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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended March 31, 1999 Commission File Number 0-26056
- ----------------------------------- ------------------------------
IMAGE SENSING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1519168
- ------------------------------- ----------------------------------
State of other jurisdiction of I.R.S. Employer Identification No.
incorporation organization
500 SPRUCE TREE CENTRE
1600 UNIVERSITY AVE. W.
ST. PAUL, MN 55104-3825
(Address of principal executive offices)
Registrant's telephone number, including area code: (651) 603-7700
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 ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $.01 Par Value -- 2,479,200 shares as of May 5, 1999.
-------------------------------------------------------------------
<PAGE>
IMAGE SENSING SYSTEMS, INC.
INDEX
PART I. FINANCIAL INFORMATION Page No.
--------
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets
March 31, 1999 and December 31, 1998 4
Condensed Consolidated Statements of Operations
Three-month periods ended March 31, 1999 and 1998 5
Condensed Consolidated Statements of Cash Flows
Three-month periods ended March 31, 1999 and 1998 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition 8
PART II. OTHER INFORMATION
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
SAFE HARBOR STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report on Form 10-QSB contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements involve risks and uncertainties that may cause
the Company's actual results to differ materially from the results discussed in
the forward-looking statements. Factors that might cause such differences
include, but are not limited to, lack of market acceptance of the Company's
products; dependence on third parties for manufacturing and marketing
capabilities and continuing ability to pay royalties owed; inability of the
Company to diversify its product offerings; revenue fluctuations caused by the
Company's dependence on sales to governmental entities; failure of the Company
to secure adequate protection for the Company's intellectual property rights;
failure of the Company to respond to evolving industry standards and
technological changes; inability
2
<PAGE>
of the Company to properly manage growth in revenues and/or production
requirements; inability of the Company to meet its future additional capital
requirements; and control of the voting stock by insiders. The forward-looking
statements are qualified in their entirety by the cautions and risk factors set
forth in Exhibit 99, under the caption "Cautionary Statement," to this Quarterly
Report.
3
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
IMAGE SENSING SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------ ------------
ASSETS (Unaudited) (Note)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,561,000 $ 1,326,000
Accounts receivable 1,026,000 1,402,000
Inventories 54,000 74,000
Prepaid expenses 102,000 32,000
Deferred income taxes 57,000 57,000
------------ ------------
Total current assets 2,800,000 2,891,000
Property and equipment, net 443,000 470,000
Other assets:
Capitalized software development costs, net 824,000 856,000
Deferred income taxes 318,000 318,000
Other 88,000
------------ ------------
1,230,000 1,174,000
------------ ------------
Total Assets $ 4,473,000 $ 4,535,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 342,000 $ 296,000
Accrued compensation 190,000 270,000
Deferred income 89,000 252,000
------------ ------------
Total current liabilites 621,000 818,000
Deferred income tax liability 366,000 366,000
Minority interest 80,000
Shareholders' equity:
Common stock 25,000 25,000
Additional paid-in capital 3,890,000 3,890,000
Retained earnings (deficit) (509,000) (564,000)
------------ ------------
3,406,000 3,351,000
------------ ------------
Total liabilities and shareholders' equity $ 4,473,000 $ 4,535,000
============ ============
</TABLE>
Note: The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes
4
<PAGE>
IMAGE SENSING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three-Month Period Ended
March 31
-----------------------------
1999 1998
-----------------------------
<S> <C> <C>
REVENUE:
Product sales $ 334,000 $ 275,000
Royalties 760,000 470,000
Consulting services 62,000 13,000
-----------------------------
1,156,000 758,000
COSTS OF REVENUE:
Product sales 160,000 153,000
Royalties 82,000 53,000
Consulting services 22,000 3,000
-----------------------------
264,000 209,000
-----------------------------
Gross profit 892,000 549,000
OPERATING EXPENSES:
Selling, general and administrative 664,000 577,000
Research and development 189,000 --
-----------------------------
853,000 577,000
-----------------------------
Income (loss) from operations 39,000 (28,000)
Other income, net 16,000 29,000
-----------------------------
Income before income taxes 55,000 1,000
Income taxes -- --
