 99.1	Audited financial statements of Vertical Pitch, LLC for the years ended December 31, 2006 and 2005 and related Independent Auditor’s Report
Exhibit 99.2	The Unaudited Balance Sheet as of September 30, 2007, Unaudited Statements of Income and Cash Flows for the nine months ended September 30, 2007 and 2006 and Notes to Unaudited Financial Statements for Vertical Pitch, LLC
Exhibit 99.3	The Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2007, the Unaudited Pro Forma Consolidated Statements of Operations and Cash Flows for the year ended December 31, 2006 and for the nine months ended September 30, 2007 and the Notes to Unaudited Pro Forma Consolidated Financial Statements

3

EX-23.1

EXHIBIT 23.1

     CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statement Nos. 333-50912, 333-88313, and 333-106325 of Edgewater Technology, Inc. on Form S-8 of our report dated February 21, 2008 related to the financial statements of Vertical Pitch, LLC (the “Company”) as of and for the years ended December 31, 2006 and 2005 (which report is unqualified and contains an explanatory paragraph regarding the sale of the Company to Edgewater Technology, Inc.) appearing in this Current Report on Form 8-K/A of Edgewater Technology, Inc. dated February 21, 2008.

     /s/ DELOITTE & TOUCHE LLP
     Boston, Massachusetts
     February 21, 2008

EX-99.1

Exhibit 99.1

VERTICAL PITCH, LLC
FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

CONTENTS

	Page
INDEPENDENT AUDITORS’ REPORT	2
FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
Balance Sheets	3
Statements of Income	4
Statements of Member’s Equity	5
Statements of Cash Flows	6
Notes to Financial Statements	7-11

1

INDEPENDENT AUDITORS’ REPORT

To the Member of Vertical Pitch, LLC
Evergreen, Colorado

We have audited the accompanying balance sheets of Vertical Pitch, LLC (the “Company”) as of December 31, 2006 and 2005, and the related statements of income, member’s equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2006 and 2005, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 6 to the financial statements, on December 10, 2007, substantially all assets of the Company were acquired by Edgewater Technology, Inc.

/s/ DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 21, 2008

2

VERTICAL PITCH, LLC

BALANCE SHEETS
(In Thousands, Except Per Share Data)

DECEMBER 31, 2006 and 2005

	2006		2005
ASSETS
Current assets:
Cash and cash equivalents	$	898	$	689
Accounts receivable		2,769		1,353
Prepaid expenses and other current assets		—		2
Total current assets		3,667		2,044
Property and equipment, net		64		58
Total assets	$	3,731	$	2,102
LIABILITIES AND MEMBER’S EQUITY
Current liabilities:
Accounts payable	$	672	$	142
Accrued expenses and other current liabilities		482		302
Total current liabilities		1,154		444
Commitments and equity compensation (Note 5)
Member’s equity:
Member’s Interest		5		5
Retained earnings		2,572		1,653
Total member’s equity		2,577		1,658
Total liabilities and member’s equity	$	3,731	$	2,102

See accompanying notes to financial statements.

3

VERTICAL PITCH, LLC

STATEMENTS OF INCOME
(Amounts in Thousands)

YEARS ENDED DECEMBER 31, 2006 and 2005

	2006		2005
Revenue:
Service revenues	$	6,824	$	3,883
Software revenue		1,486		552
Reimbursable expenses		707		391
Total revenue		9,017		4,826
Cost of revenue (excluding depreciation):
Project and personnel costs		3,783		2,243
Software costs		1,248		422
Reimbursable expenses		707		391
Total cost of revenue		5,738		3,056
Gross profit		3,279		1,770
Operating expenses:
Selling, general and administrative		1,261		547
Depreciation		32		19
Total operating expenses		1,293		566
Operating income		1,986		1,204
Interest income		33		9
Net income	$	2,019	$	1,213

See accompanying notes to financial statements.

4

VERTICAL PITCH, LLC

STATEMENTS OF MEMBER’S EQUITY
(In Thousands, Except Share Data)

YEARS ENDED DECEMBER 31, 2006 and 2005

								Total
	Common Stock				Retained			Member’s
	Shares		Amount		Earnings			Equity
Balance, January 1, 2005		100	$	5	$	441		$	446
Distributions to member		—		—		(1	)		(1	)
Net income		—		—		1,213			1,213
Balance, December 31, 2005		100	$	5	$	1,653		$	1,658
Distributions to member						(1,100	)		(1,100	)
Net income						2,019			2,019
Balance, December 31, 2006		100	$	5	$	2,572		$	2,577

See accompanying notes to financial statements.

