HUMANCLICK LTD.
(An Israeli corporation in the development stage)
CONDENSED INTERIM BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
---------- -----------
(Unaudited) (Audited)
---------- -----------
U.S. dollars
-------------------------
<S> <C> <C>
Assets
CURRENT ASSETS:
Cash and cash equivalents 728,283 750,401
Accounts receivable 63,204 29,643
---------- ----------
Total current assets 791,487 780,044
---------- ----------
FIXED ASSETS:
Cost 63,357 18,058
Less - accumulated depreciation 3,855 1,067
---------- ----------
59,502 16,991
---------- ----------
850,989 797,035
========== ==========
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Short-term credit from banks 2,989
Accounts payable and accruals:
Trade 65,316 9,898
Other 76,059 49,808
---------- ----------
Total current liabilities 144,364 59,706
LIABILITY FOR EMPLOYEE RIGHTS UPON
RETIREMENT, net of amount funded 69,043 23,597
---------- ----------
Total liabilities 213,407 83,303
---------- ----------
SHAREHOLDERS' EQUITY:
Share capital - ordinary shares of NIS 0.01 par value: authorized
3,800,000 shares; issued and paid: June 30, 2000 - 1,756,000;
December 31, 1999 - 1,561,800, see note 3 4,203 3,717
Additional paid in capital 1,458,801 863,285
Deficit accumulated during the development stage (825,422) (153,270)
---------- ----------
637,582 713,732
---------- ----------
850,989 797,035
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
1
<PAGE>
HUMANCLICK LTD.
(An Israeli corporation in the development stage)
CONDENSED INTERIM STATEMENTS OF LOSS
Period from Period from
Six months June 24, June 24,
ended 1999* to 1999* to
June 30, December 31, June 30,
2000 1999 2000
(Unaudited) (Audited) (Unaudited)
----------- ----------- -----------
U.S. dollars
--------------------------------------
COSTS AND EXPENSES:
Development costs 355,520 97,996 453,516
Selling and marketing 306,934 306,934
General and administrative 57,812 76,227 134,039
-------- -------- ---------
LOSS FROM OPERATIONS 720,266 174,223 894,489
FINANCIAL INCOME - net 48,114 20,953 69,067
-------- -------- ---------
LOSS FOR THE PERIOD 672,152 153,270 825,422
======== ======== =========
* Date of incorporation. see note 1.
The accompanying notes are an integral part of these condensed financial
statements.
2
<PAGE>
HUMANCLICK LTD.
(An Israeli corporation in the development stage)
CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
accumulated
during the
Share Premium development
capital on shares stage Total
------- --------- ------------ -----
U.S. dollars
---------------------------------------------------
<S> <C> <C> <C> <C>
CHANGES DURING THE PERIOD FROM
JUNE 24, 1999* TO DECEMBER 31, 1999
(audited):
Issuance of share capital (net of share issuance
expenses of $ 8,758) 3,717 863,285 867,002
Loss (153,270) (153,270)
---------- ---------- ---------- ----------
BALANCE AT DECEMBER 31, 1999 (audited) 3,717 863,285 (153,270) 713,732
CHANGES DURING THE SIX MONTHS
ENDED JUNE 30, 2000 (unaudited):
Issuance of share capital (net of
share issuance expenses of $ 15,677) 486 595,516 596,002
Loss (672,152) (672,152)
---------- ---------- ---------- ----------
BALANCE AT JUNE 30, 2000 (unaudited) 4,203 1,458,801 (825,422) 637,582
========== ========== ========== ==========
</TABLE>
* Date of incorporation, see note 1.
The accompanying notes are an integral part of these condensed financial
statements.
3
<PAGE>
HUMANCLICK LTD.
(An Israeli corporation in the development stage)
CONDENSED INTERIM STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Period from Period from
Six months June 24, June 24,
ended 1999* to 1999* to
June 30, December 31, June 30,
2000 1999 2000
---------- ---------- ----------
(Unaudited) (Audited) (Unaudited)
---------- ---------- ----------
U.S. dollars
--------------------------------------0
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss for the period (672,152) (153,270) (825,422)
---------- ---------- ----------
Adjustments required to reflect the cash flows
from operating activities:
Cash flows from operating activities:
Depreciation 2,788 1,067 3,855
Liability for employee rights upon retirement 45,446 23,597 69,043
Changes in operating asset and liability items:
Increase in accounts receivable (33,561) (29,643) (63,204)
Increase in accounts payable and accruals 81,328 59,365 141,034
---------- ---------- ----------
96,001 54,386 150,728
---------- ---------- ----------
Net cash used in operating activities (576,151) (98,884) (674,694)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES -
purchase of fixed assets (45,299) (17,717) (63,357)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of share capital 596,002 867,002 1,463,004
Short-term credit from banks 2,989 2,989
Payment to suppliers in respect of acquisition of fixed assets 341 341
---------- ---------- ----------
Net cash provided by financing activities 599,332 867,002 1,466,334
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (22,118) 750,401 728,283
BALANCE OF CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 750,401
---------- ---------- ----------
BALANCE OF CASH AND CASH EQUIVALENTS
AT END OF PERIOD 728,283 750,401 728,283
========== ========== ==========
SUPPLEMENTARY DISCLOSURE OF CASH FLOW
INFORMATION - cash paid during the year for interest 1,853 482 2,335
========== ========== ==========
</TABLE>
* Date of incorporation, see note 1.
