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| 8-K - FORM 8-K - Merriman Holdings, Inc | v321456_8-k.htm |
Merriman
HOLDINGS, INC. Announces Financial Results
for the Second quarter Ended June 30, 2012
Strategic shift to service oriented recurring revenue model gains momentum: 35% increase in clients sequentially
Financial Entrepreneur Platform expands adding 2 additional groups
SAN FRANCISCO – August 14, 2012 – Merriman Holdings, Inc. (OTCQX: MERR), the parent company of Merriman Capital, Inc., today released earnings for the second quarter 2012. Please review our 10-Q filing for detailed information of our year-to-date financials and other matters.
| · | For the three months ended June 30, 2012, GAAP net operating loss was $2,675,000 which included non-cash items of $1,093,000 |
| · | For the three months ended June 30, 2012, total revenues were $2,682,000 |
| · | Non GAAP net operating loss, excluding non cash items of $1,093,000, was $1,612,000 |
| · | Total operating expenses continue to decrease as a result of focused efforts to reduce fixed costs |
| · | 145% increase in CMAG revenues due to the Company’s repositioning its business to focus on capital markets advisory services and its platform revenue model |
Jon Merriman commented: “The financing and commission businesses remain extremely challenging. Despite this, we continued to see our pipeline expand within our Capital Markets Advisory Group and Financial Entrepreneur Platform. We’ve made solid progress, ahead of our internal plan, securing clients and we remain squarely focused on our year-end target for new advisory engagements. Our Advisory and platform businesses are areas we can execute on despite the markets, and this focus diminishes our reliance on quarter to quarter investment banking revenues.”
Will Febbo, Chief Operating Officer, stated, “We have made significant headway relative to the largest expense lines in our P&L, which our stakeholders will see in the coming quarters. We are pleased to have brought on two new groups to the Financial Entrepreneur Platform and we expect to see a strong second half in this area. We are in a positive position to bring our culture, strong work ethic and the availability of our platform to people focused on funding innovative companies.”
Conference Call for the First Quarter 2012 Results
Following this announcement, Merriman’s management will host a teleconference call beginning at 1:30 PM (PT) / 4:30 PM (ET) today, Tuesday, August 14, 2012, to discuss the results and related matters. Interested listeners and participants may access the live teleconference call by dialing (877) 941-6009 or may access the live webcast at www.merrimanco.com.
For those unable to listen to the live teleconference call, a replay version of the event will be available shortly following the conclusion of the live call and can be accessed by dialing (800) 406-7325 (Pass code: 4537809#). The call will also be archived in the investor relations section of the Company’s website.
About Merriman Capital, Inc.
Merriman Capital, Inc. is an investment banking firm providing equity and options execution services, market making, and differentiated research for high growth companies. The firm also provides capital raising, advisory, and M&A services. Merriman Capital, Inc. is a wholly owned subsidiary of Merriman Holdings, Inc. (OTCQX: 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) http://www.sipc.org/.
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 30, 2012 and the form 10-Q filed on August 14, 2012. 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 30, 2012 and the form 10-Q filed on August 14, 2012, 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:
Michael Doran
General Counsel
(415) 568-3905
Will Febbo
Chief Operating Officer
(415) 248-5603
MERRIMAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues | ||||||||||||||||
| Commissions | $ | 1,561,771 | $ | 3,055,582 | $ | 2,899,495 | $ | 6,987,365 | ||||||||
| Principal transactions | (934,724 | ) | (710,929 | ) | 16,898 | 492,983 | ||||||||||
| Investment banking | 1,601,688 | 2,870,897 | 4,222,869 | 7,150,633 | ||||||||||||
| Advisory and other | 453,594 | 185,182 | 845,583 | 295,840 | ||||||||||||
| Total revenues | 2,682,329 | 5,400,732 | 7,984,845 | 14,926,821 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Compensation and benefits | 2,495,103 | 5,433,330 | 5,504,183 | 11,384,398 | ||||||||||||
| Stock-based compensation | 159,551 | 268,553 | 1,876,709 | 538,505 | ||||||||||||
| Brokerage and clearing fees | 122,316 | 333,196 | 280,583 | 760,946 | ||||||||||||
| Professional services | 182,803 | 337,045 | 454,386 | 763,376 | ||||||||||||
| Occupancy and equipment | 393,632 | 469,647 | 887,077 | 923,720 | ||||||||||||
| Communications and technology | 257,425 | 529,419 | 574,394 | 1,008,469 | ||||||||||||
| Depreciation and amortization | 5,657 | 30,007 | 10,940 | 96,405 | ||||||||||||
| Travel and entertainment | 126,709 | 235,123 | 202,252 | 546,617 | ||||||||||||
| Legal services and litigation settlement expense | 125,860 | 276,734 | 335,784 | 445,360 | ||||||||||||
| Cost of underwriting capital | 35,600 | - | 152,600 | 97,625 | ||||||||||||