5

VERTICAL PITCH, LLC

STATEMENTS OF CASH FLOW
(Amounts in thousands)

YEARS ENDED DECEMBER 31, 2006 and 2005

	2006			2005
Cash Flows from Operating Activities:
Net income	$	2,019		$	1,213
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		32			19
Changes in operating accounts:
Accounts receivable		(1,416	)		(842	)
Prepaid expenses and other current assets		2			(2	)
Accounts payable		530			112
Accrued expenses and other current liabilities		180			203
Net cash provided by operating activities		1,347			703
Cash Flows from Investing Activities:
Purchases of property and equipment		(38	)		(34	)
Net cash used in investing activities		(38	)		(34	)
Cash Flows from Financing Activities:
Distributions to member		(1,100	)		(1	)
Net cash used in financing activities		(1,100	)		(1	)
Net increase in cash and cash equivalents		209			668
Cash and cash equivalents, beginning of year		689			21
Cash and cash equivalents, end of year	$	898		$	689
See accompanying notes to financial statements.

6

VERTICAL PITCH, LLC

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2006 and 2005

1.	NATURE OF THE BUSINESS
	Vertical Pitch, LLC (the “Company”) was formed in the State of Colorado on November 7, 2003, as a limited liability company. The Company specializes in combining strategic consulting and technical knowledge to develop and implement business intelligence (“BI”) and business performance management (“BPM”) solutions for all types of businesses. While the Company’s client base is diversified across a variety of industries, the Company is especially adept at implementing and integrating Hyperion TM software in healthcare, manufacturing/consumer goods, professional services and financial services organizations.
	Headquartered in Evergreen, Colorado, the Company employed approximately 22 technical consultants and conducted business operations in the United States and Canada as of December 31, 2006.
	As discussed in Note 6 to the financial statements, on December 10, 2007, substantially all assets of the Company were acquired by Edgewater Technology, Inc.
2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	The accompanying financial statements reflect the application of certain significant accounting policies, as described in this note and elsewhere in the accompanying financial statements and notes.
	Use of Estimates — The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. These accounting principles require management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The estimates, judgments and assumptions used in preparing the accompanying financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Although the Company regularly assesses the estimates, judgments and assumptions used in preparing these financial statements, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.
	Revenue recognition — The Company generates revenue from providing corporate performance management consulting services under written service contracts with its customers. The service contracts the Company enters into are generally time and materials engagements. Revenue from consulting services is recognized as the services are performed and amounts are earned. The Company considers amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable and collectibility is reasonably assured.
	When a customer enters into a contract with the Company, the related revenue is accounted for under SAB 104 and Emerging Issues Task Force Abstract (“EITF”) No. 00-21, “Revenue Arrangement with Multiple Deliverables”. For all arrangements, the Company evaluates the deliverables in each contract to determine whether they represent separate units of accounting. If the deliverables represent separate units of accounting, the Company then measures and allocates the consideration from the arrangement to the separate units, based on reliable evidence of the fair value of each deliverable.
	Client prepayments, even if nonrefundable, are deferred (classified as a liability) and recognized over future periods as services are performed. There were no amounts classified as deferred revenue as of December 31, 2006 and 2005.

7

VERTICAL PITCH, LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2006 and 2005

Software revenue represents the resale of certain third-party off-the-shelf software and is recorded on a gross basis provided the Company acts as a principal in the transaction, whereby the Company has credit risk and sets the price to the end user. In the event the Company does not meet the requirements to be considered a principal in the software sale transaction and act as an agent, software revenue will be recorded on a net basis. Revenue from software resale arrangements represented 16.5% and 11.44% of total revenues for the years ended December 31, 2006 and 2005. Revenue and related costs are recognized and amounts are invoiced upon the customer’s constructive receipt of purchased software. All related warranty and maintenance arrangements are performed by the primary software vendor and are not the obligation of the Company. All software sales are recorded in accordance with SOP 97-2, Software Revenue Recognition.

Out-of-pocket reimbursable expenses charged to customers are reflected as revenue.

Allowance for Doubtful Accounts — The Company did not maintain an allowance for doubtful accounts related to its accounts receivables as of December 31, 2006 and 2005, as management’s review of historical positive collection activity, lack of bad debt trends and aged accounts receivable balances did not support any recorded amount.

Cost of Revenue — Cost of revenue primarily consists of project personnel costs principally related to salaries, payroll taxes, employee benefits and travel expenses for personnel dedicated to customer projects. These costs represent the most significant expense incurred in providing services to the Company’s client base. Cost of revenue also includes costs of purchased software and reimbursable customer expenses.

Cash and Cash Equivalents — All highly liquid investments with remaining maturities of three months or less at the date of purchase are considered cash equivalents. Cash consists of deposits with large U.S. and Canadian commercial banks. All excess cash, is invested by the Company in highly liquid money market funds, with a daily availability, and such funds are considered cash equivalents.

Concentration of Credit Risk and Significant Customers — Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. At December 31, 2006 and 2005, the Company had cash balances at a financial institution in excess of federally insured limits; however, management does not believe that the Company is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company had two and three customers with outstanding balances that accounted for greater than 10% of the consolidated accounts receivable balance as of December 31, 2006 and 2005, respectively.

	December 31,
Accounts Receivable:	2006			2005
Customer A		17	%		32	%
Customer B		11	%		19	%
Customer C		—			15	%

To minimize credit risk related to accounts receivable, the Company performs ongoing credit evaluations of its significant customers.

