<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of
Securities Exchange Act of 1934
For Period ended June 30, 2000
Commission File Number 0-28287
CALIPSO, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 88-0418749
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(State of Incorporation) (I.R.S. Employer Identification No.)
13525 MIDLAND RD., SUITE I, POWAY, CA 92064
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(Address of Principal Executive Offices) (Zip Code)
(619) 692-2518
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock at the latest practicable date.
As of June 30, 2000, the registrant had 9,039,600 shares of common stock, $.001
par value, issued and outstanding.
<PAGE> 2
PART 1 FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CALIPSO, INC.
(a Development Stage Company)
BALANCE SHEETS
UNAUDITED
<TABLE>
<CAPTION>
3 Months Year
Ended Ended
6/30/00 3/31/00
ASSETS
<S> <C> <C>
CURRENT ASSETS
CASH 15 55
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TOTAL CURRENT ASSETS 15 55
FIXED ASSETS
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NET FIXED ASSETS 0 0
OTHER ASSETS
ORGANIZATION COSTS 0 0
LESS AMORTIZATION 0 0
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TOTAL OTHER ASSETS 0 0
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TOTAL ASSETS 15 55
===================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
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TOTAL CURRENT LIABILITIES 0 0
LONG TERM LIABILITIES
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TOTAL LONG TERM LIABILITIES 0 0
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TOTAL LIABILITIES 0 0
STOCKHOLDERS' EQUITY
COMMON STOCK - $.001 par value 9,040 6,696
100,000,000 shares authorized,
9,039,600 issued and outstanding
at 6/30/00 and 6,696,000
issued and outstanding at 3/31/00
ADDITIONAL PAID IN CAPITAL 9,560 11,904
BEGINNING RETAINED DEFICIT -18,545 -10,026
NET LOSS -40 -8,519
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ENDING RETAINED DEFICIT -18,585 -18,545
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TOTAL STOCKHOLDERS' EQUITY 15 55
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TOTAL LIAB & STOCKHOLDERS' EQUITY 15 55
===================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 3
FINANCIAL STATEMENTS (continued)
CALIPSO, INC.
STATEMENTS OF OPERATIONS
(a Development Stage Company)
UNAUDITED
<TABLE>
<CAPTION>
5/31/94
3 Months 3 Months Year Year (Inception)
Ended Ended Ended Ended To
6/30/00 6/30/99 3/31/00 3/31/99 6/30/00
<S> <C> <C> <C> <C> <C>
REVENUE
--------------------------------------------------------------------
TOTAL REVENUE 0 0 0 0 0
DIRECT COSTS
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TOTAL COST OF GOODS SOLD 0 0 0 0 0
--------------------------------------------------------------------
GROSS PROFIT 0 0 0 0 0
EXPENSES
GENERAL, SELLING, AND ADMINISTRATIVE 40 243 8519 5026 18585
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TOTAL OPERATING EXPENSES 40 243 8,519 5,026 18,585
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LOSS FROM OPERATIONS -40 -243 -8,519 -5,026 -18,585
OTHER INCOME & EXPENSE
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TOTAL OTHER INCOME & EXPENSE 0 0 0 0 0
--------------------------------------------------------------------
LOSS BEFORE TAXES -40 -243 -8,519 -5,026 -18,585
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NET LOSS -40 -243 -8,519 -5,026 -18,585
====================================================================
NET LOSS PER SHARE NIL NIL -0.0009 -0.0006 -0.0021
WEIGHTED AVERAGE NUMBER OF COMMON 9,039,600 9,039,600 9,039,600 9,039,600 9,039,600
SHARES OUTSTANDING
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 4
FINANCIAL STATEMENTS (continued)
CALIPSO, INC.
