artnet AG — Interim / Quarterly Report 2012

Apr 30, 2012

artnet AG 1/2012

Interim Group Management Report First Quarter 2012

Content

• 3 artnet AG Interim Group Management Report First Quarter 2012 For the Three Months Ended March 31, 2012
• 8 artnet AG Consolidated Statement of Financial Position As of March 31, 2012 and Dezember 31, 2011
• 9 artnet AG Consolidated Statement of Comprehensive Income For the Three Months Ended March 31, 2012 and 2011
• 10 artnet AG Consolidated Statements of Changes in Shareholders' Equity (USD) For the Three Months Ended March 31, 2012 and 2011 artnet AG Consolidated Statements of Changes in Shareholders' Equity (EUR) For the Three Months Ended March 31, 2012 and 2011
• 11 artnet AG Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2012 and 2011
• 12 Notes to the Interim Consolidated Financial Statements For the Three Months Ended March 31, 2012
• 15 Authorities, Offices Investor Relations, Information on artnet Stock

artnet AG Interim Group Management Report For the Three Months Ended March 31, 2012

Business Development

During the three months ended March 31, 2012 the Group's revenue increased by 1.5% in EUR terms to EUR 3,542,000 (decreased by (2.7%) in USD terms to USD 4,643,000) from EUR 3,492,000 (USD 4,771,000) in 2011.

Launched in 2008, artnet Auctions is the fastest growing segment with revenue increasing EUR terms by 19.5% (USD 14.6%) to EUR 735,000 (USD 963,000) for the three months ended March 31, 2012 from EUR 615,000 (USD 840,000) in the same period of 2011.

In the three months ended March 31, 2012 artnet Auctions buyers and sellers premiums averaged 17% for 21% in the same period in 2011. The decrease in premium % is driven by the increase in high value transactions and private high-value deals.

Revenue growth is a combination of increased volume and improved average lot price (up 75% in the three months ended March 31, 2012 compared to the same period in 2011)—in both online auctions and private deals—compared to the same period last year.

Revenue from artnet Galleries were flat compared to the same period last year in EUR (down (4.5%) in USD), despite fewer gallery memberships in 2012 as compared to the same period in 2011, as many galleries continue to struggle.

artnet Price Database Fine Art and Design and artnet Price Database Decorative Art revenue increased by EUR 30,000, decreased by USD (28,000), or EUR 2.5% and USD (1.7%). artnet Advertising revenue decreased in EUR (24%), in USD (27%). Because of homepage and other webpage redesign, artnet could not log in major advertising for the fist three months of 2012. artnet Advertising revenue is expected to kick back in later this year.

Results of Operations, Financial Position and Net Assets

Loss from operations increased by EUR 90,000 (USD 113,000) to EUR (171,000) (USD (224,000)) from a loss of EUR (81,000) (USD (111,000)) in the same period in 2011.

The revenue for the period increased by EUR 51,000 (decreased by USD (128,000)) primarily because of the increase in the artnet Auctions revenue. The increase in revenue was offset by additional costs incurred by the Group for product development and payroll increases, primarily in artnet Auctions. Additionally Artnet Worldwide Corporation incurred additional costs due to its office move (EUR 55,000, or USD 72,000). The challenges in artnet Galleries and the artnet Price Database Fine Art and Design and artnet Price Database Decorative Art are being addressed by targeted sales coaching.

Net loss increased by EUR 14,000 (USD 15,000) to EUR (85,000) (USD (112,000)) in 2012 from EUR 71,000 (USD 97,000) in 2011. Other income/expense in the amount of EUR 70,000 (USD 92,000) resulted primarily from currency exchange rate differences.

Diluted earnings per share were EUR (0.02) (USD (0.02)) compared to EUR (0.01) (USD 0.02) in the same period in 2011.

The interim consolidated financial statements on EUR terms benefited from a 4.4% appreciation of the US dollar compared to the euro, for the first quarter ended March 31, 2012 compared to the same period in 2011.

