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 December 31, 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
25 East Ortega 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
Common stock, no par value
Outstanding at December 31, 1999 1,894,395
<PAGE>
ExperTelligence, Inc.
REPORT ON FORM 10-QSB
TABLE OF CONTENTS
Page No.
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheet at December 31, 1999
and September 30, 1999 3
Consolidated Statement of Operations for the 3 months
ended December 31, 1999 4
Consolidated Statement of Cash Flows for the 3 months
ended December 31, 1999 5
Notes to Consolidated 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.
Consolidated Balance Sheets
at 12/31/99 at 09/30/99
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $589,803 $ 331,309
Accounts receivable, net 30,810 39,074
Inventory 46,049 46,536
Prepaid exp. and other current assets 37,354 35,537
Prepaid Royalties 32,785 32,785
Deferred tax asset-current 202,840 114,000
Total current assets $ 939,641 $ 599,241
Product development costs, net 553,189 575,571
Property and equipment, net 438,136 387,914
Organizational Costs, net 30,337 0
Deferred tax asset-non-current 687,000 687,000
Other non-current assets 86,582 5,295
Total assets $2,734,885 $2,255,021
LIABILITIES & STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 73,839 $ 66,853
Accrued vacation 73,159 79,915
Other accrued expenses 21,616 0
Total current liabilities $168,614 $ 146,768
Stockholders' equity:
Subsidiary-3DStockCharts.com
Preferred stock, no par value
8,000,000 shares $800,000 $ 0
Preferred stock, no par value.
Authorized 1,000,000 shares;
Issued and outstanding, 0 shares $ 0 $ 318,487
as of December 31, 1999 and 159,244
as of September 30, 1999
Common stock, no par value.
Authorized 20,000,000 shares; Issued and
Outstanding 1,894,395 shares as of
December 31,1999 and 1,734,451 as of
September 30, 1999 $5,657,376 $ 5,338,890
Retained earnings (Accumulated deficit) $(3,891,105) $(3,549,124)
Net stockholders' equity $2,566,271 $2,108,253
Total liabilities and stockholders equity $2,734,885 $2,255,021
<FN>
See accompanying notes to financial statements
Subsequent to December 31, 1999, the Company sold $1,000,000 of unregistered
common stock.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ExperTelligence, Inc
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months
ended December 31,
(unaudited)
1999 1998
<S> <C> <C>
Revenues $ 58,694 $ 52,512
Operating costs and expenses
Cost of Sales $ 19,564 $ 38,132
Sales & Marketing 52,107 31,744
General & Administration 384,195 82,841
Research & Development 52,277 23,371
Total operating costs
& expenses $ 508,143 $176,088
Profit/(loss) from
operations $(449,449) $(123,576)
Other expense (income)
Interest expense $ 9 $ 0
Interest income (8,091) (464)
Gain/Loss on Fixed Assets 0 0
Income Tax 800 800
Deferred Tax Expense ( 88,840) (52,507)
Other ( 11,348) 0
Total other expense (income) $(107,470) $ (52,171)
Net income (loss) $(341,979) $ (71,405)
Net income (loss) per share $ (.18) $ (.04)
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXPERTELLIGENCE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH
For the three months
Ended December 31,
(unaudited)
1999 1998
<S>
<C> <C>
Cash flows from operating
activities:
Net income (loss) for the
period ending December 31, $(341,979) $(71,405)
Adjustments to reconcile
net income (loss) to net cash
used by operating activities:
Depreciation and amortization 48,708 $ 18,743
Decrease (increase) in accounts
receivable 5,264 30,291
Decrease (increase) in
inventory 487 4,280
Decrease (increase) in prepaid
expenses (6,601) (34,508)
Decrease (increase) in other
current assets 0 0
Increase (decrease) in accounts
payable & accrued expenses 21,843 (42,771)
Increase (decrease) in
deferred revenue 0 0
Total adjustments $ 69,701 $( 23,965)
Net cash provided (used) by
operating activities $(272,278) $( 95,370)
Cash flows from investing activities:
(Increase) decrease in product
development costs $ 15,693 $ ( 65,959)
Purchase of property and
equipment (90,922) ( 1,265)
(Increase)Decrease in
Organizational Costs (31,656) 0
(Increase)Decrease in
Deferred Tax Assets (88,840) (52,507)
(Increase)Decrease in
other assets (73,502) 0
Net cash provided (used)
investing activities $(269,227) $ (119,731)
Cash flows from financing activities:
Repayments of notes to related
parties $ 0 $ 0
Repayments of other
long-term debt 0 0
Proceeds from issuance of
common stock 800,000 125,000
Net cash provided (used) by
financing activities $ 800,000 $ 125,000
Net increase(decrease) in cash $ 258,495 $ (90,101)
Cash and cash equivalents as
of beginning of period $ 331,309 $ 130,149
Cash and cash equivalents as
of period end $ 589,804 $ 40,048
</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 December 31, 1999 and results of
operations and changes in financial position for the three months ended
December 31, 1999.
