LOOK » Topics » Liquidity and Capital Resources

This excerpt taken from the LOOK 10-Q filed Nov 7, 2008.

Liquidity and Capital Resources

LookSmart’s primary sources of liquidity during the nine months ended September 30, 2008 were existing cash, cash equivalents, short term investments, as well as cash received from the collection of accounts receivable.

 

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This excerpt taken from the LOOK 10-Q filed Aug 11, 2008.

Liquidity and Capital Resources

LookSmart’s primary sources of liquidity during the six months ended June 30, 2008 were existing cash, cash equivalents, short term investments as well as cash received from the collection of accounts receivable balances generated from sales in the first and second quarters of 2008.

This excerpt taken from the LOOK 10-Q filed May 12, 2008.

Liquidity and Capital Resources

The following table presents our cash flows provided by (used in) operating, investing and financing activities for the three months ended March 31, 2008 and 2007 (in thousands):

 

     Three Months Ended
March 31,
 
     2008     2007  

Net cash used in operating activities

   $ (2,052 )   $ (1,967 )

Net cash used in investing activities

   $ (567 )   $ (4,849 )

Net cash provided by (used in) financing activities

   $ (20,882 )   $ 81  

Our primary source of cash is receipts from revenues. The primary uses of cash are labor and labor related costs (salaries, benefits, other employee compensation, temporary help, and consulting), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and professional services fees related to legal and audit costs. During the first quarter of 2008 the Company repurchased 5,952,596 shares for a total cost of approximately $20.8 million. This amount is included in the cash used in financing activities.

We ended the first quarter of 2008 with approximately $32.8 million in cash, cash equivalents, and short and long-term investments, a decrease of approximately $23.4 million from December 31, 2007 of $56.2 million and a decrease of approximately $5.8 million from March 31, 2007 of approximately $38.6 million.

We have outstanding standby letters of credit (“SBLC”) of approximately $1.1 million at March 31, 2008 related to security of a building lease and security for payroll processing services. The SBLC contains two financial covenants. As of March 31 2008, we were in compliance with all required covenants.

On April 6, 2007, the Company entered into a master equipment lease agreement with CNB for an amount of up to $5 million for the purchase of technical equipment. This line of credit expired on March 30, 2008 and was available for equipment leases with rental terms from 36 to 48 months. Interest on the capital lease was calculated using an interest rate of 7.38% per annum. As of March 31, 2008, we had drawn down approximately $1.4 million from the available lease line of credit and repaid approximately $0.2 million of the capital lease.

On April 1, 2008, the Company renewed the master equipment lease agreement with CNB, which expired on March 30, 2008. See Footnote 11 for further details.

On February 22, 2008, we repurchased 5,151,504 of our shares via a modified Dutch Auction tender offer at $3.40 per share for a total cost of approximately $18.0 million. The common stock accepted for repurchase represented approximately 22.5% of our common stock issued and outstanding as of February 13, 2008.

On February 26, 2008, our Board of Directors authorized a stock repurchase program pursuant to which up to $5 million worth of our outstanding common stock may be repurchased through December 31, 2008. On February 29, 2008, we agreed to buy 801,092 shares at $3.51 per share, for a total cost of approximately $2.8 million. This trade settled on March 5, 2008. As a result 16,977,854 shares were issued and outstanding at March 31, 2008, net of 801,902 treasury shares.

The increase in cash used in operating activities for the first three months of 2008 compared to the first three months of 2007 was primarily due to a decrease in cash collected from accounts receivable of approximately $2.6 million, an increase in share-based compensation of approximately $0.5 million, and a decrease in accrued expenses of approximately $1.2 million. The increase in cash used in operating activities was offset by a decrease in net loss of approximately $2.9 million, a decrease in other assets of approximately $0.5 million, a decrease in amortization and depreciation of approximately $0.4 million, and a decrease in deferred revenue of approximately $0.4 million. .

The decrease in cash used in investing activities in the first three months of 2008 was primarily due to increase in proceeds from short-term investments of approximately $9.4 million, partially offset by an increase in purchases of short-term investments of approximately $5.2 million.

The increase in net cash used in financing activities during the first three months of 2008 was primarily due to the modified Dutch Auction, which cost approximately $18.0 million, and the stock repurchase program, on which the Company spent approximately $2.8 million, in the first quarter of 2008, as well as approximately $0.1 million related to the repayment of the capital lease obligations under our master equipment lease agreement with CNB.

We believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be assured that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

 

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These excerpts taken from the LOOK 10-K filed Mar 17, 2008.

Liquidity and Capital Resources

The following table presents our cash flows provided by (used in) operating, investing and financing activities for the years ended December 31, 2007, 2006, and 2005 (in thousands).

 

     Year ended
December 31, 2007
    Year ended
December 31, 2006
    Year ended
December 31, 2005
 

Cash flows used in operating activities

   $ (1,946 )   $ (6,312 )   $ (7,467 )

Cash flows provided by (used in) investing activities

   $ 4,568     $ 5,614     $ (2,470 )

Cash flows provided by financing activities

   $ 220     $ 163     $ 111  

Our primary source of cash is receipts from revenues. The primary uses of cash are labor costs (salaries, benefits, and other employee compensation), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and content costs associated with our consumer sites, and professional services fees related to legal and audit costs. We ended 2007 with $56.2 million in cash, cash equivalents, and short and long-term investments, an increase of $15.0 million from $41.2 million at December 31, 2006.

We have outstanding standby letters of credit (“SBLC”) related to security of building leases and security for payroll processing services of $1.1 million at December 31, 2007. The SBLC contains two financial covenants. As of December 31, 2007, we were in compliance with all required covenants.

On April 6, 2007, the Company entered into a master equipment lease agreement with City National Bank (“CNB”) for an amount of up to $5 million for the purchase of technical equipment. This lease line of credit expires on March 30, 2008 and is available for equipment leases with rental terms from 36 to 48 months. Interest on the capital lease is calculated using an interest rate of 7.66% per annum. As of December 31, 2007, we had drawn down approximately $1.1 million from the available lease line of credit and repaid approximately $0.1 million of the capital lease.

Subsequent to the year end, on February 22, 2008, we repurchased 5,151,504 of our shares via a modified Dutch Auction tender offer at $3.40 per share for a total cost of approximately $17.5 million. The common stock accepted for purchase represents approximately 22.5% of our common stock issued and outstanding as of February 13, 2008. As a result of the completion of the tender offer, approximately 17.8 million shares of common stock are issued and outstanding as of February 22, 2008.

 

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On February 26, 2008, we announced that our Board of Directors authorized a stock repurchase program pursuant to which up to $5 million of our outstanding common stock may be repurchased through December 31, 2008. On March 5, 2008, we bought back 801,092 shares at $3.51 per share, for a total cost of approximately $2.8 million. See Footnote 18 for further details.

The decrease in cash used in operating activities in 2007 compared to 2006 was primarily due to the increase in net income of $17.1 million, which included a non operating cash net gain and contingent purchase consideration received from the sale of certain consumer assets of approximately $14.2 and $0.3 million, respectively, an increase in impairment charges of $1.6 million, an increase in accounts receivable of $1.3 million, a decrease in cash paid for accrued liabilities of $1.9 million, a decrease in depreciation and amortization of $1.6 million, as well as a decrease in deferred revenue and customer deposits of approximately $1.1 million. During 2006 the decrease in cash used in operating activities compared to 2005 was primarily due to the decrease in net loss of $4.1 million, a decrease in cash paid for accrued liabilities of $2.5 million and a decrease in depreciation and amortization of $1.5 million, offset by an increase in accounts receivable of approximately $3.0 million due to increased revenues and a shift from self-service customers to managed customers. Managed service accounts represented less than 50% of revenues at the beginning of 2006, and more than 50% of revenues by the end of 2006. The change in cash used is also due to an increase in share-based compensation of approximately $2.3 million, and an increase in long-term liabilities of approximately $1.3 million.

Net cash provided by investing activities in 2007 of $4.6 million resulted primarily from the proceeds from the sale of certain consumer assets of approximately $17.7 million, and proceeds from the sale of investments of approximately $27.4 million and partially offset by the purchase of investments of approximately $39.6 million. Further, we invested approximately $1.6 in property, equipment and capitalized software development in 2007 as compared to $4.1 million in 2006, and financed approximately $1.1 million through a capital lease in 2007. The decrease in cash provided in 2007 was partially offset by cash received from our joint venture in the amount of approximately $0.4 million, as part of the joint venture liquidation. Net cash provided by investing activities in 2006 of $5.6 million resulted primarily from the maturities of investments of $20.2 million, partially offset by purchases of short-term investments of $9.5 million and long-term investments of $1.0 million. Further, we purchased equipment and capitalized costs related to internally developed software of $4.1 million compared to $3.9 million in 2005.

