-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HrcH0q6vCoeOSEBkCOy7knABC6TWK6nyRItHSaxWvPoNSTJNDt3bEUVQwbuPvg9O OmWQrtBfpEVGmnHzaYTgBQ== 0000927016-99-001494.txt : 19990419 0000927016-99-001494.hdr.sgml : 19990419 ACCESSION NUMBER: 0000927016-99-001494 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981031 FILED AS OF DATE: 19990416 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LYCOS INC CENTRAL INDEX KEY: 0001007992 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 043277338 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-27830 FILM NUMBER: 99595444 BUSINESS ADDRESS: STREET 1: 500 OLD CONNECTICUT PATH CITY: FRAMINGTON STATE: MA ZIP: 01701-4576 BUSINESS PHONE: 7813702700 MAIL ADDRESS: STREET 1: 400-2 TOTTEN POND ROAD CITY: WALTHAM STATE: MA ZIP: 02154 10-Q/A 1 FORM 10-Q/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended October 31, 1998 COMMISSION FILE NUMBER 0-27830 --------------------- LYCOS, INC. (Exact name of registrant as specified in its charter) DELAWARE 04-3277338 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 400-2 TOTTEN POND ROAD, WALTHAM, MASSACHUSETTS 02451-2000 (Address of principal executive offices, including Zip Code) (781) 370-2700 (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 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. X Yes No - --- --- The number of shares outstanding of the registrant's Common Stock as of November 30, 1998 was 42,942,234. LYCOS, INC. TABLE OF CONTENTS Page ---- PART I. FINANCIAL INFORMATION ITEM 1 Unaudited Condensed Consolidated Financial Statements: Condensed Consolidated Balance Sheets October 31, 1998 (Restated) and July 31, 1998................... 3 Condensed Consolidated Statements of Operations Three months ended October 31, 1998 (Restated) and 1997......... 4 Condensed Consolidated Statements of Cash Flows Three months ended October 31, 1998 (Restated) and 1997......... 5 Notes to Condensed Consolidated Financial Statements (Restated)..................................................... 7 ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations....................................... 12 PART II OTHER INFORMATION ITEM 1 Legal Proceedings............................................... 16 ITEM 2 Changes in Securities........................................... 16 ITEM 3 Defaults Upon Senior Securities................................. 16 ITEM 4 Submission of Matters to a Vote of Securities Holders........... 16 ITEM 5 Other Information............................................... 16 ITEM 6 Exhibits and Reports on Form 8-K................................ 16 Signature....................................................... 17 2 LYCOS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
OCTOBER 31, JULY 31, 1998 1998 ----------------------- ------------------ (Unaudited and Restated) (Restated) ASSETS Current assets: Cash and cash equivalents................................................ $ 140,771,169 $ 153,728,200 Accounts receivable, net................................................. 15,906,633 10,958,470 License fees receivable.................................................. 27,099,167 30,223,986 Prepaid expenses......................................................... 18,627,723 5,559,842 Other current assets..................................................... 636,352 326,292 ------------- ------------- Total current assets.................................................. 203,041,044 200,796,790 ------------- ------------- Property and equipment, less accumulated depreciation...................... 6,155,196 3,960,059 Long-term license fees receivable.......................................... 25,625,000 21,537,371 Investments................................................................ 8,427,416 8,874,568 Intangible assets, net..................................................... 227,973,842 78,787,554 Other assets............................................................... 4,809,929 3,278,994 ------------- ------------- Total assets.......................................................... $ 476,032,427 $ 317,235,336 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable......................................................... $ 3,019,042 $ 4,873,302 Accrued expenses......................................................... 15,457,660 17,277,168 Deferred revenues........................................................ 32,879,177 30,730,390 Billings in excess of revenues........................................... 800,041 681,849 Current portion of long-term debt........................................ 1,538,469 171,783 ------------- ------------- Total current liabilities............................................. 53,694,389 53,734,492 Deferred revenues.......................................................... 28,395,581 26,159,754 Long-term debt, less current portion....................................... 1,445,323 140,749 Deferred income taxes...................................................... 31,667 36,667 ------------- ------------- 29,872,571 26,337,170 Commitments and contingencies -- -- Stockholders' equity: Common stock............................................................. 433,610 389,916 Additional paid-in capital............................................... 436,889,126 278,126,582 Treasury stock, at cost.................................................. (984,595) (984,593) Deferred compensation.................................................... (104,704) (116,338) Accumulated deficit...................................................... (43,847,826) (40,251,893) Accumulated other comprehensive income................................... 79,856 -- ------------- ------------- Total stockholders' equity............................................ 392,465,467 237,163,674 ------------- ------------- Total liabilities and stockholders' equity............................ $ 476,032,427 $ 317,235,336 ============= =============
See accompanying notes to condensed consolidated financial statements. 3 LYCOS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS THREE MONTHS ENDED ENDED OCTOBER 31, OCTOBER 31, 1998 1997 ------------------- ------------------ (Restated) REVENUES: Advertising....................................................... $ 17,274,840 $ 6,409,033 Electronic commerce, license and other............................ 7,509,279 2,894,119 ------------ ----------- Total revenues................................................. 24,784,119 9,303,152 Cost of revenues.................................................... 5,300,325 1,779,382 ------------ ----------- Gross profit................................................... 19,483,794 7,523,770 Operating expenses: Research and development.......................................... 5,303,566 1,434,535 Sales and marketing............................................... 16,170,301 5,476,746 General and administrative........................................ 2,486,226 931,779 Amortization of intangible assets................................. 11,135,885 113,422 ------------ ----------- Total operating expenses....................................... 35,095,978 7,956,482 ------------ ----------- Operating loss...................................................... (15,612,184) (432,712) Interest income, net................................................ 1,896,420 540,192 Gain on sale of investments......................................... 10,119,831 -- ------------ ----------- Net income (loss)................................................... $ (3,595,933) $ 107,480 ============ =========== Basic and diluted net income (loss) per share....................... $ (0.09) $ 0.00 ============ =========== Shares used in computing net income (loss) per share: Basic.......................................................... 41,909,950 28,185,860 ============ =========== Diluted........................................................ 41,909,950 29,363,952 ============ ===========