-----------------------------
Net income $ 55,000 $ 1,000
=============================
Net income per common share-basic and diluted $ 0.02 $ 0.00
=============================
Weighted average number of common
shares outstanding:
Basic 2,479,000 2,478,000
=============================
Diluted 2,531,000 2,478,000
=============================
</TABLE>
See accompanying notes
5
<PAGE>
IMAGE SENSING SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three-Month Period Ended
March 31
------------------------------
1999 1998
------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 55,000 $ 1,000
Adjustments to reconcile net income to
net cash provided by operating activities 217,000 533,000
------------------------------
Net cash provided by operating activities 272,000 534,000
INVESTING ACTIVITIES:
Purchase of property and equipment (27,000) (12,000)
Other (10,000) --
Capitalized software development costs -- (259,000)
------------------------------
Net cash used in investing activities (37,000) (271,000)
FINANCING ACTIVITIES: -- --
------------------------------
Increase in cash and cash equivalents 235,000 263,000
Cash and cash equivalents, beginning of period 1,326,000 2,000,000
------------------------------
Cash and cash equivalents, end of period $ 1,561,000 $ 2,263,000
==============================
</TABLE>
See accompanying notes
6
<PAGE>
IMAGE SENSING SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1999
Note A: Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for interim
financial information and with the instructions to Form 10-QSB. 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 management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three-month period ended March 31, 1999 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1999. For further information, refer to the financial statements and footnotes
thereto for the year ended December 31, 1998.
7
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Three Month Period Ended March 31, 1999)
Revenues for the first quarter of 1999 were $1,156,000 up 53% from $758,000 for
the same period a year ago. The increase in first quarter revenues was due
primarily to more sales of Autoscope(R) systems by both Image Sensing Systems,
Inc. (ISS) and its majority owned subsidiary and by its North American
distributor, Econolite Control Products, Inc. Econolite reported a significant
sale that represented a 33 system extension of an existing project in Michigan.
Asian sales were also better than expected with 12 units sold in the first
quarter of 1999 compared to no sales in the first quarter of 1998.
Gross profits were $892,000 in the first quarter of 1999, or 77% of revenue,
compared to $549,000, or 72% of revenue, for the same period a year ago. The
increased margin in 1999 was due primarily to proportionately more revenue from
royalties, which have significantly higher gross profit margins than product
sales or consulting services.
Selling, general and administrative expenses were $664,000 for the first quarter
of 1999 compared to $577,000 for the same period a year ago. The increase was
due primarily to increased efforts in business development.
Research and development expenses were $189,000 in the first quarter of 1999
compared to none for the same period a year ago. The increase resulted because
all development efforts in the first quarter of 1998 were directed toward
software development for the new Autoscope Solo product with associated costs
capitalized in accordance with Statement of Financial Accounting Standards No.
86.
Other income, net was $16,000 in the first quarter of 1999 compared to $29,000
for the same period a year ago. The decrease resulted due to a decrease in
interest bearing cash equivalents during the first quarter on 1999.
The Company expects to avail itself of operating loss and research and
development tax credit carryforwards and incur no income tax expense in 1999.
Liquidity and Capital Resources:
Cash provided by operating activities was $272,000 for the first quarter of
1999, compared to $534,000 for the same period in 1998. The reduced cash flow
from operations in the first quarter of 1999 was primarily due to an unusually
large collection on accounts receivables for the first quarter of 1998 compared
to 1999.
8
<PAGE>
Capital expenditures were $27,000 for the first quarter of 1999, compared to
$12,000 for the same period in 1998. The Company does not expect to make
significant changes to the level of investments in capital expenditures for the
balance of 1999. The Company is no longer incurring software development costs
that should be capitalized, whereas $259,000 in such costs were incurred in the
first quarter of 1998.
Management believes that its cash and investment position, anticipated cash
flows from operations, and funds available through its bank line of credit will
be sufficient to meet working capital requirements for current operations and
planned new product introductions for the foreseeable future.
