<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(x) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2000
--------------
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period from to
----- -----
Commission file number 000-19579
INTERACTIVE NETWORK, INC.
(Exact name of registrant as specified in its charter)
California 94-3025019
(State of incorporation) (I.R.S. employer identification number)
1161 Old County Road
Belmont, California 94002
(Address of principal executive offices and zip code)
(650) 508-8793
(Registrant's telephone number, including area code)
with a copy to Robert S. Townsend
Morrison & Foerster, LLP
425 Market Street
San Francisco, California 94105
(415) 268-7000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities 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.
Yes x No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Shares outstanding as of May 2, 2000
- ----- ------------------------------------
Common Stock 39,427,605
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INTERACTIVE NETWORK, INC.
INDEX
PART I. FINANCIAL INFORMATION Page
----
ITEM 1. FINANCIAL STATEMENTS..............................................1
CONSOLIDATED BALANCE SHEETS AS OF
DECEMBER 31, 1999 AND MARCH 31, 2000 (Unaudited)................1
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1999 and 2000..............2
STATEMENTS OF CONSOLIDATED CASH FLOWS (Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1999 and 2000..............3
NOTES TO FINANCIAL STATEMENTS.....................................4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................4
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS........................................8
SIGNATURES .........................................................9
i
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<TABLE>
<CAPTION>
INTERACTIVE NETWORK, INC.
CONSOLIDATED BALANCE SHEETS AS OF AS OF
DECEMBER 31, 1999 MARCH 31, 2000
ASSETS (Unaudited)
<S> <C> <C>
Current assets
Cash $ 7,576,157 $ 6,522,298
Prepaid expenses and other current assets 81,796 82,811
----------------- -----------------
Total current assets 7,657,953 6,605,109
----------------- -----------------
INVESTMENTS -- 494,509
Total Assets $ 7,657,953 $ 7,099,618
================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable $ 614,077 $ 574,121
Accrued liabilities to officer 3,600 3,600
Other accrued liabilities -- --
----------------- -----------------
Total current liabilities 617,677 577,721
----------------- -----------------
Liabilities subject to compromise 5,015,718 4,517,732
Deferred legal fees 916,867 916,867
Shareholders' deficit
Preferred stock, no par value, 10,000,000
Shares authorized; no shares issued and
outstanding of December 31, 1999 and March 31,
2000 -- --
Common stock, no par value, 150,000,000 shares
authorized; 38,855,030 and 39,368,364 shares
issued and outstanding as of December 31, 1999
and March 31, 2000, respectively 142,374,180 142,865,807
Accumulated deficit (141,267,119) (141,778,509)
----------------- -----------------
Total shareholders' equity 1,107,691 1,087,298
----------------- -----------------
Total liabilities and shareholders equity $ 7,657,953 $ 7,099,618
================= =================
</TABLE>
1
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<TABLE>
<CAPTION>
INTERACTIVE NETWORK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED MARCH 31,
----------------------------------------
1999 2000
---- ----
----------------------------------------
<S> <C> <C>
Revenues: $ -- $ --
General and administrative expenses:
Salaries 40,250 65,641
Employer payroll taxes 3,710 5,592
Contract labor 25,600 25,670
Rent 1,100 2,066
Other administrative costs 33,346 77,757
Accounting fees 255,000 37,318
Advisory fees -- 390,000
Legal - NTN litigation 7,620 4,769
Shareholder relations - proxy 30,862 3,883
Payroll taxes - Q395 6,252 --
----------------- -----------------
Total G&A expenses 403,740 612,696
Reorganization items:
Professional fees 634,179 105,522
U.S. Trustee quarterly fees 500 750
----------------- -----------------
Total reorganization items 634,679 106,272
----------------- -----------------
Loss from operations 1,038,419 718,968
Interest income (expense) 2,526 (5,347)
Net profit (loss) from investment in affiliate
accounted for by the equity method -- (5,491)
Other Income -- 219,215
----------------- -----------------
Net (loss) before federal & state taxes (1,035,893) (510,590)
Federal & state income taxes 800 800
----------------- -----------------
Net profit (loss) $ (1,036,693) $ (511,390)
================== ==================
</TABLE>
2
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<TABLE>
INTERACTIVE NETWORK, INC.
