8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 30, 2007

INNERWORKINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-52170	20-5997364
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

600 West Chicago Avenue Suite 850 Chicago, Illinois	60610
(Address of principal executive offices)	(Zip Code)

(312) 642-3700

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

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:

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))

EXPLANATORY NOTE

This Current Report on Form 8-K/A (“Amendment No. 1”) amends and restates Item 9.01 of the Current Report on Form 8-K previously filed by InnerWorkings, Inc. (the “Company”) with the Securities and Exchange Commission on December 6, 2007 to include historical financial statements of Corporate Edge, Inc. (“Corporate Edge”) and certain pro forma financial information required by Item 9.01 with respect to the Company’s acquisition of Corporate Edge.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The audited balance sheet of Corporate Edge as of December 31, 2006 and the related statements of income, shareholders’ equity and cash flows of Corporate Edge for the year ended December 31, 2006, and the notes related thereto, are filed as Exhibit 99.2 to this Amendment No. 1 and incorporated by reference herein.

The unaudited balance sheet of Corporate Edge as of September 30, 2007 and the unaudited statements of income and cash flows of Corporate Edge for the nine months ended September 30, 2007 and 2006, and the notes related thereto, are filed as Exhibit 99.3 to this Amendment No. 1 and incorporated by reference herein.

(b) Pro Forma Financial Information

The unaudited pro forma condensed consolidated balance sheet of the Company as of September 30, 2007 and the unaudited pro forma condensed consolidated income statements of the Company for the nine months ended September 30, 2007 and the year ended December 31, 2006, and the notes related thereto, are filed as Exhibit 99.4 to this Amendment No. 1 and incorporated by reference herein.

(d) Exhibits:

Exhibit No.	Description
10.1*	Purchase Agreement dated as of November 30, 2007 by and among InnerWorkings, Inc., Corporate Edge, Inc. and the owners of the capital stock of Corporate Edge, Inc.
99.1*	Press Release dated December 3, 2007
99.2	Audited balance sheet of Corporate Edge, Inc. as of December 31, 2006 and the related statements of income, statement of shareholders’ equity and cash flows of Corporate Edge, Inc. for the year ended December 31, 2006.
99.3	Unaudited balance sheet of Corporate Edge, Inc. as of September 30, 2007 and the unaudited statements of income, statement of shareholders’ equity and cash flows of Corporate Edge, Inc. for the nine months ended September 30, 2007 and 2006.
99.4	Unaudited pro forma condensed consolidated balance sheet of InnerWorkings, Inc. as of September 30, 2007 and unaudited pro forma condensed consolidated income statements of InnerWorkings, Inc. for the nine months ended September 30, 2007 and the year ended December 31, 2006.

* Previously filed with the Current Report on Form 8-K filed by the Company on December 6, 2007.

2

SIGNATURES

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

	INNERWORKINGS, INC.
Dated: February 19, 2008	By:	/s/ Nicholas J. Galassi
	Name:	Nicholas J. Galassi
	Title:	Chief Financial Officer

3

Exhibit Index

Exhibit No.	Description
10.1*	Purchase Agreement dated as of November 30, 2007 by and among InnerWorkings, Inc., Corporate Edge, Inc. and the owners of the capital stock of Corporate Edge, Inc.
99.1*	Press Release dated December 3, 2007
99.2	Audited balance sheet of Corporate Edge, Inc. as of December 31, 2006 and the related statements of income, statement of shareholders’ equity and cash flows of Corporate Edge, Inc. for the year ended December 31, 2006.
99.3	Unaudited balance sheet of Corporate Edge, Inc. as of September 30, 2007 and the unaudited statements of income, statement of shareholders’ equity and cash flows of Corporate Edge, Inc. for the nine months ended September 30, 2007 and 2006.
99.4	Unaudited pro forma condensed consolidated balance sheet of InnerWorkings, Inc. as of September 30, 2007 and unaudited pro forma condensed consolidated income statements of InnerWorkings, Inc. for the nine months ended September 30, 2007 and the year ended December 31, 2006.

* Previously filed with the Current Report on Form 8-K filed by the Company on December 6, 2007.

4

EX-99.2

Exhibit 99.2

Corporate Edge, Inc.

Financial Statements

Year Ended December 31, 2006

Contents

Report of Independent Auditors	1
Financial Statements
Balance Sheet	2
Statement of Income	3
Statement of Shareholders’ Equity	4
Statement of Cash Flows	5
Notes to Financial Statements	6

Report of Independent Auditors

The Shareholders

Corporate Edge, Inc.

We have audited the accompanying consolidated balance sheet of Corporate Edge, Inc. as of December 31, 2006 and the related consolidated statements of income, shareholders’ equity, and cash flows for the year 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 audit.

We conducted our audit in accordance with the auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control 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, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Corporate Edge, Inc. at December 31, 2006, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Chicago, Illinois

February 15, 2008

1

Corporate Edge, Inc.