8

VERTICAL PITCH, LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

     YEARS ENDED DECEMBER 31, 2006 and 2005

     For the years ended December 31, 2006, and 2005, no one customer and two customers contributed more than 10% of the Company’s service revenue.

	Year ended December 31,
Revenue:	2006		2005
Customer A		—		29	%
Customer B		—		11	%

Property and Equipment — Property and equipment is recorded at cost. Property and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets, which range from three to seven years. Capital improvements that extend the lives of the assets are capitalized, while repairs and maintenance costs are expensed as incurred.

Income Taxes — The Company, in accordance with guidelines and regulations contained in the Internal Revenue Code, has elected to be treated as a Limited Liability Corporation for federal and state income tax purposes. All profits, losses, and other items incurred from the operations of the Company are allocated to the sole member. Accordingly, the Company’s financial statements do not contain any provision for federal or state income taxes as of December 31, 2006 and 2005.

Comprehensive Income - The Company had no components of other comprehensive income, therefore reported net income is the same as comprehensive income for the years ended December 31, 2006 and 2005.

Recently Issued Accounting Pronouncements — In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes” — an interpretation of FASB Statement No. 109, Accounting for Income Taxes, (“FIN 48”) FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition as of the period ended January 1, 2007. There would be no impact to the Company in regards to the adoption of FIN 48, as the Company is taxed as a limited liability corporation.

In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements (“SFAS No. 157”). Among other requirements, FSAS No. 157 defines the fair value of a liability as the price that would be paid to transfer the liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 requires an entity to consider the effect of its own credit risk on the fair value of a liability in all periods in which the liability is measured at fair value. SFAS No. 157 will be effective for the Company on January 1, 2008. The Company believes the adoption of SFAS No. 157 will not have a material impact on the Company’s financial statements.

In February 2007, the FASB issued FASB Statement 159, The Fair Value Option for Financial Assets and Financial Liabilities, which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently to be measured at fair value. FASB Statement 159 will be effective for the Company on January 1, 2008. The Company believes the adoption of FASB Statement 159 will not have a material impact on the Company’s financial statements.

9

VERTICAL PITCH, LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2006 and 2005

	In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”, which replaces SFAS No. 141. SFAS No 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any no controlling interest in the acquiree and the goodwill acquired. The Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) is effective for the fiscal years beginning after December 15, 2008. The Company believes the adoption of SFAS No. 141(R) will not have a material impact on the Company’s financial statements
3.	PROPERTY AND EQUIPMENT
	Property and equipment consisted of the following as of December 31:

	2006			2005
	(in thousands)
Computer equipment and purchased software	$	104		$	75
Furniture, fixtures and equipment		16			7
		119			82
Less accumulated depreciation		(56	)		(24	)
Property & equipment, net	$	64		$	58

	Depreciation expense related to property and equipment for the years ended December 31, 2006 and 2005 was $32 thousand and $19 thousand, respectively.
4.	RELATED PARTY TRANSACTIONS
	During 2006 and 2005, the Company paid $1.1 million and $1 thousand, respectively in distributions to its member, which were allocated based upon the sole member’s 100% respective membership interest in the Company. The sole member is also the CEO of the Company.
	During 2005 and 2006, the Company’s business operations were conducted in space owned by the sole member and as such, there was no rent expense in the years ended 2005 and 2006.

10

VERTICAL PITCH, LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 2006 and 2005

5.	COMMITMENTS AND EQUITY COMPENSATION
	Operating Lease:
	The Company signed an office space lease on July 1, 2007, under a non-cancelable operating lease agreement expiring May 31, 2008. As the Company entered into its office facility lease during 2007, there was no rent expense for the years ended December 31, 2006 and 2005 as Company operations were conducted out of the property owned by the sole member. Annual future minimum lease payments required under the operating lease is as follows:

Years ending, December 31:	Amount
	(in thousands)
2007	$	12
2008		10
Total minimum payments	$	22

	Phantom Equity Plan:
	In 2003 and 2006, the Company established phantom equity plans (the “Plans”). Under the terms of the Plans, certain key employees receive phantom equity awards whereby upon a change of control, as defined, a portion of the sale proceeds will be distributed to the plan participants based upon the number of vested phantom equity awards held. The phantom equity awards vest over a period of one to four years and are forfeited upon employee termination. As of December 31, 2006 and 2005, plan participants will receive 19% and 10%, respectively of any sales proceeds upon a change of control. Payment to the employees will only be made upon a change of control and therefore, compensation expense would be recorded at the time of the change of control is deemed probable. For the years ended December 31, 2006 and 2005, no compensation expense has been recorded related to the Plans.
	On December 5, 2007 the participation agreements of all the holders of these awards was amended to remove the vesting provisions such that on a change of control, all outstanding awards became fully vested. There is no requirement for the participant to remain employed by the Company or its successor entity.
6.	SUBSEQUENT SALE OF THE COMPANY
	On December 10, 2007, the Company and its sole member entered into a definitive Asset Purchase Agreement (the “Purchase Agreement”) with Edgewater Technology-Ranzal, Inc., a wholly owned subsidiary of Edgewater Technology, Inc. (“Edgewater”), providing for the acquisition of substantially all of the assets of the Company, its operations, and its business related to the consulting services development of business intelligence and business performance management solution. Total consideration included a payment at closing of approximately $14 million in cash and $6 million in Edgewater’s common stock, which is subject to a three year lock-up agreement and assumed liabilities of $920 thousand.
	Under the phantom equity plan arrangements, as described in Note 5 above, approximately 29% of total consideration was allocated to the plan participants, with 50% being paid upfront and the remaining portion being payable 18 months from the purchase date.