Net cash provided by financing activities during 2007 of approximately $0.2 million resulted from payments under the capital lease obligation of approximately $0.1 million, repayment of notes of $57 thousand, proceeds from issuance of common stock related to our employee stock plans of approximately $0.2 million, as well as proceeds from the sale and lease back of equipment of approximately $0.2 million. Net cash provided by financing activities in 2006 of $0.2 million resulted primarily from the proceeds related to our employee stock plans of $0.2 million, which remained relatively constant from 2005. We also made payments against our outstanding note payable of approximately $53 thousand.

While cash decreased through the date of filing by approximately $20.3 million due to the completion of the tender offer, as well as the stock buyback through our repurchase program, we believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short-term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be certain that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

Liquidity and Capital Resources

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The following table presents our cash flows provided by (used in) operating, investing and financing activities for the years ended December 31,
2007, 2006, and 2005 (in thousands).

 







































































   Year ended
December 31, 2007
  Year ended
December 31, 2006
  Year ended
December 31, 2005
 

Cash flows used in operating activities

  $(1,946) $(6,312) $(7,467)

Cash flows provided by (used in) investing activities

  $4,568  $5,614  $(2,470)

Cash flows provided by financing activities

  $220  $163  $111 

Our primary source of cash is receipts from revenues. The primary uses of cash are labor costs
(salaries, benefits, and other employee compensation), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and content costs associated with our
consumer sites, and professional services fees related to legal and audit costs. We ended 2007 with $56.2 million in cash, cash equivalents, and short and long-term investments, an increase of $15.0 million from $41.2 million at December 31,
2006.

We have outstanding standby letters of credit (“SBLC”) related to security of building leases and security for payroll
processing services of $1.1 million at December 31, 2007. The SBLC contains two financial covenants. As of December 31, 2007, we were in compliance with all required covenants.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">On April 6, 2007, the Company entered into a master equipment lease agreement with City National Bank (“CNB”) for an amount of up to $5 million
for the purchase of technical equipment. This lease line of credit expires on March 30, 2008 and is available for equipment leases with rental terms from 36 to 48 months. Interest on the capital lease is calculated using an interest rate of 7.66%
per annum. As of December 31, 2007, we had drawn down approximately $1.1 million from the available lease line of credit and repaid approximately $0.1 million of the capital lease.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Subsequent to the year end, on February 22, 2008, we repurchased 5,151,504 of our shares via a modified Dutch Auction tender offer at $3.40 per
share for a total cost of approximately $17.5 million. The common stock accepted for purchase represents approximately 22.5% of our common stock issued and outstanding as of February 13, 2008. As a result of the completion of the tender offer,
approximately 17.8 million shares of common stock are issued and outstanding as of February 22, 2008.

 


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On February 26, 2008, we announced that our Board of Directors authorized a stock repurchase program
pursuant to which up to $5 million of our outstanding common stock may be repurchased through December 31, 2008. On March 5, 2008, we bought back 801,092 shares at $3.51 per share, for a total cost of approximately $2.8 million. See Footnote 18
for further details.

The decrease in cash used in operating activities in 2007 compared to 2006 was primarily due to the increase in net
income of $17.1 million, which included a non operating cash net gain and contingent purchase consideration received from the sale of certain consumer assets of approximately $14.2 and $0.3 million, respectively, an increase in impairment charges of
$1.6 million, an increase in accounts receivable of $1.3 million, a decrease in cash paid for accrued liabilities of $1.9 million, a decrease in depreciation and amortization of $1.6 million, as well as a decrease in deferred revenue and customer
deposits of approximately $1.1 million. During 2006 the decrease in cash used in operating activities compared to 2005 was primarily due to the decrease in net loss of $4.1 million, a decrease in cash paid for accrued liabilities of $2.5 million and
a decrease in depreciation and amortization of $1.5 million, offset by an increase in accounts receivable of approximately $3.0 million due to increased revenues and a shift from self-service customers to managed customers. Managed service
accounts represented less than 50% of revenues at the beginning of 2006, and more than 50% of revenues by the end of 2006. The change in cash used is also due to an increase in share-based compensation of approximately $2.3 million, and an increase
in long-term liabilities of approximately $1.3 million.