Impact of the Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Some computer programs
that have date-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. All of the software produced by the Company has
been analyzed and the Company is not aware of any potential for date recognition
problems in its products. However, the Company also uses off-the-shelf software
(Administrative Software) produced by third parties for use in administrative
functions such as word processing, network administration, voice mail messaging,
billing and record keeping. In the event that any of such programs are
susceptible to date recognition problems, this could result in a system failure
or miscalculations causing disruption of operations, including, among other
things, intra-company communications, preparation of invoices and collection of
accounts receivables, and many other normal business activities.
The Company has made every attempt to identify all relevant software that may
affect the Company's operations through surveys and examination. Based on risk
assessments that have been completed for the majority of the Company's
operations, the Company must replace some of its Administrative Software so that
its computer systems will properly utilize dates beyond December 31, 1999. The
Company expects to convert its business operations to Year 2000 compatible
software during the first half of 1999 by a combination of conversion to new
software and upgrading existing software. The cost of these conversions is
expected to be less than $20,000. However, there can be no guarantee that the
Administrative Software on which the Company's systems rely will be timely
converted, or that a failure to convert by another company, or a conversion that
is incompatible with the Company's systems, would not have a material adverse
effect on the Company.
9
<PAGE>
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed as part of this quarterly report on
Form 10-QSB for the quarterly period ended March 31, 1999:
27 Financial Data Schedule
99 Cautionary Statement
(b) Reports
No reports on Form 8-K were filed during the quarter covered by this
Form 10-QSB
10
<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.
Image Sensing Systems, Inc.
----------------------------------------
(Registrant)
Dated: May 14, 1999 /s/ William L. Russell
----------------------------------------
William L. Russell
President and Chief Executive Officer
(principal executive officer)
Dated: May 14, 1999 /s/ Arthur J. Bourgeois
----------------------------------------
Arthur J. Bourgeois
Chief Financial Officer
(principal financial and accounting officer)
11
EXHIBIT 99
CAUTIONARY STATEMENT
Image Sensing Systems, Inc. (the Company), or persons acting on behalf
of the Company, or outside reviewers retained by the Company making statements
on behalf of the Company, or underwriters, from time to time make, in writing or
orally, "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. When used in conjunction with an identified
forward-looking statement, this Cautionary Statement is for the purpose of
qualifying for the "safe harbor" provisions of such sections and is intended to
be a readily available written document that contains factors which could cause
results to differ materially from such forward-looking statements. These factors
are in addition to any other cautionary statements, written or oral, which may
be made or referred to in connection with any such forward-looking statement.
The following matters, among others, may have a material adverse effect
on the business, financial condition, liquidity, results of operations or
prospects, financial or otherwise, of the Company. Reference to this Cautionary
Statement in the context of a forward-looking statement or statements shall be
deemed to be a statement that any or more of the following factors may cause
actual results to differ materially from those in such forward-looking statement
or statements:
MARKET ACCEPTANCE OF AUTOSCOPE SYSTEM. The success of the Company is dependent
upon increasing acceptance of its Autoscope system vehicle detection system in
the markets in which that product is sold. The application of machine vision
technology to traffic management is a relatively new concept in the traffic
management industry. A substantial portion of the Company's revenues to date has
been from royalties from sales of the Autoscope system for deployment in
conjunction with federally funded ITS programs or for evaluation purposes. The
Company's future results of operations and immediate prospects for future growth
will depend in large part on the continued development of the market for
advanced technology solutions for traffic management and the acceptance of the
Autoscope system as a reliable, cost-effective alternative to traditional
vehicle detection systems. There is no assurance that the Autoscope system will
gain sufficient market acceptance to enable the Company to sustain profitable
operations.
DEPENDENCE ON THIRD PARTIES FOR MANUFACTURING AND MARKETING. The Company does
not have and does not in the near future intend to develop the capability to
manufacture its products. Pursuant to the Econolite Agreement, the Company
appointed Econolite as its licensee to manufacture, distribute and sell the
Autoscope system and related technology on an exclusive basis in North America
and the Caribbean. Pursuant to the Cohu Production Agreement, the Company
appointed Cohu to manufacture the Autoscope Solo product. The Company believes
that alternative manufacturing sources could be obtained, if necessary, but the
inability to obtain alternative sources, if and as required in the future, could
result in delays or reductions in product shipments which in turn may have an
adverse effect on the Company's operating results. In addition, Econolite has
the
<PAGE>
exclusive right to market the Autoscope system and related products in North
America and the Caribbean. Consequently, the Company's revenues depend to a
significant extent on the marketing efforts of Econolite. The inability of
Econolite to adequately manufacture or effectively market the Autoscope system,
or the disruption or termination of that relationship could have a material
adverse effect on the Company's operations.
