U. S. Securities & Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACTS OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from _______ to _______
Commission file Number 0-11596
ExperTelligence, Inc.
(Exact name of small business issuer)
California 95-3506403
(State of incorporation) IRS Employer Identification number
203 Chapala Street, Santa Barbara, CA 93101
(Address of principal executive offices)
(805) 962-2558
(Issuers telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter periods that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.
YES NO
X
Indicate the number of shares outstanding of each of the issuer's class of
stock, as of the latest practical date.
Class Outstanding at June 30, 1999
Preferred stock, no par 150,000
Common stock, no par 1,744,395
<PAGE>
ExperTelligence, Inc.
REPORT ON FORM 10-QSB
TABLE OF CONTENTS
Page No.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheet at June 30, 1999 and September 30, 1998 3
Statement of Operations for the 3 and 9 month period
ended June 30, 1999 and June 30, 1998. 4
Statement of Cash Flows for the 3 and 9 month period
ended June 30, 1999 and June 30, 1998. 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
Management's Discussion and Analysis of the
Financial Condition and Results of Operation 7
PART II - OTHER INFORMATION
Other Information 8
<PAGE>
<TABLE>
<CAPTION>
ExperTelligence, Inc.
Balance Sheets
at 6/30/99 at 09/30/98
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 638,438 $ 130,149
Accounts receivable, net 43,364 102,409
Inventory 61,918 66,723
Prepaid exp. and other current assets 31,301 16,570
Deferred tax asset-current 381,178 125,000
Total current assets $1,156,199 $ 440,851
Long-Term Receivable 51,585 51,585
Product development costs, net 1,045,900 801,144
Property and equipment, net 67,388 52,732
Deferred tax asset-non-current 353,000 353,000
Other non-current assets 409,280 0
Total assets $3,083,352 $1,699,312
LIABILITIES & STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 27,458 $ 87,498
Accrued vacation 78,401 63,994
Deferred revenue 0 0
Line of Credit 0 0
Other accrued expenses 630 0
Total current liabilities $106,489 $ 151,492
Long term debt 0 0
Stockholders' equity:
Preferred stock, no par value.
Authorized 1,000,000 shares;
outstanding and 150,000 shares $300,000 $ 318,487
as of June 30, 1999 and 159,244
shares as of September 30, 1998
Common stock, no par value.
Authorized 20,000,000 shares; issued and
Outstanding 1,744,395 shares as of
June 30,1999 and 1,732,288 shares as
of September 30, 1998 $ 5,338,891 $ 3,651,890
Retained earnings (Accumulated deficit) $(2,680,515) $(2,422,557)
Net stockholders' equity $2,976,863 $ 1,547,820
Total liabilities and stockholders equity $3,083,352 $ 1,699,312
<FN>
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXPERTELLIGENCE, INC
STATEMENTS OF OPERATIONS
For the three months For the nine months
ended June 30, ended June 30,
(unaudited) (unaudited)
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues $ 56,031 $257,367 $ 148,561 $787,027
Operating costs and expenses
Cost of Sales $ 38,510 $ 80,069 $ 104,611 $239,243
Sales & Marketing 49,672 1,125 128,370 8,254
General & Administration 205,954 146,068 433,863 372,245
Research & Development 20,515 26,406 72,274 95,657
Total operating costs
& expenses $ 314,651 $253,668 $ 739,118 $715,399
Profit/(loss) from
operations $(258,620) $ 3,699 $(590,557) $ 71,628
Other expense (income)
Interest expense $ 0 $ 610 $ 0 $ 2,154
Interest income (6,841) (1,003) (11,661) (2,135)
Gain/Loss on Fixed Assets 0 0 0 0
Income Tax 0 0 800 800
Deferred Tax Expense (138,856) 3,850 (256,178) 27,750
Other 0 0 0 0
Total other expense (income) $(145,697) $ 3,457 $(267,039) $ 28,569
Net income (loss) $(112,923) $ 242 $(323,518) $ 43,059
Net income (loss) per share $ (.06) $ .00 $ (.17) $.03
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXPERTELLIGENCE, INC.