Net cash provided by investing activities in 2007 of $4.6 million resulted
primarily from the proceeds from the sale of certain consumer assets of approximately $17.7 million, and proceeds from the sale of investments of approximately $27.4 million and partially offset by the purchase of investments of approximately $39.6
million. Further, we invested approximately $1.6 in property, equipment and capitalized software development in 2007 as compared to $4.1 million in 2006, and financed approximately $1.1 million through a capital lease in 2007. The decrease in cash
provided in 2007 was partially offset by cash received from our joint venture in the amount of approximately $0.4 million, as part of the joint venture liquidation. Net cash provided by investing activities in 2006 of $5.6 million resulted primarily
from the maturities of investments of $20.2 million, partially offset by purchases of short-term investments of $9.5 million and long-term investments of $1.0 million. Further, we purchased equipment and capitalized costs related to internally
developed software of $4.1 million compared to $3.9 million in 2005.

Net cash provided by financing activities during 2007 of
approximately $0.2 million resulted from payments under the capital lease obligation of approximately $0.1 million, repayment of notes of $57 thousand, proceeds from issuance of common stock related to our employee stock plans of approximately $0.2
million, as well as proceeds from the sale and lease back of equipment of approximately $0.2 million. Net cash provided by financing activities in 2006 of $0.2 million resulted primarily from the proceeds related to our employee stock plans of $0.2
million, which remained relatively constant from 2005. We also made payments against our outstanding note payable of approximately $53 thousand.

SIZE="2">While cash decreased through the date of filing by approximately $20.3 million due to the completion of the tender offer, as well as the stock buyback through our repurchase program, we believe that our working capital will provide adequate
liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures,
take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In
addition, unanticipated developments in the short-term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be certain that
additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

STYLE="margin-top:18px;margin-bottom:0px">Off-Balance Sheet Arrangements

We do not have any
off-balance sheet arrangements, investments in special-purpose entities or undisclosed borrowings or debt. Additionally, we are not a party to any derivative contracts or synthetic leases.

STYLE="margin-top:0px;margin-bottom:0px"> 


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This excerpt taken from the LOOK 10-Q filed Nov 9, 2007.

Liquidity and Capital Resources

The following table presents our cash flows provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2007, and 2006 (in thousands):

 

     Nine Months Ended
September 30,
 
     2007     2006  

Cash flows used in operating activities

   $ (2,882 )   $ (8,146 )

Cash flows provided by (used in) investing activities

   $ (11,374 )   $ 4,691  

Cash flows provided by financing activities

   $ 276     $ 45  

Our primary source of cash is receipts from revenue. The primary uses of cash are labor costs (salaries, benefits, and other employee compensation), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and content costs associated with our consumer sites, and professional services fees related to legal and audit costs. We ended the third quarter of 2007 with $37.4 million in cash, cash equivalents, and short and long-term investments, a decrease of $3.8 million from December 31, 2006 of $41.2 million.

The decrease in cash used in operating activities for the first nine months of 2007 compared to the first nine months of 2006 was primarily due to a decrease in net loss of approximately $2.8 million, a decrease of approximately $0.5 million in cash paid for accounts payable, a decrease in depreciation and amortization of approximately $1.1 million and a decrease of approximately $2.6 million in cash collected from accounts receivable. We received $1 million proceeds from the insurance carrier in relation to a settlement of a lawsuit, of which $0.6 million was applied to other current assets and $0.4 million to accrued expenses and other current liability.

Net cash used in investing activities for the first nine months of 2007 was higher than net cash provided by investing activities for the first nine months of 2006. We purchased approximately $19.6 million more investments during the first nine months of 2007. Further we sold $1.7 million more investments during the first nine months of 2007 than the same period of 2006. Additionally, we invested approximately $1.6 million in property, equipment and capitalized software development in the first nine months of 2007 compared to the same period in 2006, of which approximately $0.5 million was financed through a capital lease. The increase in cash used was partially offset by cash received from our joint venture in the amount of $0.4 million, as part of our liquidation process. We expect capital expenditures for technical equipment for the remainder of 2007 will be financed through a $5 million capital lease line of credit.

Net cash provided by financing activities during the first nine months of 2007 was higher than the same period of 2006 primarily due to approximately $77 thousand more in proceeds for the issuance of common stock related to our employee stock plans, as well as $0.2 million from the sale and lease back of equipment. This was offset by a $42 thousand of cash used in repayment of notes and $54 thousand of cash used for the repayment of our capital lease obligation.