See accompanying notes to condensed consolidated financial statements. 4 LYCOS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS THREE MONTHS ENDED ENDED OCTOBER 31, OCTOBER 31, 1998 1997 ----------------- ----------------- (Restated) OPERATING ACTIVITIES Net income (loss)................................................... $ (3,595,933) $ 107,480 Adjustments to reconcile net income (loss) to net cash used in operating activities: Amortization of deferred compensation............................. 11,634 34,196 Depreciation...................................................... 885,683 261,344 Amortization of intangible assets................................. 11,135,885 106,787 Allowance for doubtful accounts................................... (107,018) 105,021 Gain on sale of investments....................................... (10,119,831) -- Deferred income taxes............................................. (5,000) (5,000) Changes in operating assets and liabilities: Accounts receivable............................................... (2,495,311) (763,452) License fees receivable........................................... (962,810) (386,340) Prepaid expenses.................................................. (11,769,432) (548,607) Other current assets.............................................. (306,019) (695,541) Other assets...................................................... (1,505,584) -- Accounts payable.................................................. (3,442,969) 1,618,132 Accrued expenses.................................................. (3,480,814) (898,925) Deferred revenues................................................. 2,438,932 1,527,776 Billings in excess of revenues.................................... 118,192 (760,471) Due to related parties............................................ -- 5,401 ------------ ----------- Net cash used in operating activities............................... (23,200,395) (292,199) ------------ ----------- INVESTING ACTIVITIES Purchase of property and equipment.................................. (166,423) (103,145) Acquisition costs paid.............................................. (1,114,101) -- Cash proceeds from sale of investment............................... 12,158,790 -- Cash acquired through acquisitions.................................. 1,906,467 -- Investment in affiliates............................................ (1,511,951) -- ------------ ----------- Net cash provided by (used in) investing activities................. 11,272,782 (103,145) ------------ ----------- FINANCING ACTIVITIES Proceeds from exercise of stock options............................. 778,953 646,453 Proceeds from issuance of common stock under ESPP................... 82,522 -- Proceeds from note receivable....................................... 623,438 -- Payments on notes payable........................................... (2,514,331) -- ------------ ----------- Cash provided by (used in) financing activities..................... (1,029,418) 646,453 ------------ ----------- Net increase (decrease) in cash and cash equivalents................ (12,957,031) 251,109 ------------ ----------- Cash and cash equivalents at beginning of period.................... 153,728,200 40,766,258 ------------ ----------- Cash and cash equivalents at end of period.......................... $140,771,169 $41,017,367 ============ ===========
See accompanying notes to condensed consolidated financial statements. 5 LYCOS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (UNAUDITED)
THREE MONTHS THREE MONTHS ENDED ENDED OCTOBER 31, OCTOBER 31, 1998 1997 ------------------- ------------------- Schedule of non-cash financing and investing activities: Issuance of common stock upon acquisition of WhoWhere? Inc............................................... $157,994,762 $ -- Assets and liabilities recorded upon acquisition Of WhoWhere? Inc.; Accounts receivable............................................ 2,345,834 -- Prepaids....................................................... 1,302,490 -- Property and equipment......................................... 2,914,397 -- Notes receivable............................................... 623,438 -- Other assets................................................... 25,351 -- Notes payable.................................................. 5,185,591 -- Accounts payable............................................... 1,588,709 -- Accrued expenses............................................... 1,661,306 -- Deferred revenues.............................................. 1,945,682 --
See accompanying notes to condensed consolidated financial statements. 6 LYCOS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. THE COMPANY AND BASIS OF PRESENTATION Lycos, Inc., ("Lycos" or the "Company") is a global Internet navigation and community network that offers globally branded media properties and aggregated content distributed primarily through the Web. Under the "Lycos Network" brand, Lycos provides guides to online content, aggregated third-party content, Web search and directory services and community and personalization features. Lycos seeks to draw a large number of viewers to its Websites by providing multiple destinations for identifying, selecting and accessing resources, services, content and information on the Web. The Company was formed in June 1995 by CMG@Ventures L.P., a wholly-owned subsidiary of CMG Information Services. The Company operates in one industry segment, generating revenue from selling advertising, electronic commerce and licensing its products and services. The Company's fiscal year end is July 31. The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, these financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of these interim periods. Certain information and related footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although the Company believes the disclosures in these financial statements are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the Company's audited financial statements for the year ended July 31, 1998, included in the Company's Annual Report on Form 10-K/A filed with the Securities and Exchange Commission on April 16, 1999. The results of operations for the interim periods shown are not necessarily indicative of the results for any future interim period or for the entire fiscal year. Restatement Related to Acquired In-Process Technology The accompanying consolidated financial statements as of and for the year ended July 31, 1998 have been restated to reflect a