-----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, FERgv5kmQalmLDxcYGNN2xvn0QKSdf7f7G97+RB3xpIaNEmhRlO8v3/q9e/XitvO k5nBdx5XM+XRRVW9Jpo4TA== 0000912057-99-004038.txt : 19991110 0000912057-99-004038.hdr.sgml : 19991110 ACCESSION NUMBER: 0000912057-99-004038 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RMI NET INC CENTRAL INDEX KEY: 0001003282 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 841322326 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-28738 FILM NUMBER: 99743752 BUSINESS ADDRESS: STREET 1: 999 18TH STREET STREET 2: STE 2201 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036720700 MAIL ADDRESS: STREET 1: 999 18TH STREET STREET 2: STE 2201 CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: ROCKY MOUNTAIN INTERNET INC DATE OF NAME CHANGE: 19960508 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 ---------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to __________________ Commission file number 001-12063 ----------- RMI.NET, INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 84-1322326 - -------------------------------------- -------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 999 EIGHTEENTH STREET, SUITE 2201 DENVER, COLORADO 80202 - ------------------------------------------------------ ------------------------ (Address of principal executive offices) (Zip Code) (303) 672-0700 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) - ------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 November 8, 1999 - ------------------------------------ ------------------------------------------ Common Stock, $0.001 par value [18,117,947]
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q and the information incorporated by reference may include "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. In particular, your attention is directed to Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation and Part II, Item 1. Legal Proceedings. We intend the disclosure in these sections and throughout the Quarterly Report on Form 10-Q to be covered by the safe harbor provisions for forward-looking statements. All statements regarding our expected financial position and operating results, our business strategy, our financing plans and the outcome of any contingencies are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as "may," "believe," "plan," "will," "anticipate," "estimate," "expect," "intend" and other phrases of similar meaning. Known and unknown risks, uncertainties and other factors could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and was derived using numerous assumptions. Although we believe that the expectations expressed in these forward-looking statements are reasonable, our expectations may not turn out to be correct. Actual results could be materially different from our expectations, including the following: - we may lose subscribers or fail to grow our subscriber base; - we may not successfully integrate new subscribers or assets obtained through acquisitions; - we may fail to compete with existing and new competitors; - we may not be able to sustain our current growth; - we may not adequately respond to technological developments impacting the Internet; - we may fail to identify and correct a significant Year 2000 compliance problem and experience a major system failure; - we may fail to settle outstanding litigation; and - we may not be able to find needed financing. This list is intended to identify some of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere in this report. These factors are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 1998 under the caption "Item 1. Business - Risk Factors" and in our other SEC filings and our press releases. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS RMI.NET, INC. INDEX TO FINANCIAL STATEMENTS
PAGE ---- Consolidated Balance Sheets as of September 30, 1999 and December 31,1998..........................................................................1 Consolidated Statements of Operations for the Three Months Ended September 30, 1999 and 1998...................................................................2 Consolidated Statements of Operations for the Nine Months Ended September 30, 1999 and 1998...................................................................3 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1999 and 1998...................................................................4 Notes to Consolidated Financial Statements.......................................................5
RMI.NET, INC. CONSOLIDATED BALANCE SHEETS ASSETS
SEPTEMBER 30, DECEMBER 31, 1999 1998 ---------------------- ------------------- (UNAUDITED) Current Assets Cash and cash equivalents $ 6,212,781 $ 5,729,346 Trade receivables, net of allowance for doubtful accounts 4,681,118 1,598,479 Inventories 222,896 56,440 Other 1,123,698 224,629 ---------------------- ------------------- Total current assets 12,240,493 $ 7,608,894 ---------------------- ------------------- PROPERTY AND EQUIPMENT, NET 9,881,161 3,540,400 GOODWILL, NET 35,451,111 13,101,814 OTHER 547,673 430,693 ---------------------- ------------------- Total assets $ 58,120,438 $ 24,681,801 ====================== =================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 3,479,742 $ 2,280,101 Current maturities of long-term debt and capital lease obligations 2,464,560 915,211 Deferred revenue 2,184,507 513,167 Accrued payroll and related taxes 657,188 302,660 Accrued expenses 1,931,014 1,611,242 ---------------------- ------------------- Total current liabilities 10,717,011 5,622,381 ---------------------- ------------------- LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS 2,742,361 493,963 ---------------------- ------------------- Total liabilities 13,459,372 6,116,344 ---------------------- ------------------- REDEEMABLE, CONVERTIBLE PREFERRED STOCK: Series B, $.001 par value; 9,600 shares authorized, 2,150 and 8,000 shares issued and outstanding (liquidation preference of $2,150,000 at September 30, 1999), respectively, net 1,928,171 6,747,843 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, $.001 par value; 100,000,000 shares authorized, 17,533,247 and 9,446,272 issued, respectively, 17,453,153 and 9,384,677 outstanding, respectively 17,533 9,384 Additional paid-in capital 73,048,000 29,257,415 Accumulated deficit (30,332,638) (17,449,185) ---------------------- ------------------- 42,732,895 11,817,614 ---------------------- ------------------- $ 58,120,438 $ 24,681,801 ====================== ===================