Balance Sheet

December 31, 2006

Assets
Current assets:
Accounts receivable - net of allowance for doubtful accounts of $199,884	$	15,430,763
Inventories	4,137,287
Note receivable - related party	359,451
Prepaid expenses and other current assets	405,502
Total current assets	20,333,003
Property and equipment, net	783,325
Other assets:
Security deposits	182,425
Deferred financing costs - net	37,300
	219,725
Total assets	$	21,336,053
Liabilities and shareholders’ equity
Current liabilities:
Line of credit	$	5,319,421
Accounts payable	6,905,652
Accrued liabilities	5,326,863
Customer deposits	761,064
Total current liabilities	18,313,000
Subordinated note payable - affiliate	2,250,000
Total liabilities	20,563,000
Shareholders’ equity:
Common stock, no par value, 1,000 shares authorized, 400 shares issued and outstanding	—
Additional paid in capital	645,275
Retained earnings	127,778
Total shareholders’ equity	773,053
Total liabilities and shareholders’ equity	$	21,336,053

See accompanying notes to financial statements.

2

Corporate Edge, Inc.

Statement of Income

Year Ended December 31, 2006

Revenue	$	57,850,691
Cost of goods sold (exclusive of depreciation and amortization shown separately below)	42,756,237
Gross profit	15,094,454
Operating expenses:
Selling, general, and administrative expenses	13,582,203
Depreciation and amortization	239,707
Income from operations	1,272,544
Other income (expense)
Interest income	142
Interest expense	(627,398		)
Total other (expense)	(627,256		)
Income before income taxes	645,288
Income tax expense	38,320
Net income	$	606,968

See accompanying notes to financial statements.

3

Corporate Edge, Inc.

Statement of Shareholders’ Equity

Year Ended December 31, 2006

	Common Stock			Additional Paid		Retained
	Shares	Amount		In Capital		Earnings			Total
Balance at December 31, 2005	400	—		$	645,275	$	482,810		$	1,128,085
Net income	—	—		—		606,968			606,968
Distributions to shareholders	—	—		—		(962,000		)	(962,000		)
Balance at December 31, 2006	400	$	—	$	645,275	$	127,778		$	773,053

See accompanying notes to financial statements.

4

Corporate Edge, Inc.

Statement of Cash Flows

Year Ended December 31, 2006

Cash flows from operating activities
Net income	$	606,968
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	239,707
Bad debt provision	(22,111		)
Change in assets
Accounts receivable	(2,406,678		)
Inventories	(2,456,604		)
Prepaid expenses and other current assets	11,434
Security deposits	(10,867		)
Change in liabilities
Accounts payable and accrued expenses	3,780,547
Customer deposits	405,112
Net cash provided by operating activities	147,508
Cash flows from investing activities
Purchases of property and equipment	(419,984		)
Issuance of note receivable, net	(359,451		)
Net cash used in investing activities	(779,435		)
Cash flows from financing activities
Repayments on line of credit	(60,485,856		)
Proceeds from the line of credit	62,113,461
Payment for deferred financing costs	(33,678		)
Distributions to shareholders	(962,000		)
Net cash provided by financing activities	631,927
Net change in cash	—
Cash, beginning of year	—
Cash, end of year	$	—

See accompanying notes to financial statements.

5

Corporate Edge, Inc.

Notes to Financial Statements

December 31, 2006

1.  Description of the Business

Corporate Edge, Inc. (the Company) is a national distributor of promotional products and is principally involved in the design, development and sale of corporate specialty items.

The Company was incorporated in the State of New Jersey on October 5, 1988 and was authorized to do business in New York on January 7, 2003.

2.  Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Corporate Edge, Inc. and its wholly owned subsidiary, Screened Image, Inc.  All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results can differ from those estimates.

Fair Value of Financial Instruments

As of December 31, 2006, the carrying value of the Company’s financial instruments, which consist of accounts receivable, line of credit, and accounts payable, approximate their fair values due to their short term nature.

Revenue Recognition

The Company recognizes revenue for goods sold when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) title transfers to the customer, (3) the fee is fixed and determinable and (4) collectibility is reasonably assured.

Accounts Receivable

Accounts receivable are uncollaterized customer obligations due under normal trade terms.  Invoices require payment within 30 days from the invoice date.  Accounts receivable are stated at the amount billed to the customer.  Interest is not accrued on outstanding balances.

The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management’s best estimate of the amounts that will not be collected.   Management individually reviews all accounts receivable balances and, based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected.  Fully reserved receivables are reviewed on a monthly basis and uncollectible accounts are written off when all reasonable collection efforts have been exhausted.

Inventory

Inventory is stated at the lower of cost or market.  Cost is determined by the first-in, first-out method, and represents the lower of replacement cost or estimated realizable value.  Inventory consists primarily of finished goods.

6

Corporate Edge, Inc.

Notes to Financial Statements - (Continued)

Property and Equipment

Property and equipment are stated at cost.  Depreciation and amortization expense is computed using accelerated and straight-line methods over the estimated useful lives of the respective assets.  The estimated useful lives, by asset class, are as follows:

	Years
Equipment	3-10
Furniture	7-10
Transportation equipment	6

Leasehold improvements are depreciated using the straight-line method over the shorter of their estimated useful lives or the terms of the related leases.