11

EX-99.2

Exhibit 99.2

VERTICAL PITCH, LLC
UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2006

	Page
Balance Sheet	2
Statements of Income	3
Statements of Cash Flows	4
Notes to Financial Statements	5-9

1

VERTICAL PITCH, LLC
UNAUDITED BALANCE SHEET

(Amounts in thousands, except share data)

	September 30,
	2007
ASSETS
Current assets:
Cash and cash equivalents	$	2,556
Accounts receivable		2,543
Prepaid expenses and other current assets		—
Total current assets		5,099
Property and equipment, net		90
Total assets	$	5,189
LIABILITIES AND MEMBER’S EQUITY
Current liabilities:
Accounts payable	$	210
Accrued expenses and other current liabilities		710
Total current liabilities		920
Commitments and equity compensation (Note 5)
Member’s equity:
Membership interest		5
Retained earnings		4,264
Total member’s equity		4,269
Total liabilities and member’s equity	$	5,189

See accompanying notes to unaudited financial statements.

2

VERTICAL PITCH, LLC
UNAUDITED STATEMENTS OF INCOME

(Amounts in thousands)

	For the Nine Months Ended
	September 30,		September 30,
	2007		2006
Revenue:
Service revenue	$	7,724	$	4,886
Software revenue		912		841
Reimbursable expenses		978		516
Total revenues		9,614		6,243
Cost of revenue (excluding depreciation):
Project and personnel costs		4,163		2,544
Software costs		783		741
Reimbursable expenses		978		516
Total cost of revenue		5,924		3,801
Gross profit		3,690		2,442
Operating expenses:
Selling, general and administrative		1,243		962
Depreciation and amortization		30		24
Total operating expenses		1,273		986
Operating income		2,417		1,456
Interest income		45		25
Net income	$	2,462	$	1,481

     See accompanying notes to unaudited financial statements.

3

VERTICAL PITCH, LLC
UNAUDITED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	For the Nine Months Ended
	September			September
	30,			30,
	2007			2006
Cash Flows from Operating Activities:
Net income	$	2,462		$	1,481
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		30			24
Changes in operating accounts:
Accounts receivable		224			(342	)
Prepaid expenses and other current assets		—			2
Accounts payable		(462	)		(111	)
Accrued expenses and other current liabilities		229			115
Net cash provided by operating activities		2,483			1,169
Cash Flows from Investing Activities:
Purchases of property and equipment		(55	)		(27	)
Net cash used in investing activities		(55	)		(27	)
Cash Flows from Financing Activities:
Distributions to member		(770	)		(733	)
Net cash used in financing activities		(770	)		(733	)
Net increase in cash and cash equivalents		1,658			409
Cash and cash equivalents, beginning of period		898			689
Cash and cash equivalents, end of period	$	2,556		$	1,098

See accompanying notes to unaudited financial statements.

4

VERTICAL PITCH, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
For the periods ending September 30, 2007 and 2006

1.	NATURE OF THE BUSINESS
	Vertical Pitch, LLC (the “Company”) was incorporated in the State of Colorado on November 7, 2003, as a limited liability company. The Company specializes in combining strategic consulting and technical knowledge to develop and implement business intelligence (“BI”) and business performance management (“BPM”) solutions for all types of businesses. While the Company’s client base is diversified across a variety of industries, the Company is especially adept at implementing and integrating Hyperion TM software in healthcare, manufacturing/consumer goods, professional services and financial services organizations.
	Headquartered in Evergreen, Colorado, the Company employed approximately 22 technical consultants and conducted business operations in the US states and Canada as of December 31, 2006.
	The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. These financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, which are considered necessary for fair presentation, have been included. For further information, you should refer to the audited financial statements and accompanying notes included in this Current Report on Form 8-K/A.
	As discussed in Note 6 to the financial statements, on December 10, 2007, substantially all assets of the Company were acquired by Edgewater Technology, Inc.
2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	The accompanying financial statements reflect the application of certain significant accounting policies, as described in this note and elsewhere in the accompanying financial statements and notes.
	Use of Estimates — The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. These accounting principles require management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. The estimates, judgments and assumptions used in preparing the accompanying financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Although the Company regularly assesses the estimates, judgments and assumptions used in preparing these financial statements, actual results could differ from those estimates. Changes in estimates are recorded in the period in which they become known.
	Revenue recognition — The Company generates revenue from providing corporate performance management consulting services under written service contracts with its customers. The service contracts the Company enters into are generally time and materials engagements. Revenue from consulting services is recognized as the services are performed and amounts are earned. The Company considers amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable and collectibility is reasonably assured.
	When a customer enters into a contract with the Company, the related revenue is accounted for under SAB 104 and Emerging Issues Task Force Abstract (“EITF”) No. 00-21, “Revenue Arrangement with Multiple Deliverables”. For all arrangements, the Company evaluates the deliverables in each contract to determine whether they represent separate units of accounting. If the deliverables represent separate units of accounting, the Company then measures and allocates the consideration from the arrangement to the separate units, based on reliable evidence of the fair value of each deliverable.