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1 RMI.NET, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30 1999 1998 ------------ ------------ (UNAUDITED) REVENUE Communication services $ 8,058,486 $ 1,922,143 Web solutions 1,073,115 643,181 ------------ ------------ 9,131,601 2,565,324 ------------ ------------ COST OF REVENUE EARNED Communication services 4,564,365 715,430 Web solutions 361,467 192,954 ------------ ------------ 4,925,832 908,384 ------------ ------------ GROSS PROFIT 4,205,769 1,656,940 Selling expenses 1,712,389 474,219 General and administrative expenses 5,562,262 1,371,426 Costs related to unsuccessful merger attempt -- 4,549,301 Depreciation and amortization 2,275,010 489,625 ------------ ------------ OPERATING LOSS (5,343,892) (5,227,631) Other income (expense) Interest expense (140,471) (85,407) Interest income 52,298 18,074 ------------ ------------ Net loss (5,432,065) (5,294,964) Preferred stock dividends 21,654 -- ------------ ------------ NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $ (5,453,719) $ (5,294,964) ============ ============ Basic and diluted loss per common share (0.35) (0.67) ============ ============ Weighted average common shares outstanding 15,471,000 7,919,000 ============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2 RMI.NET, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30 1999 1998 ------------ ------------ (UNAUDITED) REVENUE Communication services $ 17,859,424 $ 5,177,518 Web solutions 2,923,935 1,328,848 ------------ ------------ 20,783,359 6,506,366 ------------ ------------ COST OF REVENUE EARNED Communication services 9,969,618 2,074,305 Web solutions 872,736 438,094 ------------ ------------ 10,842,354 2,512,399 ------------ ------------ GROSS PROFIT 9,941,005 3,993,967 Selling expenses 3,726,203 1,313,781 General and administrative expenses 13,770,819 4,298,524 Costs related to unsuccessful merger attempt -- 4,549,301 Depreciation and amortization 4,879,947 978,700 ------------ ------------ OPERATING LOSS (12,435,964) (7,146,339) Other income (expense) Interest expense (368,968) (243,130) Interest income 120,741 61,110 ------------ ------------ Net loss (12,684,191) (7,328,359) Preferred stock dividends 199,261 -- ------------ ------------ NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $(12,883,452) $ (7,328,359) ============ ============ Basic and diluted loss per common share (1.09) (0.99) ============ ============ Weighted average common shares outstanding 11,806,000 7,402,000 ============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3 RMI.NET, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30 1999 1998 ------------ ------------ (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES Net loss $(12,684,191) $ (7,328,359) Items not requiring cash: Depreciation 1,374,435 185,094 Amortization 3,505,512 846,706 Issuance of warrants for services related to unsuccessful merger -- 2,765,229 Stock option compensation -- 383,077 Stock contribution to pension plan 60,006 52,419 Provision for doubtful accounts 1,117,946 177,705 Changes in operating assets and liabilities net of effects from acquired interests: Trade receivables (2,621,261) (384,382) Inventories (96,764) (10,063) Other current assets (336,944) (63,063) Accounts payable 99,013 2,112,397 Deferred revenue 720,089 (56,490) Accrued payroll and related taxes 264,964 (20,940) Accrued expenses (616,331) 1,004,395 ------------ ------------ Net cash used in operating activities (9,213,526) (336,275) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (2,638,466) (567,831) Purchases of interests, net of cash acquired (176,565) -- Increase in deferred acquisition costs (109,701) (285,042) ------------ ------------ Net cash used in investing activities (2,924,732) (852,873) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from exercise of common stock options and warrants 14,032,390 843,497 Proceeds from issuance of notes -- 400,000 Purchase of treasury stock -- (18,000) Payments on long-term debt and capital lease obligations (1,410,697) (358,825) ------------ ------------ Net cash provided by financing activities 12,621,693 866,672 ------------ ------------ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 483,435 (322,476) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,729,346 1,053,189 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,212,781 $ 730,713 ============ ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. BASIS OF PRESENTATION The interim financial data are unaudited; however, in the opinion of management, the interim data include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The financial statements included herein have been prepared by RMI.NET, Inc. (hereinafter, "the Company") pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. COST OF REVENUE EARNED Communication Services cost of revenue earned consists of the cost of high speed data circuits and telephone lines that allow customers access to the Company's service plus Internet access fees paid by the Company to Internet backbone carriers. Cost of revenue earned for Web Solutions consist of payroll costs of employees directly related to the production of customers' web sites and outside services required for such projects. Previously, the payroll costs of these employees were included in General and Administrative expenses. RECLASSIFICATIONS Certain prior year balances have been reclassified to conform to the current year presentation. NOTE 2. NET LOSS PER SHARE The Company follows the provisions of SFAS No. 128, "Earnings Per Share." SFAS No. 128 provides for the calculation of "Basic" and "Diluted" earnings per share. Basic loss per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution of securities that could share in the earnings of an entity. As all of the Company's stock options and warrants are antidilutive, basic and diluted loss per share is the same for all periods presented herein. NOTE 3. COMPREHENSIVE INCOME As of January 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income," which establishes standards for the reporting and display of comprehensive income and its components in the financial statements. The Company does not report any items that would qualify for disclosure under this statement. NOTE 4. ACQUISITIONS On July 30, 1999, the Company agreed to issue 441,175 shares of common stock (valued at approximately $5.3 million) in the acquisition of Triad Resources, L.L.C., an Oklahoma limited liability company doing business as "WebZone" and headquartered in Tulsa, Oklahoma. WebZone is an Internet service provider. On July 30, 1999, the Company agreed to issue 174,634 shares of common stock (valued at approximately $1.9 million) in the acquisition of ACES Research, Inc., an Arizona corporation headquartered in Tucson, Arizona. ACES Research is an Internet service provider whose customer base is comprised primarily of business customers who are dedicated Internet access users. 5 On August 30, 1999, the Company agreed to issue 174,001 shares of common stock (valued at approximately $1.5 million) in the acquisition of the high-end web hosting and dedicated access service assets, serving primarily business customers, of Novo Media Group, Inc., a California corporation headquartered in San Francisco, California. On August 31, 1999, the Company agreed to issue 811,687 shares of common stock (valued at approximately $6.6 million) in the acquisition of the assets of Wolfe Internet Access, L.L.C., a Washington limited liability company headquartered in Seattle, Washington and doing business as "WolfeNet." WolfeNet is an Internet service provider. Substantially all the purchase consideration of the acquisitions was recorded as goodwill. NOTE 5. SEGMENT INFORMATION The Company's management regularly evaluates the performance of the Company by reviewing operating results comprising two segments of the business. As such, the Company considers each division to be an operating segment. In making operating decisions and allocating resources, the Company's management specifically focuses on the revenues and operating costs generated by each operating segment, as summarized in the following tables. Certain shared costs of the segments have been allocated to each segment based upon its share of the consolidated revenues for the period reported. Excluded from the operating loss of the segment for 1998 is expense of $4,549,301 related to an unsuccessful merger attempt.
