InSite Vision Incorporated today reported financial
results for the full year and fourth quarter ended December 31, 2009.
“2009 was a year of steady performance by InSite Vision in which we
executed against our strategic objectives,” said Louis Drapeau, InSite
Vision’s Chief Executive Officer. “We begin 2010 in a solid cash
position, having successfully conserved our financial assets. In
addition, AzaSite sales are up through the efforts of our partner
Inspire Pharmaceuticals and we have received our first royalty payment
from Bausch & Lomb for Besivance.”
Recent Accomplishments and Events
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Prescriptions of AzaSite (azithromycin ophthalmic solution) 1%, for
the treatment of bacterial conjunctivitis, increased by 45 percent in
the fourth quarter 2009 compared to the fourth quarter of 2008 and 74
percent for the full year 2009 over 2008. AzaSite is marketed by
Inspire Pharmaceuticals in the United States. Inspire disclosed that
they estimate that approximately $3.0 - $4.0 million of AzaSite net
sales for 2009 was associated with hospital usage of AzaSite as a
substitute therapy for erythromycin ophthalmic ointment (0.5%).
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In February 2010, InSite Vision received a mid-single digit royalty
from Bausch & Lomb on global net product sales of Besivance™
(besifloxacin ophthalmic suspension) 0.6%. Besivance, the second
commercial product to utilize InSite Vision’s proprietary DuraSite®
drug delivery platform, is being marketed by InSite Vision’s licensee,
Bausch & Lomb and their partner, Pfizer Inc, for the treatment of
bacterial conjunctivitis in patients one year and older.
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Inspire Pharmaceuticals announced that enrollment is complete in two
Phase 2 clinical trials of AzaSite for the treatment of blepharitis.
Inspire Pharmaceuticals initiated two randomized, placebo-controlled
multi-center Phase 2 studies in May 2009 to evaluate the safety and
efficacy of AzaSite for the treatment of blepharitis, an ocular
disease characterized by inflammation of the eyelids. Inspire
Pharmaceuticals disclosed that they expect to report preliminary
results from the Phase 2 clinical trials in the first quarter of 2010.
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In December, InSite Vision announced plans to advance ISV-303, a
topical anti-inflammatory product that combines a low concentration of
bromfenac with the company’s proprietary DuraSite® technology. ISV-303
is being developed to reduce the pain and swelling associated with
ocular surgery. InSite Vision is currently preparing an
Investigational New Drug Application for this novel product candidate.
Full Year 2009 Results Summary
Revenues for the year ended December 31, 2009 were $9.8 million compared
to $13.7 million for the same period in 2008. 2009 revenues included
royalties from Inspire Pharmaceuticals of $8.0 million for sales of
AzaSite compared to $3.6 million in 2008. Royalties from Inspire
Pharmaceuticals increased by $4.4 million compared to 2008 principally
due to a 91 percent increase in AzaSite revenues recorded by Inspire as
well as an increase in the contractual royalty rate from 20 percent to
25 percent beginning in August 2009. InSite Vision’s revenues in 2008
also included the $9.9 million amortization of the license fee and
milestone payment for AzaSite from Inspire that ended in April 2008.
Research and Development (R&D) expenses for the year ended December 31,
2009 were $5.4 million compared to $16.2 million for the 2008 fiscal
year. Reduced R&D spending in 2009 was primarily driven by the
completion of the first Phase 3 trial of ISV-502 in late 2008. In
addition, the company incurred lower personnel-related expenses
associated with the corporate restructurings which occurred in December
2008 and March 2009.
General and Administrative (G&A) expenses for the year ended December
31, 2009 were $5.8 million compared to $8.3 million in 2008. G&A
expenses decreased primarily due to legal and other expenses related to
the proxy contest in 2008. In addition, personnel-related expenses
declined due to the corporate restructurings in December 2008 and March
2009.
Severance and impairment expenses for the year ended December 31, 2009
were $0.5 million and $0.6 million which represent non-recurring
restructuring costs. Severance expenses for the year ended December 31,
2008 were $1.9 million.