STATEMENTS OF CONSOLIDATED CASH FLOWS
(UNAUDITED)
<CAPTION>
--------------------------------------
THREE MONTHS ENDED MARCH 31,
--------------------------------------
1999 2000
---- ----
--------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,036,693) $ (511,390)
Adjustments to reconcile net loss to net cash provided by (used for)
operating activities:
Reorganization expenses 845,400 105,521
Changes in assets and liabilities:
Accounts payable 255,000 (40,970)
Taxes payable 800 --
Other accrued liabilities (211,221) (603,509)
---------------- ----------------
Cash provided by (used in) operating activities: (146,714) (1,050,348)
================ ================
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in TWIN Entertainment Inc. -- (494,509)
--------------- ----------------
Cash provided by (used in) investing activities: -- (494,509)
=============== ================
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of common stock 2,106 --
--------------- ----------------
Exercise of options -- 490,997
--------------- ---------------
Cash provided by (used in) financing activities: 2,106 490,997
================ ===============
NET DECREASE IN CASH $ (144,608) $ (1,053,860)
CASH:
Beginning of period 300,601 7,576,158
End of period 155,993 6,522,298
</TABLE>
3
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INTERACTIVE NETWORK, INC.
Notes to Unaudited Consolidated Financial Statements
March 31, 2000
The consolidated financial information of Interactive Network, Inc. (the
"Company") furnished herein reflects all adjustments, consisting only of normal
recurring adjustments which in the opinion of management are necessary to
present fairly the financial position of the Company as of March 31, 2000 and
the results of its operations and cash flows for the periods presented. This
Quarterly Report on Form 10-Q should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-K Report for the
year ended December 31, 1999 filed with the Securities and Exchange Commission
("SEC") on April 14, 2000. The results of operations for the three-month period
ended March 31, 2000 are not necessarily indicative of the results for any
subsequent quarter or for the entire year ending December 31, 2000.
Long Term liabilities consists of professional fees and expenses incurred in
connection with the Company's Chapter 11 bankruptcy proceedings. Payment of
these fees, which is subject to Bankruptcy Court approval, has been deferred by
this agreement until April 22, 2000, when payment is due in full without
interest. This amount, as well as the amount of professional accounting fees,
are subject to reduction by the Bankruptcy Court.
INVESTMENT IN AFFILIATE. The Company owns 50% of the outstanding capital stock
of TWIN Entertainment, Inc. ("TWIN Entertainment"), a corporate joint venture
between the Company and Two Way TV. TWIN Entertainment's offices are located at
50 Francisco Street, Suite 490, San Francisco, California 94111. TWIN
Entertainment operates in the United States and Canada using technology licensed
by the Company and Two Way TV.
The amount of losses that represents the consolidated expenses of TWIN
Entertainment for the period from January 31, 2000 (inception) through March 31,
2000, accounted for by the equity method, was $5,491.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Conditions and Results of Operations
contained in the Company's Annual Report for the year ended December 31, 1999,
filed with the SEC on April 14, 2000. The discussion of the Company's current
business and future expectations under this item contain forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ significantly from the results discussed in the forward-looking
statements. Factors that might cause such differences include, but are not
limited to, those discussed in the subsection entitled "Forward Looking
Statements" below and in the section "Factors Affecting Future Operating Results
from Item 1 of the Company's 10-K for the fiscal year ended December 31, 1999,
incorporated herein by reference.
OVERVIEW
Our company was originally founded to provide interactive television services,
which we began providing in 1991. We incurred significant expenses in
developing, testing and marketing our services, and were forced to curtail our
operations by August, 1995, due to lack of ongoing financing. While in
operation, we acquired key strategic investors such as TCI Cable (now a part of
AT&T), NBC, Gannet, Motorola, Sprint, and AC Nielson.
Today, we own certain intellectual property assets related to the interactive
television market and other interactive technology. Our prior strategic
investors remain as our stockholders and our current management is confident in
its strategy to deliver stockholder value by marketing our intellectual property
and by working to enhance and develop our patent portfolio. We plan to
concentrate on exploiting our patent portfolio in a cost effective way through
licenses, joint ventures, strategic alliances, or other methods that will not
involve large overhead demands.
