Merriman Holdings, Inc

Merriman Holdings, Inc. and subsidiaries (the “Company”) is a financial services holding company. Its wholly-owned subsidiary, Merriman Capital, Inc. (“MC”), is a boutique investment bank and broker-dealer providing equity and options executions services to sophisticated investors and comprehensive advisory, fund raising and M&A services for fast growing public and private companies. The firm is also a leader in providing entrepreneurial, independent investment banking teams with a compliant, flexible and highly collegial platform, the Financial Entrepreneur Platform (“FEP”). The FEP enables teams of finance professionals to grow their business by providing them with a flexible platform with “high touch” compliance, legal and operational assistance. MC facilitates efficient and diligent capital formation through its proprietary digital network (“DCN”). The DCN is a capital marketplace that enables highly targeted execution of transactions primarily targeted to family offices.

Our advisory practice consists of 45 public and private clients that are typically under $500 million in market capitalization. These clients are seeking advice with regard to capital market, fund raising or strategic matters. We began focusing on the advisory business given the lack of attention given to smaller, less liquid public companies. The potential total available market for these services we view as significant, given the structural changes that have taken place in the capital markets the last five years. We believe we are the only full service boutique investment bank focused on this area.

On August 31, 2015 the Company extended eight secured promissory notes with two related parties, and one unrelated party, to mature on March 31, 2016, with no change to interest rate or terms. The notes have with an aggregate principal of $2,097,426. Additional consideration included warrants to purchase an aggregate of 1,727,698 shares of the Company’s Common Stock at $0.3035 per share. The warrants expire on August 31, 2020. The Company recorded a charge of $2,491,000 for the fair value of the warrants granted which have been included as a component of interest expense for the three and nine months ended September 30, 2015.

The Series F Convertible Preferred Stock carries a dividend rate of 4.5% per annum, such dividends will be paid only when, if and as declared by the Board of Directors. The Company is prohibited from paying any dividends on the Common Stock until all accrued dividends on the Series F Convertible Preferred Stock are first paid. The Series F Convertible Preferred stock is convertible into common stock at $0.30 per share.

The holders of Series F Convertible Preferred Stock are entitled to a “liquidation preference payment” of $0.30 per share of Series F Convertible Preferred Stock plus all accrued but unpaid dividends on such shares prior and in preference to any payment to holders of the Common Stock upon a merger, acquisition, sale of substantially all the assets, or certain other liquidation events of the Company. Any proceeds after payment of the “liquidation preference payment” shall be paid pro rata to the holders of the Series F Convertible Preferred Stock and Common Stock on an as converted to Common Stock basis.