change in the original accounting for the purchase price allocations related to the acquisitions of Tripod, Wisewire, Guestworld and WhoWhere?. In a letter (the "SEC Letter"), dated September 9, 1998, to the American Institute of Certified Public Accountants SEC Regulations Committee, which was made public in October, 1998, the Securities and Exchange Commission (SEC) set forth its views on purchased in-process research and development. Subsequent to the issuance of the SEC Letter the staff of the SEC has reviewed various filings of the Company. As part of this review the management of the Company and the staff of the SEC have had discussions with respect to the methods used to value purchased in-process research and development that was written off at the date of acquisition. As a result of these discussions, the Company has modified the methods used to value purchased in-process research and development in connection with the Company's acquisitions. This resulted in a reduction in the amount of charges for in- process research and development from $106,639,000 to $17,280,000 and an increase in the amounts allocated to intangible assets from $156,121,336 to $245,480,391. The restatement does not affect previously reported net cash flows for the periods. The effect of this restatement on previously reported consolidated financial statements as of and for the three months ended October 31, 1998 is as follows (in thousands except per share amounts):
Three Months Ended October 31, 1998 ------------------ Statement of Operations: As Reported Restated ----------- ----------- In-process research and Development $ 15,400 $ -- Amortization of intangibles 6,796 11,136 Loss from operations (26,673) (15,612) Net Loss (14,656) (3,596) Basic and diluted net loss per share (0.35) (0.09) October 31, 1998 July 31, 1998 ---------------- ---------------- Balance Sheets: As Reported Restated As Reported Restated ----------- ----------- ----------- ----------- Intangible assets $ 148,436 $ 227,974 $ 10,310 $ 78,788 Total Assets 396,495 476,032 248,758 317,235 Accumulated deficit (123,385) (43,848) (108,729) (40,252) Total shareholders' equity 312,928 392,465 168,687 237,164
2. REVENUE RECOGNITION The Company's advertising revenues are derived principally from short-term advertising contracts in which the Company guarantees a number of impressions for a fixed fee or on a per impression basis with an established minimum fee. Revenues from advertising are recognized as the services are performed. Electronic commerce revenues are derived principally from "slotting fees" paid for selective positioning and promotion within the Company's suite of products as well as from royalties from the sale of goods and services from the Company's Websites. The Company's license and product revenues are derived principally from product licensing fees and fees from maintenance and support of its products. Electronic commerce, license and product revenues are generally recognized upon delivery provided that no significant Company obligations remain and collection of the receivable is probable. In cases where there are significant remaining obligations, the Company defers such revenue until those obligations are satisfied. Fees from maintenance and support of the Company's products including revenues bundled with the initial licensing fees are deferred and recognized ratably over the service period. Deferred revenues are comprised of license and electronic commerce fees to be earned in the future on noncancelable agreements at the balance sheet date. 7 LYCOS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 3. INVESTMENTS The Company's investments include those in which its ownership is less than 20%, and are not majority-owned or controlled, and are recorded at cost. In March, 1998, the Company acquired a 9.9% interest in GlobeComm, Inc. (iName), a leading global provider of free Web-based e-mail products, in exchange for shares of the Company's Common Stock valued at $4.0 million at the time of the transaction. Lycos utilizes GlobeComm's e-mail products to provide free Web based e-mail to Lycos users. Additionally, in April 1998, the Company acquired an approximate 14% ownership stake in Sage Enterprises, Inc. (PlanetAll) which, at the time, was owned 29% by CMGI, a related party, in exchange for shares of the Company's Common Stock valued at $2.5 million at the time of the transaction. Launched in November 1997, PlanetAll provides through the Internet free core contact management services. In August 1998, pursuant to an Agreement and Plan of Merger, Amazon.com acquired all of the outstanding capital stock of PlanetAll for approximately 800,000 shares of Amazon.com common stock valued at approximately $87 million. Of the total 800,000 shares issued by Amazon.com, the Company received 107,376 shares valued at approximately $12.8 million at the time of acquisition in exchange for its shares of PlanetAll, resulting in a gain of $10.1 million in the quarter ended October 31, 1998. The Company has 10,737 shares of Amazon.com remaining at October 31, 1998, which are subject to escrow restrictions that expire in August 1999. 4. COMPREHENSIVE INCOME (LOSS) The Company adopted Statement of Financial Accounting Standard No. 130 (SFAS 130), "Reporting Comprehensive Income" during the quarter ended October 31, 1998. SFAS 130 establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Examples of items to be included in comprehensive income, which are excluded from net income, include foreign currency translation adjustment and unrealized gains and losses on available-for-sale securities. For the quarter ended October 31, 1998, comprehensive loss was $3,516,077. The difference between net loss and comprehensive loss for the quarter is due to $79,856 of unrealized gains on marketable securities classified as available- for-sale. The Company had no "other comprehensive income" items in the quarter ended October 31, 1997. 5. LONG-TERM DEBT Upon acquisition of WhoWhere? Corporation on August 13, 1998 (see Note 9), the Company assumed a $1.5 million note payable to a bank, $1.5 million in capital lease obligations, and $2.2 million in notes payable to the former stockholders of Angelfire, a company acquired by WhoWhere? in October 1997. In September 1998, the Company paid off the $1.5 million note payable to a bank in full. As of October 31, 1998, $1,422,852 of principal remains under the capital lease obligations, of which $489,493 is classified as a current liability. The capital lease obligations require principal and interest payments through December 2001, bear interest at various rates from 9% to 15.7%, and are collateralized by the certain of the Company's property and equipment. As of October 31, 1998, $1,290,416 remains outstanding under the notes payable to the former stockholders of Angelfire, of which $877,193 is classified as a current liability. The notes mature on October 17, 2000, bear interest at 7%, and are collateralized by substantially all of the assets of WhoWhere?. Long-term debt also includes a senior loan assumed upon the acquisition of WiseWire. As of October 31, 1998, the loan has an outstanding balance of $270,524, of which $171,783 is classified as a current liability. The senior loan and security agreement cannot exceed $750,000, bears interest at 18.4%, and is collateralized by certain of the Company's computer equipment. The existing promissory note requires 36 monthly principal and interest payments of $16,216 through January 1, 2000, and a final payment equal to the then fair market value of the collateral at that time as determined by the lender, but not less than 10% of the original loan, or, at the Company's option, 6 additional monthly payments of $16,216 through July 1, 2000. Prepayments are not permitted under the terms of the loan agreement. 