Currency conversion in the consolidated statement of comprehensive income is based on the average exchange rate for the period ending March 31, 2012 and 2011, respectively. For the first 2012 quarter, the average rate was 0.763 euros/US dollars compared to 0.732 euros/US dollars for the first 2011 quarter. Currency conversion for the balance sheet is based on the exchange rate at the end of the period. As of March 31, 2012, the rate was 0.750 euros/US dollars compared

to 0.772 euros/US dollars on December 31, 2011, representing a 2.3% decrease.

artnet is subject to exchange rate fluctuations because it invoices in euros, US dollars and British pounds, but conducts most of its business in the United States. The Group works to reduce its exposure to exchange rate differences by billing European customers in euros and British customers in British pounds and paying vendors in the same currency with these cash funds.

Group operating cash flow was EUR (81.000) as of March 31, 2012 as compared to EUR 319,000 as of March 31, 2011. The decrease is due to lower cash from deferred revenue and receivables during the first quarter of 2012 as compared to the first quarter 2011.

Group investing cash flow was EUR (336,000) as of March 31, 2012 as compared to EUR (17,000) as of March 31, 2011. In 2012, work-in-progress leasehold improvements and furniture purchases for the new New York office represent EUR 262,000 (USD 344,000) of Group investing cash flow.

The cash flow for financing activities was EUR (20,000) as of March 31, 2012 and EUR (40,000) as of March 31, 2011. The amounts represent payments towards finance leases which were entered into in 2009, 2010 and 2011.

In total, the cash balance decreased from EUR 2,112,000 (USD 2,735,000) on December 31, 2011 to EUR 1,645,000 (USD 2,194,000) on March 31, 2012.

The cash investment policy for the Group is conservative and based on short term investments. This policy allows all cash to be liquid and available. Based on the average outstanding shares of 5,552,986, liquidity per share was EUR 0.30 (USD 0.39) on March 31, 2012 compared to EUR 0.38 (USD 0.49) on December 31, 2011.

The balance sheet total was EUR 7,257,000 (USD 9,681,000) on March 31, 2012 compared to EUR 7,437,000 (USD 9,631,000) on December 31, 2011, representing a decrease in EUR of 2% (an increase in USD of 1%).

Trade accounts receivable increased by EUR 122,000 (USD 199,000) to EUR 1,062,000 (USD 1,417,000).

Fixed assets increased by EUR 168,000 (USD 297,000) to EUR 2,066,000 (USD 2,756,000). The continuing depreciation and amortization from prior periods was offset by leasehold improvements and furniture purchases for the New York office.

Total current liabilities increased by EUR 88,000, (USD 219,000) from EUR 2,634,000, (USD 3,411,000) to EUR 2,722,000 (USD 3,630,000). The primary increase was in accrued expenses and deferred revenue that relates to sales contracts sold in the first 2012 quarter for which revenue will be earned in future periods.

Long term liabilities represent the long-term portion of finance leases.

The Group's consolidated equity was EUR 4,514,000, (USD 6,021,000) on March 31, 2012 compared to EUR 4,752 ,000, (USD 6,154,000) on December 31, 2011.

artnet Price Database Fine Art and Design is an intangible asset that has been developed by gathering auction information over the last twenty years. This valuable asset to the Group has not been attributed full earnings recognition on the balance sheet due to accounting rules. Balance sheet assets would be substantially increased if this recognition were allowed by law.

On March 31, 2012 there were 121 full-time employees as compared with 112 in the first quarter of 2011. Additionally, the Group employed 18 part-time employees as of March 31, 2012 as compared to 12 in the previous year's quarter, and 11 sales and other consultants compared to 13 in the first quarter ended March 31, 2011.

General Information and Business Activities

artnet AG is a holding company listed on the "Regulierter Markt" in the Prime Standard segment at the Frankfurt Stock Exchange. artnet AG's principal holding is its wholly-owned subsidiary, Artnet Worldwide Corporation, a New York corporation founded in 1989. artnet AG ("artnet" or "the Company") and Artnet Worldwide Corporation ("Artnet Corp.", collectively, "the artnet Group" or "the Group") operate under the trade name "artnet".

Artnet Corp. has two wholly-owned subsidiaries: artnet UK Ltd., which provides sales and client support in the United Kingdom and artnet France sarl which publishes the artnet Magazine in French on artnet.fr in addition to sales and customer service.

With a Q 1 2012 average of 1.7 million monthly unique visitors on its three domains artnet.com, artnet.de, and artnet.fr, artnet offers the world's most comprehensive art market overview, enabling collectors and art professionals to better navigate the art market by providing timely information about artwork values, artists, their galleries, price developments, exhibitions, news, and reviews.