4
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To provide the technical and management expertise to assist in the fulfillment
of our goals, we established an advisory panel of consultants and re-employed
our former Chief Scientist, Dr. Robert Brown. Further, our management is
planning to hire additional personnel to meet our anticipated future needs. Our
bankruptcy reorganization plan has been approved by the Bankruptcy Court and we
continue to expend significant resources in litigating disputed claims. In
addition, we expend significant resources in the enforcement of our intellectual
property rights. Our management believes that our intellectual property assets
put our company in a position to be a part of the interactive content and
interactive services businesses currently being created.
On January 31, 2000, we consummated the formation of a joint venture company,
TWIN Entertainment Inc. ("TWIN Entertainment"), to be co-managed by us and Two
Way TV Limited ("Two Way TV") under the terms of a Joint Venture and Stock
Purchase Agreement dated as of December 6, 1999. A Form 8-K Report regarding
this matter was filed with the Commission on February 11, 2000 and is
incorporated herein by reference. We currently expect that TWIN Entertainment
will develop, market and supply digital (as well as analog) interactive and
related services, products and technology in the United States and Canada. We
have licensed TWIN Entertainment the non-exclusive use of our patents and other
intellectual property for the United States and Canada. Two Way TV also licensed
to TWIN Entertainment certain technology on a non-exclusive basis. Additionally,
as part of the agreements with Two Way TV to create TWIN Entertainment, we
entered into a separate worldwide license agreement that exclusively licenses
our intellectual property in countries other than the United States and Canada
to Two Way TV.
We hope that TWIN Entertainment, which will initially be jointly managed by us
and Two Way TV, will use our and Two Way TV's technology to become an active
participant in the interactive television market. As part of our agreements with
Two Way TV, we have agreed to seek shareholder approval at our annual meeting to
make our license to TWIN Entertainment exclusive, at which time Two Way TV's
license to TWIN Entertainment will also become exclusive.
OTHER CONTINGENCIES AND COMMITMENTS:
There have been no changes in the discussion of "Other Contingencies and
Commitments" since the Company's discussion of that subject in its Annual Report
for the year ended December 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
We consummated a settlement agreement with our secured senior noteholders and
have paid all undisputed claims under our confirmed plan of reorganization.
$39,072,949 in principal and accrued interest of our outstanding indebtedness
was converted at $5.00 per share into 7,814,589 shares of our common stock.
Liens on our patent portfolio and other assets were released, and the
noteholders paid $10 million plus accrued interest to us. A substantial portion
of the proceeds received from the noteholders was allocated to pay creditors and
a large portion of those funds were set aside in a reserve account for the
payment of creditors whose claims we are continuing to dispute. As of March 31,
2000, the balance of these reserved funds was $6.1 million. Material claims of
over $6 million still exist. The amount of funds available to us after
resolution of contested claims with creditors will depend on the extent to which
we are successful in substantially reducing, defeating or deferring payment of
the claims we are contesting. In the event we are not successful in defeating,
substantially reducing or deferring payment of these claims by creditors, our
working capital requirements would need to be satisfied in part by external
sources of financing to the extent revenues from exploitation of our patent
portfolio are not sufficient.
In addition, our available working capital as of December 31, 1999 was
approximately $1.1 million and our budget for 2000 contains expenses of
approximately $3.6 million, including repayment of approximately $917,000 of
debt due in 2000, our increased funding of $390,000 to our bankruptcy trust for
disputed claims, and payments made to and reserved for TWIN Entertainment
operations of $1 million. We currently expect revenues in 2000 to be
insufficient to meet budgeted needs for cash and are in negotiations to secure
outside sources of financing. In the event we do not secure adequate financing,
our ability to meet our working capital needs could be impaired.
Our current business plan continues to be one of exploiting our patent portfolio
through licenses, joint ventures or other methods that will not impose large
overhead or capital demands on us, including our support of TWIN Entertainment's
efforts to exploit our technology. We currently expect our need for working
5
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capital for year 2000 to consist largely of general and administrative expenses,
repayment of debt due in 2000, patent development and marketing expenses of
approximately $2.6 million expected to be incurred in generating revenues from
our intellectual property assets, $1 million paid to and set aside for TWIN
Entertainment, and professional fees of approximately $120,000. We anticipate a
total operating budget of approximately $3.6 million for year 2000.