We have outstanding standby letters of credit (“SBLC”) of $1.1 million at September 30, 2007 related to security of a building lease and security for payroll processing services. The SBLC contains two financial covenants. As of September 30, 2007, we were in compliance with all required covenants.

We believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be assured that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

 

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Table of Contents
This excerpt taken from the LOOK 10-Q filed Aug 9, 2007.

Liquidity and Capital Resources

The following table presents our cash flows provided by (used in) operating, investing and financing activities for the six months ended June 30, 2007, and 2006 (in thousands):

 

     Six Months Ended
June 30,
 
   2007     2006  

Cash flows used in operating activities

   $ (1,715 )   $ (5,924 )

Cash flows provided by (used in) investing activities

   $ (7,631 )   $ 2,138  

Cash flows provided by financing activities

   $ 321     $ 58  

Our primary source of cash is receipts from revenue. The primary uses of cash are labor costs (salaries, benefits, and other employee compensation), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and content costs associated with our consumer sites, and professional services fees related to legal and audit costs. We ended the second quarter of 2007 with $38.3 million in cash, cash equivalents, and short and long-term investments, a decrease of $2.9 million from December 31, 2006 of $41.2 million.

The decrease in cash used in operating activities for the first half of 2007 compared to the first half of 2006 was primarily due to a decrease in net loss of approximately $3.4 million, a decrease of approximately $1.1 million in cash paid for accounts payable, a decrease in depreciation and amortization of approximately $0.8 million, as well as a decrease of approximately $0.4 million in cash collected from accounts receivable.

Net cash used in investing activities for the first half of 2007 was higher than net cash provided by investing activities for the first half of 2006. We purchased approximately $14.6 million more investments during the first half of 2007. Further we sold $10.0 million more investments in the first half of 2007 than the first half of 2006. Additionally, we invested approximately $1.3 million in property, equipment and capitalized software development during the first half of 2007 compared to the same period in 2006, of which approximately $0.3 million was financed through a capital lease. Capital expenditure levels are expected to increase by approximately $1 million in 2007 from approximately $2.2 million spent in 2006 to accommodate required investments that were deferred during 2005 and 2006. We expect capital expenditures for technical equipment for the remainder of 2007 will be financed through a $5 million capital lease line of credit.

Net cash provided by financing activities during the first half of 2007 was higher than the same period of 2006 primarily due to approximately $75 thousand more in proceeds for the issuance of common stock related to our employee stock plans, as well as $0.2 million from the sale and lease back of equipment. This was offset by a $28 thousand of cash used in repayment of notes and $21 thousand of cash used in repayment of our capital lease obligation.

We have outstanding standby letters of credit (“SBLC”) of $1.0 million at June 30, 2007 related to security of a building lease and security for payroll processing services. The SBLC contains two financial covenants. As of June 30, 2007, we were in compliance with all required covenants.

We believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be assured that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

This excerpt taken from the LOOK 10-Q filed May 10, 2007.

Liquidity and Capital Resources

The following table presents our cash flows provided by (used in) operating, investing and financing activities for the three months ended March 31, 2007, and 2006 (in thousands):

 

     Three Months Ended
March 31,
 
     2007     2006  

Cash flows used in operating activities

   $ (1,967 )   $ (3,953 )

Cash flows provided by (used in) investing activities

   $ (4,849 )   $ 611  

Cash flows provided by financing activities

   $ 81     $ 12  

Our primary source of cash is receipts from revenue. The primary uses of cash are labor costs (salaries, benefits, and other employee compensation), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and content costs associated with our consumer sites, and professional services fees related to legal and audit costs. We ended the first quarter of 2007 with $38.6 million in cash, cash equivalents, and short and long-term investments, a decrease of $2.5 million from December 31, 2006 of $41.2 million.

The decrease in cash used in operating activities for the first three months of 2007 compared to the first three months of 2006 was primarily due to a decrease in net loss of approximately $1.1 million, an increase of approximately $0.6 million in cash collected from accounts receivable, an increase of approximately $0.5 million in cash paid for accounts payable, as well as a decrease in depreciation and amortization of approximately $0.4 million.