8 LYCOS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 6. COMMITMENTS AND CONTINGENCIES The Company leases its facilities and certain other equipment under operating lease agreements expiring through 2004. Future noncancelable minimum payments under these leases for each fiscal year are as follows: 1999 $ 8,409,663 2000 5,934,501 2001 3,615,590 2002 3,402,195 2003 2,384,660 Thereafter 1,228,522 ----------- $24,975,131 =========== The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially effect the financial position, results of operations or cash flows of the Company. 7. STOCK SPLIT In July 1998, the Company's Board of Directors approved a two-for-one common stock split. Shareholders of record on August 14, 1998 (the record date) were entitled to one additional share of the Company's common stock for every share held on August 25, 1998. All share and per share amounts presented in the condensed consolidated financial statements have been restated to reflect the stock split. 8. SIGNIFICANT AGREEMENTS During the quarter, the Company paid approximately $19 million under contracts to provide search and navigation services between June 1998 and September 1999 (the "Premier Provider Agreements"). The Company recognizes the cost of the Premier Provider Agreements ratably over the one year terms, with the cost included in sales and marketing expense. 9. ACQUISITIONS Acquisition of WhoWhere? Inc. On August 7, 1998, the Company entered into an Agreement and Plan of Merger (the "Agreement") by and among the Company, What Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of the Company ("WWAC"), WhoWhere? Inc., a California corporation ("WhoWhere?"), and certain shareholders of WhoWhere? providing for the merger of WWAC with and into WhoWhere? (the "Merger"). On August 13, 1998, the Company completed the closing of the Merger and WhoWhere? became a wholly-owned subsidiary of the Company. The acquisition was accounted for under the purchase method of accounting. The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values. Results of operations for WhoWhere? were included with those of the Company beginning on August 13, 1998, the date of acquisition. 9 LYCOS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(continued) 9. ACQUISITIONS (continued) In the Merger, all outstanding shares of Common Stock and Preferred Stock of WhoWhere? were converted into an aggregate of 3,770,254 shares of Common Stock , par value $.01 per share, of the Company (the "Lycos Common Stock"), and all outstanding options and warrants to purchase Common Stock or Preferred Stock of WhoWhere? were assumed by the Company and became options or warrants to purchase an aggregate of 1,335,244 shares of Lycos Common Stock. The Company has filed a Registration Statement on Form S-3 with respect to the resale of the shares of Lycos Common Stock issued in the Merger and the shares of Lycos Common Stock issuable upon the exercise of warrants assumed in the Merger and filed a Registration Statement on Form S-8 with respect to the shares of Lycos Common Stock issuable upon the exercise of options and warrants assumed in the Merger. Under the terms of the Agreement and related Escrow Agreement dated August 13, 1998, an aggregate of 377,038 shares of Lycos Common Stock and options and warrants to purchase an additional 133,540 shares of Lycos Common Stock will be held in escrow for the purpose of indemnifying the Company against certain liabilities of WhoWhere? and its stockholders. The escrow will expire on August 13, 1999. The purchase price was allocated as follows: (Restated) Developed technology, goodwill and other intangibles $160,322,174 Other assets, principally cash and equipment 9,117,977 Liabilities assumed (10,381,288) ------------ Purchase price $159,058,863 ============ Pro forma financial information for the three months ended October 31, 1998 is not materially different than the Company's actual consolidated results as reported, which do not include the results from operations of WhoWhere? for the twelve days from August 1, 1998 to August 12, 1998. Unaudited combined pro forma financial information for the three months ended October 31, 1997, assuming the WhoWhere? acquisition had occurred on August 1, 1997, would have resulted in net revenues of $10.1 million, net loss of $12.0 million, and basic and diluted loss per share of $.36. The pro forma net loss includes amortization of developed technology, goodwill and other intangible assets of $8.1 million for the three months ended October 31, 1997. The unaudited pro forma information is for illustrative purposes only and is not necessarily indicative of the actual results of operations had the acquisition occurred on August 1, 1997, nor the results of any future period. 10 LYCOS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) 9. ACQUISITIONS (continued) Acquisition of Wired Ventures, Inc. On October 5, 1998, the Company entered into a definitive merger agreement to acquire Wired Ventures Inc. ("Wired") in a stock-for-stock transaction. The transaction will be accounted for under the purchase method of accounting, and accordingly, the purchase price will be allocated to assets acquired and liabilities assumed based on their respective fair values. Intangible assets will be amortized over a period of five years. The merger is subject to several conditions, including approval of Wired's shareholders and the Federal Trade Commission. The Company has filed a Registration Statement on Form S-4, which is pending the approval of the Securities and Exchange Commission, with respect to the registration of the shares of Lycos Common Stock to be issued in the merger. The following represents the preliminary allocation of the purchase price over the historical net book values of the acquired assets and liabilities of Wired at September 30, 1998, and is presented for illustrative purposes only. Actual fair values will be based on financial information as of the acquisition date. Based on preliminary estimates, approximately $1 million to $5 million of the purchase price will be allocated to in-process research and development expense which will be charged to operations during the quarter in which the merger agreement is consummated. For the purpose of the following presentation, $5 million was used as the amount of acquired in-process research and development. The following illustration assumes the Company issues approximately 2.2 million shares at $42.86 per share, which represents the maximum share price subject to the collar contained in the merger agreement. The following illustration also assumes that the Wired cash balance will be paid by the Company in cash. The estimated purchase price is expected to be allocated as follows: Developed technology, goodwill and other intangible assets $101,253,000 In-process research and development 5,000,000 Other assets, principally cash 59,493,000 Liabilities assumed (19,905,000) ------------ $145,841,000 ============ 10. RECLASSIFICATIONS Certain amounts in the quarter ended October 31, 1997 have been reclassified to permit comparison to the current period presentation. 