Advertising

The Company expenses advertising as incurred.  Advertising expense for the year ended December 31, 2006 was $69,880.

Income Taxes

For income tax purposes, the Company has elected to be taxed as a Subchapter “S” Corporation under certain sections of the Internal Revenue Code.  As such, the Company is not obligated to pay federal income taxes, and the individual shareholders assume the responsibility for the payment on their proportionate share of the income of the Company.

As the Company is incorporated in the State of New Jersey and authorized to do business in New York, the Company is obligated to pay state taxes based upon the respective state laws.  Although New Jersey recognizes the Subchapter “S” Corporation, the Company is required to pay New Jersey corporate income taxes which are based on the difference between the corporate rate and the individual tax rate.  New York City does not recognize the Subchapter “S” Corporation.  Therefore, the Company is obligated to pay New York City corporate taxes on income allocable to this jurisdiction.

The Company accounts for income taxes imposed by jurisdictions that do not recognize the Subchapter “S” election pursuant to the asset and liability method.  Under this method, deferred tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial carrying values of assets and liabilities and their respective tax bases.  The measurement of deferred tax assets and liabilities is based on provisions of the enacted tax law.  The Company had no material accrued or refundable income taxes or deferred tax assets or liabilities as of December 31, 2006.

Deferred Financing Costs

Loan fees and other debt issuance costs are deferred and included in non-current assets. Any debt discount is offset against the principal balance of the related loan. Deferred financing costs and debt discount are amortized to interest expense over the term of the related loan (3-10 years) using the effective interest method.

Deferred financing costs were $37,300, net of accumulated amortization of $36,709, as of December 31, 2006.  The amortization included in interest expense for the year ended December 31, 2006 was $66,585.

7

Corporate Edge, Inc.

Notes to Financial Statements - (Continued)

3.  Property and Equipment

Property and equipment at December 31, 2006 consisted of the following:

Furniture and equipment	$	2,729,320
Leasehold improvements	271,709
Transportation equipment	159,464
	3,160,493
Less accumulated depreciation	(2,377,168		)
	$	783,325

Depreciation and amortization expense for the year ended December 31, 2006 was $239,707.

4.  Note Receivable — Related Party

The Company has a note receivable from one of its sales representatives which is due on demand and is non-interest bearing.  Under the terms of the note, 20% of all commissions due to the sales representative shall be applied as payment against the note.

5.  Line of Credit

On March 29, 2006, the Company refinanced its revolving line of credit with a new bank increasing the limit to $7,500,000.  Interest on borrowings is payable at 1% above the prime rate (8.25% at December 31, 2006).  As defined in the loan agreement, the maximum availability under the line is limited to 85% of eligible accounts receivables.  The line of credit is secured by a blanket lien on all assets of the Company and is personally guaranteed by the shareholders.  The line of credit expired June 1, 2007 and was renewed effective July 1, 2007 for an additonal one year term.  As of December 31, 2006, the unused portion of the line totaled $2,180,579.

The line of credit contains various financial covenants relating to debt service coverage and debt to equity ratios.  As of December 31, 2006, the Company was in breach of the debt to equity covenant.  Under the terms of the loan agreement, the lender may call the loan if the Company is in violation of any restrictive covenant.  The lender has waived the debt to equity requirement.  Management is not aware of any other violations of these covenants at December 31, 2006.

Interest expense relating to the line of credit was $401,285 for the year ended December 31, 2006.

6.  Subordinated Note Payable - Affiliate

The note payable to affiliate is secured by a second lien on all the Company’s assets.  Under the terms of the note, the loan cannot be repaid until January 3, 2009.  The note bears interest at 6.67% per annum, payable monthly, and is due on or before January 3, 2013, if certain conditions are not met.  Interest expense relating to this note was $150,000 for the year ended December 31, 2006.  Pursuant to a subordination agreement with the Company’s lender, the note is fully subordinate to the Company’s line of credit.

8

Corporate Edge, Inc.

Notes to Financial Statements - (Continued)

7.  Commitments and Contingencies

Lease Commitments

The Company leases office space under non-cancellable operating leases expiring at various times from January 2007 to December 2011.  The leases contain provisions for payments relating to real estate taxes and operating expenses.  Minimum future rental payments required under these leases for each of the next five years and in the aggregate are as follows:

Years ending December 31,	Amount
2007	$	484,127
2008	467,153
2009	507,153
2010	547,153
2011	347,153
Total minimum future rentals	$	2,352,739

Total rent expense on all operating leases for the year ended December 31, 2006 was $681,039.

8.  Retirement Plan

The Company has a profit sharing plan that covers substantially all of the Company’s employees.  Contributions to the plan are at the discretion of the shareholders.  For the year ended December 31, 2006, the Company did not make any contributions to the plan.

