We believe shares of The Active Network, Inc. (NYSE:ACTV) are grossly overvalued, reflecting few, if any, of the serious risks that could threaten thecompany’s existence. We believe the company is functionally insolvent and that management has taken to masking the company’s weakening financial condition by gaming the accounting. As a result of our concern over the integrity of its financial reporting, we believe Active is at high risk of having to restate its historical financial results. We believe the growth story management has spun to investors is a bill of goods; the real story is between the lines of management share liquidations. We believe Active’s stock has an intrinsic value today of $2.00 per share, ~75% below current trading levels.