11. SUBSEQUENT EVENTS Merger with Home Shopping Network, Ticketmaster and Ticketmaster Online--CitySearch On February 9, 1999, the Company announced the formation of USA/Lycos Interactive Networks, Inc. ("USA/Lycos"), a three way merger between Lycos, Ticketmaster Online-CitySearch, Inc. ("TMCS") and certain USA Networks, Inc. ("USAi") properties; Home Shopping Network, Ticketmaster and First Auction. Under the terms of the proposed merger agreement, Lycos shareholders will own 30% of USA/Lycos, USAi will own 61.5% and TMCS shareholders other than USAi will own 8.5% of USA/Lycos. Additionally, Lycos shareholders can increase their ownership another 5%, to a total of 35%, and TMCS public shareholders can increase their ownership by 0.15%, to a total of 8.65%, should the initial USA/Lycos shares achieve a market value of $45 billion over specified periods. The transaction is expected to be completed in the second quarter of calendar 1999 and is subject to Lycos shareholder approval and customary regulatory approvals. Additional information with respect to the proposed transaction is available on Forms 8-K filed with the Securities and Exchange Commission on February 11, 1999 and February 26, 1999. Litigation The Company is subject to several purported class action lawsuits. The complaints allege, among other claims, violations of the United States federal securities law through alleged misrepresentations relating to the Company's agreement to enter into an announced transaction with USA Networks, Inc. and certain affiliated companies. Each complaint seeks an unspecified award of damages. The Company believes that the allegations in the complaints are without merit and intends to contest them vigorously. 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This quarterly report on Form 10-Q/A amends and supersedes, to the extent set forth herein, the Registrant's quarterly report on Form 10-Q for the three months ended October 31, 1998 previously filed on December 14, 1998. As more particularly set forth below, the following financial and related information has been updated in connection with the filing of the restated financial statements included herein. The matters discussed in this report contain forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this section and elsewhere in this Report, and the risks discussed in the "Factors Affecting the Company's Business, Operating Results and Financial Condition" section included in the Company's 1998 Annual Report on Form 10-K/A filed with the Securities and Exchange Commission on April 16, 1999. RESULTS OF OPERATIONS Restatement Related to Acquired In-Process Technology The accompanying consolidated financial statements as of and for the year ended July 31, 1998 have been restated to reflect a change in the original accounting for the purchase price allocations related to the acquisitions of Tripod, Wisewire, Guestworld and WhoWhere?. In a letter (the "SEC Letter"), dated September 9, 1998, to the American Institute of Certified Public Accountants SEC Regulations Committee, which was made public in October 1998, the Securities and Exchange Commission (SEC) set forth its views on purchased in-process research and development. Subsequent to the issuance of the SEC Letter the staff of the SEC has reviewed various filings of the Company. As part of this review the management of the Company and the staff of the SEC have had discussions with respect to the methods used to value purchased in-process research and development that was written off at the date of acquisition. As a result of these discussions, the Company has modified the methods used to value purchased in-process research and development in connection with the Company's acquisitions. This resulted in a reduction in the amount of charges for in- process research and development from $106,639,000 to $17,280,000 and an increase in the amounts allocated to intangible assets from $156,121,336 to $245,480,391. The restatement does not affect previously reported net cash flows for the periods. The effect of this restatement on previously reported consolidated financial statements as of and for the three months ended October 31, 1998 is as follows (in thousands except per share amounts):
Three Months Ended October 31, 1998 ------------------ Statement of Operations: As Reported Restated ----------- ----------- In-process research and Development $ 15,400 $ -- Amortization of intangibles 6,796 11,136 Loss from operations (26,673) (15,612) Net Loss (14,656) (3,596) Basic and diluted net loss per share (0.35) (0.09)
October 31, 1998 July 31, 1998 ---------------- ---------------- Balance Sheets: As Reported Restated As Reported Restated ----------- ----------- ----------- ----------- Intangible assets $ 148,436 $ 227,974 $ 10,310 $ 78,788 Total Assets 396,495 476,032 248,758 317,235 Accumulated deficit (123,385) (43,848) (108,729) (40,252) Total shareholders' equity 312,928 392,465 168,687 237,164
Total Revenues Total revenues for the three months ended October 31, 1998 increased 166% to $24.8 million from $9.3 million for the three months ended October 31, 1997, as a result of the growth in the number of advertisers. As of October 31, 1998, deferred revenues, including billings in excess of revenues, increased to $62.1 million, compare to $57.6 million at July 31, 1998, attributable to advertising contracts and guaranteed commitments under license and electronic commerce agreements for which there are significant obligations of the Company remaining. Advertising Revenues Advertising revenues increased 170% to $17.3 million for the three months ended October 31, 1998, representing 70% of total revenues, as compared to advertising revenues of $6.4 million for the three months ended October 31, 1997, which represented 69% of total revenues. The top ten customers accounted for 21% of advertising revenues in the quarter ended October 31, 1998 as compared to 31% of advertising revenues in the quarter ended October 31, 1997. The increase in advertising revenue was attributable primarily to an increase in the number of advertisers. The Company currently derives a substantial portion of its revenues from the sale of advertisements on its Websites, primarily through banner advertisements and sponsorships. Advertising contracts are primarily sold as: (1) a "run of site" contract under which a customer is guaranteed a number of impressions; (2) a "key word" contract in which a customer purchases the right to advertise in connection with specified word searches; or (3) a "targeted" contract where the customer purchases a specified number of impressions in one of the targeted categories or on a specified page or service. Electronic Commerce, Licensing and Other Revenues Electronic commerce, licensing and other revenues increased 