Net cash used in investing activities for the first three months of 2007 was higher than net cash used in investing activities for the three months of 2006. We purchased approximately $6.3 million more investments during the first quarter of 2007. Additionally, we invested approximately $0.8 million less in property, equipment and capitalized software development during the first three months of 2007 compared to the same period in 2006.

Net cash provided by financing activities during the first three months of 2007 was higher than the same period of 2006 primarily due to approximately $68 thousand more in proceeds for the issuance of common stock related to our employee stock plans.

We have outstanding standby letters of credit (“SBLC”) of $1.1 million at March 31, 2007 related to security of a building lease and security for payroll processing services. The SBLC contains two financial covenants. As of March 31, 2007, we were in compliance with all required covenants.

We believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be assured that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

This excerpt taken from the LOOK 10-K filed Mar 16, 2007.

Liquidity and Capital Resources

The following table presents our cash flows provided by (used in) operating, investing and financing activities for the years ended December 31, 2006, 2005, and 2004 (in thousands).

 

    

Year ended

December 31, 2006

   

Year ended

December 31, 2005

   

Year ended

December 31, 2004

 

Cash flows used in operating activities

   $ (6,312 )   $ (7,467 )   $ (6,771 )

Cash flows provided by (used in) investing activities

   $ 5,614     $ (2,470 )   $ (18,031 )

Cash flows provided by financing activities

   $ 163     $ 111     $ 4,561  

Our primary source of cash is receipts from revenues. The primary uses of cash are labor costs (salaries, benefits, and other employee compensation), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and content costs associated with our consumer sites, and professional services fees related to legal and audit costs. We ended 2006 with $41.2 million in cash, cash equivalents, and short and long-term investments, a decrease of $10.1 million from $51.3 million at December 31, 2005.

The decrease in cash used in operating activities in 2006 compared to 2005 was primarily due to the decrease in net loss of $4.1 million, a decrease in cash paid for accrued liabilities of $2.5 million and a decrease in depreciation and amortization of $1.5 million, offset by an increase in accounts receivable due to increased revenues and a shift from self-service customers to managed customers. Managed service customers have a dedicated account manager and therefore are invoiced. Self-service customers are supported by a customer service team and make payments with credit cards. Managed service accounts represented less than 50% of revenues at the beginning of 2006, and more than 50% of revenues by the end of 2006. During 2005, net cash used in operations increased $0.7 million from 2004. A net loss of $17.8 million in 2005 compared to a net loss of $9.6 million in 2004 was the primary reason for the increase. Further, a decrease in revenues caused a corresponding decrease in cash paid for accrued liabilities of $15.6 million primarily due to lower accruals for partner payments related to cost of revenues.

Net cash provided by investing activities in 2006 of $5.6 million resulted primarily from the maturities of investments of $20.2 million, partially offset by purchases of short-term investments of $9.5 million and long-term investments of $1.0 million. Further, we purchased equipment and capitalized costs related to internally developed software of $4.1 million compared to $3.9 million in 2005. In 2005 compared to 2004, net cash used in investing activities decreased $15.6 million primarily due to the proceeds from the sale of short-term investments of $9.9 million.

Net cash provided by financing activities in 2006 of $0.2 million resulted primarily from the proceeds related to our employee stock plans of $0.2 million, which remained relatively constant from 2005. We also made payments against our outstanding note payable of approximately $53 thousand. In 2005, net cash provided by financing activities decreased $4.5 million primarily due to a decrease in proceeds from our employee stock plans of $4.5 million.

We have outstanding standby letters of credit (“SBLC”) related to security of building leases and security for payroll processing services of $1.1 million at December 31, 2006. The SBLC contains two financial covenants. As of December 31, 2006, we were in compliance with all required covenants.

 

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While we expect cash to decrease in 2007, we believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short-term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be certain that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

This excerpt taken from the LOOK 10-Q filed Nov 9, 2006.

Liquidity and Capital Resources

The following table presents our cash flows provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2006 and 2005 (in thousands):

 

     Nine Months Ended
September 30,
 
     2006     2005  

Cash flows used in operating activities

   $ (8,146 )   $ (4,699 )

Cash flows provided by (used in) investing activities

   $ 4,691     $ (14 )

Cash flows provided by financing activities

   $ 45     $ 46  

Our primary source of cash is receipts from revenue. The primary uses of cash are payroll (salaries, benefits, and other employee compensation), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and content costs associated with owned and operated consumer sites, and professional services fees related to legal and audit costs. We ended the third quarter of 2006 with $40.2 million in cash, cash equivalents, and short and long-term investments, a decrease of $11.1 million from December 31, 2005 of $51.3 million.

