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Absence of Operating Business
6 Months Ended
Jun. 30, 2011
Absence of Operating Business [Abstract]  
Absence of Operating Business
2. Absence of Operating Business
As a result of the loss of its customers, the Company no longer has any operating business. Since August 2001, the Company has concentrated its efforts on reducing its costs and settling numerous claims, contractual obligations, and pending litigation. By April 2002, the Company had effectively eliminated a majority of its ongoing promotions business operations and was in the process of disposing of its assets and settling its liabilities related to the promotions business and defending and pursuing litigation with respect thereto. In essence, the Company discontinued its promotions business and changed the nature of its operation to focus on its pending litigation and winding down its contracted obligations. As a result of these efforts, the Company has been able to resolve a significant number of outstanding liabilities that existed in August 2001 or arose subsequent to that date. As of June 30, 2011, the Company had reduced its workforce to 4 employees from 136 employees as of December 31, 2001.
With no revenues from operations, the Company closely monitors and controls its expenditures within a reasonably predictable range. Cash used by continuing operating activities was $2.3 million and $2 million in the years ended December 31, 2010 and 2009, respectively. The Company continues to incur losses in 2011 for the general and administrative expenses incurred to manage the affairs of the Company. By utilizing cash available at June 30, 2011 to maintain its scaled back operations, management believes it has sufficient capital resources and liquidity to operate the Company for at least one year.
As of December 31, 2010, the Company has federal net operating loss carryforwards (“NOLs”) of approximately $70.2 million and state NOLs of approximately $46.7 million that may, subject to applicable tax rules, be used to reduce certain income tax obligations in the future. Because of its current lack of operations, the Company has established a valuation allowance for the entire amount of federal and state NOLs as it is unlikely that the Company can realize these deferred tax benefits in the future.