5

VERTICAL PITCH, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
For the period ending September 30, 2007

Client prepayments, even if nonrefundable, are deferred (classified as a liability) and recognized over future periods as services are performed. There were no amounts classified as deferred revenue as of September 30, 2007 and 2006.

Software revenue represents the resale of certain third-party off-the-shelf software and is recorded on a gross basis provided the Company acts as a principal in the transaction, whereby the Company has credit risk and sets the price to the end user. In the event the Company does not meet the requirements to be considered a principal in the software sale transaction and act as an agent, software revenue will be recorded on a net basis. Revenue from software resale arrangements represented 9.5% and 13.5% of total revenues for the periods ended September 30, 2007 and 2006. Revenue and related costs are recognized and amounts are invoiced upon the customer’s constructive receipt of purchased software. All related warranty and maintenance arrangements are performed by the primary software vendor and are not the obligation of the Company. All software sales are recorded in accordance with SOP 97-2, Software Revenue Recognition.

Out-of-pocket reimbursable expenses charged to customers are reflected as revenue.

Allowance for Doubtful Accounts — The Company did not maintain an allowance for doubtful accounts related to its accounts receivables as of September 30, 2007 and 2006, as management’s review of historical positive collection activity, lack of bad debt trends and aged accounts receivable balances did not support any recorded amount.

Cost of Revenue — Cost of revenue primarily consists of project personnel costs principally related to salaries, payroll taxes, employee benefits and travel expenses for personnel dedicated to customer projects. These costs represent the most significant expense incurred in providing services to the Company’s client base. Cost of revenue also includes costs of purchased software and reimbursable customer expenses.

Cash and Cash Equivalents — All highly liquid investments with remaining maturities of three months or less at the date of purchase are considered cash equivalents. Cash consists of deposits with large U.S. and Canadian commercial banks. All excess cash, is invested by the Company in highly liquid money market funds, with a daily availability, and such funds are considered cash equivalents.

Concentration of Credit Risk and Significant Customers — Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. At September 30, 2007 and 2006, the Company had cash balances at a financial institution in excess of federally insured limits; however, management does not believe that the Company is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Property and Equipment — Property and equipment is recorded at cost. Property and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets, which range from three to seven years. Capital improvements that extend the lives of the assets are capitalized, while repairs and maintenance costs are expensed as incurred.

6

VERTICAL PITCH, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
For the periods ending September 30, 2007 and 2006

Income Taxes — The Company, in accordance with guidelines and regulations contained in the Internal Revenue Code, has elected to be treated as a Limited Liability Corporation for federal and state income tax purposes. All profits, losses, and other items incurred from the operations of the Company are allocated to the member. Accordingly, the Company’s financial statements do not contain any provision for federal or state income taxes as of September 30, 2007 and 2006.

Comprehensive Income - The Company had no components of other comprehensive income, therefore reported net income is the same as comprehensive income for the periods ended September 30, 2007 and 2006.

Recently Issued Accounting Pronouncements — In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes” — an interpretation of FASB Statement No. 109, Accounting for Income Taxes, (“FIN 48”) FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition as of the period ended January 1, 2007. There would be no impact to the Company in regards to the adoption of FIN 48, as the Company is taxed as a limited liability corporation.

In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements (“SFAS No. 157”). Among other requirements, FSAS No. 157 defines the fair value of a liability as the price that would be paid to transfer the liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 requires an entity to consider the effect of its own credit risk on the fair value of a liability in all periods in which the liability is measured at fair value. SFAS No. 157 will be effective for the Company on January 1, 2008. The Company believes the adoption of SFAS No. 157 will not have a material impact on the Company’s financial statements.