9.  Capital Structure and Common Stock

At December 31, 2006, the Company had 400 shares of voting, no par value common stock issued and outstanding.  Dividends are paid at the discretion of the Board of Directors.  A distribution of $962,000 was approved and made to the outstanding shareholders during the year ended December 31, 2006.

10.  Significant Customer

During the year ended December 31, 2006, sales to one customer were approximately 33% of the Company’s total revenue.  The amount included in accounts receivable for this customer at December 31, 2006 was approximately $9,738,000.

9

EX-99.3

Exhibit 99.3

Corporate Edge, Inc.

Financial Statements (Unaudited)

Nine Months Ended September 31, 2007 and 2006

Contents

Financial Statements
Balance Sheet	1
Statements of Income	2
Statement of Shareholders’ Equity	3
Statements of Cash Flows	4
Notes to Financial Statements	5

Corporate Edge, Inc.

Balance Sheet

(Unaudited)

	September 30, 2007
Assets
Current assets:
Cash	$	261,995
Accounts receivable - net	8,213,761
Inventories	3,824,856
Note receivable	229,341
Prepaid expenses and other current assets	1,032,270
Total current assets	13,562,223
Property and equipment, net	643,901
Other assets:
Security deposits	186,817
Deferred financing costs - net	20,804
	207,621
Total assets	$	14,413,745
Liabilities and shareholders’ equity
Current liabilities:
Line of credit	$	5,869,520
Accounts payable	3,303,633
Accrued expenses	1,414,343
Customer deposits	596,847
Total current liabilities	11,184,343
Subordinated note payable - affiliate	2,250,000
Total liabilities	13,434,343
Shareholders’ equity:
Common stock, no par value, 1,000 shares authorized, 400 shares issued and outstanding	—
Additional paid in capital	645,275
Retained earnings	334,127
Total shareholders’ equity	979,402
Total liabilities and shareholders’ equity	$	14,413,745

See accompanying notes to financial statements.

1

Corporate Edge, Inc.

Statements of Income

(Unaudited)

	Nine Months Ended September 30,
	2006			2007
Revenue	$	36,564,299		$	39,760,519
Cost of goods sold (exclusive of depreciation and amortization shown separately below)	26,477,176			29,181,517
Gross profit	10,087,123			10,579,002
Operating expenses:
Selling, general, and administrative expenses	8,830,565			9,714,305
Depreciation and amortization	163,501			161,242
Income from operations	1,093,057			$	703,455
Other expense - interest expense	(471,055		)	(468,221		)
Income before income taxes	622,002			235,234
Income tax expense	20,012			9,269
Net income	$	601,990		$	225,965

See accompanying notes to financial statements.

2

Corporate Edge, Inc.

Statement of Shareholders’ Equity

Nine Months Ended September 30, 2007

(Unaudited)

	Common Stock			Additional Paid		Retained
	Shares	Amount		In Capital		Earnings			Total
Balance at December 31, 2006	400	$	—	$	645,275	$	333,162		$	978,437
Net income	—	—		—		225,965			225,965
Distributions to shareholders	—	—		—		(225,000		)	(225,000		)
Balance at September 30, 2007	400	$	—	$	645,275	$	334,127		$	979,402

See accompanying notes to financial statements.

3

Corporate Edge, Inc.

Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	2006			2007
Cash flows from operating activities
Net income	$	601,990		$	225,965
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	163,501			161,242
Bad debt provision	73,914			18,781
Change in assets
Accounts receivable	5,276,988			8,456,164
Inventories	(908,732		)	455,607
Prepaid expenses and other current assets	(62,881		)	(743,957		)
Security deposits	(10,667		)	(4,392		)
Change in liabilities
Accounts payable and accrued expenses	(3,198,609		)	(8,446,480		)
Customer deposits	(211,976		)	(164,217		)
Net cash provided by (used in) operating activities	1,723,528			(41,287		)
Cash flows from investing activities
Purchases of property and equipment	(379,114		)	(21,817		)
Issuance of note receivable, net	(335,284		)	—
Net cash used in investing activities	(714,398		)	(21,817		)
Cash flows from financing activities
Proceeds from line of credit	60,485,859			48,281,000
Repayments of line of credit	(60,649,311		)	(47,730,901		)
Payment for deferred financing costs	(33,678		)	—
Distributions to shareholders	(812,000		)	(225,000		)
Net cash provided by (used in) financing activities	(1,009,130		)	325,099
Net change in cash	—			261,995
Cash, beginning of period	—			—
Cash, end of period	$	—		$	261,995
Non-cash operating and investing activities:
Reduction in commissions paid in fulfillment of note receivable	—			130,110

See accompanying notes to financial statements.

4

Corporate Edge, Inc.

Notes to Financial Statements

September 30, 2007

(Unaudited)

1.  Description of the Business

Corporate Edge, Inc. (the Company) is a national distributor of promotional products and is principally involved in the design, development and sale of corporate specialty items.

The Company was incorporated in the State of New Jersey on October 5, 1988 and was authorized to do business in New York on January 7, 2003.