As of March 31, 2012, artnet Galleries represents over 2,000 of the world's most prestigious art galleries and auction houses on five continents. Members of artnet Galleries are indexed by specialty and location, and represent an aggregate 170,000 works in inventory from 35,000 artists. Besides all forms of contemporary, modern, and classic Fine Art, artnet Galleries also offers Decorative Art and Design objects from the 1st century BC to the present.

The artnet Price Database is an updated archive of over 6.7 million illustrated auction records from over 700 of the world's top auction houses, giving price transparency to an otherwise secretive market. Subscribers to the artnet Price Database Fine Art and Design and the artnet Price Database Decorative Art receive access to current results as well as auction results dating back to 1985, and with that, the most up-to-date and impartial appraisal value for artworks they would like to buy or sell. The artnet Price Database is widely subscribed by appraisers, dealers, auctioneers, financiers, as well as private and government institutions, including the IRS and the FBI. Most importantly, it provides an illustrated "blue book" for private collectors with which to appraise the works they own, and measure opportunities at upcoming auctions or on the dealer market. Dealers and auctioneers also use artnet Comps (comparable sales) from the artnet Price Database to support the valuation and sale of important works of art.

A derivative of the artnet Price Database is the artnet Market Alert, which informs subscribers by email when artworks by artists they selected come up at auction, or when they are offered by any of the artnet Galleries members or on artnet Auctions.

With artnet Auctions, artnet has become a businessto-customer transaction platform with an integrated information resource. The main advantages for buyers and sellers on artnet Auctions are the attractive pricing and the fast turnaround, which can be finalized in a few weeks, compared to the six months or a year required by the brick-and-mortar art auctioneers. artnet Auctions routinely sees works by blue-chip Modern and Contemporary artists sell in the five- and six-figure range.

artnet Monographs is an online art library developed in close collaboration with artists, estates, foundations, and galleries. This growing resource of Modern and Contemporary artists' monographs features comprehensive artwork selections and 145 biographies and can be viewed free of charge on the artnet website.

No reportable events of significant importance have occurred after the balance sheet date.

artnet holds the view that the risk structure has not changed since December 31, 2011.

In the first quarter of this year, artnet has continued to develop and strengthen its businesses, in particular by investing in artnet Auctions and finalizing the development of artnet Analytics.

artnet Auctions is now a well-established integrated trading platform for buyers and sellers of Modern and Contemporary paintings, prints, photographs, sculptures, and more. Works are traded through our online auction platform, as well as through private sales. In 2010, artnet Auctions sold USD 650,000 via private sales; USD 1,500,000 in 2011. Now, in the first quarter of 2012 alone, artnet Auctions sold more than USD 1,500,000 in private sales. In online auctions, there has been a 75% increase in the average lot value. artnet Auctions is now regularly trading high-end artworks (price points exceeding USD 250,000).

Since its soft launch in December 2011, artnet Analytics has received a successful welcome from customers and praising articles in the financial and economic media worldwide, from The New York Times and Bloomberg,

to El País and The Wall Street Journal, to name a few. The full launch, planned for the second quarter of this year, will bring artnet Analytics to a new level of recognition, including in the Asian markets.

The sales challenges for artnet Galleries and artnet Price Database are being addressed by specifically targeted coaching and marketing support that are expected to show results in the second half of 2012.

artnet has undertaken deep reforms in its sales approach and its operational structure during the last nine months and is working on improving its marketing and customer management which will benefit all business activities.

Finally, the New York artnet team is ready to move into its new office in the Woolworth Building, bringing all personnel on the same floor for the first time in ten years. The building is justly famous for its artistic construction, both interior and exterior design. This new office which can accommodate public relations events and art exhibitions will further help artnet make its mark on the art world.