In February 2007, the FASB issued FASB Statement 159, The Fair Value Option for Financial Assets and Financial Liabilities, which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently to be measured at fair value. FASB Statement 159 will be effective for the Company on January 1, 2008. The Company believes the adoption of FASB Statement 159 will not have a material impact on the Company’s financial statements.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”, which replaces SFAS No. 141. SFAS No 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any no controlling interest in the acquiree and the goodwill acquired. The Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) is effective for the fiscal years beginning after December 15, 2008. The Company believes the adoption of SFAS No. 141(R) will not have a material impact on the Company’s financial statements

7

VERTICAL PITCH, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
For the periods ending September 30, 2007 and 2006

3.	PROPERTY AND EQUIPMENT
	Property and equipment consisted of the following as of:

	September 30,			December 31,
	2007			2006
	(In thousands)
Computer equipment and software	$	165		$	104
Furniture, fixtures and equipment		10			15
		175			119
Less accumulated depreciation and amortization		(85	)		(55	)
Net property and equipment	$	90		$	64

	Depreciation expense related to property and equipment was $30 thousand and $24 thousand for the nine months ended September 30, 2007 and 2006, respectively.
4.	RELATED PARTY TRANSACTIONS
	During the nine month periods ended September 30, 2007 and 2006 respectively, the Company paid $770 thousand and $733 thousand in distributions to its member which were allocated based upon the sole member’s 100% respective membership interest in the Company. The sole member is also the CEO of the Company.
	During 2006, the Company’s business operations were conducted in space owned by the sole member and as such, there was no rent expense in the year ended 2006.
5.	COMMITMENTS AND EQUITY COMPENSATION
	Operating Leases:
	The Company signed an office space lease on July 1, 2007 under a non-cancelable operating lease agreement expiring May 31, 2008. As the Company entered into its facility lease during 2007, there was no rent expense for the period ended September 30, 2006 as Company operations were conducted out of the property owned by the sole member. Annual future minimum lease payments required under operating leases are as follows:

	Amount
Years ending, December 31:	(In thousands)
2007	$	12
2008		10
Total minimum payments	$	22

8

VERTICAL PITCH, LLC
NOTES TO UNAUDITED FINANCIAL STATEMENTS
For the periods ending September 30, 2007 and 2006

	Phantom Equity Plan:
	In 2003 and 2006, the Company established phantom equity plans (the “Plans”). Under the terms of the Plans, certain key employees receive phantom equity awards whereby upon a change of control, as defined, a portion of the sale proceeds will be distributed to the plan participants based upon the number of vested phantom equity awards held. The phantom equity awards vest over a period of one to four years and are forfeited upon employee termination. As of September 30, 2007 and 2006, plan participants will receive 19% and 10%, respectively of any sales proceeds upon a change of control. Payment to the employees will only be made upon a change of control and therefore, compensation expense would be recorded at the time of the change of control is deemed probable. For the periods ended September 30, 2007 and 2006, no compensation expense has been recorded related to the Plans.
	On December 5, 2007 the participation agreements of all the holders of these awards was amended to remove the vesting provisions such that on a change of control, all outstanding awards became fully vested. There is no requirement for the participant to remain employed by the Company or its successor entity.
6.	SUBSEQUENT SALE OF THE COMPANY
	On December 10, 2007, the Company and its sole member entered into a definitive Asset Purchase Agreement (the “Purchase Agreement”) with Edgewater Technology-Ranzal, Inc., a wholly owned subsidiary of Edgewater Technology, Inc. (“Edgewater”), providing for the acquisition of substantially all of the assets of the Company, its operations, and its business related to the consulting services development of business intelligence and business performance management solution. Total consideration included a payment at closing of approximately $14 million in cash and $6 million in Edgewater’s common stock, which is subject to a three year lock-up agreement, and assumed liabilities of $920 thousand.
	Under the phantom equity plan arrangements, as described in Note 5 above, approximately 29% of total consideration was allocated to the plan participants, with 50% being paid upfront and the remaining portion being payable 18 months from the purchase date.

9

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

     On December 10, 2007, Edgewater completed its previously announced acquisition (the “Acquisition”) of substantially all of the assets of Vertical Pitch, LLC (“Vertical Pitch”), a Colorado limited liability corporation. The Acquisition was recorded using the purchase method of accounting and, accordingly, the purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed on the basis of their fair values on the acquisition date. Independent valuation specialists are assisting management of the Company in determining the fair values of a significant portion of these assets. The preliminary valuation work, as performed by the Company’s management and valuation specialists, was used to prepare the estimates of fair value reflected in these unaudited pro forma consolidated financial statements. These amounts are subject to final adjustment based upon the final determination of these fair values.

     The following unaudited pro forma consolidated financial information was derived from the historical consolidated financial statements of Edgewater and Vertical Pitch. The following unaudited pro forma consolidated balance sheet as of September 30, 2007, is presented as if the Acquisition had occurred on September 30, 2007. The unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2007 are presented as if the acquisition had occurred on January 1, 2007.

     The unaudited pro forma consolidated financial statements reflect pro forma adjustments that are based upon available information and certain assumptions that management believes are reasonable. The unaudited pro forma consolidated financial statements do not purport to represent Edgewater’s results of operations or financial position that would have resulted had the transactions, to which pro forma effects are given, been consummated as of the date or for the periods indicated. The pro forma combined financial statements reflect preliminary estimates of the allocation of the purchase price for the Acquisition, which estimates may be adjusted in the future.

