<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarter ended: March 31, 1996 Commission File Number: 33 - 98282
APPLEWOODS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13- 3859709
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
274 Riverside Avenue, Westport , Conn. CT 06881
(Address of principal executive offices) (Zip code)
(203) 227 4912
Registrant's telephone number, including area code:
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities and 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.
(1) Yes X No
(2) Yes No X
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of May 24, 1996: 4,124,000
<PAGE>
APPLEWOODS, INC.
INDEX
PART 1: FINANCIAL INFORMATION Page:
Item 1. Financial Statements:
Balance Sheet as of March 31, 1996 [Unaudited] 2 - 3
Statements of Operations for the three and nine months ended
March 31, 1996 and 1995 [Unaudited] 4
Statement of Stockholders Equity for the nine months
ended March 31, 1996 [Unaudited] 5
Statements of Cash Flows for the nine months ended
March 31, 1996 and 1995 [Unaudited] 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of the Financial
Condition and Results of Operations 8 - 11
PART II: OTHER INFORMATION:
Item 6. Exhibits & Reports on Form 8-K 12
Signatures 13
Page 1
<PAGE>
APPLEWOODS, INC.
BALANCE SHEET AS OF MARCH 31, 1996.
[UNAUDITED]
Assets:
Current Assets:
Trade Accounts Receivable $ 699,185
Other Receivables 21,030
Inventory 1,414,311
Prepaid Consultancy Fees 960,000
Other Current Assets 175,874
----------
Total Current Assets 3,270,400
----------
Property, Plant and Equipment
Plant & Machinery 357,994
Fixtures and Fittings 37,828
Motor Vehicles 65,380
----------
Totals - At cost 461,202
Less Accumulated Depreciation 181,487
----------
Property, Plant and Equipment -Net 279,715
----------
Other Assets
Trade Marks - Net 57,576
Prepaid Consultancy Fees 480,000
----------
Total Other Assets 537,576
----------
Total Assets $4,087,691
==========
See Accompanying Notes to Financial Statements.
Page 2
APPLEWOODS, INC.
BALANCE SHEET AS OF MARCH 31, 1996.
[UNAUDITED]
Liabilities and Stockholders
Equity
Current Liabilities:
Overdraft at Bank 408,768
Accounts Payable 765,860
Accrued Expenses 366,401
Accrued Taxes 66,561
Leases Payable 39,919
Other Current Liabilities 198,152
Other Current Liabilities - Related Parties 54,418
Notes Payable 229,500
-----------
Total Current Liabilities 2,129,579
Long-Term Liabilities
Leases Payable 59,688
Related Party Debt 3,141,500
-----------
Total Long-Term Liabilities 3,201,188
-----------
Commitments --
Stockholders Equity:
Series A Preferred Stock - $.0001 Par Value,
500,000 Shares Authorized, None Issued --
Common Stock, $.0001 Par Value,
30,000,000 Shares Authorized,
2,280,000 Shares Issued 228
Additional Paid In Capital 2,183,891
Accumulated [Deficit] (3,494,569)
Cumulative Foreign Currency Translation Adjustment 67,374
Total Stockholders Equity (1,243,076)
-----------
Total Liabilities and Stockholders Equity $ 4,087,691
===========
See Accompanying Notes to Financial Statements.
APPLEWOODS, INC.
STATEMENT OF OPERATIONS
[UNAUDITED]
<TABLE>
<CAPTION>
3 months ended 9 months ended
March 31 March 31
----------------- -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Product Sales $ 583,003 $ 446,037 $ 2,374,198 $ 2,098,828
Shopfitting Revenue 60,915 220,416 637,512 621,651
---------- ---------- ---------- ----------
Total Revenues 643,918 666,453 3,011,710 2,720,479
---------- ---------- ---------- ----------
Cost of Sales:
Product Sales 342,413 274,384 1,486,892 1,350,478
Shopfitting Revenue 103,079 154,628 448,744 393,496
---------- ---------- ---------- ----------
Total Cost of sales: 445,492 429,012 1,935,636 1,743,974
---------- ---------- ---------- ----------
Gross Profit 198,426 237,441 1,076,074 976,505
Selling, General and Admin.