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 1999 1998 1999 1998 ---------------- --------------- ---------------- ---------------- (unaudited) (unaudited) NET SALES Communication Services $ 8,058,486 $ 1,922,143 $ 17,859,424 $ 5,177,518 Web Solutions 1,073,115 643,181 2,923,935 1,328,848 Total Net Sales 9,131,601 2,565,324 20,783,359 6,506,366 COST OF REVENUE EARNED Communication Services 4,564,365 715,430 9,969,618 2,074,305 Web Solutions 361,467 192,954 872,736 438,094 Total Cost of Revenue Earned 4,925,832 908,384 10,842,354 2,512,399 SELLING EXPENSES Communication Services 1,511,934 355,322 3,201,977 1,042,930 Web Solutions 200,455 118,897 524,226 270,851 Total Selling 1,712,389 474,219 3,726,203 1,313,781 GENERAL & ADMINISTRATIVE ("G&A") Communication Services 4,910,573 973,278 11,833,453 3,549,133 Web Solutions 651,689 398,148 1,937,366 749,391 Total G&A 5,562,262 1,371,426 13,770,819 4,298,524 6 THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 1999 1998 1999 1998 ---------------- --------------- ---------------- ---------------- (unaudited) (unaudited) OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION Communication Services (2,928,386) (121,887) (7,145,624) (1,488,850) Web Solutions (140,496) (66,818) (410,393) (129,488) Total Operating Income (Loss) (3,068,882) (188,705) (7,556,017) (1,618,338)
NOTE 6. NAME CHANGE In July 1999, the Company filed its amended and restated Certificate of Incorporation with the Secretary of State of Delaware, thereby changing the Company's name from Rocky Mountain Internet, Inc. to RMI.NET, Inc. The Company's common stockholders had previously approved the name change at the 1999 Annual Meeting of Stockholders. NOTE 7. COMMITMENTS AND CONTINGENCIES In June 1998, the Company announced it had entered into a merger agreement to acquire Internet Communications Corporation ("ICC"). The closing of the acquisition was subject to various closing conditions, and the merger agreement contained certain rights of termination. On October 13, 1998, the Company announced that it terminated the merger agreement due to, among other things, ICC's failure to satisfy certain obligations under the merger agreement. On October 14, 1998, ICC filed a complaint against the Company in Denver District Court claiming $30 million in damages and alleging, among other things, that the Company had breached the merger agreement and had made certain misrepresentations to ICC with respect to the merger transaction. The Company has consistently stated that ICC's claims were frivolous and without merit, and vigorously defended such action and asserted counterclaims against ICC. On August 6, 1999, ICC agreed to dismiss with prejudice all claims brought in their lawsuit against the Company, and entered into a Settlement Agreement resolving all current and future claims related to the terminated merger. Under the Settlement Agreement, the Company made no payment of any monies or anything of value to ICC as a result of the claims. As a result of the merger termination and the related financing transactions, which were not completed, the Company incurred costs, expenses and related fees of $6.1 million, a portion of which are in dispute. Of this amount, approximately $4.2 million relates to a non-cash item related to warrants issued by the Company. Of the $6.1 million expensed, $0.8 million remained accrued at September 30, 1999 related to this matter. At this time, management of the Company is unable to determine the possible outcome of this dispute. NOTE 8. COMMON STOCK TRANSACTIONS The increase in the Company's common stock issued and outstanding as of September 30, 1999 is primarily a result of: - On August 13, 1999, the Company's Chief Executive Officer exercised 3,950,000 warrants to purchase the Company's common stock yielding net proceeds to the Company of approximately $7.5 million. 7 - On July 30, 1999, the Company agreed to issue 441,175 shares of common stock (valued at approximately $5.3 million) in the acquisition of Triad Resources, L.L.C., an Oklahoma limited liability company doing business as "WebZone" and headquartered in Tulsa, Oklahoma. WebZone is an Internet service provider. - On July 30, 1999, the Company agreed to issue 174,634 shares of common stock (valued at approximately $1.9 million) in the acquisition of ACES Research, Inc., an Arizona corporation headquartered in Tucson, Arizona. ACES Research is an Internet service provider whose customer base is comprised of business dedicated Internet access users. - On August 30, 1999, the Company agreed to issue 174,001 shares of common stock (valued at approximately $1.5 million) in the acquisition of the high-end web hosting and dedicated access service assets of Novo Media Group, Inc., a California corporation headquartered in San Francisco, California. - On August 31, 1999, the Company agreed to issue 811,687 shares of common stock (valued at approximately $6.6 million) in the acquisition of the assets of Wolfe Internet Access, L.L.C., a Washington limited liability company headquartered in Seattle, Washington and doing business as "WolfeNet." - During the quarter ended September 30, 1999, the Company issued 354,023 shares of common stock upon conversion of 3,276 shares of its Series B Preferred Stock. Pursuant to the terms of the Company's Series B Preferred Stock, the conversion price was 93.13% of the arithmetic average of the lowest three closing bid prices during the 20 consecutive trading days immediately preceding the conversion date. NOTE 9. SUBSEQUENT EVENTS The Company announced on November 8, 1999 that it was consolidating its national call center operations and closing its Opelika, Alabama call center. The Company expects to save approximately $2.5 million on an annual basis, and reduce its overall headcount by approximately 75 employees, through this action. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The following discussion of the results of operations and financial condition of RMI.NET, Inc. (the "Company") should be read in conjunction with the Company's Consolidated Financial Statements and the Notes thereto included elsewhere in this Quarterly Report. RESULTS OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998 TOTAL REVENUE The Company's total revenues grew 256% from $2.6 million to $9.1 million for the three months ended September 30, 1999 from September 30, 1998. Revenue growth is primarily attributable to an increase in the number of the Company's customers as a result of customers added by acquisition and a more aggressive sales effort. The Company intensified its sales efforts in 1999 versus 1998 by increasing the size of the sales force and by segmenting the sales team by product group. COMMUNICATION SERVICES Communication Services is comprised predominately of dial-up and dedicated Internet access service. Communication Services revenues grew 319% from $1.9 million to $8.1 million for the three months ended September 30, 1999 from September 30, 1998. The increase results in part from the addition of over 49,000 8 dial-up customers, over 1,200 dedicated access customers and over 19,500 local and long distance customers due to acquisitions in the fourth quarter of 1998 and the first nine months of 1999. The growth in revenue is also due to increasing demand for a wide range of bandwidth options to connect customers to the Internet and the productivity of the Company's sales department in 1999. WEB SOLUTIONS Web Solutions revenues grew 67% from $0.6 million for the three months ended September 30, 1998 to $1.1 million for the three months ended September 30, 1999. Web Solutions revenues are comprised of three major products: web site hosting, web site production and web site marketing. Web site hosting accounted for $0.2 million of revenue in the three months ended September 30, 1998 and $0.4 million in the three months ended September 30, 1999, for an increase of 121%. Web site production increased from $0.4 million in the three months ended September 30, 1998 to $0.7 million in the three months ended September 30, 1999, for an increase of 64%. The increase in web site production is primarily due to the acquisition of Application Methods in July 1998, as well as an increase in sales personnel throughout the country. GROSS PROFIT Gross profit consists of total revenue less the direct cost of delivering services and equipment. These costs include costs for circuit and local line charges to provide service to customers. Gross margin for the three months ended September 30, 1999 was $4.2 million, or 46% of revenue, compared to $1.7 million, or 65% of revenue for the three months ended September 30, 1998. The lower gross margin ratio was due primarily to lower margins of three recent non-ISP acquisitions. Although the underlying cost structure for these acquisitions is being improved to restore the Company to higher margins, traditional telecom services historically generate lower gross margins than the Company's other Communication Services operations. The Company plans to transition these local and long distance telecom customers to dial-up Internet subscribers over the next year, which may help restore margins to historical levels. SELLING EXPENSES Total selling expenses increased from approximately $0.5 million for the three months ended September 30, 1998 to $1.7 million for the three months ended September 30, 1999, for an increase of 261%. The increase was primarily due to the launch of a national advertising campaign in the third quarter of 1999 to support the Company's growing national presence and expanding line of products and services, as well as an increase in sales personnel throughout the country. GENERAL AND ADMINISTRATIVE EXPENSES Total general and administrative expenses ("G&A") increased from approximately $1.4 million for the three months ended September 30, 1998 to $5.6 million for the three months ended September 30, 1999, for an increase of 306%. This increase was partially the result of higher payroll costs and benefits. Payroll and benefits cost increased 280% from $0.9 million in the three months ended September 30, 1998 to $3.2 million in the three months ended September 30, 1999 as a result of increasing the Company's headcount from approximately 115 employees in September 1998 to approximately 425 employees in September 1999. Outside services, which includes "temporary to hire" staff and professional services, increased 188% from $0.2 million in the three months ended September 30, 1998 to $0.5 million in the three months ended September 30, 1999. The Company hires many of the technical support call center staff and the Web production staff on a "temp to hire" program, wherein the new employee remains on the temporary employment agency's payroll for approximately ninety days. COSTS RELATED TO UNSUCCESSFUL MERGER ATTEMPT In June 1998, the Company announced it had entered into a merger agreement to acquire Internet Communications Corporation ("ICC"). The closing of the acquisition was subject to various closing conditions, and the merger agreement contained certain rights of termination. As a result of the termination and the related financing transactions which were not completed, the Company incurred cost, expenses and related fees of approximately $6.1 million, a portion of which are in dispute. Of this amount, approximately $4.2 million relates to a non-cash item related to warrants issued by the Company. Of the $6.1 million total expense incurred, $4.5 million was recognized in the third quarter of 1998. The remaining $1.6 million was recognized in the fourth quarter of 1998. DEPRECIATION AND AMORTIZATION Depreciation and amortization increased from $0.5 million for the three months ended September 30, 1998 to $2.3 million for the three months ended September 30, 1999 for an increase of 365%. The increase was due to higher goodwill amortization associated with seventeen companies that were acquired since September 30, 1998. 9 NINE MONTHS ENDED SEPTEMBER 30, 1999 AND SEPTEMBER 30, 1998 TOTAL REVENUE The Company's total revenues grew 219% from $6.5 million to $20.8 million for the nine months ended September 30, 1999 from September 30, 1998. Revenue growth performance is attributable to an increase in the number of the Company's customers as a result of customers added by acquisition and a more aggressive sales effort. The Company intensified its sales efforts in 1999 versus 1998 by increasing the size of the sales force and by segmenting the sales team by product group. COMMUNICATION SERVICES Communication Services is comprised predominately of dial-up and dedicated Internet access service. Communication Services revenues grew 245% from $5.2 million to $17.9 for the nine months ended September 30, 1999 from September 30, 1998. The increase results in part from the addition of over 49,000 dial-up customers, over 1,200 dedicated access customers and over 19,500 local and long distance customers due to acquisitions in the fourth quarter of 1998 and the first nine months of 1999. The growth in revenue is also due to increasing