STATEMENTS OF CASH FLOWS
(a Development Stage Company)
UNAUDITED
<TABLE>
<CAPTION>
5/31/94
3 Months 3 Months Year Year (Inception)
Ended Ended Ended Ended To
6/30/00 6/30/99 3/31/00 3/31/99 6/30/00
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET LOSS -40 -243 -8,519 -5,026 -18,585
ADJ TO RECONCILE NET LOSS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
ISSUE COMMON STOCK 0 0 0 5,000 10,000
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NET CASH USED IN OPERATING ACTIVITIES -40 -243 -8,519 -26 -8,585
CASH FLOWS FROM INVESTING ACTIVITIES 0 0 0 0 0
CASH FLOWS FROM FINANCING ACTIVITIES 0 8600 0 0 8600
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NET INCREASE (DECREASE) -40 8,357 -8,519 -26 15
CASH BEGINNING OF PERIOD 55 0 8574 8600 0
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CASH END OF PERIOD 15 8,357 55 8,574 15
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE> 5
FINANCIAL STATEMENTS (continued)
NOTES TO FINANCIAL STATEMENTS
1. MANAGEMENT'S OPINION
In the opinion of management, the accompanying financial statements contain all
adjustments necessary to present fairly the financial position of the company as
of June 30, 2000 and 1999, and the results of operations and cash flows for the
three months ended June 30, 2000 and 1999, and the two years ended March 31,
2000 and 1999, and the period May 31, 1994 (Inception) to June 30, 2000. The
accompanying financial statements have been adjusted as of June 30, 2000 as
required by Item 310 (b) of Regulation S-B to include all adjustments which in
the opinion of Management are necessary in order to make the financial
statements not misleading.
2. INTERIM REPORTING
The results of operations for the three months ended June 30, 2000 and 1999, are
not necessarily indicative of the results to be expected for the remainder of
the year.
3. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization and Nature of Operations
The Company was incorporated in Delaware on May 31, 1994. The Company is a
development stage company and has not conducted any business activities to date.
The Company has selected March 31st as its fiscal year end.
4. Basis of Accounting
The Company's policy is to use the accrual method of accounting and to prepare
and present financial statements which conform to generally accepted accounting
principles. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
5. Cash and equivalents
For purpose of the statements of cash flows, all highly liquid investments with
a maturity of three months or less are considered to be cash equivalents. There
were no cash equivalents as of June 30, 2000.
<PAGE> 6
FINANCIAL STATEMENTS (continued)
NOTES TO FINANCIAL STATEMENTS
6. Income Taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS 109),
"Accounting for Income Taxes." A deferred tax asset or liability is recorded for
all temporary differences between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.
7. Stockholders' equity
On April 27, 2000, the Board of Directors adopted a resolution to authorize a
forward stock split of 1.35 shares of common stock for every share of record as
of April 27, 2000, resulting in a total of 9,039,600 shares issued and
outstanding.
On May 23, 2000, the Secretary of State of Delaware recorded a Certificate of
Amendment of the Articles of Incorporation of the Company, as approved by
shareholder vote, to amend Article Four authorizing the number of common stock
shares to be one hundred million shares with a par value of $.001 and the number
of preferred stock shares to be twenty million shares with a par value of $.001.
PART 1 FINANCIAL INFORMATION
Management's Plan of Operations
The Company maintains a cash balance sufficient to sustain corporate operations
until such time as Management can raise the funding necessary to advance its
business plan. The losses of $40 through June 2000 were due to operating
expenses. Sales of the Company's equity securities have allowed the Company to
maintain a positive cash flow balance.
The Company's two year business plan encompasses the following steps to
implement its Internet service business plan: raise capital of $2,000,000
through the sale of equity securities via a private placement during months one
through six, during months seven through twelve budget $511,000 for development
of its web site to include $100,000 for content materials and licenses, $30,000
for one Webmaster programmer, $40,000 for two programmers, $17,000 for one
scientific text writer, $12,000 for one artist, $25,000 for one marketing
manager to handle advertising and sponsor revenues, $12,000 for one office staff
assistant, $25,000 for purchase of computers and fixed assets, $200,000 for
advertising, and $50,000 for rent and other operating expenses.
Management made initial progress in implementing its business plan by
registering its Internet domain name on the Internet, applying for U.S.
trademark protection, and setting up a preliminary
<PAGE> 7
FINANCIAL STATEMENTS (continued)
NOTES TO FINANCIAL STATEMENTS
web site - universeofnature.com. The Company will only be able to continue to
advance its business plan after it receives capital funding through the sale of
equity securities. After raising capital, Management intends to hire employees,
rent commercial space in San Diego, purchase furniture and equipment, and begin
development of its web site operations. The Company intends to use its equity
capital to fund the Company's business plan during the next twelve months as
cash flow from sales is not estimated to begin until year two of its business
plan. As previously disclosed in the Company's public filings, the Company's
business plan includes acquiring other compatible businesses in order to broaden
the Company's revenue base. On May 8, 2000, Calipso's Shareholders voted
unanimously to take the necessary steps to acquire 100% of another business,
Knowledge Foundations, Inc.