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
For the three months For the nine months
Ended June 30, Ended June 30,
(unaudited) (unaudited)
1999 1998 1999 1998
<S>
<C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss) for the
period ending June 30, $(112,923) $ 242 $(323,518) $ 43,059
Adjustments to reconcile
net income (loss) to net cash
used by operating activities:
Depreciation and amortization 22,608 $ 18,527 $ 57,856 $ 53,865
Decrease (increase) in accounts
receivable 34,856 (125,273) 59,044 (68,461)
Decrease (increase) in
inventory 319 2,961 4,805 6,398
Decrease (increase) in prepaid
expenses (8,715) (20,157) (21,010) 33,704
Decrease (increase) in other
current assets 300 (2,222) (3,000) (2,222)
Increase (decrease) in accounts
payable & accrued expenses 5,874 (1,664) (45,004) 1,814
Increase (decrease) in
deferred revenue 0 0 0 0
Total adjustments $ 55,242 $(127,828) $ 52,691 $ 42,310
Net cash provided (used) by
operating activities $ (57,681) $(127,586) $(270,827) $ 749
Cash flows from investing activities:
(Increase) decrease in product
development costs $ (84,856) $ (8,198) $ (219,474) $(35,838)
Purchase of property and
equipment (11,806) (2,080) (32,232) (9,505)
(Increase)Decrease in
Deferred Tax Assets (138,856) 3,850 (256,178) 27,750
(Increase)Decrease in
other assets (25,000) 0 (400,000) 0
Net cash provided (used)
investing activities $(260,518) $ (6,428) $ (907,884) $(17,593)
Cash flows from financing activities:
Repayments of notes to related
parties $ 0 $ 0 $ 0 $ 0
Repayments of other
long-term debt 0 0 0 0
Proceeds from issuance of
common stock 0 50,000 1,687,000 50,000
Net cash provided (used) by
financing activities $ 0 $ 50,000 $1,687,000 $ 50,000
Net increase(decrease) in cash $(318,199) $ (84,014) $ 508,289 $ 33,156
Cash and cash equivalents as
of beginning of period $ 956,637 144,635 $ 130,149 $ 27,465
Cash and cash equivalents as
of period end $ 638,438 $ 60,621 $ 638,438 $ 60,621
</TABLE>
<PAGE>
ExperTelligence,Inc.
NOTES TO FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying financial statements
contain all adjustments necessary to present fairly, ExperTelligence,
Inc., financial position as of June 30, 1999 and results of
operations and changes in financial position for the three and nine
month ended June 30, 1999.
The accounting policies followed by the Company are set forth
in Note 1 of the ExperTelligence, Inc. Annual Report to Stockholders
September 30, 1998 and are incorporated by reference.
2. Fixed assets are comprised of the following :
<TABLE>
<CAPTION>
6/30/99 09/30/98
<S> <C> <C>
Furniture & Fixtures $34,714 $33,983
Purchased Software 10,500 9,662
Equipment 422,329 391,667
Total 467,543 435,312
Less :Accumulated depreciation 400,155 382,580
$ 67,388 $ 52,732
</TABLE>
3. The results of operations for the three and nine month period ended
June 30, 1999, are not necessarily indicative of the results to be
expected for the full year.
4. Primary earnings per share are based on the weighted average number
of common stock and equivalents outstanding during the period.
5. At September 30, 1998, the Company had the following approximate net
operating loss carryforwards available to reduce future Federal income
taxes:
<TABLE>
<CAPTION>
Federal Federal State State
Expiring Net Operating Tax Net Operating Tax
September30 Losses Credits Losses Credits
<S> <C> <C> <C> <C>
1999 28,000 56,000 - -
2000 487,000 30,000 - -
2001 390,000 - - -
2002 309,000 - 171,000 -
2003 125,000 - 38,000 -
2004 - 6,000 - -
2005 614,000 30,000 - -
2006 481,000 39,000 - 9,000
2007 68,000 14,000 - 16,000
2008 - 10,000 - -
2009 - - - -
2010 - 1,000 - -
2011 - 4,000 - 8,000
2012 342,000 2,000 - -
2013 76,000 -
$2,920,000 $192,000 $209,000 $33,000
</TABLE>
SFAS 109 was adopted as of October 1, 1993. The Company believes
that the net effect to the tax provision and deferred taxes will not
materially differ from the amounts presented in the accompanying
financial statements due to the available Federal tax net operating loss
carryforwards.
<PAGE>
ExperTelligence, Inc.