Expenses 691,487 321,232 1,738,026 984,932
---------- ---------- ---------- ----------
[Loss] From Operations: (493,061) (83,791) (661,952) (8,427)
---------- ---------- ---------- ----------
Other Income [Expense]:
Gain on Sale of Equipment 0 0 5,088 41,486
Interest Expense (71,379) (68,972) (232,989) (202,304)
---------- ---------- ---------- ----------
Total Other [Expense] (71,379) (68,972) (227,901) (160,818)
---------- ---------- ---------- ----------
Net [Loss] Before
Provision for Taxes (564,440) (152,763) (889,853) (169,245)
Provision for Income Taxes 0 0 0 0
---------- ---------- ---------- ----------
Net [Loss] $ (564,440) $ (152,763) $ (889,853) $ (169,245)
========== ========== ========== ==========
Net [Loss] Per Share $ (0.22) $ (0.06) $ (0.35) $ (0.07)
========== ========== ========== ==========
Weighted Average Number of
Shares 2,568,000 2,568,000 2,568,000 2,568,000
========== ========== ========== ==========
</TABLE>
See Accompanying Notes to Financial Statements.
Page 4
APPLEWOODS, INC.
STATEMENTS OF STOCKHOLDERS EQUITY FOR THE NINE MONTHS ENDED MARCH 31, 1996
[UNAUDITED]
<TABLE>
<CAPTION>
Cumulative
Foreign Total
Common Stock Additional Currency Shareholders'
----------------- Paid In Accumulated Translation Equity
Shares Amount Capital [Deficit] Adjustment [Deficit]
------ ------ ------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance - June 30, 1995 1,800,000 180 211,153 (2,604,716) (28,106) (2,421,489)
Capital Contributions of
Imputed Interest 52,786 52,786
Issuance of Stock 480,000 48 1,919,952 1,920,000
Foreign Currency
Translation Adjustment 95,480 95,480
Net [Loss] for the Nine Months
Ended March 31, 1996 (889,853) (889,853)
--------- --- --------- ----------- ------ -----------
Balance - March 31, 1996 2,280,000 228 2,183,891 (3,494,569) 67,374 (1,243,076)
========= === ========= =========== ====== ===========
</TABLE>
See Accompanying Notes to Financial Statements.
Page 5
APPLEWOODS, INC.
STATEMENTS OF CASH FLOWS
[UNAUDITED]
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
March 31
--------
1996 1995
---- ----
<S> <C> <C>
Operating Activities:
Net [Loss] $(889,853) $(169,245)
Adjustment to Reconcile Net [Loss] to Net
Cash [Used for] Operating Activities
Depreciation 66,698 81,414
Amortization of Trademarks 16,041 15,806
[Gain] on Sale of Equipment (5,088) (41,486)
Imputed Interest Contributed to Capital 52,786 53,777
Non-Cash Consulting Fees 480,000 -
Changes in Assets and Liabilities
[Increase]Decrease in:
Trade Accounts Receivable (278,532) (230,392)
Other Receivables 4,253 28,355
Inventory (131,476) (318,094)
Other Current Assets (51,218) (20,560)
Increase [Decrease] in
Accounts Payable (116,399) 210,834
Accrued Expenses 353,741 129,843
Accrued Taxes 30,820 9,266
Other Current 27,798 (87,162)
Liabilities
Other Current Liabilities - Related Parties (64,628) (72,856)
--------- ---------
Net Cash- Operating Activities (505,057) (410,500)
--------- ---------
Investing Activities
Proceeds from Sale of Equipment 21,433 131,416
Purchase of Property and Equipment (55,658) (38,355)
Investment in Trademarks (10,508) (25,905)
--------- ---------
Net Cash - Investing Activities (44,733) 67,156
--------- ---------
Financing Activities
Payment of Lease Obligations (51,609) (35,117)
Cash Overdraft (1,047) 8,628
Proceeds From Short Term Loans 500,000 238,035
Proceeds From Related Party Loans 108,031 132,647
--------- ---------
Net Cash - Financing Activities 555,375 344,193
--------- ---------
Effect of Exchange Rate Changes On Cash (5,585) (850)
--------- ---------
Net Increase In Cash -- --
Cash - Beginning of Periods -- --
--------- ---------
Cash - End of Periods $ -- $ --
========= =========
</TABLE>
See Accompanying Notes to Financial Statements.
Page 6
<PAGE>
APPLEWOODS, INC.
NOTES TO FINANCIAL STATEMENTS [UNAUDITED]
[A] Significant Accounting Policies
Significant Accounting Policies of Applewoods Inc. [the "Company"] are
set forth in the Company's Form SB-2, as filed with the Securities and Exchange
Commission on April 10, 1996.