We will continue our litigation against NTN Communications, Inc. in Canada for
that company's alleged infringement of our patents. We currently expect to incur
aggregate additional expenses in excess of $35,000 in connection with the
pursuit of this claim.
We recognize that we will require additional financing to meet our budgeted
needs for 2000. We have entered into agreements with two of our advisory board
members whereby they have agreed to provide up to $500,000 in the aggregate in
exchange for shares of our common stock upon our request. We are also seeking
other additional sources of financing.
RESULTS OF OPERATIONS
REVENUES. During the quarters ended March 31, 2000 and 1999, the Company
realized no revenues.
GENERAL AND ADMINISTRATIVE. General and administrative expenses primarily
consist of payroll and related expenses and fees for executive and
administrative personnel, insurance, independent contractor, accounting, audit
and general legal fees and other corporate expenses. General and administrative
expenses for the quarter ended March 31, 2000 increased to $612,696 from the
$403,740 of expenses incurred in the same period in 1999. This increase of
$208,956 was due primarily to expenses incurred in connection with our advisory
board members in 2000 offset by reduced audit fees for 2000 (due to a change in
auditors and the fact that the prior year audit expenses included audit fees for
the periods 1995-1999) and decreased shareholder relations fees (some of which
we expect to incur in the second quarter of 2000 related to our annual meeting
to be held on June 30, 2000), offset by increased salary expense and other
administrative costs.
REORGANIZATION ITEMS. Reorganization items consist primarily of legal and
trustee fees directly related to our Chapter 11 bankruptcy reorganization,
entered into as a condition to the consummation of the Settlement Agreement and
the litigation and other expenses incurred in contesting claims in our
bankruptcy reorganization, which is still ongoing. Reorganization expenses for
the quarter ended March 31, 2000 decreased to $106,272 from the $634,679 of
expenses incurred in the same period in 1999. This decrease of $528,407 was due
primarily to the fact that our bankruptcy was ongoing during the first quarter
of 1999, requiring substantially more expense, while our plan of reorganization
was approved in 1999 and the majority of claims had been settled or were pending
resolution during the first quarter of 2000.
INTEREST INCOME (EXPENSE). Interest income (expense) consists primarily of
interest earned on cash and cash equivalents held by the Company, offset by
interest accrued on the 12% Senior Secured Convertible Promissory Notes issued
to certain of our shareholders, which were converted into shares of our common
stock as part of the Settlement Agreement with certain of our shareholders. For
the quarter ended March 31, 2000, we incurred interest expense of $106,000
related to disputed claims in our bankruptcy pending resolution which was
substantially offset by $100,653 of interest earned on cash and cash equivalents
held by the Company. We had $2,526 of interest income on cash deposits for the
comparable quarter ended March 31, 1999.
OTHER INCOME. Other income consists primarily of debt-forgiveness from
negotiated settlements and checks written to unsecured creditors in our
bankruptcy which were returned for various reasons. After performing the actions
and waiting for the amount of time specified by our counsel, we have voided
these returned checks and accounted for these funds as other income. Other
income for the quarter ended March 31, 2000 was $219,215. There was no
comparable income during the same period in 1999.
NET LOSSES. During the quarters ended March 31, 2000 and 1999, the Company
incurred a net loss of $511,390 and $1,036,693, respectively. These losses
resulted primarily from expenses incurred for advisory board member expenses,
salaries, other administrative costs, and expenses related to our Chapter 11
reorganization, offset by other income accrued in 2000 as part of our Chapter 11
reorganization.
6
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FORWARD LOOKING STATEMENTS.