MANAGEMENT's DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company notes that, except for the historical information contained
herein, the matters discussed below contain forward-looking statements, made
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section21E of the Securities Exchange Act of 1934, as amended,
subject to risks and uncertainties that may cause the Company's actual
results to differ materially. These statements relate to our plans,
objectives, expectations and intentions. Risks and uncertainties include, but
are not limited to, various important competitive and technological
factors such as pricing pressures; as well as customers opting to
upgrade to newer or more fully featured products; changes in customer
order patterns, manufacturing considerations, including the maintenance
of margins in a declining-price environment as well as risk of inventory
obsolescence due to shifts in market demand and new product
introductions; and other risk factors listed from time to time in the
Company's reports filed with the Securities and Exchange Commission,
including, but not limited to, the report on Form 10-K for the year
ended September 30, 1998. You should not rely on these forward looking
statements, which reflect only our opinion as of the date of this report. We
do not assume any obligation to revise forward-looking statements.
OVERVIEW
Founded in 1984, ExperTelligence is a pioneer in Web database server and
Internet Portal technology. ExperTelligence created WebData.com, the #1
database destination on the web, the WebData Network banner ad exchange, and
3DStockCharts.com, the first 3D display of real-time stock quotes and trading
volumes on the web. In addition, ExperTelligence is a Web Internet
consulting and software company with a worldwide clientele and an
international reputation. The company specializes in the development and
hosting of Web/Database and Electronic Commerce application solutions using
its flagship products WebBase? and ExperForms?. The Company received an "A"
ranking from Advertising Age's NetMarketing Online for its work on
HarrisInfoOnline.com as a Best Business to Business Web Site. Additional
information on the Company's products and consulting services can be found
online; http://www.webdata.com/, http://3dstockcharts.com/,
http://www.expertelligence.com/ and http://www.exgp.com/.
On December 1, 1998 the company launched WebData.com, an Internet portal
specializing in the cataloging, searching and comparison of online content
from web sites with databases. It is the first portal to uncover the
invisible part of the web. It is for everyone who uses the Internet to
search, from the professional, information-based knowledge worker (an
individual requiring the use of information sources in the decision-making
process for business, academic or other applications) to comparative
shoppers. WebData.com provides its target market the ability to search and
browse high-quality interactive databases found on the Internet, for free,
from a single location. The databases cover a broad range of topics from
Arts and Humanities to Shopping, Travel and Stocks with presently 6,000
different queries, from 3,000 different online databases. There are two
patent pending features that offer alternatives to traditional searches
across a variety of the content topics.
WebData.com is often confused with the traditional search engines when
compared to each other, side by side, because they look alike. However,
results from searches on WebData.com return databases where the other search
engines return web pages. At the same time WebData.com offers its visitors
access toshopping, auctions and other e-commerce opportunities. The
WebData.com suite of features includes options for shopping for books, music,
movies, auctions and computers, checking flight schedules, viewing the latest
stock quotes, job search information and a simultaneous keyword search across
multiple search engines.
Banner ads on web accounted for $1.2 billion in revenues in 1998 for the
entire web. WebData.com and 3DStockCharts.com expect to generate revenue from
banner ad sales. The Company is building the revenue infrastructure by hiring
staff for banner sales, building the Merchant affiliate program, identifying
targets for sponsorships and content alliances. ExperTelligence created its
own banner exchange network "WebDataNetwork". This is the first banner
exchange program based on interactive queries to databases. Users can add
banners to their sites by following the instructions at
http://www.webdatanetwork.com/; the rest is completely automatic.
ExperTelligence patent pending technologies provide the engine behind
WebData.com and 3DStockCharts.com. WebData 4D is a proprietary, patent
pending technology that enables users to locate specific products or data,
from multiple internet databases web sites by entering information once and
using a single click to retrieve the resulting information. ExperSearch(tm) is
an advanced searching capability provided with WebData that provides
consolidated results from searching across multiple shopping, auction,
classified and database sites. ExperSearch is powered by Enchilada, a patent
pending search technology developed by Time0, a business of Perot Systems
Corporation, that enables the simultaneous search of multiple web sites and
the integration of the results displayed in one location. The merging of the
Enchilada technology with the WebData 4D technology retains site branding and
look and feel, and also provides users with the option of integrating results
from many sites.