[B] Basis of Reporting
The balance sheet as of March 31, 1996, the statements of operations for
the three and nine months ended March 31, 1996 and 1995, the statement of
stockholders' equity for the nine months ended March 31, 1996, and the
statements of cash flows for the nine months ended March 31, 1996 and 1995 have
been prepared by the Company without audit. The accompanying unaudited financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB and Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of the Company such statements
include all adjustments [consisting only of normal recurring items] which are
considered necessary for a fair presentation of the financial position of the
Company at March 31, 1996, and the results of its operations and cash flows for
the nine months then ended. It is suggested that that these financial statements
be read in conjunction with Form SB-2 filed with the Securities and Exchange
Commission on April 10, 1996.
[C] Subsequent Events
On April 10, 1996, the Company's registration statement to offer for
sale 1,200,000 shares of Common Stock at $5.00 per share, was declared
effective. In April 1996, the Company received net proceeds of $5,298,894 from
the sale of 1,200,000 shares and 180,000 over-allotment shares. In May 1996, an
additional $1,050,000 was received from the conversion of 176,000 Class A
Warrants.
Consequent upon the public offering becoming effective, the bridge
lenders exercised their right to acquire 288,000 shares of Common Stock in the
Company, with no cash consideration. These shares were valued at $1,440,000
($5.00 per share). This financing cost will be amortised in the Statement of
Operations for the year ended June 30, 1996.
Part of the proceeds have been used to repay the bridge lenders the
principal sum of $500,000 and a loan made by one of the directors in the sum of
approximately $325,000.
Page 7
<PAGE>
APPLEWOODS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
historical financial statements of the Company and notes thereto
included elsewhere herein:
Overview
Applewoods, Inc., a Delaware corporation, ["AI"], was formed in
September 1995 to acquire all of the outstanding stock of Applewoods
International Limited ["AIL"] and ALA Limited ["ALA"]. ALA, formed to
license the Applewoods trademark in Latin America, is a shell company
with no assets, liabilities or operations. AIL was established in 1978
as a development stage enterprise making natural toiletries. AIL had
just relocated its headquarters when in July 1992 it went into
receivership. The reasons were primarily due to poor management, a
history of poor customer relations and erratic deliveries. In August
1992, Roger Buoy, the Company's Chief Executive Officer and Tony Swash,
the Company's Chief Operating Officer bought the assets of AIL from
Ernst and Young, receivers on behalf of the prime creditor Lloyds Bank.
AI and AIL are collectively referred to as the "the Company."
Messrs. Buoy and Swash began to focus the Company, tighten its
operations and reorganize its distribution facility. It was decided
that the primary focus of the Company was the establishment of licensed
retail stores to sell "natural" soaps, toiletries an related gift
products. In addition, this strategy would be supplemented by
distribution through traditional retail outlets in areas where it was
deemed premature to establish licensed stores. International
distribution was to be handled by distributors, well established in
their own country.
In 1992, the Company did not have sufficient product lines to
pursue a retail strategy. Compared to its competitors it had little to
offer certain types of customers. After extensive market review and
analysis, nine new products lines were conceived and introduced over
the next three years. Such new product lines are traditionally
announced each February at the Spring Trade Shows in Europe.
Since 1992, the Company has grown from approximately $1,100,000
in sales to in excess of $3,400,000 for the year ended June 30, 1995.
Management believes the Company could achieve greater sales
results if it had sufficient working capital. Historically, working
capital had been made available by shareholder and director loans and
the availability of a limited overdraft facility provided by its bank.
Additional working capital has been provided through a Small Business
Firm Guarantee Loan from the Company's bank, guaranteed by the British
Government.
The Company has recently exhibited at major trade shows in the
USA, Canada and Europe where management met with its existing and
potential licensees in order to secure new operators of Applewoods
retail stores.
In July 1995, the Company signed a letter of intent with an
underwriter for an initial public offering of its securities.
Immediately prior to the effective date of the public offering, AI was
to acquire 100% of the stock of AIL and 100% of the stock of ALA in
exchange for 1,800,000 shares of AI. The acquisition is to be recorded
as a recapitalization of AIL, with AI as the acquirer. AI is considered
a public shell and accordingly, the transaction is not considered a
business combination. The transaction is to be accounted for as a
reverse acquisition whereby AI is considered to be the acquiree even
though legally it is the acquiror, since it issued its shares of stock
to effect the acquisition. Since this is a reverse acquisition, the
legal quiror, AI, is to continue in existence as the legal entity whose
shares represent the outstanding common stock of the combined entities.
