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| 8-K - 8-K - Merriman Holdings, Inc | v240716_8k.htm |
FOR IMMEDIATE RELEASE
MERRIMAN HOLDINGS, INC. ANNOUNCES FINANCIAL RESULTS
FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2011
SAN FRANCISCO – November 15, 2011 – Merriman Holdings, Inc. (NASDAQ: MERR) today released earnings for the third quarter 2011.
Third Quarter Financial Results
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Total revenues for the third quarter were $4.1 million, as compared to $4.2 million in third quarter of 2010.
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Investment banking revenue was $901,000, a 68% increase from the third quarter of 2010;
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Commission revenue was $3.8 million, a 3% decrease from the third quarter of 2010; and
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Principal transaction revenue resulted in a loss of $910,000, of which $934,000 was due to net unrealized losses on our investment portfolio and $24,000 was attributable to net gains from our trading and proprietary operations. This compared to a net loss of $309,000 for the same period in 2010, which was comprised of a net loss of $234,000 from our investment portfolio and a net loss of $75,000 from our trading and proprietary operations.
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Other revenues, which consist primarily of OTCQX service fees, were $262,000, as compared to $49,000 for the same period last year.
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Net loss from continuing operations was $1.8 million, or $0.69 per share, compared to a net loss from continuing operations of $4.5 million, or $2.22 per share, in third quarter 2010.
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“We are navigating a difficult brokerage environment by eliminating legacy, profitless revenues and focusing on our rapidly growing advisory, execution and banking businesses,” said Jon Merriman, CEO of Merriman Holdings. “We have also repositioned our investment banking approach to lead with our OTCQX services and advisory practices. Our leadership position in the global OTCQX marketplace, which we believe is in the early stages of a very significant opportunity, gives us a formula for differentiation as well as a path to sustained profitability.”
Merriman continued, “The total available market of public companies around the world that are underfollowed, or not followed at all, by the banking community grows every quarter and creates an important gap for us to fill. We believe the decision to focus on this large and vital market greatly increases our opportunities to create long term shareholder value.”
Conference Call for the Third Quarter 2011 Results
Following this announcement, Merriman’s management will host a teleconference call beginning at 1:30 PM (PT) / 4:30 PM (ET) today, Tuesday, November 15, 2011, to discuss the results and related matters. Interested listeners and participants may access the live teleconference call by dialing (877) 941-2333 or may access the live webcast at www.merrimanco.com.
About Merriman Holdings, Inc.
Merriman Capital, Inc. is an investment banking firm providing equity and options execution services, market making, and differentiated research for high growth companies. We also provide capital raising, advisory and M&A services. Merriman Capital, Inc. is a wholly owned subsidiary of Merriman Holdings, Inc. (NASDAQ: MERR) and is the leading investment banking firm for OTCQX companies. For more information, please go to http://www.merrimanco.com/.
Merriman Capital, Inc. is a registered broker-dealer and member of The Financial Industry Regulatory Authority (FINRA) http://www.finra.org/ and the Securities Investor Protection Corporation (SIPC).
Note to Investors
This press release contains certain forward-looking statements based on our current expectations, forecasts and assumptions that involve risks and uncertainties. This release does not constitute an offer to sell or a solicitation of offers to buy any securities of the Company. Forward-looking statements in this release are based on information available to us as of the date hereof. Our actual results may differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with our business, which include the risk factors disclosed in our Form 10-K/A filed on April 28, 2011 and the Form 10-Q filed on November 14, 2011. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as "anticipate," believe," "could," "estimate," "expect," "intend," "may," "should," and "would" or similar words. We assume no obligation to update the information included in this press release, whether as a result of new information, future events or otherwise. The Form 10-K/A filed on April 28, 2011 and the Form 10-Q filed on November 14, 2011 together with this press release and the financial information contained herein, are available on our website, www.merrimanco.com. Please click on "Investor Relations."
# # #
At the Company:
Jack Thrift
Chief Financial Officer
Merriman Holdings, Inc.
(415) 248-5640
MERRIMAN HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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September 30,
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September 30,
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2011
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2010
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2011
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2010
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Revenues:
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Commissions
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$ | 3,834,121 | $ | 3,959,937 | $ | 10,821,486 | $ | 11,402,663 | ||||||||
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Principal transactions
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(910,382 | ) | (309,422 | ) | (417,399 | ) | (133,261 | ) | ||||||||
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Investment banking
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900,879 | 537,187 | 8,051,512 | 8,099,497 | ||||||||||||
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Other
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261,920 | 49,124 | 557,759 | 413,465 | ||||||||||||
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Total revenues
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4,086,538 | 4,236,826 | 19,013,358 | 19,782,364 | ||||||||||||
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Operating expenses:
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Compensation and benefits
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3,229,605 | 4,863,982 | 15,152,508 | 15,462,360 | ||||||||||||
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Brokerage and clearing fees
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326,236 | 361,413 | 1,087,182 | 1,131,584 | ||||||||||||
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Professional services
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421,576 | 456,533 | 1,342,679 | 1,195,094 | ||||||||||||
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Occupancy and equipment
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483,834 | 479,205 | 1,407,554 | 1,451,045 | ||||||||||||
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Communications and technology
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491,197 | 476,941 | 1,499,666 | 1,563,417 | ||||||||||||
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Depreciation and amortization
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20,755 | 99,746 | 117,160 | 302,600 | ||||||||||||
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Travel and entertainment
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200,411 | 303,956 | 747,028 | 955,525 | ||||||||||||
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Legal services and litigation settlement expense
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104,322 | 855,286 | 549,681 | 1,867,878 | ||||||||||||
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Cost of underwriting capital
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- | 8,000 | 97,625 | 968,576 | ||||||||||||
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Other
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492,228 | 874,232 | 1,130,565 | 1,587,580 | ||||||||||||
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Total operating expenses
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5,770,164 | 8,779,294 | 23,131,648 | 26,485,659 | ||||||||||||
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Operating loss
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(1,683,626 | ) | (4,542,468 | ) | (4,118,290 | ) | (6,703,295 | ) | ||||||||
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Other income
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15,000 | - | 26,601 | 29,319 | ||||||||||||
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Interest expense, net
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(171,137 | ) | (3,530 | ) | (327,548 | ) | (29,759 | ) | ||||||||