DEPENDENCE ON PRIMARY DISTRIBUTOR. Pursuant to the Econolite Agreement,
Econolite pays a royalty to the Company for sales of Autoscope systems. Since
1991, over sixty percent of the Company's revenue has been from royalties
resulting from sales made by the Company's primary distributor, Econolite.
Although Econolite has consistently made payments to the Company when due and
although the Company has no reason to believe that Econolite will not continue
to do so in the future, there can be no assurance that Econolite will continue
to make such payments in a timely manner, whether due to financial insolvency,
liquidity problems or other reasons. The inability of Econolite to make such
payments could have a material adverse effect on the Company's financial
condition and operations.
DEPENDENCE ON ONE PRODUCT. Over eighty percent of the Company's revenues since
inception have been generated from sales of, or royalties from the sale of, the
Autoscope system. The Autoscope system is currently the Company's only product
sold commercially. The Company expects the Autoscope system to gain greater
market acceptance and the number of applications for the system to increase.
There can be no assurance, however, that a significant sustainable market will
develop for the Autoscope system or that the Company will be able to profitably
utilize its technology in other products or markets.
DEPENDENCE ON SALES TO GOVERNMENTAL ENTITIES; PERIODIC FLUCTUATIONS IN SALES.
Sales of the Autoscope system are made primarily to governmental entities.
Purchase decisions by governmental entities often take considerable time, and
there can be no assurance that, notwithstanding the marketing efforts by the
Company or Econolite, such purchase decisions will not be substantially delayed
and adversely affect the Company's business operations. Until broader market
acceptance of the Autoscope system is achieved, revenues and royalties from
sales of the Autoscope system will come substantially from sales to governmental
entities for use in large traffic control projects using advanced traffic
control technologies. It often takes considerable time before these projects are
developed to the point where an actual purchase of the Autoscope system is made.
Once a governmental entity decides to purchase the Autoscope system, however, it
will often purchase a significant number. Consequently, the Company's revenues
and income may fluctuate significantly between fiscal periods. Moreover, there
can be no assurance that, once market acceptance of the Company's technology is
obtained, governmental budgetary constraints in the U.S. and elsewhere will not
delay or decrease purchases of the Company's product by such entities.
PATENTS AND PROPRIETARY RIGHTS. The Company's success depends in part on its
ability to maintain its proprietary rights in the technology underlying the
Autoscope system. The Company relies on a combination of trade secrets,
copyrights and patents to protect its
2
<PAGE>
proprietary rights in the system. The U.S. and foreign patents for certain
aspects of the underlying technology for the Autoscope system are owned by the
University of Minnesota. The Company has entered into a license agreement with
the University of Minnesota, pursuant to which the Company has been granted an
exclusive, worldwide license, with a right to grant sub-licenses, to make, have
made, use, sell and lease products incorporating such technology, and the
Company pays the University a royalty for the license. The University of
Minnesota may terminate the license only in limited circumstances. Nevertheless,
termination of the license agreement with the University of Minnesota for
whatever reason, could have a material adverse effect on the Company's
operations. The Company has not applied for patent protection in all foreign
countries in which it may market and sell the Autoscope system. Consequently,
the Company's proprietary rights in the technology underlying the Autoscope
system will be protected only to the extent that trade secret, copyright or
other non-patent protection is available in such countries and to the extent the
Company is able to enforce such rights. No assurance can be given that the scope
of current or any future patents relating to the Company's product will exclude
competitors or provide competitive advantages to the Company or that the current
patent on the technology underlying the Autoscope system will be held valid if
subsequently challenged. There can be no assurance that others have not
developed or will not develop similar products, duplicate any of the Company's
products or design around such patents. Litigation, which could result in
substantial cost to and diversion of effort by the Company, may be necessary to
enforce patents related to the Company's products, to defend the Company against
claimed infringement of the rights of others or to determine the ownership,
scope or validity of the proprietary rights of the Company and others. The
Company also relies on trade secrets to protect technology not covered by
patent. The Company has entered into confidentiality agreements with its
employees, consultants and others, however, there can be no assurance that
confidentiality obligations will be honored or that the Company's trade secrets
will not otherwise become known or independently developed by competitors.