Berlin, April 27, 2012

The CEO Hans Neuendorf

artnet AG Consolidated Financial Statements For the Three Months Ended March 31, 2012 and 2011

artnet AG Consolidated Statement of Financial Position

As of March 31, 2012 and December 31, 2011

	03/31/2012	12/31/2011	03/31/2012	12/31/2011
	Consolidated	Consolidated	Consolidated	Consolidated
	USD	USD	EUR	EUR
Current Assets
Cash and cash equivalents	2,193,776	2,735,520	1,644,674	2,112,368
Accounts receivable-net	1,417,103	1,217,974	1,062,402	940,519
Prepaids and other current assets	769,322	676,248	576,761	522,199
Total Current Assets	4,380,201	4,629,741	3,283,837	3,575,086
Property and Equipment, Net
Noncurrent Assets
Property and equipment	1,104,395	792,402	827,965	611,893
Intangible assets	1,651,997	1,666,614	1,238,502	1,286,959
Security deposit	636,361	634,498	477,080	489,959
Deferred tax asset	1,907,577	1,907,577	1,430,110	1,473,031
Total noncurrent assets	5,300,330	5,001,091	3,973,657	3,861,842
Total Assets	9,680,531	9,630,832	7,257,494	7,436,928
Liabitities and Shareholders' Equity
Current Liabitities
Accounts payable	405,720	504,209	304,168	389,350
Accrued expenses and other liabilities	1,170,325	1,038,247	877,392	801,734
Finance lease obligation	140,254	129,308	105,149	99,852
Deferred revenue	1,913,907	1,739,107	1,434,857	1,342,939
Total current liabitities	3,630,206	3,410,872	2,721,566	2,633,875
Long Term Liabitities
Long term portion of finance lease	28,878	65,557	21,650	50,623
Total Liabitities	3,659,083	3,476,429	2,743,216	2,684,498
Commitments and Contingencies
Shareholders' Equity
Common stock	5,941,512	5,941,512	5,631,067	5,631,067
Treasury stock	(269,241)	(269,241)	(264,425)	(264,425)
Additional paid-in capital	52,114,930	52,061,314	50,764,389	50,723,480
Accumulated deficit	(51,784,190)	(51,827,976)	(51,482,744)	(51,514,219)
Current net profit	(111,645)	43,786	(85,187)	31,475
Foreign currency translation	130,081	205,008	(48,822)	145,052
Total Shareholders' Equity	6,021,447	6,154,403	4,514,278	4,752,430
Total Liabitities and Shareholders' Equity	9,680,531	9,630,832	7,257,494	7,436,928

artnet AG Consolidated Statement of Comprehensive Income

For the Three Months Ended March 31, 2012 and 2011

	01/01– 03/31/2012	01/01– 03/31/2011	01/01– 03/31/2012	01/01– 03/31/2011
	Consolidated	Consolidated	Consolidated	Consolidated
	USD	USD	EUR	EUR
Revenue
artnet Galleries	1,622,114	1,698,137	1,237,673	1,242,866
artnet Price Database	1,635,734	1,663,601	1,248,065	1,217,589
artnet Auctions	962,696	839,818	734,537	614,663
artnet Advertising	395,817	544,063	302,008	398,200
artnet Magazine	26,189	24,967	19,982	18,273
Total revenue	4,642,550	4,770,585	3,542,265	3,491,591
Cost of sales	2,270,299	1,974,493	1,732,238	1,445,132
Gross Profit	2,372,251	2,796,092	1,810,027	2,046,459
Other Operating Expenses
Selling and marketing	570,980	777,030	435,658	568,708
General and administrative	1,143,161	1,311,245	872,232	959,700
Product development	828,527	762,785	632,166	558,282
Non-cash compensation	53,616	55,895	40,909	40,910
Total Other Operating Expenses	2,596,284	2,906,955	1,980,965	2,127,600
Profit from Operations	(224,033)	(110,863)	(170,938)	(81,141)
Interest expense	(6,569)	(5,297)	(5,012)	(3,877)
Interest income	0	9,326	0	6,826
Other income/expense	91,171	33,177	69,563	24,282
Profit Prior to Tax Provision	(139,431)	(73,657)	(106,387)	(53,910)
Income taxes	27,786	(22,985)	21,200	(16,823)
Net Loss	(111,645)	(96,642)	(85,187)	(70,733)
Earnings per Share
Net profit per basic share	(0.02)	(0.02)	(0.02)	(0.01)
Net profit per diluted share	(0.02)	(0.02)	(0.02)	(0.01)
Weighted average Shares
Basic	5,552,986	5,552,986	5,552,986	5,552,986
Diluted	5.552.986	5.579.986	5.552.986	5.579.986

artnet AG Consolidated Statements of Changes in Shareholders' Equity (USD)