159% to $7.5 million for the three months ended October 31, 1998, representing 30% of total revenues as compared to $2.9 million for the three months ended October 31, 1997, representing 31% of total revenues. The increase in electronic commerce, licensing and other revenue is attributable primarily to the addition of several new partners including, among others, AT&T and Preview Travel. Electronic commerce revenues are derived principally from "slotting fees" paid for selective positioning and promotion within the Company's suite of products as well as from royalties from the sale of goods and services from the Company's websites. The Company's license and product revenues are derived principally from product licensing fees and fees from maintenance and support of its products. Electronic commerce, license and product revenues are generally recognized upon delivery provided that no significant Company obligations remain and collection of the receivable is probable. In cases where there are significant remaining obligations, the Company defers such revenue until those obligations are satisfied. Fees from maintenance and support of the Company's products including revenues bundled with the initial licensing fees are deferred and recognized ratably over the service period. Cost of Revenues Cost of revenues totaled $5.3 million for the quarter ended October 31, 1998, representing 21% of total revenues, as compared to $1.8 million in the quarter ended October 31, 1997, which represented 19% of total revenues. Cost of revenues consist primarily of expenses associated with the ongoing maintenance and support of the Company's products and services, including compensation, consulting fees, equipment costs, networking and other related indirect costs. 12 OPERATING EXPENSES Research and Development Research and development expenses totaled $5.3 million for the three months ended October 31, 1998, representing 21% of total revenues as compared to $1.4 million for the three months ended October 31, 1997, or 15% of total revenues. Research and development expenses consist primarily of equipment and salary costs. The overall increase in research and development expenses was primarily due to increased engineering staffing to continue to develop and enhance the Company's expanded product offerings. With the exception of technology acquired in the Tripod and WiseWire acquisitions, all research and development costs have been expensed as incurred. The Company believes that significant investments in research and development are required to remain competitive. As a consequence, the Company expects to continue to commit substantial resources to research and development in the future. Sales and Marketing Sales and marketing expenses totaled $16.2 million for the three months ended October 31, 1998, representing 65% of total revenues, as compared to $5.5 million for the three months ended October 31, 1997, representing 59% of total revenues. Sales and marketing expenses consist primarily of compensation, advertising, public relations, trade shows, travel and costs of marketing literature. The spending increases were due to the addition of sales and marketing personnel, increased commissions associated with higher sales, and expenses pertaining to the Company's advertising, marketing and public relations campaigns. Sales and marketing expenses also includes the cost of the Company's Premier Provider Agreements, as further described below. The Company expects continued increases in sales and marketing expenses in future periods. During the quarter, the Company paid approximately $19 million under Premier Provider Agreements to provide search and navigation services between June 1998 and September 1999. The Company recognizes the cost of the Premier Provider Agreements ratably over the one year terms, with the cost included in sales and marketing expense. General and Administrative General and administrative expenses totaled $2.5 million for the three months ended October 31, 1998, representing 10% of total revenues, as compared to $932,000 for the three months ended October 31, 1997, representing 10% of total revenues. General and administrative expenses consist primarily of compensation, rent expenses and fees for professional services. The increases in spending were primarily due to the expansion of the Company's corporate infrastructure, including the addition of finance and administrative personnel, installation of information systems and increased costs for professional services. 13 Amortization of Intangible Assets Amortization of intangible assets was approximately $11.1 million for the three months ended October 31, 1998 versus $113,000 for the three months ended October 31, 1997. The increase is attributable to increased amortization related to developed technology and goodwill and other intangible assets recorded upon the acquisitions of WhoWhere?, Tripod, WiseWire and GuestWorld. Interest Income, Net Net interest income was approximately $1.9 million for the three months ended October 31, 1998 versus $540,000 for the three months ended October 31, 1997. Interest income is generated from investment of the Company's cash equivalents. The $1.4 million increase in interest income reflects the investment of the net proceeds of the Company's secondary stock offering in June 1998. Interest expense was not significant in either period. Gain on sale of Investments In August 1998, pursuant to an Agreement and Plan of Merger, Amazon.com acquired all of the outstanding capital stock of PlanetAll for approximately 800,000 shares of Amazon.com common stock valued at approximately $87 million. Of the total 800,000 shares issued by Amazon.com, the Company received 107,376 shares valued at approximately $12.8 million at the time of acquisition in exchange for its shares of PlanetAll, resulting in a gain of $10.1 million in the quarter ended October 31, 1998. The Company has 10,737 shares of Amazon.com remaining at October 31, 1998, which are subject to escrow restrictions that expire in August 1999. FACTORS WHICH MAY AFFECT FUTURE OPERATIONS There are a number of business factors which singularly or combined may affect the Company's future operating results. These factors include dependence on third party relationships to create traffic on the Company's websites, dependence on major customers, dependence on advertising revenues, dependence on the Internet, rapid technological change, competition and variability of quarterly results, which have been outlined in the Company's 1998 Annual Report on Form 10-K/A. LIQUIDITY AND CAPITAL RESOURCES At October 31, 1998, the Company had cash and cash equivalents of approximately $140.8 million. The Company regularly invests excess funds in short-term money market funds, government securities and commercial paper. The Company used cash from operations of approximately $23.2 million during the three months ended October 31, 1998, due primarily to increases in prepaid expenses pertaining to the Company's Premier Provider Agreements paid during the quarter. The Company's primary investing activity during the quarter pertains to the cash proceeds received from the sale of Amazon.com common stock as discussed above. As of October 31, 1998 the Company