TECHNOLOGICAL RISK. The Company believes that the Autoscope system is the most
advanced and adaptive technology commercially available for vehicle detection,
and the market served by the Company is increasingly seeking advanced
technological solutions to traffic management and control problems.
Consequently, competitive product developments, introductions and enhancements
are increasing. There can be no assurance that developments by current or future
competitors of the Company will not render the Company's products or
technologies noncompetitive or obsolete.
MANAGEMENT OF GROWTH. The Company intends to increase its Asian operations and
intensify its marketing efforts and distribution arrangements in Asia through
its sixty-percent owned affiliate. If the Company's increased marketing efforts
are successful and its expansion occurs, the Company may experience a period of
significant growth. This growth and expansion could place a significant strain
on the Company's resources, including working capital resources, and result in
an increase in the level of responsibility of the Company's management
personnel. The Company's ability to manage its growth effectively will require
it to continue to improve its operational, financial and management systems, and
to successfully train, motivate and manage its employees. If
3
<PAGE>
the Company's management is unable to manage its growth effectively, the
Company's results of operations could be materially adversely affected. While
the Company believes that it can manage such growth, there can be no assurances
that it will be able to do so.
CONTROL BY EXISTING SHAREHOLDERS. As of December 31, 1998, directors and
executive officers of the Company owned beneficially approximately 54.5% of the
Company's outstanding Common Stock. Accordingly, these shareholders may be able
to influence the outcome of shareholder votes, including votes concerning the
election of directors and the outcome of corporate actions requiring shareholder
approval, such as mergers and acquisitions, regardless of how other shareholders
of the Company may vote. This concentration of voting control may have a
significant effect in delaying, deferring or preventing a change in management
or change in control of the Company and may adversely affect the voting or other
rights of other holders of Common Stock.
YEAR 2000 ISSUE. Many currently installed computer systems and software are
coded to accept only two-digit entries in the date code fields. These date code
fields will need to accept four-digit entries to distinguish 21st century dates
from 20th century dates. This problem could result in system failures or
miscalculations causing disruptions of business operations (including, among
other things, a temporary inability to process transactions, send invoices or
engage in other similar business activities). As a result, many companies'
computer systems and software will need to be upgraded or replaced in order to
comply with year 2000 requirements. The potential global impact of the year 2000
problem is not known, and, if not corrected in a timely manner, could affect the
Company and the U.S. and world economies generally.
Based on assessments to date, the Company believes it will not
experience any material disruption as a result of year 2000 problems with
respect to its products and the third-party systems the Company uses for its
internal functions, and, in any event, the Company does not anticipate the year
2000 issues it will encounter will be significantly different than those
encountered by other computer hardware and software manufacturers, including our
competitors. For example, if certain critical third-party providers, such as
those providers supplying electricity, water or telephone service, experience
difficulties resulting in disruption of service to the Company, a shutdown of
the Company's operations could occur for the duration of the disruption.
Assuming no major disruption in service from utility companies or other critical
third-party providers, the Company believes that it will be able to manage its
year 2000 transition without any material effect on the Company's results of
operations or financial condition.
4
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,561,000
<SECURITIES> 0
<RECEIVABLES> 1,041,000
<ALLOWANCES> 15,000
<INVENTORY> 54,000
<CURRENT-ASSETS> 2,800,000
<PP&E> 1,207,000
<DEPRECIATION> 764,000
<TOTAL-ASSETS> 4,473,000
<CURRENT-LIABILITIES> 621,000
<BONDS> 0
0
0
<COMMON> 25,000
<OTHER-SE> 3,381,000
<TOTAL-LIABILITY-AND-EQUITY> 4,473,000
<SALES> 334,000
<TOTAL-REVENUES> 1,156,000
<CGS> 160,000
<TOTAL-COSTS> 1,117,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 55,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 55,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,000
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