demand for a wide range of bandwidth options to connect customers to the Internet and the productivity of the Company's sales department in 1999. WEB SOLUTIONS Web Solutions revenues grew 120% from $1.3 million for the nine months ended September 30, 1998 to $2.9 million for the nine months ended September 30, 1999. Web Solutions revenues are comprised of three major products: web site hosting, web site production and web site marketing. Web site hosting accounted for $0.4 million of revenue in the first nine months of 1998 and $0.9 million in the first nine months of 1999, for an increase of 101%. Web site production increased from $0.8 million in the first nine months of 1998 to $2.0 million in the first nine months of 1999, for an increase of 159%. The increase in web site production is primarily due to the acquisition of Application Methods in July 1998, as well as an increase in sales personnel throughout the country. GROSS PROFIT Gross profit consists of total revenue less the direct cost of delivering services and equipment. These costs include costs for circuit and local line charges to provide service to customers. Gross margin for the first nine months of 1999 was $9.9 million, or 48% of revenue, compared to $4.0 million, or 61% of revenue for the first nine months of 1998. The lower gross margin ratio was due primarily to lower margins of three recent non-ISP acquisitions. Although the underlying cost structure for these acquisitions is being improved to restore the Company to higher margins, traditional telecom services historically generate lower gross margins than the Company's other Communication Services operations. The Company plans to transition these local and long distance telecom customers to dial-up Internet subscribers over the next year, which may help restore margins to historical levels. SELLING EXPENSES Total selling expenses increased from approximately $1.3 million for the nine months ended September 30, 1998 to $3.7 million for the nine months ended September 30, 1999, for an increase of 184%. The increase was primarily due to the launch of a national advertising campaign in the third quarter of 1999 to support the Company's growing national presence and expanding line of products and services. 10 GENERAL AND ADMINISTRATIVE EXPENSES Total general and administrative expenses ("G&A") increased from approximately $4.3 million for the nine months ended September 30, 1998 to $13.8 million for the nine months ended September 30, 1999, for an increase of 220%. This increase was partially the result of higher payroll costs and benefits. Payroll and benefits cost increased 187% from $2.4 million in the first nine months of 1998 to $8.0 million in the first nine months of 1999 as a result of increasing the Company's headcount from approximately 115 employees in September 1998 to approximately 425 employees in September 1999. Outside services, which includes "temporary to hire" staff and professional services increased 123% from $0.8 million in the first nine months of 1998 to $1.8 million in the first nine months of 1999. The Company hires many of the technical support call center staff and the Web production staff on a "temp to hire" program, wherein the new employee remains on the temporary employment agency's payroll for approximately ninety days. COSTS RELATED TO UNSUCCESSFUL MERGER ATTEMPT In June 1998, the Company announced it had entered into a merger agreement to acquire Internet Communications Corporation ("ICC"). The closing of the acquisition was subject to various closing conditions, and the merger agreement contained certain rights of termination. As a result of the termination and the related financing transactions which were not completed, the Company incurred cost, expenses and related fees of approximately $6.1 million, a portion of which are in dispute. Of this amount, approximately $4.2 million relates to a non-cash item related to warrants issued by the Company. Of the $6.1 million total expense incurred, $4.5 million was recognized in the third quarter of 1998. The remaining $1.6 million was recognized in the fourth quarter of 1998. DEPRECIATION AND AMORTIZATION Depreciation and amortization increased from $1.0 million for the nine months ended September 30, 1998 to $4.9 million for the nine months ended September 30, 1999, for an increase of 399%. The increase was due to higher goodwill amortization that was associated with acquisitions completed subsequent to September 30, 1998. EFFECTS OF INFLATION Historically, inflation has not had a material effect on the Company. LIQUIDITY AND CAPITAL RESOURCES For the nine months ended September 30, 1999, the Company's cash used in operations was $9.2 million as compared to $0.3 million for the nine months ended September 30, 1998. The increase in cash used in operations primarily resulted from increased operating losses and higher working capital requirements in 1999. The Company expects to continue to have operating cash flow deficiencies for the near future as it develops and expands its business. For the nine months ended September 30, 1999, the Company used $2.9 million in investing activities compared to $0.9 million for the same period in 1998. This change was primarily due to increased capital expenditures in 1999. Cash provided by financing activities increased in the nine months ended September 30, 1999 compared to the same period in 1998 due to proceeds received from the exercise of warrants issued in conjunction with the Company's 1996 initial public offering. The warrants were exercised after the Company exercised its call option. In addition, on August 13, 1999, the Company's Chief Executive Officer exercised 3,950,000 warrants to purchase the Company's common stock yielding net proceeds to the Company of approximately $7.5 million. 