Net loss for the year ended December 31, 2009 was $14.2 million, or
$0.15 per share, compared to a net loss of $21.3 million, or $0.23 per
share, in 2008.
InSite Vision had cash, cash equivalents and short-term investments of
$24.7 million at December 31, 2009. Total cash usage in 2009 was $12.7
million.
Fourth Quarter 2009 Results Summary
Revenues for the quarter ended December 31, 2009 were $3.5 million
compared to $1.5 million in the fourth quarter of 2008. Revenues were
primarily royalties from Inspire for sales of AzaSite. The royalties
increase was driven by a 67 percent increase in AzaSite revenues and an
increase in the royalty rate from 20 percent to 25 percent beginning in
August 2009.
R&D expenses for the fourth quarter 2009 were $0.9 million compared to
$3.5 million in the same quarter of 2008. The decrease in R&D expenses
was primarily driven by the conclusion of the Phase 3 study of ISV-502
in December 2008. G&A expenses were $1.2 million in the fourth quarter
ended 2009 compared to $2.0 million in 2008. G&A expenses in 2008 were
higher due to non-recurring charges associated with administrative and
legal fees related to the proxy contest. Severance expenses for the
fourth quarter ended 2009 were $0.2 million compared to $1.9 million in
2008 which represented non-recurring restructuring costs.
Net loss for the fourth quarter ended December 31, 2009 was $2.0
million, or $0.02 per share, compared to a net loss of $8.6 million, or
$0.09 per share, in 2008.
Conference Call Today
InSite Vision will host a conference call today beginning at 4:30 p.m.
Eastern Time to discuss the company's fourth quarter results.
Analysts and investors can listen to the conference call by dialing
(877) 407-8035 for domestic callers and (201) 689-8035 for international
callers. A telephone replay will be available following the conclusion
of the call by dialing (877) 660-6853 for domestic callers and (201)
612-7415 for international callers. All callers will need to enter the
account number 286 and conference ID 346211.
The live conference call will also be webcast and available on the
Investor Relations page of the company's website at www.insitevision.com.
A copy of this press release will be furnished to the Securities and
Exchange Commission on a Form 8-K and posted on the company’s website
prior to the call.
About InSite Vision
InSite Vision is committed to advancing new and superior ophthalmologic
products for unmet eye care needs. InSite Vision is recognized for the
discovery and development of novel ocular pharmaceutical products based
on its DuraSite® bioadhesive polymer core technology, an innovative
platform that extends the duration of drug delivery on the eye’s
surface, thereby reducing frequency of treatment and improving the
efficacy of topically delivered drugs. The DuraSite platform is
currently leveraged in two commercial products for the treatment of
bacterial eye infections, AzaSite (azithromycin ophthalmic solution) 1%
and Besivance™ (besifloxacin ophthalmic suspension) 0.6%. AzaSite is
approved in the United States and Canada and currently marketed by
InSite Vision’s partner, Inspire Pharmaceuticals in the United States.
InSite Vision has formed multiple strategic licensing and distribution
agreements with qualified partners to market AzaSite in select countries
in Asia and South America upon regulatory approval in those regions.
Besivance was approved by the U.S. Food and Drug Administration in the
second quarter 2009 and is being marketed by Bausch & Lomb and Pfizer
Inc.
InSite Vision’s ophthalmic product development pipeline also includes
ISV-502 and additional product candidates leveraging the company’s core
technologies. For further information on InSite Vision, please visit www.insitevision.com.