     There were no material differences between the accounting policies of Edgewater and Vertical Pitch. Certain historical amounts of Vertical Pitch have been reclassified to conform to the pro forma presentation. No adjustments were necessary to eliminate intercompany transactions and balances in the unaudited pro forma consolidated statements, as there were no transactions or balances between Edgewater and Vertical Pitch.

     The unaudited pro forma consolidated financial statements and accompanying notes should be read in conjunction with the historical audited financial statements of Edgewater contained in its 2006 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 14, 2007, and the historical audited financial statements of Vertical Pitch contained herein.

1

EDGEWATER TECHNOLOGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

	September			September
	30,			30,
	2007			2007
	Edgewater			Vertical
	Technology			Pitch		(1) Pro Forma					Edgewater
	Historical			Historical		Adjustments					Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	7,749		$	2,556	$	(2,556	)	(a	)	$	7,749
Marketable securities, current portion		24,086			—		(15,548	)	(b	)		8,538
Accounts receivable, net		14,854			2,543		—					17,397
Deferred income taxes, net		1,760			—		—					1,760
Income tax refund receivable					—		—					—
Prepaid expenses and other current assets		476			—		—					476
Total current assets		48,925			5,099		(18,104	)				35,920
Property and equipment, net		4,861			90		—					4,951
Goodwill		30,609			—		16,017		(c	)		46,626
Intangible assets, net		4,146			—		3,950		(c	)		8,096
Deferred income taxes		15,346			—		—					15,346
Other assets		52			—		—					52
Total assets	$	103,939		$	5,189	$	1,863				$	110,991
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	3,041		$	210	$					$	3,251
Accruals related to discontinued operations		30			—		—					30
Accrued payroll and related liabilities		4,397			710		—					5,107
Other liabilities		959			—		—					959
Capital lease obligations, current		191			—		—					191
Total current liabilities		8,618			920							9,538
Capital lease obligations		691			—		—					691
Total liabilities		9,309			920							10,229
Commitments and contingencies
Equity:
Common stock / Membership interest		297			5		(5	)	(a	)		297
Paid-in capital		213,098			—		6,132		(b	)		219,230
Treasury stock		(130,642	)		—		—					(130,642	)
Retained earnings		11,877			4,264		(4,264	)	(a	)		11,877
Total equity		94,630			4,269		1,863					100,762
Total liabilities and equity	$	103,939		$	5,189	$	1,863				$	110,991

(1) The letters refer to a description of the pro forma adjustments in Note 1. See accompanying notes to unaudited pro forma consolidated financial information.

2

EDGEWATER TECHNOLOGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2007
(In thousands, Except Per Share Data)

	September		September
	30,		30,
	2007		2007
	Edgewater		Vertical
	Technology		Pitch		(1) Pro Forma					Edgewater
	Historical		Historical		Adjustments					Pro Forma
Revenue:
Service revenue	$	47,244	$	7,724	$	—				$	54,968
Software revenue		1,849		912		—					2,761
Reimbursable expenses		2,109		978		—					3,087
Total revenue		51,202		9,614		—					60,816
Cost of revenue:
Project and personnel costs		26,264		4,163		—					30,427
Software costs		1,559		783		—					2,342
Reimbursable expenses		2,109		978		—					3,087
Total cost of revenue		29,932		5,924		—					35,856
Gross profit		21,270		3,690		—					24,960
Operating expenses:
Selling, general and administrative		15,991		1,243		(34	)	(d	)		17,200
Depreciation and amortization		1,734		30		593		(e	)		2,357
Total operating expenses		17,725		1,273		559					19,557
Operating income		3,545		2,417		(559	)				5,403
Interest income and other, net		1,236		45		(525	)	(f	)		756
Income before taxes		4,781		2,462		(1,084	)				6,159
Tax provision		1,801		—		572		(g	)		2,373
Net income	$	2,980	$	2,462	$	(1,656	)			$	3,786
Basic income per share:
Net income	$	0.26								$	0.31
Weighted average shares, basic		11,614				657		(h	)		12,271
Diluted income per share:
Net income	$	0.23								$	0.27
Weighted average shares, diluted		13,172				657		(h	)		13,829

(1) The letters refer to a description of the pro forma adjustments in Note 1. See accompanying notes to unaudited pro forma consolidated financial information.

3

EDGEWATER TECHNOLOGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the Twelve Months Ended December 31, 2006
(In thousands, Except Per Share Data)

