UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
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[X] |
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the quarterly period ended September 30, 2004 |
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Or |
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[ ] |
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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For the transition period from ____________________ to ____________________ |
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Commission File Number: |
001-12895 |
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nStor Technologies, Inc. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
95-2094565 |
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(State or other jurisdiction of |
(IRS Employer Identification Number) |
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6190 Corte Del Cedro |
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(Address of principal executive offices) |
(Zip code) |
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(760) 683-2500 |
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(Registrant's telephone number, including area code) |
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NOT APPLICABLE |
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(Former name, former address and former fiscal year, if changed since last report) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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[X] |
Yes |
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[ ] |
No |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
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[ ] |
Yes |
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[X] |
No |
The number of shares outstanding of the registrant’s Common Stock, par value $0.05 per share, as of October 31, 2004 was 165,097,838 shares.
nSTOR TECHNOLOGIES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
2
Part 1 – FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
nSTOR TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
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September 30, |
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2004 |
December 31, |
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(unaudited) |
2003 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
2 |
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$ |
-- |
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Receivables, net |
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1,351 |
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482 |
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Inventories |
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1,768 |
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1,571 |
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Prepaid expenses and other |
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115 |
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295 |
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Assets held for sale |
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9,067 |
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10,582 |
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Total current assets |
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12,303 |
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12,930 |
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Property and equipment, net of $348 and $184 of accumulated depreciation |
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469 |
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323 |
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Goodwill, net of $807 of accumulated amortization |
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1,989 |
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1,989 |
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$ |
14,761 |
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$ |
15,242 |
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LIABILITIES |
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Current liabilities: |
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Borrowings: |
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Affiliate |
$ |
12,914 |
$ |
6,941 |
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Other |
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418 |
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561 |
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Accounts payable and other |
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2,869 |
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2,402 |
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Liabilities held for sale |
3,081 |
2,077 |
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Total current liabilities |
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19,282 |
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11,981 |
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SHAREHOLDERS’ (DEFICIT) EQUITY |
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Preferred stock, $.01 par; 1,000,000 shares authorized; 0 shares issued |
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Common stock, $.05 par; 230,000,000 shares authorized; 165,097,838 and |
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Additional paid-in capital |
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108,388 |
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108,327 |
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Deficit |
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(121,163 |
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(113,318 |
) |
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Total shareholders’(deficit) equity |
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(4,521 |
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3,261 |
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$ |
14,761 |
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$ |
15,242 |
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See accompanying notes to consolidated financial statements.
3
nSTOR TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
(unaudited)
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Three Months Ended |
Nine Months Ended |
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September 30, |
September 30, |
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2004 |
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2003 |
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2004 |
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2003 |
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Sales |
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$ |
3,122 |
$ |
2,804 |
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$ |
7,379 |
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$ |
5,608 |
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Cost of sales |
1,896 |
2,074 |
5,080 |
4,104 |
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Gross margin |
1,226 |
730 |
2,299 |
1,504 |
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Operating expenses: |
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Selling, general and administrative |
1,576 |
949 |
4,318 |
2,719 |
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Research and development |
747 |
625 |
2,443 |
1,838 |
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Depreciation |
60 |
29 |
164 |
76 |
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Total operating expenses |
2,383 |
1,603 |
6,925 |
4,633 |
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Loss from operations |
(1,157 |
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(873 |
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(4,626 |
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(3,129 |
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Interest expense, net |
(289 |
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(174 |
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(702 |
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(518 |
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Loss from continuing operations |
(1,446 |
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(1,047 |
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(5,328 |
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(3,647 |
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Loss from discontinued operations (including |
(2,461 |
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Net loss |
$ |
(3,907 |
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$ |
(1,138 |
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$ |
(7,845 |
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$ |
(4,360 |
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Basic and diluted net loss per common share: |
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Loss from continuing operations |
$ |
(.01 |
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$ |
(.01 |
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$ |
(.03 |
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$ |
(.02 |
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Loss from discontinued operations |
(.01 |
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(.00 |
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(.02 |
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(.01 |
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Net Loss |
$ |
(.02 |
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$ |
(.01 |
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$ |
(.05 |
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$ |
(.03 |
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Weighted average number of common shares |
165,097,838 |
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See accompanying notes to consolidated financial statements.
4
nSTOR TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(dollars in thousands)
(unaudited)
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Deferred |
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Stock |
Additional |
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Common Stock |
Compen- |
Paid-In |
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Shares |
Amount |
sation |
Capital |
Deficit |
Total |
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Balances, December 31, 2003 |
165,067,838 |
$ |
8,252 |
$ |
-- |
$ |
108,327 |
$ |
(113,318 |
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$ |
3,261 |
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Deferred stock compensation |
(54 |
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54 |
-- |
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Amortization of deferred stock compensation |
54 |
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Exercise of stock options |
30,000 |
2 |
7 |
9 |
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Net loss for the nine months |
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Balances, September 30, 2004 |
165,097,838 |
$ |
8,254 |
$ |
-- |
$ |
108,388 |
$ |
(121,163 |
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$ |
(4,521 |
) |
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See accompanying notes to consolidated financial statements.
5
nSTOR TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
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Nine Months Ended |
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September 30, |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
2004 |
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2003 |
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Continuing Operations |
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Loss from continuing operations |
$ |
(5,328 |
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$ |
(3,647 |
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Adjustments to reconcile loss to net cash used in continuing operating activities: |
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Depreciation |
164 |
76 |
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Provision for inventory reserves |
68 |
132 |
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Stock-based compensation |
54 |
75 |
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Provision for ncollectible accounts and other |
50 |
(82 |
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Changes in assets and liabilities: |
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Increase in receivables |
(919 |
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(492 |
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Increase in inventories |
(265 |
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(660 |
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Decrease (increase) in prepaid expenses and other assets |
180 |
(103 |
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Increase in accounts payable and other liabilities |
893 |
382 |
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NET CASH USED IN CONTINUING OPERATIONS |
(5,103 |
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(4,319 |
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Discontinued Operations |
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Loss from discontinued operations |
(2,517 |
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(713 |
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Adjustments to reconcile loss to net cash used in discontinued operating activities: |
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Depreciation and amortization |
318 |
297 |
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Impairment of goodwill |
2,619 |
-- |
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Amortization of capitalized software development costs |
98 |
43 |
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Capitalized software development costs and other |
(2 |
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(349 |
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Stock-based compensation |
-- |
708 |
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Changes in assets and liabilities: |
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(Increase) decrease in receivables |
(853 |
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181 |
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(Increase) decrease in prepaid expenses and other assets |
(714 |
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3 |
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Increase (decrease) in accounts payable and other liabilities |
899 |
(151 |
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