The initial public offering was declared effective on April 10,
1996 and the acquisition of AIL and ALA was effected immediately prior
to this date. Details of the offering are contained in the Notes to the
Financial Statements.
Page 8
<PAGE>
APPLEWOODS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Result of Operations
Three months ended March 31, 1996 Compared to Three months ended March
31 , 1995
The Company's revenues are generated from the initial fee
charged to its retail store licensees for the design and fixturing of
the retail space ["shopfitting revenue"] and from the sale of products
to these licensees. Total revenues decreased by 3.4% to $643,918 for
the three months ended March 31, 1996 from $666,453 for the three
months ended March 31, 1995. Within this, shopfitting revenue decreased
by 72.4% to $60,915. This was a result of the standstill in shopfitting
activity due to potential licencees waiting for the outcome of the
public offering. Product sales, however, increased by 30.7% over the
previous year, essentially due to the increased number of shops.
The gross profit for the three months ended March 31, 1996 was
$198,426 compared to $237,441 for the three months ended March 31,
1995. The gross profit percentage for the three months ended March 31,
1996 declined by approximately 5% to 31% . This was a result of the
lack of activity in shopfitting which recorded no gross margin at all,
while product sales gross margin increased by 3% to 41%.
Selling, general and administrative expenses increased to
$691,487 in the three months ended March 31, 1996 from $321,232 in the
three months ended March 31, 1995. This increase of 115% reflects an
increase in administrative salary and consulting expenses. During the
three months ended March 31, 1996, the Company recognized $240,000 of
non-cash consulting expense related to two new consulting agreements
which commenced in October 1995.
Interest expense for the three months ended March 31, 1996
increased by $2,407 or 3.5% from the three months ended March 31, 1995.
This reflects the similarity in the level of borrowings in the two
periods.
Result of Operations
Nine months ended March 31, 1996 Compared to Nine months ended March
31 , 1995
The Company's revenues are generated from the initial fee
charged to its retail store licensees for the design and fixturing of
the retail space ["shopfitting revenue"] and from the sale of products
to these licensees. Total revenues increased by 10.7% to $3,011,710 for
the nine months ended March 31, 1996 from $2,720,479 for the nine
months ended March 31, 1995. Within this, shopfitting revenue increased
by 2.6% to $637,512, while product sales increased by 13.1% over the
corresponding period, essentially due to the increased number of shops.
The gross profit for the nine months ended March 31, 1996 was
$1,076,074 compared to $976,505 for the nine months ended March 31,
1995. The gross profit percentage for the nine months ended March 31,
1996 remained approximately the same at 36% . The lack of activity in
Shopfitting in the last quarter caused that margin to decline from 37%
to 30%, while product margin increased from 36% to 37%.
Selling, general and administrative expenses increased to
$1,738,026 in the nine months ended March 31, 1996 from $984,932
in the nine months ended March 31, 1995. This increase of 76%
reflects an increase in administrative salary and consulting
expenses. During the nine months ended March 31, 1996, the
Company recognized $480,000 of non-cash consulting expense
related to two new consulting agreements which commenced in
October 1995.
Interest expense for the nine months ended March 31, 1996
increased by $30,685 or 15.2% from the nine months ended March 31,
1995. The increse is due principally to interest on new debt
outstanding during the nine months ended March 31, 1996.
Page 9
<PAGE>
APPLEWOODS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Result of Operations [Continued]
The Company has entered into various notes and/or agreements
pursuant to which it will incur material non-recurring charges.
Interest expense in relation to the issuance of rights to acquire
shares to bridge lenders for the value of those underlying shares in
the amount of $1,440,000, will be included in the statement of
operations of the Company for the year ended June 30, 1996.
The Company has agreed to retain the Underwriter of its public
offering as consultants for a period of three years and to compensate
the Underwriter for those consulting services in the amount of
$100,000. Compensation expense of $100,000 will be recognized over the
term of the agreement and will be included in the statement of
operations of the Company for the years ended June 30, 1996, 1997, 1998
and 1999 in the approximate amount of $14,000, $33,000, $33,000 and
$20,000, respectively.
.