The increase in cash used in operating activities for the nine months of 2006 compared to the nine months of 2005 was primarily due to a decrease of $4.0 million in cash collected from accounts receivable, as well as an increase of $1.6 million in cash paid for accounts payable.

Net cash provided by investing activities for the nine months of 2006 was higher than net cash used in investing activities for the nine months of 2005. We purchased $0.3 million less investments in 2006. Of the $5.5 million in investments we purchased in 2006, $1.0 million was classified as long term. Further, $12.9 million more investments matured in 2006 compared to 2005, which increased cash provided in 2006. Additionally, we invested $0.5 million more in property, equipment and capitalized software development during the nine months of 2006 compared to the same period in 2005.

Net cash provided by financing activities during the nine months of 2006 was consistent with the same period of 2005 representing payments against the principal balance of our outstanding note payable and proceeds for the issuance of common stock related to our employee stock plans.

We have outstanding standby letters of credit (“SBLC”) of $1.3 million at September 30, 2006 related to security of a building lease and security for payroll processing services. The SBLC contains two financial covenants. As of September 30, 2006, we were in compliance with all required covenants.

We believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be assured that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

This excerpt taken from the LOOK 10-Q filed Aug 9, 2006.

Liquidity and Capital Resources

The following table presents our cash flows provided by (used in) operating, investing and financing activities for the six months ended June 30, 2006 and 2005 (in thousands):

 

     Six Months Ended
June 30,
 
     2006     2005  

Cash flows used in operating activities

   $ (5,924 )   $ (1,448 )

Cash flows provided by (used in) investing activities

   $ 2,138     $ (60 )

Cash flows provided by financing activities

   $ 58     $ 56  

Our primary source of cash is receipts from revenue. The primary uses of cash are payroll (salaries, benefits, and other employee compensation), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and content costs associated with owned and operated sites, and professional services fees related to legal and audit costs. We ended the second quarter of 2006 with $43.2 million in cash, cash equivalents, and short and long-term investments, a decrease of $8.1 million from December 31, 2005 of $51.3 million.

The increase in cash used in operating activities in the first half of 2006 compared to the first half of 2005 was primarily due to a decrease of $2.2 million in cash collected from accounts receivable, as well as a decrease of $1.8 million in cash paid for accounts payable.

Net cash provided by investing activities in the first half of 2006 was higher than net cash used in investing activities in the first half of 2005. We purchased $4.8 million less investments in 2006. Of the $2.0 million in investments we purchased in 2006, $1.0 million was classified as long term. Further, $1.9 million more investments matured in 2005 compared to 2006, which decreased cash used in 2006. Additionally, we invested $1.2 million more in property, equipment and capitalized software development in the first half of 2006 compared to the same period in 2005.

Net cash provided by financing activities in the first half of 2006 was consistent with the first half of 2005 representing payments against the principal balance of our outstanding note payable and proceeds for the issuance of common stock related to our employee stock plans.

We have outstanding standby letters of credit (“SBLC”) of $1.3 million at June 30, 2006 related to security of a building lease and security for payroll processing services. The SBLC contains two financial covenants. As of June 30, 2006, we were in compliance with all required covenants.

We believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be assured that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

This excerpt taken from the LOOK 10-Q filed May 10, 2006.

Liquidity and Capital Resources

The following table presents our cash flows provided by (used in) operating, investing and financing activities for the three months ended March 31, 2006 and 2005.

 

     Three Months Ended
March 31,
 
(in thousands)    2006     2005  

Cash flows used in operating activities

   $ (3,953 )   $ (967 )

Cash flows provided by investing activities

   $ 611     $ 2,919  

Cash flows provided by financing activities

   $ 12     $ 12  

Our primary source of cash is receipts from revenue. The primary uses of cash are payroll (salaries, benefits, and other employee compensation), general operating expenses (office rent, utilities, insurance and supplies), payments to distribution network partners related to traffic acquisition and content costs, and professional services fees related to legal and audit costs. We ended the first quarter of 2006 with $45.9 million in cash, cash equivalents, and short-term and long-term investments, a decrease of $5.4 million from December 31, 2005 of $51.3 million.