2.  Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Corporate Edge, Inc. and its wholly owned subsidiary, Screened Image, Inc.  All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Actual results can differ from those estimates.

Fair Value of Financial Instruments

As of September 30, 2007, the carrying value of the Company’s financial instruments, which consist of cash, accounts receivable, line of credit, and accounts payable, approximate their fair values due to their short maturities term nature.

Revenue Recognition

The Company recognizes revenue for goods sold when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) title transfers to the customer, (3) the fee is fixed and determinable and (4) collectibility is reasonably assured.

Accounts Receivable

Accounts receivable are uncollaterized customer obligations due under normal trade terms.  Invoices require payment within 30 days from the invoice date.  Accounts receivable are stated at the amount billed to the customer.  Interest is not accrued on outstanding balances.

The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management’s best estimate of the amounts that will not be collected.   Management individually reviews all accounts receivable balances and, based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected.  Fully reserved receivables are reviewed on a monthly basis and uncollectible accounts are written off when all reasonable collection efforts have been exhausted.

Inventory

Inventory is stated at the lower of cost or market.  Cost is determined by the first-in, first-out method, and represents the lower of replacement cost or estimated realizable value.  Inventory consists primarily of finished goods.

5

Corporate Edge, Inc.

Notes to Financial Statements - (Continued)

Property and Equipment

Property and equipment are stated at cost.  Depreciation and amortization expense is computed using accelerated and straight-line methods over the estimated useful lives of the respective assets.  The estimated useful lives, by asset class, are as follows:

	Years
Equipment	3-10
Furniture	7-10
Transportation equipment	6

Leasehold improvements are depreciated using the straight-line method over the shorter of their estimated useful lives or the terms of the related leases.

Income Taxes

For income tax purposes, the Company has elected to be taxed as a Subchapter “S” Corporation under certain sections of the Internal Revenue Code.  As such, the Company is not obligated to pay federal income taxes, and the individual shareholders assume the responsibility for the payment on their proportionate share of the income of the Company.

As the Company is incorporated in the State of New Jersey and authorized to do business in New York, the company is obligated to pay state taxes based upon the respective state laws.  Although New Jersey recognizes the Subchapter “S” Corporation, the Company is required to pay New Jersey corporate income taxes which are based on the difference between the corporate rate and the individual tax rate.  New York City does not recognize the Subchapter “S” Corporation.  Therefore, the Company is obligated to pay New York City corporate taxes on income allocable to this jurisdiction.

The Company accounts for income taxes imposed by jurisdictions that do not recognize the Subchapter “S” election pursuant to the asset and liability method.  Under this method, deferred tax assets and liabilities are recognized based upon anticipated future tax consequences attributable to differences between financial carrying values of assets and liabilities and their respective tax bases.  The measurement of deferred tax assets and liabilities is based on provisions of the enacted tax law.  The Company had no material accrued or refundable income taxes or deferred tax assets or liabilities as of September 30, 2007.

Deferred Financing Costs

Loan fees and other debt issuance costs are deferred and included in non-current assets. Any debt discount is offset against the principal balance of the related loan. Deferred financing costs and debt discount are amortized to interest expense over the term of the related loan (3-10 years) using the effective interest method.

Deferred financing costs were $20,804, net of accumulated amortization of $53,205 as of September 30, 2007.  The amortization included in interest expense for the nine months ended September 30, 3007 and 2006 was $16,553 and $58,600, respectively.

6

Corporate Edge, Inc.

Notes to Financial Statements - (Continued)

3.  Property and Equipment

Property and equipment at September 30, 3007 consisted of the following:

Furniture and equipment	$	2,750,179
Leasehold improvements	272,668
Transportation equipment	159,464
	3,182,311
Less accumulated depreciation	(2,538,410		)
	$	643,901

Depreciation and amortization expense for the nine months ended September 30, 2007 and 2006 was approximately $161,000 and 164,000, respectively.

4.  Note Receivable – Related Party

The Company has a note receivable from one of its sales representatives which is due on demand and is non-interest bearing.  Under the terms of the note, 20% of all the commissions due to the sales representative shall be applied against the note.

5.  Line of Credit

On March 29, 2006, the Company refinanced its revolving line of credit with a new bank increasing the limit to $7,500,000.  Interest on borrowings is payable at 1% above the prime rate.  As defined in the loan agreement, the maximum availability under the line is limited to 85% of eligible accounts receivables.  The line of credit is secured by a blanket lien on all assets of the Company and is personally guaranteed by the shareholders.  The line of credit expired June 1, 2007 and was renewed effective July 1, 2007 for an additional one year term.  As of September 30, 2007, the unused portion of the line totaled $1,630,480.

Interest expense relating to the line of credit was approximately $359,000 and $299,000 for the nine months ended September 30, 2007 and 2006, respectively.