Liquidity and Capital Resources
Nine months ended March 31, 1996 Compared to Nine months ended March
31, 1995
At March 31, 1995, the Company's working capital was $1,140,821
During the nine months ended March 31, 1996, the Company used
cash of approximately $505,000 to fund operations. Contributing to this
use of cash was a net loss for the nine months ended March 31, 1996 of
approximately $890,000 and an increase in the Company's accounts
receivable of approximately $279,000 resulting from the increase in
revenues during the nine months ended March 31, 1996. These uses of
cash were offset by an adjustment to the Company's net loss of $480,000
representing a non-cash consulting expense recorded by the Company
during the nine months ended March 31, 1996.
During the nine months ended March 31, 1996, the Company
utilized cash of approximately $56,000 for capital expenditures.
Certain equipment was sold during the nine months ended March 31, 1996
generating cash proceeds of $21,433.
The Company financed its use of cash for operations primarily
through bridge loans. In September and October 1995, bridge financing
totaling $500,000, was received.
In September and October 1995, the Company borrowed an aggregate
of $500,000 from certain lenders [the "Bridge Lenders"]. In exchange
for making loans to the Company, each Bridge Lender received (i) a
promissory note [each a "Bridge Note"] and (ii) the right, commencing
on the Effective Date of AI's proposed public offering ["Effective
Date"], to receive a number of Units ["Bridge Units"] equal to sixty
four percent [64%] of the dollar amount of the loan made by the Bridge
Lender to the Company. Each Bridge Lender also received the right
commencing on the Effective Date to receive a number of Class B
Warrants equal to the number of Bridge Units. Each of the Bridge Notes
bears interest at the rate of eight percent [8%] per annum. The Bridge
Notes are due and payable upon the earlier of (i) June 30, 1996 and
(ii) the closing of any initial public offering of AI's securities.
Each Class B Warrant is identical to each Class A Warrant, except that
the exercise price of each Class B Warrant is $10.00 per share.
In April 1996, certain of the bridge lenders exercised their
right to convert their Class A Warrants into 176,000 shares of Common
Stock in the Company.
Page 10
<PAGE>
APPLEWOODS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources [Continued]
Since the purchase of the business by the present owners, the
stockholders and directors have made loans to the Company totaling
$2,641,500, of which $765,000 is in the form of a debenture loan. These
financing transactions have provided the Company with resources to fund
operations, prior to the public offering.
The Company has a continuing cash requirement to fund its
expansion in the range of products it can offer and to increase
inventory to meet the demand of its seasonal retail market. The Company
has historically experienced seasonable fluctuations in its revenues.
Typically, the Company experiences higher sales in the second fiscal
quarter due to the holiday season. In the year ended June 30, 1995,
33.8% of total sales were made during the two months of October and
November. It is anticipated that such a seasonal trend will continue.
If for any reason the Company's sales were below seasonal norms for the
late fall or early winter, the Company's annual results could be
adversely affected.
The Company's sales and marketing efforts are focused on
expanding the number of shops and increasing the sales of products at
each location. Management believes that the Company's existing markets,
which are global, will provide for substantial expansion. Additionally,
a portion of the proceeds from the public offering will be used to
expand the Company's product lines which management believes will
result in increased product sales and the ability to compete more
aggressively with specialty retailers.
The Company believes that it has a diverse and stable market.
The Company is not economically dependent on any suppliers or any
customers. While its shops are geographically dispersed, the Company
conducts all transactions in its local currency [British pound
sterling] eliminating foreign currency risks. Additionally, all of its
export business is insured providing further insulation from risk. The
Company does not believe that there are any governmental, economic,
fiscal, monetary or political factors related to its export sales which
could materially affect its financial condition or the results of its
operations.
Management believes that the net proceeds of the public offering
of common stock should be sufficient to conduct operations for at least
eighteen months. Proceeds will be utilized to repay approximately
$325,000 of related party debt and the $500,000 bridge financing that
was utilized in the nine months ended March 31, 1996 for working
capital. A substantial portion of related party debt, approximately
$2,316,000, is to be either cancelled and contributed to capital or
converted to preferred stock.
Impact of Inflation
Inflation has not been a major factor in the Company's business
since inception. There can be no assurances that this will continue.
Page 11
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
[a] Exhibits as required by Item 601 of Regulation S-K:
None Required
[b] Reports on Form 8-K
None filed during the quarter for which this form is submitted.
Page 12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
APPLEWOODS, INC.
Date: May 24, 1996
By: /s/ Terence McAuley
-------------------------------
Terence McAuley,
Chief Financial Officer
Page 13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>