The increase in cash used in operating activities in the first quarter of 2006 compared to the first quarter of 2005 was primarily due to increases in accounts receivable, prepaid expenses and other assets. The increase in accounts receivable was caused by a past due amount from a major customer, which was subsequently collected in April 2006.

 

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Net cash provided by investing activities in the first quarter of 2006 was lower than in the first quarter of 2005 as less maturities and sales of investments occurred in 2006. Proceeds from maturities and sales of investments were $2.8 million less in the first quarter of 2006 than in the first quarter of 2005. Offsetting this decline in proceeds was a $1.7 million reduction in purchases of investments during the same comparative period. Additionally, the Company invested $1.2 million more in property, equipment and capitalized software development in the first quarter of 2006 compared to the same period in 2005.

Net cash provided by financing activities in the first quarter of 2006 was consistent with the first quarter of 2005 representing payments against the principal balance of our outstanding note payable and proceeds for the issuance of common stock related to our employee stock plans.

We have outstanding standby letters of credit (“SBLC”) of $1.3 million at March 31, 2006 related to security of a building lease and security for payroll processing services. The SBLC contains four financial covenants. As of March 31, 2006, we were in compliance with all required covenants.

We believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot be assured that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

This excerpt taken from the LOOK 10-Q filed Aug 9, 2005.

Liquidity and Capital Resources

 

Our primary source of cash is receipts from revenue. Another source of cash is proceeds from the exercise of employee stock options. The primary uses of cash are payroll (salaries, bonuses and benefits), general operating expenses (office rent), payments to distribution partners related to cost of revenue and professional services related to audit costs. We ended the second quarter of 2005 with $61.1 million in cash, cash equivalents, short-term investments and long-term investments, a decrease from $63.9 million at December 31, 2004. Our short-term and long-term investments decreased by $1.3 million from December 31, 2004 to June 30, 2005.

 

(000’s)    Six Months Ended
June 30,


 
   2005

    2004

 

Cash flows used in operating activities

   (1,448 )   (5,153 )

Cash flows used in investing activities

   (60 )   (23,244 )

Cash flows provided by financing activities

   56     3,507  

 

The termination and winding down of the Company’s distribution and licensing relationship with Microsoft significantly reduced the Company’s revenue and cash from operating activities in the six months ended June 30, 2005 compared to the six months ended June 30, 2004. In order to minimize the impact of the termination of the Microsoft agreement on the Company’s liquidity, the Company implemented a restructuring plan.

 

The decrease in cash used in operating activities in the first half of 2005 compared to the first half of 2004 was primarily due to an increase in accounts payable of $2.0 million due to timing difference of payment cycles and a decrease in accounts receivable of $1.6 million due to a reduction of revenue. Collections of accounts receivable can impact our operating cash flows. Management places significant

 

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emphasis on collection efforts and has assessed the allowance for doubtful accounts as of June 30, 2005 and has deemed it to be adequate.

 

Net cash used in investing activities in the first half of 2005 and the first half of 2004 included purchases of investments of $5.8 million and $22.1 million, respectively, and purchases of equipment and capitalization of costs related to internally developed software of $1.2 million and $1.8 million, respectively. Cash used in investing activities in the first half of 2004 also included the purchase of NetNanny, which used $0.9 million in cash in the first half of 2004 and was offset by proceeds from the sale of discontinued operations of $1.5 million. Cash provided by investing activities in the first half of 2005 included proceeds from sale of investments of $5.0 million and maturities of investments of $1.9 million.

 

In the six months ended June 30, 2005 and 2004, net cash provided by financing activities was primarily due to proceeds from the exercise of employee stock options of $0.1 and $3.6 million, respectively.

 

We believe that our working capital will provide adequate liquidity to fund our operations and meet other cash requirements for at least the next 12 months. We may seek to raise additional capital through public or private debt or equity financings in order to fund our operations and capital expenditures, take advantage of favorable business opportunities, develop and upgrade our technology infrastructure, develop new product and service offerings, take advantage of favorable conditions in capital markets or respond to competitive pressures. In addition, unanticipated developments in the short term, such as the entry into agreements requiring large cash payments or the acquisition of businesses with negative cash flows, may necessitate additional financing. We cannot assure you that additional financing will be available on terms favorable to us, or at all. If we issue additional equity or convertible debt securities, our existing stockholders may experience substantial dilution.

 

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