The Company also filed a patent for a three dimensional (3D) display mechanism
for real-time stock information over the Internet. The 3DStockCharts.com
portal highlights 3D displays of real-time streams stock quotes and trading
volumes so Internet users can gain insight into stock market activity.
On February 16, 1999, the Company announced the hiring of Mr. Trygve
Duryea, as Chief Operating Officer. Mr. Duryea joins ExperTelligence
from The Executive Committee (TEC), an international organization of
CEO's. Mr. Duryea has been brought on as Chief Operating Officer to
manage the growth of WebData.com. Mr. Duryea was elected a Director of
the Corporation at the Company's most recent annual meeting.
On March 6, 1999 the Company announced a software license and
collaborative service agreement with Time0, a Perot Systems Corporation
business. Time0 is a pioneer in business to business Digital Marketplace
design and development. Time0's patent pending technology, Enchilada, will
extend Webdata4D (WD4D), the Company's patent pending technology, allowing
for simultaneous search of multiple web sites and the integration of the
results displayed in one location.
On March 19, 1999, the Company announced ExperSearch, powered by Enchilada.
ExperSearch is an advanced searching capability provided with WebData.com that
gives consolidated results retrieved from web sites. Users simply enter the
keyword once and ExperSearch does all the work for them. The merging of these
technologies retains site branding and look and feel, and also provides users
with the option of integrating results from many sites.
On March 30, 1999 the Company announced a new patent pending, banner ad
server technology. This new technology departs from existing business
models for serving banner ads to Web sites. The most popular business
models today are cost per thousand (CPM) ads shown or pay per click
through. The Company's new technology vastly improves on the two
existing business models. This new technology allows an advertiser to
independently control costs to their target audience while still giving
sites maximum value for their control. The domain names acquired in
conjunction with this technology are experclick.com, maxclick.com,
extraclick.com, and maxiclick.com.
In March, 1999, the Company signed a letter of intent, to grant a
non-exclusivelicense on the Company's portal technology, to eCustomize.com,
in exchange for 20% of eCustomize.com. eCustomize.com is an Internet portal
company that will be the premier gateway dedicated to customized products and
services.
In the business to business ecommerce arena, the Company has registered the
domain names: dexcentral.com, chemicaldex.com, cofeedex.com, wheatdex.com,
manudex.com, plasticdex.com, commercedex.com, lumberdex.com, metaldex.com,
dexplace.com, dexcite.com, dexzone.com, zonedex.com, and dexsite.com.
The Company filed a patent pertaining to ecommerce and registered the domain
names 1please.com, orderme1.com, buyme1.com, getme1.com, and charge1.com.
The Company has applied for the trademark "The Internet IS the Database".
On April 1, 1999 the Company hired Mr. John McNamara. Mr. McNamara will
develop and deploy a real-time financial section of WebData.com.
Mr. McNamara's many years as a CEO, plus sales and marketing experience in
technically complex industries will be of great value to the Company. The
domain names acquired in conjunction with this program are tickerchat.com,
commoditychat.com, bondchat.com, equitychat.com and
optionchat.com and 3Dstockcharts.com.
On May 13, 1999 the Company announced the hiring of The Financial Relations
Board, Inc. The Financial Relations Board Inc., established in 1961, is
regarded as the world's oldest and largest agency specializing in investor
relations and financial communications. The Company feels this relationship
will enhance the Company's shareholder value.
On May 24, 1999 the Company hired Jennifer Goddard of The Goddard Company
Public Relations. Since enlisting Ms. Goddard, Denison Bollay, CEO, has
appeared on thirteen media events, such as radio, newspapers and magazines.
He has been interviewed by Cyberstation.com, Wall Street Transcript, CEO Chat,
CBS Marketwatch, PC Week, PC Today and the Los Angeles Times, just to name a
few. Ms. Goddard has been in public relations arena for 15 years.
On June 10, 1999 the Company announced that incorporating portions of The
World Almanac and Book of Facts 1999 in a searchable format would enhance
WebData.com. The Company will continue to aggressively target premier
Partners and branding opportunities to enhance its WebData.com portal. The
Company is planning a number of marketing programs featuring World Almanac
excerpts.