For the Three Months Ended March 31, 2012 and 2011

		Common stock	Additional			Foreign
	Shares		paid-in	Treasury	Accumulated	currency
	issued	Amount	capital	stock	deficit	translation	Total
Balance December 31, 2010	5,631,067	5,941,512	51,833,659	(269,241)	(51,827,976)	39,679	5,717,633
Net loss					(96.642)		(96.642)
Foreign currency translation						(61.351)	(61.351)
Total comprehensive income					(96,642)	(61,351)	(157,993)
Non-cash compensation			55,895				55,895
Balance March 31, 2011	5,631,067	5,941,512	51,889,554	(269,241)	(51,924,618)	(21,672)	5,615,535
Balance December 31, 2011	5,631,067	5,941,512	52,061,314	(269,241)	(51,784,190)	205,008	6,154,403
Net loss					(111.645)		(111.645)
Foreign currency translation						(74.927)	(74.927)
Total comprehensive income					(111,645)	(74,927)	(186,572)
Non-cash compensation			53,616				53,616
Balance March 31, 2012	5,631,067	5,941,512	52,114,930	(269,241)	(51,895,835)	130,081	6,021,447

artnet AG Consolidated Statements of Changes in Shareholders' Equity (EUR)

For the Three Months Ended March 31, 2012 and 2011

		Common stock	Additional			Foreign
	Shares		paid-in	Treasury	Accumulated	currency
	issued	Amount	capital	stock	deficit	translation	Total
Balance December 31, 2010	5,631,067	5,631,067	50,559,842	(264,425)	(51,514,219)	(97,739)	4,314,526
Net loss					(70.733)		(70.733)
Foreign currency translation						(301.605)	(301.605)
Total comprehensive income					(70,733)	(301,605)	(372,338)
Non-cash compensation			40,910				40,910
Balance March 31, 2011	5,631,067	5,631,067	50,600,752	(264,425)	(51,584,952)	(399,344)	3,983,098
Balance December 31, 2011	5,631,067	5,631,067	50,723,480	(264,425)	(51,482,744)	145,052	4,752,430
Net loss					(85.187)		(85.187)
Foreign currency translation						(193.874)	(193.874)
Total comprehensive income					(85,187)	(193,874)	(279,061)
Non-cash compensation			40,909				40,909
Balance March 31, 2012	5,631,067	5,631,067	50,764,389	(264,425)	(51,567,931)	(48,822)	4,514,278

artnet AG Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2012 and 2011

	03/31/2012	12/31/2011	03/31/2012	12/31/2011
	Consolidated	Consolidated	Consolidated	Consolidated
	USD	USD	EUR	EUR
Cash Flows from Operating Activities
Net Profit	(111,645)	(96,642)	(85,187)	(70,733)
Adjustments to Reconcile Net Profit to Net Cash Provided by (Used in) Operating Activities:
Depreciation and amortization	143,356	212,224	109,380	155,327
Provision for doubtful accounts	40,289	29,572	30,741	21,644
Non-cash compensation	53,616	55,895	40,909	40,910
Other non-cash transactions	(97,853)	(118,656)	(89,942)	(69,066)
Changes in Operating Assets and Liabilities:
Accounts receivable	(239,419)	(88,819)	(182,676)	(65,007)
Prepaid and other current assets	(93,074)	(53,668)	(54,562)	(39,280)
Security deposits	(1,863)	(16,352)	(1,421)	(11,968)
Accounts payable	(98,490)	(23,470)	(75,148)	(17,178)
Accrued expenses and tax liabilities	132,077	103,683	96,734	75,551
Deferred revenue	174,801	421,523	131,048	298,986
Total Adjustments	13,440	521,932	5,063	389,919
Net Cash (Used in)/Provided by Operating Activities	(98,205)	425,290	(80,124)	319,186
Cash Flows from Investing Activities
Purchase of property and equipment	(416,128)	(22,591)	(317,506)	(16,534)
Purchase and development of intangible assets	(24,603)	0	(18,772)	0
Net Cash Used in Investing Activities	(440,731)	(22,591)	(336,278)	(16,534)
Cash Flows from Financing Activities
Repayment of financial lease	(25,734)	(53,996)	(19,635)	(39,520)
Net Cash Used in Financing Activities	(25,734)	(53,996)	(19,635)	(39,520)
Effects of exchange rate changes on cash	22,926	57,305	(31,657)	(137,106)
Net (Decrease)/Increase in Cash and Cash Equivalents	(541,744)	406,008	(467,694)	126,025
Cash – Beginning	2,735,520	3,575,208	2,112,368	2,697,852
Cash – Ending	2,193,776	3,981,216	1,644,674	2,823,877