			December
	December		31
	31		2006
	2006		Vertical
	Edgewater		Pitch		(1) Pro Forma					Edgewater
	Historical		Historical		Adjustments					Pro Forma
Service revenue	$	56,523	$	6,824	$	—				$	63,347
Software revenue		1,304		1,486		—					2,790
Reimbursable expenses		2,256		707		—					2,963
Total revenue		60,083		9,017							69,100
Cost of revenue:
Project and personnel expenses		32,206		3,783		—					35,932
Software costs		1,120		1,248		—					2,368
Reimbursable expenses		2,256		707		—					3,020
Total cost of revenue		35,582		5,738		—					41,320
Gross profit		24,501		3,279		—					27,780
Operating expenses:
Selling, general and administrative		18,721		1,261		(46	)	(d	)		19,936
Depreciation and amortization		1,755		32		790		(e	)		2,577
Total operating expenses		20,476		1,293		744					22,513
Operating income		4,025		1,986		(744	)				5,267
Interest income and other, net		1,283		33		(700	)	(f	)		616
Income before taxes		5,308		2,019		(1,444	)				5,883
Tax provision		2,105		—		239		(g	)		2,344
Net Income	$	3,203	$	2,019	$	(1,683	)			$	3,539
Basic income per share:
Continuing operations	$	0.29								$	0.30
Weighted average shares, basic		10,980				876		(h	)		11,856
Diluted income per share:
Continuing operations	$	0.27								$	0.28
Weighted average shares, diluted		11,956				876		(h	)		12,832

(1) The letters refer to a description of the pro forma adjustments in Note 1. See accompanying notes to unaudited pro forma consolidated financial information.

4

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

1. Pro Forma Adjustments

     Pro forma adjustments are necessary to reflect the estimated purchase price, to adjust amounts related to Vertical Pitch’s net tangible and intangible assets to a preliminary estimate of their fair values, to reflect the amortization expense related to the estimated amortizable intangible assets acquired, to present salary and related benefit cost savings related to reductions in corporate overhead, and to reflect the income tax effect related to the pro forma adjustments.

     The following adjustments were applied to Edgewater’s historical financial statements and those of Vertical Pitch to arrive at the pro forma consolidated financial information.

(a)	To record the elimination of Vertical Pitch cash and cash equivalent balances not acquired according to the terms of the Asset Purchase Agreement and the Vertical Pitch common stock and retained earnings.
(b)	To record the $21.68 million purchase price for substantially all of the assets of Vertical Pitch, LLC, which represented $14.6 million in cash, $6.1 million in common stock and $0.95 million of direct acquisition costs.
(c)	To record the fair value of the goodwill and identifiable intangible assets acquired.
(d)	To record a reduction in administrative wages and related benefits due to decreased salaries as a result of the elimination of four positions as a result of the acquisition and to add wages related to an increase in compensation attributable to the sole member of Vertical Pitch.
(e)	To record amortization of identifiable intangible assets acquired, which are estimated to be $3.950 million.
(f)	To reduce interest income related to the cash portion of the purchase price at an assumed interest rate of 5.0%.
(g)	To record a tax provision at a statuary 41.50% rate associated with the Vertical Pitch income and any pro forma adjustments recorded in (d) — (f).
(h)	To show the weighted average shares outstanding in relation to the stock portion of the purchase price, which consisted of 876,040 common shares.

2. Purchase Price Allocation

     The purchase price of $21.68 million consists of $20.73 million for substantially all of the assets of Vertical Pitch and $0.95 million in direct transaction costs. The Acquisition was funded from Edgewater’s marketable securities and stock.

     The purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed with the excess purchase price being allocated to goodwill under the assumption the acquisition of Vertical Pitch was consummated on September 30, 2007. The final purchase price allocation will differ from that presented below due to adjustments primarily for items such as additional transaction costs and ongoing evaluations of valuation allowances.

5

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

     The consideration and components and preliminary allocation of the purchase price consisted of the following under the assumption the acquisition of Vertical Pitch was consummated on September 30, 2007:

	(In thousands)
Consideration and direct transaction costs:
Cash paid for assets, net	$	14,600
Direct transaction costs		948
Common stock issued to Vertical Pitch member		6,132
Total purchase price	$	21,680
Allocation of purchase price:
Accounts receivable	$	2,543
Property and equipment		90
Accounts payable and accrued liabilities		(210	)
Accrued payroll and bonus		(710	)
Intangible assets		3,950
Goodwill		16,017
Total purchase price	$	21,680

3. Intangible Assets

     For the purposes of preparing the unaudited pro forma consolidated financial statements, the preliminary identified intangible assets acquired of $3.950 million would be amortized as follows and are presented as if the acquisition had occurred on January 1, 2006:

	Fair value		Useful life
	(In thousands)		(In years)
Customer relationships	$	3,510		5
Non-compete agreements		440		5
Total intangible asset value	$	3,950

4. Goodwill

     Of the total purchase price, approximately $16.0 million has been allocated to goodwill. Goodwill was calculated based upon several factors. The Vertical Pitch acquisition offered many synergies to Edgewater, such as a gateway to the western part of the United States, strong expertise in the Hyperion Financial Management toolset and immediately enhanced and expanded Edgewater’s Hyperion-based Business Intelligence offerings. Additionally, Vertical Pitch provided Edgewater with an opportunity to increase its vertical industry expertise.

     In accordance with Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” goodwill is tested for impairment at least annually (more frequently if certain indicators are present). In the event that the Company’s management determines that the value of the goodwill has become impaired, the Company will incur an accounting charge for the amount of impairment during the fiscal period in which the determination is made. The goodwill recognized by the Company in connection with this transaction is deductible for tax purposes.

6