On July 23, 1999 the Company announced plans to launch 3DStockCharts.com, a
financial portal that will provide interactive real time 3D displays of stock
market activity and other services by subscription. The Company also
announced the filing of a patent for a three dimensional (3D) display
mechanism for real-time stock information over the Internet. The
3DStockCharts.com portal highlights 3D displays of real-time streams stock
quotes and trading volumes so Internet users can gain insight into stock
market activity. The Company is proud to deliver the most dramatic
improvement to stock market displays since the ticker tape. Online stock
traders will have the ability to visually monitor stock market activity
continuously and have the best information available to make decisions.
The Company has fourteen full time and eight part time employees.
RESULTS OF OPERATIONS FOR THE THREE AND NINE PERIOD ENDED
JUNE 30, 1999 AND 1998
ExperTelligence's revenues consist of product revenues, (including
licensing of its software), consulting, and other services.
Revenues for the three and nine month period ended June 30, 1999 were
$56,031 and $148,561, respectively. These figures were down 78% and 81%,
respectively, from comparable figures last year, of $257,367 and
$787,027. This decrease is a direct result of the Company's decision to
focus its attention on the development and marketing of its new web
database portal WebData.com and its companion WebDataNetwork.com. On
December 1, 1998 the Company launched WebData and WebData Network. Consulting
work performed for Harris accounted for 66% of revenues. Software sales to
Caere Corporation accounted for 7% of revenues.
Cost of Sales consists primarily of service personnel, software amortization
and provision for inventory.
Cost of Sales were $38,510 (69% of revenue) and $104,611 (70% of revenue) for
the three and nine month period ending June 30, 1999. These figures
were down 52% and 56%, respectively, from comparable figures last
year of $80,069 and $239,243. This decrease is directly attributable
to Management's decision to put its full efforts into WebData and
WebData Network. Software amortization, which remains a constant,
pushed the percentage mix down. During the quarter the Company employed 10
employees, known as Team Content. These individuals were responsible for
populating WebData.com with databases from the web. Various other duties
included affiliate merchant programs, generating traffic to WebData.com and
quality and assurance of the existing sites.
Sales and marketing consists of sales personnel, advertising and
promotion.
Sales and marketing expenses were $49,672 (89% of revenue) and $128,370
(86% of revenue) for the three and nine month period ended June 30, 1999.
Beginning with this fiscal year the Company is reporting sales and
marketing personnel and their related expenses under this heading. In
prior years, the Company reported these expenses under the general and
administrative heading. During this quarter the Company hired a public
relations firm, an investor relations firm and a full time marketing person.
Subsequent to the quarter end a full time corporate communications person was
hired. This individual will be responsible for the coordination of all
communications between the Company and all outside entities.
The Company has enlisted the services of Jupiter Communications, which
specializes in on-line advertising strategies. The agreement between
The Terpin Group, in which services were exchanged for stock, was not
renewed. (See Item-2, Changes in Securities.)
General and Administrative expenses includes costs of administrative
salaries, employee benefits, facilities, depreciation, communication,
insurance, professional fees, shareholder expense and other related
expenses associated with the day to day operation of the Company.
General and administrative expenses were $205,954 (368% of revenue) and
$433,863 (292% of revenue) for the three and nine month period ended
June 30, 1999, respectively. General and administrative expenses were
up 141% and 117% from comparable figures of last year of $146,068 and
$372,245, respectively. Sales and marketing expenses have been
reclassified to the Sales and Marketing heading. Professional fees are
up due to accelerated patent and trademark protection. Insurance expense was
up due to the securing of Directors and Officers Liability insurance. Travel
expense was up due to increased meetings with potential partners and the
raising of capital. Shareholder expense is up due to the February 3, 1999
Annual Meeting and the creation and mailing of the proxy. During this
quarter,an individual was hired to focus on strategic business development.
General and administrative expenses were up on the whole due to the
increased staff.
Research and Development expense consists primarily of the cost of
research and development personnel.
Research and development expenses were $20,515 (37% of revenue) and
$72,274 (49% of revenue) for the three and nine month period ended June
30, 1999, respectively. These figures are down 22% and 24% from
comparable figures of last year of $26,406 and $95,657, respectively.
The capitalization of developer's time on WebData development resulted
in this decrease.
Loss from operations for the three and nine month period ended June 30,
1999, were $(258,620) and $(590,557), respectively. These figures were
down from profits of $3,699 and $71,628 for the same periods last year.
This decrease in profits represents management's decision to diversify
its revenue streams by completing and bringing to market, WebData.com.