If the proposed acquisition of Knowledge Foundations, Inc. is consummated, the
following business plan of Knowledge Foundations, Inc. will be integrated into
Calipso's business plan:
Knowledge Foundations, Inc. holds the rights to a breakthrough
technological version of artificial intelligence, ("AI") software. The
Company's AI software was developed over twelve years ago, is in its
second generation, and has been in use and refined over the last eight
years. Users include the U.S. Air Force Space Systems Division, U. S.
Army Strategic Defense Command, NASA Johnson Space Center, and many
others.
Current computer processing systems utilize "information based
computing". These systems employ coding languages that convert
information such as words, numbers, and pictures into machine code that
allow computers to process data mechanically through set procedures.
Software engineers have been able to increase the operating and
computing speeds of these systems, but these systems are incapable of
learning or growing on their own.
The Company's software products are defined in the software-artificial
intelligence community as "knowledge based computing". In essence, this
software introduces human reasoning as an integral part of the
computer's capabilities. Knowledge based computing is a completely
different way for computers to operate. The Company's software allows
computer systems to solve and manage problems, build knowledge through
examining millions of relationships, hundreds of layers deep, and
utilize information that is disparate or even conflicting as it makes
decisions. The Company's software learns and grows as it processes more
and more information faster and faster.
The Company's software will work with most operating systems in use
today such as Unix, Microsoft DOS and Windows, etc. Software
manufacturers will be able to license the Company's software to enhance
their own information based applications. Users will be able to
permanently store their intellectual capital, work products, experience,
and learning in a knowledge base. These knowledge bases will then be
able to grow, correct themselves, and perfect themselves through new
real-world experiences and the introduction of new information.
<PAGE> 8
FINANCIAL STATEMENTS (continued)
NOTES TO FINANCIAL STATEMENTS
The Company's software was not designed to maintain a warehouse of data,
or print out mounds of information. It was designed to provide solutions
to complex problems. The Company's product is designed to replace all
relational databases.
The Company intends to establish its unique patentable technology as an
"industry standard" coding language and operating system for all
knowledge based computing.
The Company has chosen three primary markets for its initial sales:
Publishers of service or product documentation: In the process of
studying law, medicine, technical, or reference documentation,
the user will be able to ask for solutions to intricate problems
and receive expert advice. The user can examine the reasoning and
research that support these solutions.
Information technology and consulting firms: By using the
Company's software, outside consulting professionals in all
fields, such as Anderson Consulting, will be able to provide
complex systems analysis and more accurate statistical
predictions to their clients.
General business customers: Using individual computers or large
network systems, employees, managers, and owners will be able to
find expert analysis and advice culled from vast pools of
electronically stored information. Users may interact with this
analysis and advice information and add new data that will allow
the expert systems to grow.
Should Calipso, Inc. be successful in its bid to acquire Knowledge Foundations,
Inc., Calipso will file required information and financial statements on Form
8-K with the Securities and Exchange Commission.
The Company will face considerable risk in each of its business plan steps, such
as difficulty in completing business acquisitions, difficulty of hiring
competent personnel within its budget, longer than anticipated web site
programming, and a shortfall of funding due to the Company's inability to raise
capital in the equity securities market. If no funding is received during the
next twelve months, the Company will be forced to rely on its existing cash in
the bank and funds loaned by the directors and officers. The Company's officers
and directors have no formal commitments or arrangements to advance or loan
funds to the Company. In such a restricted cash flow scenario, the Company would
be unable to complete its business plan steps, and would, instead, delay all
cash intensive activities. Without necessary cash flow, the Company may be
dormant during the next twelve months, or until such time as necessary funds
could be raised in the equity securities market.
<PAGE> 9
FINANCIAL STATEMENTS (continued)
NOTES TO FINANCIAL STATEMENTS
PART II OTHER INFORMATION
ITEM 1 Not applicable.
ITEMS 2-4: Not applicable
ITEM 5: Information required in lieu of Form 8-K: None
ITEM 6: Exhibits and Reports on 8-K:
a) Exhibit #27.1, "Financial Data Schedule"
b) No reports on Form 8-K were filed during the fiscal
quarter ended June 30, 2000
SIGNATURES
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In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Calipso, Inc.
Dated: August 10, 2000 /s/ ROBERT J. RANSOM
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Robert J. Ransom
President and Chief Executive Officer