Notes to the Interim Consolidated Financial Statements For the Three Months Ended March 31, 2012

Corporate Information

artnet AG (hereinafter referred to as "artnet AG" or "the Company") is a publicly traded corporation headquartered in Berlin, Germany. The address of its registered office is Oranienstraße 164, 10969 Berlin, Germany. artnet AG was incorporated under the laws of Germany in 1998.

artnet AG holds 100% of the shares in Artnet Worldwide Corporation ("Artnet Corp."), which is located in New York, USA, Artnet Corp. holds 100% of the shares in artnet UK Ltd. and artnet France sarl. artnet AG and Artnet Corp. together with Artnet Corp.'s wholly owned subsidiaries are referred to as "the artnet Group" or "the Group".

The Group's business is to provide a website to art collectors, galleries, publishers, auction houses, and art enthusiasts, where they can research artists, view art related news, and find artworks that are currently available at art galleries and auctions around the world. Additionally, the Group launched artnet Online Auctions (now artnet Auctions) in 2008 which is a web-based trading platform for paintings, prints, photographs, sculptures, and more. by emerging and renowned artists alike.

The consolidated financial statements were authorized for issuance by the CEO on April 29, 2012.

Basis of Presentation

These unaudited interim financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and its interpretations adopted by the International Accounting Standards Board (IASB) for interim financial information effective within the EU. In particular, they correspond to the "Interim Financial Reporting" guidelines of IAS 34. They also comply with the German accounting Standard (DRS) No.16 on interim reporting as well as with §§ 37x, 37w of the Securities Trading Act. These financial statements do not include all of the information and footnotes required by IFRS for complete financial statements for year-end reporting purposes.

The following new or revised standards and interpretations became mandatory in fiscal 2012:

IFRS 7 Financial instruments: Disclosures – Transfers of financial assets

The application of these standards does not have a significant impact on the presentation of the interim consolidated financial statements in 2012.

The same accounting and valuation methods have been applied to this interim report as to the most recent annual financial statements. A detailed description of the accounting policies

is published in the notes to the annual consolidated financial statements 2011.

The Management of the Company is convinced that the consolidated interim financial statements include all adjustments of a normal and recurring nature considered necessary for a fair presentation of results for the interim period. Results of the period ended March 31, 2012 are not necessarily indicative for future results.

The interim financial statements as of March 31, 2012 and the interim management report have not been audited in accordance with § 317 of the German Commercial Code or reviewed by an auditor.

The consolidated financial statements have been prepared on a historical cost basis. The balance sheet date is March 31, 2012.

Reporting Period

The consolidated financial statements were prepared for the reporting period January 1 through March 31, 2012. The financial year for all Group companies coincides with the calendar year.

Foreign Currency Translation and Transactions

Amounts mentioned in the interim consolidated financial statements and notes to the interim consolidated financial statements are stated in euro (EUR), unless otherwise noted. The reporting currency is euro.

The currency of the primary economic environment in which the artnet Group operates is US dollar, which is the functional currency of the operating subsidiary Artnet Corp. Transactions in currencies other than US dollars are recorded at the exchange rates prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Gains and losses from foreign currency transactions are recognized as other income/expense.

On consolidation, the assets and liabilities of the Group's operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period. The accumulated gains and losses resulting from translation are recorded as a separate component of the Group's equity.

Currency exchange rates significant to the artnet Group are the translation of US dollar to euro and of US dollar to British pounds (GBP). The following exchange rates have been used for the currency translation in the periods presented:

	USD to EUR		USD to GBP
			03/31/2012 12/31/2011 03/31/2012 12/31/2011
Current rate
year end	.750	.772	.625	.647
Average rate
for the year	.763	.719	.637	.623

Basis of Consolidation and Consolidated Companies

The consolidated financial statements include the legal parent company, artnet AG, its wholly owned subsidiary Artnet Corp. as well as the subsidiaries of this company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

On February 23, 1999 artnet AG entered into a transaction with Artnet Corp. which was treated as a recapitalization of Artnet Corp., with Artnet Corp. as the acquirer of artnet AG (reverse acquisition). The Company accounted for the business combination of artnet AG and Artnet Corp. as a reverse acquisition in accordance with IFRS 3.