6.  Subordinated Note Payable - Affiliate

The note payable to affiliate is secured by a second lien on all the Company’s assets.  Under the terms of the note, the loan cannot be repaid until January 3, 2009.  The note bears interest at 6.67% per annum, payable monthly, and is due on or before January 3, 2013, if certain conditions are not met.  Interest expense relating to this note was $112,500 for the nine months ended September 31, 2007 and 2006.  Pursuant to a subordination agreement with the Company’s lender, the note is fully subordinate to the Company’s line of credit.

7.  Retirement Plan

The Company has a profit sharing plan that covers substantially all of the Company’s employees.  Contributions to the plan are at the discretion of the shareholders.  For the nine months ended September 30, 2006 and 2007, the Company did not make any contributions to the plan.

8.  Capital Structure and Common Stock

At September 30, 2007, the Company had 400 shares of voting, no par value common stock issued and outstanding.  Dividends are paid at the discretion of the Board of Directors.  A distribution of $225,000 was approved and made to the outstanding shareholders during the nine months ended September 30, 2007.

7

Corporate Edge, Inc.

Notes to Financial Statements - (Continued)

10.  Subsequent Events

On November 30, 2007, the Company was sold to InnerWorkings, Inc. for an acquisition price of $18.0 million in cash paid in November and December 2007.  The acquisition agreement provides that an additional $15.0 million in cash may be paid by InnerWorkings, Inc. contingent on the achievement of certain future performance measures by the Company.  The additional cash consideration, if any, will be paid on or prior to November 30, 2010.

8

EX-99.4

Exhibit 99.4

InnerWorkings, Inc.

Unaudited Pro Forma Condensed Consolidated Financial Statements

On November 30, 2007, InnerWorkings, Inc. (the “Company”) acquired New York City-based Corporate Edge, Inc. (“Corporate Edge”), a major national distributor of promotional products, which creates cutting-edge corporate business solutions for Fortune 500 clients. Corporate Edge offers an experienced team with creative expertise and tactical flexibility that delivers quality branded merchandise on time and on budget.

For purposes of the Unaudited Pro Forma Condensed Consolidated Income Statements for the nine months ended September 30, 2007 and the year ended December 31, 2006, we have assumed the Corporate Edge acquisition occurred on January 1, 2006.

The Unaudited Pro Forma Condensed Consolidated Balance Sheet gives effect to the Corporate Edge acquisition as if it had occurred on September 30, 2007.

The Company and Corporate Edge have the same fiscal year end, December 31.  The Unaudited Pro Forma Condensed Consolidated Income Statement for the nine months ended September 30, 2007 has been derived from:

· the unaudited historical consolidated income statement of the Company for the nine months ended September 30, 2007; and

· the unaudited historical consolidated income statement of Corporate Edge for the nine months ended September 30, 2007.

The unaudited pro forma condensed consolidated income statement for the year ended December 31, 2006 has been derived from:

· the audited historical consolidated income statement of the Company for the year ended December 31, 2006; and

· the audited historical consolidated income statement of Corporate Edge for the year ended December 31, 2006.

The unaudited pro forma condensed consolidated balance sheet as of September 30, 2007 has been derived from:

· the unaudited historical consolidated balance sheet of the Company as of September 30, 2007; and

· the unaudited historical consolidated balance sheet of Corporate Edge as of September 30, 2007.

These Unaudited Pro Forma Condensed Consolidated Financial Statements (“the unaudited pro forma financial statements”) have been prepared based on preliminary estimates of fair values of the assets acquired and liabilities assumed as of the acquisition date. The actual amounts recorded for the acquisition may differ from the information presented here. The purchase price has been allocated on a preliminary basis based on management’s best estimates of fair value, with the excess cost over net tangible and intangible assets acquired being allocated to goodwill. These allocations are subject to change pending a final analysis of the fair value of the assets acquired and liabilities assumed as of the acquisition date. In addition, post-closing adjustments to the purchase price will affect the purchase price allocation.

The unaudited pro forma financial statements presented are for illustration purposes only and do not necessarily indicate the operating results or financial position that would have been achieved if the Corporate Edge acquisition had occurred on January 1, 2006 or September 30, 2007, as applicable, nor is it indicative of future operating results or financial position.

The unaudited pro forma financial statements do not reflect any operating efficiencies or cost savings that we may achieve with respect to the combined companies, nor do they include the effects of restructuring activities.

The unaudited pro forma financial statements should be read in conjunction with the accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements and the historical consolidated financial statements and accompanying notes included in this Form 8-K filing, and the Company’s historical consolidated financial statements filed as part of our most recent Form 10-K filing and Form 10-Q filing.