The Company feels that in redirecting its team and leading Internet
technologies to it's database portal, WebData, they are much better
poised to ride the Internet growth wave.
Deferred tax expense decreased and increased proportionately with income
for the three and nine month period ended June 30, 1999, respectively.
These numbers are a result of the change in accounting policy, which took
effect FY94, and are not actual cash expenses.
The software developed and used by the Company is Year 2000 compliant.
Internal reviews indicate that the Company's products do not contain
code that directly uses dates that would lead to user problems at the
turn of the century. In house software has been reviewed and the
necessary steps for compliance have been completed.
LIQUIDITY
At June 30, 1999 the Company reported working capital of $1,049,710
which is up 363% from $289,359 at September 30, 1998. This increase is
due to the receipt of $1,187,000 raised in private placements (See Item-
2, Changes in Securities). Net stockholder's equity of $2,976,863 was
up 92% from $1,547,820 on September 30, 1998.
Accounts receivable of $94,949 was down at June 30, 1999 from the
September 30, 1998, figure of $153,994. This 38% decrease is in
keeping with the Company's decision to pursue additional sources of
revenue by launching WebData and its companion WebData Network. It is
believed that all receivables will be collected.
Net product development costs were $1,045,900 and $801,144 for the
period ending June 30, 1999 and September 30, 1998, respectively.
This 31% increase reflects the shift in salaries from software and
contract services to software development. Management continues to
believe in the commercial viability of all products for which research
costs are capitalized.
Fixed assets were up due to the purchase of equipment for new employees.
Accounts payable was $27,458 at June 30, 1999 compared to $87,498 at
September 30, 1998.
Accrued vacation was $78,401 at June 30, 1999 compared to $63,994 at
September 30, 1998. Both figures represent less than 3% of total assets.
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings
On March 24, 1999, the Company was notified of a pending lawsuit, initiated by
Opportunity Capital Partners, a former consultant for the Company, regarding a
dispute over employee options. This lawsuit was settled out of court.
Item 2 - Changes in Securities
During the quarter ended June 30, 1999, the Company issued 2,732 shares
of common stock valued at $30,000 to pay for public relation expenses.
On January 12, 1999, a private investor exercised 15,000 warrants at $3 per
share.
Under Section 4(2) of the Securities Act of 1933 and Regulation D, on
January 14 & 15, 1999, the Company sold 182,000 shares of unregistered common
stock through private placements, to individual investors at $6 per share. In
addition, 91,000 underlying warrants at $10 per share were issued. These will
expire in two years. The funds are being used for general corporate purposes.
Under the same regulation D, on February 6, 1999, the Company sold 5,000 shares
of unregistered common stock to an individual investor at $10 per share. In
addition 2,500 underlying warrants at $15 per share were issued. These
warrants will expire February 15, 2000.
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
On February 3, 1999 the Company held its Annual Meeting of Shareholders.
The matters presented for vote were the Election of Officers and the
Ratification of Selection of Auditors. The nomination for directors,
Denison W. Bollay, Robert Reali and Trygve Duryea was carried with
832,567 for and 130 abstain. McGowan, Guntermann was ratified as
auditors for the Company with 832,697 for.
Item 5 - Other Information
Item 6 - Exhibits and Reports on Form 8-K
(a) None
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ExperTelligence, Inc.
(registrant)
August 13, 1999 Denison Bollay, President and Chairman of the Board
(signature)
August 13, 1999 Robert Reali, Director
(signature)
August 13, 1999 Trygve Duryea, Director
(signature)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1999
<CASH> 638,438
<SECURITIES> 0
<RECEIVABLES> 43,364
<ALLOWANCES> 0
<INVENTORY> 61,918
<CURRENT-ASSETS> 1,156,199
<PP&E> 467,543
<DEPRECIATION> 400,155
<TOTAL-ASSETS> 3,083,352
<CURRENT-LIABILITIES> 106,489
<BONDS> 0
<COMMON> 1,744,395
0
150,000
<OTHER-SE> 2,976,863
<TOTAL-LIABILITY-AND-EQUITY> 3,083,352
<SALES> 56,031
<TOTAL-REVENUES> 56,031
<CGS> 38,510
<TOTAL-COSTS> 314,651
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (258,620)
<INCOME-TAX> (138,856)
<INCOME-CONTINUING> (112,923)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (112,923)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