The accompanying notes are an integral part of these condensed financial
statements.
4
<PAGE>
HUMANCLICK LTD.
(An Israeli corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS
AT JUNE 30, 2000
(Unaudited)
1. General
HumanClick Ltd. (the company) - an Israeli corporation in the development
stage - was incorporated and commenced operations on June 24, 1999. The
company is a software company developing a program which will enable the
users to talk for free to the visitors on their web site and monitor, in
real time, the traffic on their web site.
On October 12, 2000, all the company's shares were acquired by LivePerson,
Inc. in exchange for LivePerson, Inc. shares.
2. The interim statements at June 30, 2000 and for the six month period then
ended (hereafter - the interim statements) were drawn up in condensed
form, in accordance with generally accepted accounting principles
applicable to interim statements in Israel. The accounting principles
applied in the preparation of the interim statements are consistent with
those applied in the annual financial statements. Nevertheless, the
interim statements do not include all the information and explanations
required for annual financial statements. In management's opinion, these
statements include all adjustments necessary for a fair presentation of
the results of the interim periods shown. All adjustments are of a normal
recurring nature, unless otherwise disclosed. Expenses, assets and
liabilities can vary during each quarter of the year. Therefore, the
results and trends in these interim financial statements may not be the
same as those for the full year.
The interim financial statements presented herein have been prepared in
conformity with Israeli GAAP. Accounting principles generally accepted in
Israel vary in certain significant respects from accounting principles
generally accepted in the United States. The application of the latter
affected the determination of the net income for the period ended June 30,
2000 and the determination of the shareholders' equity and financial
position at June 30, 2000, see note 4.
3. On February 27, 2000 the company's board of directors resolved to split
38,000 ordinary shares (100% of the company's shares, issued and unissued)
of NIS 1 par value into 3,800,000 ordinary shares of NIS 0.01 par value.
4. Effect of material differences between generally accepted accounting
principles in Israel and in the United States
The company prepares its financial statements in conformity with Israeli
GAAP. Accounting principles generally accepted in Israel vary in certain
significant respects from accounting principles generally accepted in the
United States. The application of the latter affected the determination of
the net income for the period ended June 30, 2000 and the determination of
the shareholders' equity and financial position at June 30, 2000 as
follows:
a. Stock options granted to company employees
Under Israeli GAAP, the company did not account for its employee
stock option plan using the treatment prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25") as permitted by FAS 123. Under APB 25,
compensation cost for employee stock option plans is measured using
the intrinsic value based method of accounting.
5
<PAGE>
HUMANCLICK LTD.
(An Israeli corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (continued)
AT JUNE 30, 2000
(Unaudited)
The options were granted at exercise prices which represent the fair
value of the ordinary shares at the date of issuance except for
3,152 options. No compensation cost was recorded in relation to the
options granted to the company's employees since they have no
intrinsic value at their grant dates. As to 3,512 options the
company recorded $ 861 as compensation cost. The influence of the
application of FAS 123 on the company's results is a decrease of $
4,992.
b. Stock options granted to consultants
As to options granted to consultants, the effect of application of
FAS 123 is a compensation expense of $ 19,918 for the six month
period ended June 30, 2000.
c. Liability for employee rights upon retirement
Under Israeli GAAP, amounts funded by purchase of insurance
policies, as above, are deducted from the related severance pay
liability. Under U.S. GAAP, the amounts funded should be presented
as a long-term investment, among the Company's assets.
The balance of the severance pay liability and the amount funded by
purchase of insurance policies and deposits with severance pay funds
at June 30, 2000 are as follows:
U.S. dollars
-----------
Amount of severance pay liability 69,043
Amount funded 4,895
-----------
Excess of liability over amount funded 64,588
===========
d. The effect of applying APB 25 and FAS 123 on the financial
statements for the period ended June 30, 2000 is as follows:
U.S. dollars
-----------
Loss for the period as reported in the statements
of loss 672,152
Effect of applying APB 25 861
Effect of applying FAS 123 24,910
-----------
Loss under U.S. GAAP 697,923
===========
6
<PAGE>
HUMANCLICK LTD.
(An Israeli corporation in the development stage)
NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS (continued)
AT JUNE 30, 2000
(Unaudited)
5. Subsequent events:
a. On August 30, 2000 and September 19, 2000, the company signed
agreements for strategic cooperation with two U.S. companies that
provide a variety of internet services to small companies. Under
those agreements, the U.S. companies will offer the company's
product to their customers and share the profits from resulting
sales with the company.
b. After June 30, 2000, the company granted 27,218 options to employees
at an exercise price of $ 3.12.
c. As to an agreement to sell the company shares, see note 1.
7