1

InnerWorkings, Inc

Unaudited Pro Forma Condensed Consolidated Balance Sheet

September 30, 2007

						Acquisition
	InnerWorkings, Inc.			Corporate Edge		Pro Forma			Pro Forma
	September 30, 2007			September 30, 2007		Adjustments			as Adjusted
Assets
Current assets:
Cash and cash equivalents	$	54,317,892		$	261,995	$	(17,977,754	)(1)	$	36,602,133
Marketable securities	15,950,000			—		—			15,950,000
Accounts receivable, net of allowance for doubtful accounts	57,453,661			8,213,761		—			65,667,422
Unbilled revenue	8,816,169			—		—			8,816,169
Inventories	3,786,805			3,824,856		47,810		(2)	7,659,471
Note receivable	—			229,341		—			229,341
Prepaid expenses	4,297,425			1,032,270		—			5,329,695
Advances to related parties	73,309			—		—			73,309
Deferred income taxes	819,028			—		—			819,028
Other current assets	1,960,693			—		—			1,960,693
Total current assets	147,474,982			13,562,223		(17,929,944		)	143,107,261
Property and equipment, net	3,603,532			643,901		—			4,247,433
Intangibles and other assets:
Goodwill	15,615,748			—		6,436,826		(3)	22,052,574
Intangible assets, net of accumulated amortization	8,014,600			—		2,415,000		(3)	10,429,600
Deposits	208,217			186,817		—			395,034
Investment	125,000			—		—			125,000
Deferred income taxes	4,122,535			—		—			4,122,535
Other assets	26,792			20,804		(20,804		)(4)	26,792
	28,112,892			207,621		8,831,022			37,151,535
Total assets	$	179,191,406		$	14,413,745	$	(9,098,222	)	$	184,506,229
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable-trade	$	36,509,839		$	3,303,633	$	—		$	39,813,472
Line of credit	—			5,869,520		(5,869,520		)(4)	—
Payable to related parties	103,389			—		—			103,389
Due to seller	633,368			—		—			633,368
Current maturities of capital lease obligations	67,773			—		—			67,773
Customer deposits	2,277,263			596,847		—			2,874,110
Other liabilities	1,201,576			—		—			1,201,576
Deferred revenue	—			—		—			—
Accrued expenses	3,534,183			1,414,343		—			4,948,526
Total current liabilities	44,327,391			11,184,343		(5,869,520		)	49,642,214
Capital lease obligations, less current maturities	165,117			—		—			165,117
Subordinated note payable - affiliate	—			2,250,000		(2,250,000		)(4)	—
Total liabilities	44,492,508			13,434,343		(8,119,520		)	49,807,331
Stockholders’ equity:
Common stock	479			—		—			479
Additional paid-in capital	163,068,551			645,275		(645,275		)(5)	163,068,551
Treasury stock at cost	(40,000,000		)	—		—			(40,000,000		)
Unrealized gain on marketable securities	77,814			—		—			77,814
Retained earnings	11,552,054			334,127		(334,127		)(5)	11,552,054
Total stockholders’ equity	134,698,898			979,402		(979,402		)	134,698,898
Total liabilities and stockholders’ equity	$	179,191,406		$	14,413,745	$	(9,098,922	)	$	184,506,229

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

2

InnerWorkings, Inc

Unaudited Pro Forma Condensed Consolidated Income Statement

For the Nine Months Ended September 30, 2007

	InnerWorkings, Inc.			Corporate Edge			Acquisition
	Nine Months Ended			Nine Months Ended			Pro Forma			Pro Forma
	September 30, 2007			September 30, 2007			Adjustments			As Adjusted
Revenue	$	198,392,945		$	39,760,519		$	—		$	238,153,464
Cost of goods sold	148,417,678			29,181,517			—			177,599,195
Gross profit	49,975,267			10,579,002			—			60,554,269
Operating expenses:
Selling, general, and administrative expenses	33,202,122			9,714,305			—			42,916,427
Depreciation and amortization	1,579,815			161,242			132,250		(6)	1,873,307
Income from operations	15,193,330			703,455			(132,250		)	15,764,535
Other income (expense):
Interest income	1,713,820			—			(539,333		)(7)	1,174,487
Interest expense	(18,739		)	(468,221		)	468,221		(4)	(18,739		)
Other, net	327,223			—			—			327,223
Total other income	2,022,304			(468,221		)	(71,112		)	1,482,971
Income before income taxes	17,215,634			235,234			(203,362		)	17,247,506
Income tax expense (benefit)	6,705,397			9,269			(3,162		)(8)	6,711,504
Net income	$	10,510,237		$	225,965		$	(200,200	)	$	10,536,002
Basic earnings per share	$	0.22								$	0.22
Diluted earnings per share	$	0.21								$	0.21
Number of shares used for calculation:
Basic earnings per share	47,340,337									47,340,337
Diluted earnings per share	49,885,117									49,885,117