11 Since its inception, the Company has funded its operations and working capital needs primarily through the public and private placement of the Company's equity securities. In addition, a significant portion of the Company's capital expenditures has been financed through capital lease obligations payable to finance companies. The Company has also borrowed amounts from its Chief Executive Officer in order to fund working capital requirements. The Company also issued 8,000 shares of its Series B Redeemable, Convertible Preferred Stock ("Series B Preferred Stock") through a private placement, which was completed on December 10, 1998. The Company received $8 million in gross proceeds from the issuance of the Series B Preferred Stock, which was sold to two institutional investors. The Series B Preferred Stock is convertible, subject to certain restrictions, into shares of the Company's common stock at a variable rate, based on a formula linked to the market price at the time of conversion. The terms of the Series B Preferred Stock also includes restrictions on conversion depending on certain market conditions, restrictions against short sales and other hedging transactions by the investors and a conversion rate which may be up to a 20% premium to the market price or a discount to the market price depending on the time of conversion. The Series B Preferred Stock may be redeemed by the Company at any time if the Company is in compliance with certain covenants at a minimum redemption price equal to 115% times the outstanding face amount plus accrued but unpaid dividends and interest. In addition, the Series B Preferred Stock may be redeemed at the option of the holders if the Company's common stock ceases to be traded on either the NASDAQ, NASDAQ Small Cap, NYSE or the AMEX stock exchanges, if the Company is unable to convert the shares into common stock upon a requested conversion or if the Company is merged into another entity where the Company's voting stockholders do not collectively own greater than 51% of the merged entity. As of September 30, 1999, 5,963 shares of Series B Preferred Stock have been converted into 580,087 shares of the Company's common stock and 113 shares of Series B Preferred Stock have been issued as dividends; 2,150 shares of Series B Preferred Stock remained outstanding. From October 1, 1999 to November 8, 1999, an additional 2,086 shares of Series B Preferred Stock have been converted into 372,270 shares of the Company's common stock, leaving 64 shares of Series B Preferred Stock outstanding. In addition, the Company issued warrants to purchase 155,000 shares of common stock with an exercise price equal to 130% of the closing day market price, exercisable at any time over the next five years, to the purchasers of the Series B Preferred Stock and warrants to purchase 100,000 shares of common stock with an exercise price equal to 120% of the closing day market price, exercisable over the next five years, to certain brokers in connection with the transaction. The Company has cash and cash equivalents of $6.2 million as of September 30, 1999. Management estimates that, based upon its current expectations for growth, the Company will not require additional funding through the end of 1999. However, in order to execute its current business plan over the next 12 months, including financing of its anticipated capital expenditures and operating losses, the Company will require additional funding of up to $10 million. The Company intends to obtain this funding from one or more of the following sources: (1) a commitment, subject to certain conditions, from one of the institutional investors who purchased the Series B Preferred Stock in December 1998 to purchase an additional $5.0 million of preferred stock with the same terms as the Series B Preferred Stock, (2) establish master lease agreements with certain communications equipment and computer hardware manufacturers for $10.0 million, (3) establish a credit facility to finance equipment purchased and other capital expenditures for $5.0 million, and (4) placement of $10.0 million of additional equity or convertible debt securities with certain institutional investors. Management believes its current operating funds, along with these additional financing sources, will be sufficient to fund its cash requirements for at least the next 12 months. The sale of additional equity or convertible debt securities could result in additional dilution to the Company's stockholders. In addition, the Company will, from time to time, consider the acquisition of or investment in complementary businesses, products, services, and technologies, and the repurchase and retirement of debt, which might impact the Company's liquidity requirements or cause the Company to issue additional equity or debt securities. There can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all. Should the Company be unsuccessful in its efforts to raise capital it may be required to modify or curtail its plans for growth. The Company announced on November 8, 1999 that it was consolidating its national call center operations and closing its Opelika, Alabama call center. The Company expects to save approximately $2.5 million on an annual basis, and reduce its overall headcount by approximately 75 employees, through this action. YEAR 2000 ISSUES 12 The following disclosure is a "Year 2000 Statement" and a "Year 2000 Readiness Disclosure," as defined in the Year 2000 Information and Readiness Disclosure Act, signed into law by President Clinton on October 19, 1998 (Pub. L. 105-271, 112 Stat. 2386). The Company is preparing its systems and applications for the Year 2000 ("Y2K"). Various problems may result from the improper processing of dates and date-sensitive calculations by computers and other machinery as the year 2000 is approached and reached. These problems arise from the fact that most of the world's computer hardware and software have historically used only two digits to identify the year in a date. If the computer systems cannot distinguish between the year 1900 and 2000, system failures or other computer errors could result. STATE OF READINESS The Company has established a Y2K Committee to coordinate appropriate activity and a reporting structure to the Board of Directors on a monthly basis with regard to the Year 2000 issue. This committee has outlined a comprehensive plan and is currently implementing the tasks associated for the Company to become Y2K ready. Indications are that, since RMI.NET is a relatively new Company (founded in 1993), most hardware and software systems, as well as software programs used by the Company, will not be impacted by the Year 2000 issues. All of the Company's MIS user equipment is based on Microsoft Windows 95, 98, or NT. Microsoft has issued or is issuing patches that will make this software compliant by year-end. Internal MIS systems that handle accounting and customer care are being replaced due to growth needs. All future software that will be purchased will be Y2K compliant. All internally written software has been checked to ensure Y2K compliance. Users have been briefed on the necessity for them to check any special, non-mission critical software that they have purchased for their