THE MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS SECTIONS OF THIS QUARTERLY REPORT CONTAIN FORWARD-LOOKING STATEMENTS
THAT ARE BASED ON CURRENT EXPECTATIONS, ESTIMATES, FORECASTS AND PROJECTIONS
ABOUT THE COMPANY'S FUTURE PROSPECTS, PLANS AND STRATEGIES, MANAGEMENT'S BELIEFS
AND ASSUMPTIONS MADE BY MANAGEMENT. WORDS SUCH AS "EXPECTS," "ANTICIPATES,"
"INTENDS," "PLANS," "BELIEVES," "SEEKS," "ESTIMATES," VARIATIONS ON SUCH WORDS
AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING
STATEMENTS. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND
INVOLVE CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS WHICH ARE DIFFICULT TO
PREDICT. THEREFORE, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS
DESCRIBED IN THESE FORWARD-LOOKING STATEMENTS, INCLUDING CHANGES THAT COULD
AFFECT THE VALUE OF THE COMPANY'S INTELLECTUAL PROPERTY ASSETS AND DECISIONS BY
THE BANKRUPTCY COURT IN WHICH THE COMPANY'S CHAPTER 11 PROCEEDING IS PENDING
WITH RESPECT TO ALLOWANCE OF CONTESTED CLAIMS WHICH MAY CAUSE A RESULTING
INCREASE IN POST-PETITION INTEREST ON CLAIMS AND COULD REDUCE THE COMPANY'S
ANTICIPATED WORKING CAPITAL. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE
PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION,
FUTURE EVENTS OR OTHERWISE.
7
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PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Interactive Network continues to pursue the objections it has to claims
of creditors in its Bankruptcy proceedings. As of March 31, 2000, we
have set aside $6.1 million in a reserve account to pay creditors whose
claims we are disputing, as was required as part of our reorganization.
Material claims of over $6 million exist. In the first quarter of 2000,
National Datacast, one of our largest creditors, amended its claim to
over $6.3 million from its previous $3.6 million claim. Trial on this
claim was set for April 2000, but has been vacated and a new date has
not yet been set. We expect the new date to be in or after July of this
year. In addition, David Lockton, a shareholder and our former CEO,
filed a complaint in our bankruptcy case seeking specific performance
of his alleged stock option rights and damages of $17 million. In March
2000, the Bankruptcy Court ruled that Mr. Lockton could not assert any
damage claims with respect to these stock option rights and that his
remedy, if any, must be limited to requests for specific performance.
Trial for these and other claims of Mr. Lockton is set for May 8, 2000.
We also settled the $549,320 claim of Window to the World
Communications for $315,000 in February 2000, which has been approved
by the Bankruptcy Court and paid. We also have preliminarily settled
claims of the Equitable Life Assurance Society, scheduled at $1.7
million, for $840,000, to be paid one half upon approval by the
Bankruptcy Court, and one half in equal monthly installments over the
twelve months thereafter, without interest. Bankruptcy Court approval
is pending. Finally, subject to pending Bankruptcy Court approval, we
have settled a dispute with Next Factors, Inc. Next Factors is the
assignee of the claims of a company called Draft Worldwide, Inc. We
scheduled and paid a claim for Draft of about $63,000. After the bar
date for filing proofs of claim passed, Next Factors filed a proof of
claim as assignee of Draft for a total of about $350,000 (including
pre-petition interest and the $63,000 we scheduled). The parties
disagreed on whether the proof of claim was defectively late. After
discussions and exchange of information, the parties reached the
settlement under which we will pay Next Factors $100,000 in addition to
the $63,000 previously paid in full satisfaction. Other claims remain
at issue, with settlement discussions continuing in most instances.
We continue to pursue our claims for patent infringement against NTN
Communications, Inc. in Canada and intend to litigate these claims to
full resolution.
ITEM 6. EXHIBITS
(a) Exhibits
Exhibit 27.1 Financial Data Schedule.
-----------------------
(b) Reports on Form 8-K
None
8
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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.
Date: May 14, 1999
INTERACTIVE NETWORK, INC.
(Registrant)
By: /s/Bruce W. Bauer
-------------------------------------
Bruce W. Bauer
Chairman of the Board
President and Chief Executive Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE FINANCIAL
STATEMENTS OF INTERACTIVE NETWORK, INC. FOR THE FISCAL QUARTER ENDED MARCH 31,
2000, AS PRESENTED IN ITS FORM 10-Q FOR SUCH PERIOD, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 6,522
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,605
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,100
<CURRENT-LIABILITIES> 578
<BONDS> 0
0
0
<COMMON> 142,966
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 7,100
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 719
<OTHER-EXPENSES> (219)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (510)
<INCOME-TAX> 1
<INCOME-CONTINUING> (511)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (511)
<EPS-BASIC> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