On November 1, 2007, Artnet Corp. established artnet UK Ltd. which is a wholly owned subsidiary and acts as a sales agent for Artnet Corp. in the United Kingdom.

On July 3rd, 2008, Artnet Corp. established artnet France sarl, which is a wholly owned subsidiary of Artnet Corp.; artnet France sarl acts as a sales agent for Artnet Corp. in France.

All significant inter-company transactions, balances, income and expenses are eliminated.

Share Capital

Conditional Capital-Share Based Payments

The Shareholders' Meeting on July 15, 2009 conditionally increased the capital stock by EUR 560,000 through the issue of up to 560,000 new no-par value bearer shares which can be issued as stock options to members of the Company's Board of Directors and members of the management of affiliated entities as well as to employees of artnet AG or its affiliated entities (Conditional Capital 2009/I).

The entry of the amendments of the articles of incorporation in the Company's commercial register, as required for the effectiveness of these resolutions by the Shareholders' Meeting, took place on February 2, 2010.

Authorized Capital

The Shareholders' Meeting of artnet AG on July 15, 2009 authorized the Board of Directors, with the approval of the Supervisory Board, to increase the capital stock by up to EUR 2,800,000 before July 14, 2014 through the issue of 2,800,000 new no-par value bearer shares in exchange for cash contributions or contributions in kind (Authorized Capital 2009/I). In 2012 and 2011 no common shares were issued under the Authorized Capital 2009/I.

The entry of the amendments of the articles of incorporation in the Company's commercial register, as required for the effectiveness of these resolutions by the Shareholders' Meeting, took place on February 2, 2010.

Treasury shares

As of March 31, 2012 and 2011 artnet AG held 78,081 of its own shares, representing 1.4% of common stock.

Income Taxes

Income tax expense is recognized in the interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year. Due to its tax loss carry-forward, Artnet Corp. only has to pay the alternative minimum corporation tax.

The Group reviews the carrying amount of its deferred tax asset once per year and will be reviewing the deferred tax asset in the fourth quarter of 2012 based on the most recent budget for the fiscal years 2013-2015.

Segment Reporting

The Group reports on the operating segments in the same way it reports operating segment information to the management and Supervisory Board.

The five Group's reportable segments are as follows:

• The artnet Galleries segment provides services to galleries by posting their available artworks online.

• The artnet Price Database segment includes the artnet Price Database Fine Art and Design and the artnet Price Database Decorative Art sales including the imageless search as well as sales generated from the artnet Market Alert , the artnet Market Analytics Reports, and artnet Monographs.

• The artnet Advertising segment produces banners and advertising on the website.

• The artnet Auctions provides an online platform to buy and sell artworks.

• The artnet Magazine segment currently generates advertising revenue, but will be developed into a full-fledged business.

Segment performance is evaluated based on profit or loss before taxes. Not directly attributable expenses are allocated to the reportable segments primarily based on the headcount and revenue for each reportable segment.

A measure of total assets or liabilities for each reportable segment is not provided to the management. Therefore, total assets or liabilities are not disclosed for each reportable segment.

EUR
Period ended March 31, 2012	artnet Galleries	artnet Price Database	artnet Auctions	artnet Advertising	artnet Magazine	Total
Revenue	1,237,673	1,248,065	734,537	302,008	19,982	3,542,265
Profit prior to tax provision	128,883	219,881	(214,096)	37,533	(278,588)	(106,387)
Period ended March 31, 2011	artnet Galleries	artnet Price Database	artnet Auctions	artnet Advertising	artnet Magazine	Total
Revenue	1,242,866	1,217,589	614,663	398,200	18,273	3,491,591
Profit prior to tax provision	50,231	194,350	(85,602)	12,036	(224,925)	(53,910)

Earnings per share

Basic earnings per share are calculated by dividing net income by the weighted-average number of common shares outstanding during the year.