is committed to noncancelable minimum payments totaling $25 million under operating lease agreements that expire at various times through 2004. At October 31, 1998, the Company had deferred revenues of $61.3 million representing primarily license fees to be earned in the future on noncancelable license agreements. In addition, the Company had billings in excess of revenues from advertising contracts of $800,000 at October 31, 1998. The Company currently believes that available funds and cash flows expected to be generated by operations, if any, will be sufficient to fund its working capital and capital expenditures requirements for at least the next twelve months. Thereafter, the Company may need to raise additional funds. The Company may need to raise additional funds sooner in order to fund more rapid expansion, to develop new or enhanced products and services, to respond to competitive pressures or to acquire complementary businesses or technologies. If additional funds are raised through the issuance of equity securities, the percentage ownership of the stockholders of the Company will be reduced, stockholders may experience additional dilution, and such equity securities may have rights, preferences or privileges senior to those of the Company's Common Stock. There can be no assurance that additional financing will be available when needed on terms favorable to the Company or at all. If adequate funds are not available or are not available on acceptable terms, the Company may be unable to develop or enhance products or services, take advantage of future opportunities or respond to competitive pressures, which could have a material adverse effect on the Company's business, results of operations or financial condition. 14 YEAR 2000 COMPLIANCE Many currently installed computer systems and software products are coded to accept only two-digit entries in the date code field and cannot distinguish 21st century dates from 20th century dates. These date code fields will need to distinguish 21st century dates from 20th century dates and, as a result, many companies' software and computer systems may need to be upgraded or replaced in order to comply with such "Year 2000" requirements. State of Readiness The Company has evaluated the year 2000 readiness of the hardware and software products sold by the Company ("Products"), the information technology systems used in its operations ("IT Systems"), and its non-IT Systems, such as building security, voice mail and other systems. The Company's evaluation covered the following phases: (i) identification of all Products, IT Systems, and non-IT Systems; (ii) assessment of repair or replacement requirements; (iii) repair or replacement; (iv) testing; (v) implementation; and (vi) creation of contingency plans in the event of year 2000 failures. The evaluation was completed in 1998. Based on this evaluation, the Company believes it is year 2000 compliant. However, the assessment of whether a complete system or device in which a product is embedded will operate correctly for an end-user depends in large part on the year 2000 compliance of the product or system's other components, many of which are supplied by parties other than the Company. The supplier of the Company's current financial and accounting software has informed the Company that such software is year 2000 compliant. Further, the Company relies, both domestically and internationally, upon various vendors, governmental agencies, utility companies, telecommunications service companies, delivery service companies and other service providers who are outside of the Company's control. There is no assurance that such parties will not suffer a year 2000 business disruption, which could have a material adverse effect on the Company's financial condition and results of operations. Costs To date, the Company has not incurred any material expenditures in connection with identifying or evaluating year 2000 compliance issues. Most of its expenses have related to the opportunity cost of time spent by employees of the Company evaluating its software, the current versions of its products, and year 2000 compliance matters generally. Contingency Plan The Company has not developed a year 2000-specific contingency plan. If year 2000 compliance issues are discovered, the Company then will evaluate the need for contingency plans relating to such issues. 15 PART II ITEM 1. Legal Proceedings On November 5, 1998, Labrador Software, Inc. filed a lawsuit in the United State District Court for the District of Massachusetts against Lycos alleging Lycos violated several of Labrador's rights under 15 U.S.C. 1125, and Massachusetts statutory and common law. More specifically, Labrador alleges that Lycos' current advertising campaign featuring a black labrador retriever retrieving information on the Internet constitutes: (1) both unfair competition and trademark infringement under both federal and common law; (2) injury to Labrador's business reputation and trademark dilution under Massachusetts statutory and common law; and (3) unfair and deceptive trade practices under Massachusetts statutory law. Labrador requested that the court issue a temporary restraining order restraining Lycos from selling or advertising the Lycos products and services under the current advertising campaign, which request the court denied. Labrador has appealed the order denying the motion. Lycos is vigorously defending against the lawsuit and does not believe the outcome would have a material adverse effect on its business, financial condition, results of operations or cash flows. In January 1999, CIVIX-DDI brought a suit for patent infringement in the United States District Court for the District of Colorado (Case No. 99-B-172) against Lycos, Inc.; Microsoft Corporation; The Denver Post Corporation; Rand-McNally & Company, Inc.; Delorme Publishing Company, Inc.; InfoUSA, Inc.; Geosystems Global Corporation; Vicinity Corporation; Etak, Inc.; America Online, Inc.; Yahoo!, Inc.; Ticketmaster Online-CitySearch, Inc.; Zip2 Corporation; Infoseek Corporation; Alpine Electronics of America, Inc.; Magellan Corporation; Garmin International, Inc.; Excite, Inc.; Infospace.com, Inc.; and BellSouth Corporation. CIVIX-DDI asserts that Lycos, among others, infringes two patents that generally relate to electronic mapping systems. CIVIX-DDI is seeking unspecified damages, including attorneys' fees, as well as an injunction. Lycos' answer to the complaint is due on March 29, 1999. Discovery has not yet begun in this litigation, and as such, it is too early to determine any possible effect on the Company's business, financial condition, results of operations or cash flows. Eight purported class action lawsuits were filed in the Court of Chancery for the State of Delaware in and for New Castle County, by shareholders of the Company allegedly on behalf of all common stockholders of the Company (except defendants and their affiliates), entitled Jacob Horowitz v. David S. Wetherell et al., Civil Action No. 16933-NC (filed Feb. 9, 1999); Robert Johnson v. Robert J. Davis et al., Civil Action No. 16937-NC (filed Feb. 9, 1999); Debra Mayer v. David S. Wetherell et al., Civil Action No. 16947-NC (filed Feb. 11, 1999); Ellis Investment Co., Ltd