departments to ensure that it is Y2K compliant. The Company has inventoried the externally purchased network elements including routers, router software, router redundancy options, processor cards and switches. The Company has verified 100% completion of testing, in cooperation with the external vendors, that the products associated with the network elements are Y2K compliant. After testing and certification, the Company learned that over 90% of the network elements passed the Y2K compliance test. Of the elements that failed, and therefore were not Y2K compliant, the Company has upgraded the majority of equipment and software to be Year 2000 compliant. The remaining items will be replaced no later than November 1999. The Company has acquired 19 companies since June 1998. The Company is currently working very closely with each acquired company to determine its state of readiness. Overall, the Company believes that the majority of the acquired companies are Y2K compliant from a hardware and software perspective. The Company is still testing the remaining acquired companies. With respect to communications from external third parties requesting that the Company provide verification of Y2K compliance on the Company's goods and services, the Company has sent formal response letters for all requests received prior to October 31, 1999. On or before November 15, 1999, the Company expects to complete its final issuance of requests to all external third party vendors that provide additional goods and services to the Company. Subsequent testing will indicate what modifications or replacements will be necessary for the Company to be internally Year 2000 ready. The Company is continuing to evaluate the financial impact for Y2K compliance, and expects that total costs will not exceed $200,000 to $250,000. The estimates for the costs of the Year 2000 Program are based upon management's best estimates and may be updated or revised as additional information becomes available. The Company has incurred approximately $20,000 thus far on administrative costs and approximately $180,000 thus far on alternative power costs, in connection with assessing the Y2K issues. Due to the Company's headquarters and data center move 13 during the first quarter of 1999, the Company estimates no more than $50,000 was spent for the data center move and to ensure non-Y2K compliant equipment was replaced with equipment that met Y2K standards. The Company believes such costs will not have a material effect on the Company's financial condition, liquidity or results of operation. RISK ASSESSMENT The failure by the Company to correct a material Year 2000 problem could result in an interruption in, or a failure of, certain normal business activities or operations. Presently, however, the Company perceives that its most likely worst case scenario related to the Year 2000 is associated with potential concerns with third party services or products. The Company is dependent on a significant number of third party vendors to provide network services and equipment. A significant Year 2000-related disruption of the network services or equipment provided to the Company by third party vendors could cause customers to consider seeking alternate providers or cause an unmanageable burden on customer service and technical support, which in turn could materially and adversely affect the Company's results of operations, liquidity and financial condition. Although the Company believes that internal Y2K compliance will be achieved by December 31, 1999, there can be no assurance that the Y2K problem will not have a material adverse affect on the Company's business, financial condition and results of operations as a result of third party failures. CONTINGENCY PLANS Due to the current phase of the Company's Year 2000 analysis, the Company is currently unable to fully assess its risk and determine what contingency plans, if any, need to be implemented by the Company. The Company's primary concern, at this point, is with its third party communications providers. These service providers are conducting their own assessments of their Year 2000 readiness. The Company expects that these third party vendors will be Year 2000 ready. However, any failure by third party vendors to resolve Year 2000 issues on a timely basis or in a manner that is compatible with the Company's systems could have a material adverse effect on the Company. Preliminary indications are, however, that the Company's third-party providers are, or will be, Year 2000 compliant. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company does not have any derivative financial instruments as of September 30, 1999. The Company's interest income and expense are sensitive to changes in the general level of interest rates. In this regard, changes in interest rates can affect the interest earned on the Company's cash equivalents. The Company's long-term debt has fixed interest rates and the fair value of these instruments is affected by changes in market interest rates. To mitigate the impact of fluctuations in interest rates, the Company generally enters into fixed rate investing and borrowing arrangements. As a result, the Company believes that the market risk arising from holding of its financial instruments is not material. 14 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In June 1998, the Company announced it had entered into a merger agreement to acquire Internet Communications Corporation ("ICC"). The closing of the acquisition was subject to various closing conditions, and the merger agreement contained certain rights of termination. On October 13, 1998, the Company announced that it terminated the merger agreement due to, among other things, ICC's failure to satisfy certain obligations under the merger agreement. On October 14, 1998, ICC filed a complaint against the Company in Denver District Court claiming $30 million in damages and alleging, among other things, that the Company had breached the merger agreement and had made certain misrepresentations to ICC with respect to the merger transaction. The Company has consistently stated that ICC's claims were frivolous and without merit, and vigorously defended such action and asserted counterclaims against ICC. On August 6, 1999, ICC agreed to dismiss with prejudice all claims brought in their lawsuit against the Company, and entered into a Settlement Agreement resolving all current and future claims related to the terminated merger. Under the Settlement Agreement, the Company made no payment of any monies or anything of value to ICC as a result of the claims. As a result of the merger termination and the related financing transactions, which were not completed, the Company incurred cost, expenses and related fees of $6.1 million, a portion of which are in dispute. Of this amount, approximately $4.2 million relates to a non-cash item related to warrants issued by the Company. Of the $6.1 million expensed, $0.8 million remained accrued at September 30, 1999 related to this matter. At this time, management of the Company is unable to determine the possible outcome of this remaining dispute. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS During the three months ended September 30, 1999, the Company issued, committed to issue, and/or sold the following securities: - During the quarter ended September 30, 1999, the Company issued 354,023 shares of common upon conversion of 3,276 shares of its Series B Preferred Stock. Pursuant to the terms of the Company's Series B Preferred Stock, the conversion price was 93.13% of the arithmetic average of the lowest three closing bid prices during the 20 consecutive trading days immediately preceding the conversion date. - On July 30, 1999, the Company agreed to issue 441,175 shares of common stock (valued at approximately $5.3 million) in the acquisition of Triad Resources, L.L.C., an Oklahoma limited liability company doing business as "WebZone" and headquartered in Tulsa, Oklahoma. WebZone is an Internet service provider. - On July 30, 1999, the Company agreed to issue 174,634 shares of common stock (valued at approximately $1.9 million) in the acquisition of ACES Research, Inc., an Arizona corporation headquartered in Tucson, Arizona. ACES Research is an Internet service provider whose customer base is comprised of dedicated Internet access users. - On August 13, 1999, the Company issued 3,950,000 shares of common stock to Douglas H. Hanson pursuant to his exercise of warrants granted under the warrant agreement of October 1997 between Rocky Mountain Internet, Inc. (now known as RMI.Net, Inc.) and Mr. Hanson. 15 - On August 30, 1999, the Company agreed to issue 174,001 shares of common stock (valued at approximately $1.5 million) in the acquisition of the high-end web hosting and dedicated access service assets of Novo Media Group, Inc., a California corporation headquartered in San Francisco, California. - On August 31, 1999, the Company agreed to issue 811,687 shares of common stock (valued at approximately $6.6 million) in the acquisition of the assets of Wolfe Internet Access, L.L.C., a Washington limited liability company headquartered in Seattle, Washington and doing business as "WolfeNet." ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER EVENTS None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (b) Exhibits.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT ------------- --------------------------------------------- 27.1 Financial Data Schedule.
(b) Reports on Form 8-K. 1) On July 8, 1999, the Registrant filed a Current Report on Form 8-K to report a change in the Registrant's name from Rocky Mountain Internet, Inc. to RMI.NET, Inc. The Registrant's common stockholders approved the name change at the 1999 Annual Meeting of Stockholders, which was held on June 24, 1999. 2) On July 8, 1999, the Registrant filed a Current Report on Form 8-K to report the Registrant's acquisition of CommerceGate Corporation, a Washington corporation. 3) On July 12, 1999, the Registrant filed an amended Current Report on Form 8-K (initially filed on July 8, 1999) to report the acquisition of CommerceGate Corporation, a Washington corporation, and to file the acquisition agreement as an exhibit. 4) On July 19, 1999, the Registrant filed a Current Report on Form 8-K to report the Registrant's acquisition of CyberDesic Communications Corporation, Inc., an Illinois corporation. 5) On August 4, 1999, the Registrant filed an amended Current Report on Form 8-K (initially filed on June 28, 1999) to report the Registrant's acquisition of IdealDial 16 Corporation, an Illinois corporation, and to provide financial statements and pro forma financial information regarding the acquisition. 6) On August 26, 1999, the Registrant filed a Current Report on Form 8-K to report the Registrant's acquisition of Triad Resources, L.L.C., an Oklahoma limited liability company, in order to provide financial statements and pro forma financial information regarding the acquisition. The acquisition was initially reported in the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, as filed with the Securities and Exchange Commission on August 9, 1999. 7) On August 30, 1999, the Registrant filed a Current Report on Form 8-K to report the Registrant's acquisition of ACES Research, Inc., an Arizona corporation, in order to provide financial statements and pro forma financial information regarding the acquisition. The acquisition was initially reported in the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, as filed with the Securities and Exchange Commission on August 9, 1999. 8) On September 14, 1999, the Registrant filed a Current Report on Form 8-K to report the Registrant's acquisition of the high-end web hosting and dedicated access service assets of Novo Media Group, Inc., a California corporation. 9) On September 15, 1999, the Registrant filed a Current Report on Form 8-K to report the Registrant's acquisition of Wolfe Internet Access, L.L.C., a Washington limited liability company. 17 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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: November 9, 1999. RMI.NET, INC. a Delaware corporation By: /s/ DOUGLAS H. HANSON ------------------------------------- Name: Douglas H. Hanson Title: Chairman of the Board, Chief Executive Officer and Director (PRINCIPAL EXECUTIVE OFFICER) By: /s/ MICHAEL D. DINGMAN, JR. ------------------------------------- Name: Michael D. Dingman, Jr. Title: Treasurer (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER) 18 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT ------------- -------------------------------------------------- 27.1 Financial Data Schedule.
19 EX-27.1 2 EXHIBIT 27.1
5 YEAR DEC-31-1999 JAN-01-1999 SEP-30-1999 6,212,781 0 5,863,635 1,182,517 222,896 12,240,493 13,381,650 3,500,489 58,120,438 10,717,011 0 1,928,171 0 17,533 42,715,362 58,120,438 0 20,783,359 0 10,842,354 21,132,486 1,123,742 368,968 (12,684,191) 0 (12,684,191) 0 0 0 (12,684,191) (1.09) (1.09)
-----END PRIVACY-ENHANCED MESSAGE-----