Diluted earnings per share are calculated in the same manner as basic earnings per share with the exception that the average number of shares outstanding increases by adding the potential number of shares from stock option conversions.

The calculation of earnings per share is based on the following data:

	Period ended 03/31/2012	Period ended 03/31/2011
	EUR	EUR
Numerator (Earnings):
Net result for the year retained for equity shareholders	(85,187)	(70,733)
Denominator (Number of shares):
Weighted average number of ordinary shares used to calculate basic earnings per share (issued and fully paid ordinary shares)	5,552,986	5,552,986
Effect of potential shares: Stock options	0	27,000
Weighted average number of ordinary shares used to calculate dilutive earnings per share	5.552.986	5.579.986

The weighted average exercise price is higher than the average share price in 2012. In consequence, there are no diluted shares.

Employees

At March 31, 2012 there were 121 full time employees as compared with 112 in the first quarter of 2011. Additionally, the Group employed 18 part-time employees as of March 31, 2012 as compared to 12 in the previous year's quarter, and 11 sales and other consultants compared to 13 in the first quarter ended March 31, 2011.

Accounting Estimates and Assumptions

The preparation of the consolidated financial statements in accordance with IFRS necessitates estimates and assumptions that influence assets and liabilities, income and expenses, as well as information in the notes to the financial statements. Actual results and developments may differ from those estimates and assumptions.

Estimates made by management that have a significant effect on the interim consolidated financial statements include the recognition of deferred tax assets and of development costs, the measurement of provisions and accruals, the useful lives of non-current assets and the assessment of bad debt provisions on accounts receivables.

Notification Concerning Transactions by Persons Performing Managerial Responsibilities In Accordance with § 15a of the Securities Trading Act

Pursuant to § 15a of the German Securities Trading Act, artnet was notified on February 1, 2012 that Mr. John Hushon, president of the supervisory board of artnet AG, purchased 2,000 shares at EUR 3.95 or EUR 7,900.00.

Notification Within the Meaning of Section 26 (1) of the Wertpapierhandelsgesetz (WpHG – German Securities Trading Act)

Artis Partners 2X (Institutional), L.P., San Francisco, CA, USA, informed us that its share of the voting rights in artnet AG exceeded the notification threshold of 5% on March 1, 2012, and that it now holds 5.72% (322,118) of the total of 5,631,067 voting rights in artnet AG.

Report on Post-Balance Sheet Events

No reportable events of significant importance have occurred after the balance sheet date.

Berlin, April 27, 2012

Chief Executive Officer Hans Neuendorf

Authorities

artnet AG

Supervisory Board John Hushon, Chairman Prof. Dr. Walter Rust, Deputy Chairman Dr. Jochen Gutbrod Management Board Hans Neuendorf, CEO

Artnet Worldwide Corporation

Hans Neuendorf, CEO Jacob Pabst, President

artnet France sarl

Hans Neuendorf, Gérant Gina Kehayoff, Directrice Générale

Offices

artnet AG Oranienstraße 164 10969 Berlin Germany info@artnet.de Tel. +49 (0)30 209178-0 Fax +49 (0)30 20917829

Artnet Worldwide Corporation 233 Broadway, 26th floor Woolworth Building New York, NY 10279-2600 USA info@artnet.com Tel. +1 (0)212 4979700 Fax +1 (0)212 4979707

artnet France sarl 5, rue du Chevalier de Saint George 75008 Paris France info@artnet.fr Tel. +33 (0)1 42866710 Fax +33 (0)1 42861016

artnet UK Ltd. Morrell House 98 Curtain Road London EC2A 3AF United Kingdom info@artnet.co.uk Tel. +44 (0)20 7729 0824 Fax +44 (0)20 7033 9077

Investor Relations

You can find information for investors and the annual financial statements at www.artnet.de/IR.

If you have further queries, please send an email to ir@artnet.com or send your inquiry by mail to one of our offices.

Information on artnet Stock

The common stock of artnet AG is traded on the Prime Standard of the Frankfurt Stock Exchange under the symbol "ART". You can find notices of relevant company developments on http://www.artnet.com/investor-relations

German securities code number

(WKN) A1K037 ISIN DE000A1K0375

©2012 artnet AG, Berlin

artnet AG Oranienstraße 164 10969 Berlin

Concept and Realization Büro Fleischmann Prof. Gerd Fleischmann

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