| Other | 475,921 | 423,626 | 891,505 | 796,063 | ||||||||||||
| Total operating expenses | 4,380,577 | 8,336,680 | 11,170,413 | 17,361,484 | ||||||||||||
| Operating loss | (1,698,248 | ) | (2,935,948 | ) | (3,185,568 | ) | (2,434,663 | ) | ||||||||
| Other income | - | 11,601 | 15,000 | 11,601 | ||||||||||||
| Interest income | 3,745 | 2,558 | 4,978 | 3,939 | ||||||||||||
| Interest expense | (48,556 | ) | (113,321 | ) | (117,819 | ) | (164,792 | ) | ||||||||
| Amortization of debt discount | (28,609 | ) | (45,328 | ) | (56,736 | ) | 4,441 | |||||||||
| Loss on equity exchange | (903,553 | ) | - | (1,086,329 | ) | - | ||||||||||
| Net loss before income taxes | (2,675,221 | ) | (3,080,438 | ) | (4,426,474 | ) | (2,579,474 | ) | ||||||||
| Income tax benefit (expense) | - | 54,854 | - | (3,344 | ) | |||||||||||
| Net loss | $ | (2,675,221 | ) | $ | (3,025,584 | ) | $ | (4,426,474 | ) | $ | (2,582,818 | ) | ||||
| Preferred stock cash dividend | - | (137,708 | ) | - | (277,779 | ) | ||||||||||
| Net loss attributable to common shareholders | $ | (2,675,221 | ) | $ | (3,163,292 | ) | $ | (4,426,474 | ) | $ | (2,860,597 | ) | ||||
| Basic and diluted net loss per share | ||||||||||||||||
| Net loss | $ | (0.48 | ) | $ | (1.23 | ) | $ | (0.73 | ) | $ | (1.07 | ) | ||||
| Net loss attributable to common shareholders | $ | (0.48 | ) | $ | (1.28 | ) | $ | (0.73 | ) | $ | (1.19 | ) | ||||
| Weighted average number of common shares | ||||||||||||||||
| Basic and diluted | 5,538,054 | 2,461,825 | 6,041,486 | 2,406,677 | ||||||||||||
MERRIMAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(unaudited)
| ASSETS | June 30, | December 31, | ||||||
| 2012 | 2011 | |||||||
| Cash and cash equivalents | $ | 680,726 | $ | 4,003,512 | ||||
| Securities owned | ||||||||
| Marketable, at fair value | 2,302,143 | 2,136,352 | ||||||
| Not readily marketable, at estimated fair value | 636,330 | 347,218 | ||||||
| Restricted cash | 680,028 | 680,028 | ||||||
| Due from clearing broker | 144,600 | 124,805 | ||||||
| Accounts receivable, net | 286,641 | 359,900 | ||||||
| Note receivable | 125,000 | - | ||||||
| Prepaid expenses and other assets | 349,595 | 506,708 | ||||||
| Equipment and fixtures, net | 27,494 | 30,537 | ||||||
| Total assets | $ | 5,232,557 | $ | 8,189,060 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Liabilities | ||||||||
| Accounts payable | $ | 211,221 | $ | 246,040 | ||||
| Commissions and bonus payable | 658,816 | 986,722 | ||||||
| Accrued expenses and other | 718,717 | 1,757,342 | ||||||
| Deferred rent | 243,003 | 236,996 | ||||||
| Deferred revenue | 481,756 | 688,074 | ||||||
| Notes payable, net of debt discount | 880,070 | 679,454 | ||||||
| Notes payable to related parties, net of debt discount | 862,884 | 1,006,765 | ||||||
| Total liabilities | 4,056,467 | 5,601,393 | ||||||
| Shareholders’ equity | ||||||||
| Convertible preferred stock, Series A–$0.0001 par value; 2,000,000 shares | ||||||||
| authorized; 2,000,000 shares issued and 0 shares outstanding as of | ||||||||
| June 30, 2012 and December 31, 2011; aggregate liquidation | ||||||||
| preference of $0 | - | - | ||||||
| Convertible preferred stock, Series B–$0.0001 par value; 12,500,000 shares | ||||||||
| authorized; 8,750,000 shares issued and 0 shares outstanding as of | ||||||||
| June 30, 2012 and December 31, 2011; aggregate liquidation | ||||||||
| preference of $0 | - | - | ||||||
| Convertible preferred stock, Series C–$0.0001 par value; 14,200,000 shares | ||||||||
| authorized; 11,800,000 shares issued and 0 shares outstanding as of | ||||||||
| June 30, 2012 and December 31, 2011; aggregate liquidation | ||||||||
| preference of $0 | - | - | ||||||
| Convertible preferred stock, Series D–$0.0001 par value; 24,000,000 | ||||||||
| shares authorized, 23,720,916 and 23,720,916 shares issued | ||||||||
| and 18,632,974 and 19,563,206 shares outstanding as of | ||||||||
| June 30, 2012 and December 31, 2011, respectively; | ||||||||
| aggregate liquidation preference of $8,252,544 prior to conversion, | ||||||||
| and pari passu with common stock on conversion | 1,864 | 1,957 | ||||||
| Convertible Preferred stock, Series E–$0.0001 par value; 7,300,000 | ||||||||
| shares authorized, 6,254,680 and 2,531,744 shares issued and | ||||||||
| 6,254,680 and 2,531,744 shares outstanding as of June 30, | ||||||||
| 2012 and December 31, 2011, respectively; aggregate | ||||||||
| liquidation preference of $2,113,492 prior to conversion, and pari | ||||||||
| passu with common stock on conversion | 625 | 253 | ||||||
| Common stock, $0.0001 par value; 300,000,000 shares authorized; | ||||||||
| 4,346,770 and 6,183,815 shares issued and 4,317,334 and | ||||||||
| 6,154,379 shares outstanding as of June 30, 2012 and | ||||||||
| December 31, 2011, respectively | 436 | 619 | ||||||
| Additional paid-in capital | 143,872,755 | 140,857,954 | ||||||
| Treasury stock | (225,613 | ) | (225,613 | ) | ||||
| Accumulated deficit | (142,473,977 | ) | (138,047,503 | ) | ||||
| Total shareholders’ equity | 1,176,090 | 2,587,667 | ||||||
| Total liabilities and shareholders’ equity | $ | 5,232,557 | $ | 8,189,060 | ||||