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Loss from continuing operations before income taxes
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(1,839,763 | ) | (4,545,998 | ) | (4,419,237 | ) | (6,703,735 | ) | ||||||||
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Income tax (expense) benefit
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(2,763 | ) | 33,302 | (6,107 | ) | 4,285 | ||||||||||
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Loss from continuing operations
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(1,842,526 | ) | (4,512,696 | ) | (4,425,344 | ) | (6,699,450 | ) | ||||||||
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Income from discontinued operations
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- | - | - | 95,104 | ||||||||||||
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Net loss
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$ | (1,842,526 | ) | $ | (4,512,696 | ) | $ | (4,425,344 | ) | $ | (6,604,346 | ) | ||||
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Preferred stock cash dividend
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(129,433 | ) | (146,400 | ) | (407,212 | ) | (446,100 | ) | ||||||||
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Net loss attributable to common shareholders
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$ | (1,971,959 | ) | $ | (4,659,096 | ) | $ | (4,832,556 | ) | $ | (7,050,446 | ) | ||||
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Basic and diluted net income (loss) per share:
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Loss from continuing operations
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$ | (0.69 | ) | $ | (2.22 | ) | $ | (1.78 | ) | $ | (3.47 | ) | ||||
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Income from discontinued operations
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- | - | - | 0.05 | ||||||||||||
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Net loss
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$ | (0.69 | ) | $ | (2.22 | ) | $ | (1.78 | ) | $ | (3.42 | ) | ||||
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Net loss attributable to common shareholders
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$ | (0.74 | ) | $ | (2.29 | ) | $ | (1.94 | ) | $ | (3.65 | ) | ||||
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Weighted average number of common shares:
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Basic and diluted
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2,652,285 | 2,030,584 | 2,485,935 | 1,931,781 | ||||||||||||
MERRIMAN HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)
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ASSETS
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September 30,
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December 31,
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2011
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2010
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Cash and cash equivalents
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$ | 3,534,659 | $ | 4,898,093 | ||||
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Securities owned:
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Marketable, at fair value
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2,451,905 | 2,401,722 | ||||||
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Not readily marketable, at estimated fair value
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832,533 | 2,741,452 | ||||||
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Restricted cash
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680,028 | 965,000 | ||||||
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Due from clearing broker
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193,171 | 34,072 | ||||||
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Accounts receivable, net
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395,531 | 1,574,644 | ||||||
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Prepaid expenses and other assets
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697,766 | 450,243 | ||||||
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Total assets
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$ | 8,785,593 | $ | 13,065,226 | ||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Liabilities:
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Accounts payable
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$ | 205,220 | $ | 361,237 | ||||
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Commissions and bonus payable
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1,133,884 | 3,240,021 | ||||||
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Accrued expenses and other
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2,113,621 | 2,953,747 | ||||||
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Securities sold, not yet purchased
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1,934 | - | ||||||
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Deferred revenue
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475,054 | 175,712 | ||||||
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Notes payable
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1,755,674 | 259,532 | ||||||
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Notes payable to related parties
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2,144,413 | 1,139,305 | ||||||
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Total liabilities
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7,829,800 | 8,129,554 | ||||||
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Stockholders’ equity:
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Convertible preferred stock, Series A–$0.0001 par value; 2,000,000 shares
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authorized; 2,000,000 shares issued and 0 shares outstanding as of
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September 30, 2011 and December 31, 2010; aggregate liquidation
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preference of $0
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Convertible preferred stock, Series B–$0.0001 par value; 12,500,000 shares
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authorized; 8,750,000 shares issued and 0 shares outstanding as of
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September 30, 2011 and December 31, 2010; aggregate liquidation
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preference of $0
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Convertible preferred stock, Series C–$0.0001 par value; 14,200,000 shares
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authorized; 11,800,000 shares issued and 0 shares outstanding as of
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September 30, 2011 and December 31, 2010; aggregate liquidation
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preference of $0
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Convertible preferred stock, Series D–$0.0001 par value; 24,000,000
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shares authorized, 23,720,916 and 23,720,916 shares issued
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and 19,563,206 and 22,058,128 shares outstanding as of
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September 30, 2011 and December 31, 2010, respectively;
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aggregate liquidation preference of $8,412,179 prior to conversion,
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and pari passu with common stock on conversion
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1,957 | 2,206 | ||||||
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Common stock, $0.0001 par value; 300,000,000 shares authorized;
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3,009,453 and 2,384,499 shares issued and 2,980,017 and
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2,355,063 shares outstanding as of September 30, 2011 and
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December 31, 2010, respectively
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301 | 239 | ||||||
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Common stock payable
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7,193 | 461,675 | ||||||
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Additional paid-in capital
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135,751,140 | 134,851,006 | ||||||
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Treasury stock
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(225,613 | ) | (225,613 | ) | ||||
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Accumulated deficit
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(134,579,185 | ) | (130,153,841 | ) | ||||
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Total stockholders’ equity
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955,793 | 4,935,672 | ||||||
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Total liabilities and stockholders’ equity
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$ | 8,785,593 | $ | 13,065,226 | ||||