Forward-Looking Statements
This news release contains certain statements of a forward-looking
nature relating to future events, including the targeted completion date
for enrollment in Inspire’s AzaSite blepharitis Phase 2 trials, the
targeted announcement date of the results of Inspire’s blepharitis Phase
2 trials, statements regarding InSite’s review of its strategic options,
InSite's plans to advance its AzaSite family of products, and InSite's
corporate goals. Such statements entail a number of risks and
uncertainties, including but not limited to: InSite's reliance on third
parties for the commercialization of its products including Inspire,
Pfizer and Bausch & Lomb; the timing of the completion of Inspire’s
blepharitis trials and the results of such trials; the ability of InSite
to enter into corporate collaborations for its product candidates;
InSite’s ability to effectively pursue its strategic options and to
negotiate favorable terms with respect thereto; InSite's ability to
expand its technology platform to include additional indications;
InSite's ability to compete effectively, either alone or through its
partners, with other companies offering competing products or
treatments; InSite's ability to maintain and develop additional
collaborations and commercial agreements with corporate partners,
including those with respect to AzaSite; InSite's ability and
willingness to commence additional clinical trials with respect to
ISV-502 and InSite's various other product candidates and the results of
such trials; its ability to adequately protect its intellectual property
and to be free to operate with regard to the intellectual property of
others and determinations of the U.S. Patent and Trademark Office
regarding same; and determinations by the U.S. Food and Drug
Administration. Reference is made to the discussion of these and other
risk factors detailed in InSite Vision's filings with the Securities and
Exchange Commission, including its annual report on Form 10-K and its
quarterly reports on Form 10-Q, under the caption "Risk Factors" and
elsewhere in such reports. Any forward-looking statements or projections
are based on the limited information currently available to InSite
Vision, which is subject to change. Although any such forward-looking
statements or projections and the factors influencing them will likely
change, InSite Vision undertakes no obligation to update the
information. Such information speaks only as of the date of its release.
Actual events or results could differ materially and one should not
assume that the information provided in this release is still valid at
any later date.
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InSite Vision Incorporated
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Condensed Consolidated Statements of Operations
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For the Three Months and Year Ended December 31, 2009 and 2008
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(in thousands, except per share amounts; unaudited)
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Three months ended
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Year ended
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December 31,
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December 31,
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2009
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2008
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2009
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2008
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Revenues
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$
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3,463
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$
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1,510
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$
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9,798
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$
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13,706
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Expenses:
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Research and development
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887
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3,521
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5,436
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16,242
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General and administrative
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1,165
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1,957
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5,792
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8,251
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Cost of revenues, principally royalties to third parties
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751
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254
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1,549
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630
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Severance
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158
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1,909
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527
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1,909
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Impairment
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-
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-
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615
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-
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Total expenses
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2,961
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7,641
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13,919
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27,032
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Income (loss) from operations
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502
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(6,131)
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(4,121)
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(13,326)
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Interest expense and other, net
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(2,550)
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(2,437)
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(10,034)
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(7,984)
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Net loss
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$
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(2,048)
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$
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(8,568)
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$
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(14,155)
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$
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(21,310)
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Net loss per share:
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Basic
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$
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(0.02)
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$
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(0.09)
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$
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(0.15)
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$
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(0.23)
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Diluted
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$
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(0.02)
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$
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(0.09)
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$
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(0.15)
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$
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(0.23)
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Shares used to calculate net loss per share:
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Basic
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94,738
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94,630
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94,710
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94,607
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Diluted
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94,738
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94,630
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94,710
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94,607
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Condensed Consolidated Balance Sheets
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At December 31, 2009 and December 31, 2008
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(in thousands; unaudited)
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December 31,
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December 31,
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2009
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2008
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Assets:
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Cash, cash equivalents and short-term investments
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$
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24,721
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$
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37,456
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Receivables, prepaid expenses and other current assets
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3,294
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1,667
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Property and equipment, net
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309
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1,479
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Debt issuance costs, net
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3,922
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4,341
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Total assets
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$
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32,246
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$
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44,943
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Liabilities and stockholders' deficit:
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Accounts payable and accrued expenses
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$
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2,266
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$
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2,876
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Accrued interest
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2,938
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1,200
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Deferred revenues
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75
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373
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Long-term secured notes payable
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60,000
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60,000
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Stockholders' deficit
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(33,033)
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(19,506)
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Total liabilities and stockholders' deficit
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$
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32,246
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$
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44,943
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