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

3

InnerWorkings, Inc

Unaudited Pro Forma Condensed Consolidated Income Statement

For the Year Ended December 31, 2006

	InnerWorkings, Inc.			Corporate Edge			Acquisition
	Year Ended			Year Ended			Pro Forma			Pro Forma
	December 31, 2006			December 31, 2006			Adjustments			As Adjusted
Revenue	$	160,514,987		$	57,850,691		—			$	218,365,678
Cost of goods sold	123,968,796			42,756,237			—			166,725,033
Gross profit	36,546,191			15,094,454			—			$	51,640,645
Operating expenses:
Selling, general, and administrative expenses	22,675,423			13,582,203			—			36,257,626
Depreciation and amortization	1,029,968			239,707			176,333		(6)	1,446,008
Income from operations	12,840,800			1,272,544			(176,333		)	13,937,011
Other income (expense):
Interest income	949,036			142			(719,110		)(7)	230,068
Interest expense	(168,784		)	(627,398		)	627,398		(4)	(168,784		)
Other, net	(5,242		)	—			—			(5,242		)
Total other income	775,010			(627,256		)	(91,712		)	56,042
Income before income taxes	13,615,810			645,288			(268,045		)	13,993,053
Income tax expense (benefit)	5,335,374			38,320			(108,804		)(8)	5,264,890
Net income	8,280,436			606,968			(159,241		)	8,728,163
Dividends on preferred shares	(1,408,740		)	—			—			(1,408,740		)
Net income applicable to common shareholders	$	6,871,696		$	606,968		$	(159,241	)	$	7,319,423
Basic earnings per share	$	0.22								$	0.23
Diluted earnings per share	$	0.21								$	0.22
Number of shares used for calculation:
Basic earnings per share	31,711,974									31,711,974
Diluted earnings per share	39,372,181									39,372,181

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

4

InnerWorkings, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(1) Cash and cash equivalents:

The pro forma adjustment to cash and cash equivalents reflects the purchase price of $18.0 million, which includes repayment of the line of credit and subordinated note payable, paid to the shareholders of Corporate Edge in November 2007. In addition, there is up to an additional $10.5 million in cash purchase price which may be paid contingent the achievement of certain future annual performance measures by Corporate Edge in each of the three years following November 30, 2007. Up to $4.5 million of additional purchase price may be paid based upon the achievement of certain cumulative performance measures by Corporate Edge during the three year period following November 30, 2007.  Any such additional payments will be recorded as an increase to goodwill.

(2) Inventory

The pro forma balance sheet adjustment to inventory reflects the fair value adjustment to inventory.

(3) Purchase Price:

Preliminary Purchase Price Allocation

The purchase price allocation presented in these unaudited pro forma condensed consolidated financial statements will differ from the purchase price allocation to be performed as of November 30, 2007 (date of Corporate Edge acquisition). In addition, adjustments to the purchase price allocation will be made upon settlement of the working capital and other post-closing adjustments.

For purposes of the unaudited condensed consolidated balance sheet, the $18.0 million purchase price has been allocated to the assets recorded by Corporate Edge as of September 30, 2007, based on estimated fair values. Adjustments to these estimates will be included in the allocation of the purchase price of Corporate Edge, if the adjustment is determined within the purchase price allocation period of up to twelve months. The excess of the purchase price over the identifiable intangible and net tangible assets was allocated to goodwill. The preliminary purchase price of $18.0 million has been allocated as follows:

Cash	$	261,995
Accounts receivable	8,213,761
Inventory	3,872,666
Prepaid expenses	1,032,270
Other current assets	229,341
Property, plant and equipment	643,901
Other non-current assets	186,817
Customer list	2,300,000
Noncompete agreement	115,000
Goodwill	6,436,826
Accounts payable	(3,303,633		)
Customer deposits	(596,847		)
Accrued liabilities	(1,414,343		)
Total purchase price	$	17,977,754

Goodwill and intangible assets

The pro forma adjustment to goodwill reflects the goodwill resulting from the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations” (SFAS No. 141).  We have estimated the fair value of intangible assets through the use of an independent third-party valuation firm to value these identifiable intangible assets, which are subject to amortization.  These estimates are based on a preliminary valuation and are subject to change upon management’s review of the final valuation.

The following table summarizes the intangible assets and goodwill acquired:

5

Customer list	$	2,300,000
Noncompete agreement	115,000
Goodwill acquired	$	6,436,826

(4) Subordinated note payable and line of credit balance:

                The pro forma adjustment reflects the repayment of Corporate Edge’s outstanding subordinated note payable and line of credit balance and the reduction of the related interest expense as a result of the acquisition.

(5) Common stock, additional paid-in capital and retained earnings:

The pro forma adjustment to the common shares and retained earnings reflects the elimination of Corporate Edge’s historical shareholders’ equity as a result of the acquisition.

(6) Depreciation and amortization:

The pro forma adjustment reflects the amortization of intangible assets over their useful lives.  The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Company.

	Useful Life	Year Ended December 31, 2006 Pro Forma Amortization		Nine Months Ended September 30, 2007 Pro Forma Amortization
Customer lists	15 years	$	153,333	$	115,000
Noncompete agreement	5 years	$	23,000	$	17,250

(7) Interest income:

The pro forma adjustment reflects the reduction in interest income related to the cash purchase price paid of approximately $18 million.

(8) Income tax expense:

The pro forma adjustment reflects the tax rate applied to the historical pre-tax income of Corporate Edge to reflect taxation as a C Corporation and to the pro forma adjustments related to the Corporate Edge acquisition as follows:

Nine months ended September 30, 2007	39.00	%
Year ended December 31, 2006	39.00	%

6