v. David S. Wetherell et al., Civil Action No.. 16951-NC (filed Feb. 11, 1999); Frederick Sheehan v. David S. Wetherell et al., Civil Action No. 16952-NC (filed Feb. 11, 1999); Yorkshire Group, Inc. v. David S. Wetherell et al., Civil Action No. 16955-NC (filed Feb. 12, 1999); Warren Ciafardini v. David S. Wetherell et al., Civil Action No. 16956-NC (filed Feb. 12, 1999); Martin Lewkowicz, on behalf of himself and all others similarly situated v. Lycos, Inc. et al., Civil Action No. 16976-NC (filed Feb. 23, 1999). The complaints name as defendants the directors of the Company individually, as well as the Company and, in the Horowitz, Mayer, Ellis Investment, Sheehan, Yorkshire Group and Ciafardini complaints, USA Networks, Inc. The complaints allege that the directors of the Company violated their state law fiduciary duties owed to plaintiffs and the purported class by agreeing to enter into the announced transaction with USA Networks, Inc. The complaints request that the Court declare them to be proper class actions, enjoin the announced transaction, rescind the announced transaction if it is consummated prior to a final judgment or award rescissionary damages to the purported class, direct the Company to make an accounting to plaintiffs and the purported class for all damages and for all profits or special benefits obtained by the defendants, and award to plaintiffs all costs and fees, including attorneys' fees. The Company believes that the allegations in the complaints are without merit and intends to contest them vigorously. Between February 22, 1999 and March 10, 1999, a series of purported securities class action lawsuits were filed in the United States District Court for the District of Massachusetts, entitled Kenneth R. Levine v. Lycos, Inc., et al., CA No. 99-10394(EFH), Thomas Lynch v. Lycos, Inc., et al., CA No. 99-10426(EFH), Mary Jane Crescente v. Lycos, Inc., et al., CA No. 99-10467(EFH), Arnold Silverstein v. Lycos, Inc., et al., CA No. 99-10476(EFH), Warren Ciafardini v. Lycos, Inc., et al., CA No. 99-10494(EFH), Michelle Penfold v. Lycos, Inc., et al., CA No. 99-10495(EFH), Carol Lewkowicz v. Lycos, Inc., et al., CA. No. 99-10501 (EFH), Joel Kofsky v. Lycos, Inc., et al., CA No. 99- 10502(EFH), Mark Zito v. Lycos, Inc., et al., CA No. 99-10518(EFH), Marc Berger v. Lycos, Inc., et al., CA No. 99-10519(EFH) and Salvatore Bendetto v. Lycos, Inc., et al., CA No. 99-10524(EFH). Each suit names as defendants the Company and Robert J. Davis, the Company's Chief Executive Officer and President. The Lewkowicz complaint also names as a defendant Edward M. Philip, the Company's Chief Operating Officer and Chief Financial Officer. The complaints allege, among other claims, violations of United States federal securities law through alleged misrepresentations and omissions relating to the Company's agreement to enter into an announced transaction with USA Networks, Inc. and certain affiliated companies. Each complaint seeks an unspecified award of damages. The plaintiffs in the Levine, Lynch, Silverstein, and Berger actions purport to represent a class of all persons who purchased the Company's common stock between January 25, 1999 and February 9, 1999. The plaintiff in the Zito action purports to represent a class of all persons who purchased the Company's common stock between January 21, 1999 and February 9, 1999. The plaintiffs in the Crescente, Ciafardini, Penfold, Kofsky and Bendetto actions purport to represent a class of all persons who purchased the Company's common stock between January 8, 1999 and February 9, 1999. The plaintiff in the Lewkowicz action purports to represent a class of all persons who purchased the Company's common stock between January 7, 1999 and February 9, 1999. The Company believes that the allegations in the complaints are without merit and intends to contest them vigorously. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS A special meeting of the stockholders of the Company was held on August 13, 1998. The purpose of the meeting was to consider a proposal to amend the Company's Restated Certificate of Incorporation to increase the number of shares of authorized common stock, par value $.01 per share, from 40,000,000 to 100,000,000 shares. 16,353,506 shares were cast in favor of the proposal, while 351,313 were cast against the proposal. There were 22,281 abstentions. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 11.1: Statement of Computation of Basic and Diluted Net Income (Loss) Per Share herein included on page 17. Exhibit 27.1: Financial Data Schedule (b) The following reports on Form 8-K were filed during the quarter ended October 31, 1998: On August 11, 1998 and August 13, 1998 the Company filed current reports on Form 8-K reporting the Agreement and Plan of Merger with WhoWhere?. On October 27, 1998 the Company filed a Form 8-K/A which amended the Company's current reports on Form 8-K originally filed on August 11, 1998 and August 13, 1998. On October 20, 1998 the Company filed a current report on Form 8-K reporting the Agreement and Plan of Merger with Wired Ventures. 16 SIGNATURE 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. LYCOS, INC. Date: April 16, 1999 By: /s/ Edward M. Philip ------------------------------------ Edward M. Philip Chief Operating Officer and Chief Financial Officer (Principal Financial and Accounting Officer, Authorized Officer) 17 EX-11.1 2 STATEMENT OF COMPUTATION EXHIBIT 11.1 LYCOS, INC. COMPUTATION OF SHARES USED IN COMPUTING BASIC AND DILUTED NET INCOME (LOSS) PER SHARE (2) (UNAUDITED)
THREE MONTHS THREE MONTHS ENDED ENDED OCTOBER 31, 1998 OCTOBER 31, 1997 ---------------- ---------------- (Restated) Common stock, beginning of period................................ 35,991,452 27,593,240 Weighted average common shares issued during the period, net.................................. 5,918,498 592,620 Common stock options and warrants using the modified treasury method........................... 1,178,092 ------------ ------------ 41,909,950 29,363,952 ============ ============ Net income (loss).................................................. $ (3,595,933) $ 107,480 ============ ============ Basic and diluted net income (loss) per share (1).................. $ (0.09) $ 0.00 ============ ============
(1) Diluted net income (loss) per share was not materially different from basic net loss per share. (2) Reflects the effect of a two-for-one common stock split payable to shareholders of record on August 14, 1998. All share and per share amounts presented in the condensed consolidated financial statements have been restated to reflect the stock split. EX-27 3 FINANCIAL DATA SCHEDULE
5 3-MOS 3-MOS JUL-31-1999 JUL-31-1998 AUG-01-1998 AUG-01-1997 OCT-31-1998 OCT-31-1997 140,771,169 153,728,200 0 0 17,230,706 12,166,812 1,324,073 1,208,342 0 0 203,041,044 200,796,790 9,677,428 6,596,831 3,522,232 2,636,772 476,032,427 248,758,257 53,694,389 53,734,492 0 0 0 0 0 0 433,610 389,917 392,031,857 168,296,678 476,032,427 248,758,257 24,784,119 9,303,152 24,784,119 9,303,152 5,300,325 1,779,382 40,396,303 9,735,864 0 0 0 0 0 0 (3,595,933) 107,480 0 0 (3,595,933) 107,480 0 0 0 0 0 0 (3,595,933) 107,480 (0.09) 0.00 (0.09) 0.00
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