The accounting policies followed by the Company are set forth
in Note 1 of the ExperTelligence, Inc. Annual Report to Stockholders
September 30, 1999 and are incorporated by reference.
2. Fixed assets are comprised of the following :
<TABLE>
<CAPTION>
12/31/99 09/30/99
<S> <C> <C>
Furniture & Fixtures $ 48,754 $ 36,630
Purchased Software 388,013 386,343
Equipment 522,735 445,250
Total 959,502 868,223
Less :Accumulated depreciation 521,366 480,309
$438,136 $387,914
</TABLE>
3. The results of operations for the three months ended December 31,
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, 1999, 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>
2000 487,000 30,000 - -
2001 390,000 - - -
2002 309,000 - 171,000 -
2003 125,000 - 38,000 -
2004 - 6,000 625,000 -
2005 614,000 30,000 - 9,000
2006 481,000 39,000 - 16,000
2007 68,000 14,000 - -
2008 - 10,000 - -
2009 - - - -
2010 - 1,000 - -
2011 - 4,000 - 8,000
2012 342,000 2,000 - 1,000
2013 9,000 8,000 - 5,000
2014 1,250,000 - - -
$4,075,000 $144,000 $834,000 $39,000
</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, 1999. 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.
Item 1. Description of Business
ExperTelligence, Inc. is an incubator for creating and operating Internet
businesses. ExperTelligence created WebData.com, the ultimate resource for
facts and figures on the web 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
currently has 5 businesses in various stages of development based on the
Company's technologies and patents (pending). Resources include technology,
hosting, accounting, business development, support and services. The model
the Company follows is to first create the Internet property at
ExperTelligence, build a management and support team, incorporate as a
subsidiary and if appropriate, raise equity for the new company to focus on
its business independently.
3DStockCharts.com
On October 21, 1999, the Company announced the incorporation of
3DStockCharts.com as an 80% owned subsidiary. Mr. John McNamara was named
President and CEO of 3DStockCharts.com. The Company completed a successful
$1,000,000 round of financing into 3DStockCharts.
The Company created 3DStockCharts.com, the first 3D display, on the web,
of an Electronic Communication Network, or ECN, an acronym used by Wall
Street, for real-time computerized stock "order books". It is located in
Santa Barbara, California. 3DStockCharts.com, launched October 1999, is a
highly specialized Internet financial portal that highlights 3D displays
of real-time streaming ECN "order books" so Internet users can gain
insight into stock market activity. Initially, the data is from the Island
ECN; as soon as possible the company will integrate data from the other
ECNs. The easy to read color charts give investors a clear picture of
the buy and sell pressures that lie behind current stock pricing,
providing insight into pricing trends not apparent simply by tracking
the quoted price. Previously, this information was available only to
top institutional and professional traders. The 3DStockCharts.com web
site is generating over 800,000 ad impressions per trading day with more
than 35,000 registered users in the first three months of operation. The
number of registered users and the number of banner ads translate to
more than 6,000 hours of total daily viewing, indicating that many
investors are spending hours at the site. There is a link from the
Island ECN web site (http://www.Isld.com) directly to the
http://www.3DStockCharts.com site.
The real-time charting information at the present time is provided
without cost, to allow visitors to use the information, evaluate the site
and give the company valuable feedback to improve the site. 3DStockCharts
will use a flexible marketing strategy to maximize available revenue sources
and primary, among these are revenue from banner advertisements on its web
site, www.3DStockCharts.com. Revenue can also be derived from subscriptions
and licensing arrangements with financial portals, brokerages, corporations
(3DChart of the company's own stock), and broadcasters for use in news
features.
On January 7, 2000, 3DStockCharts entered into an agreement with
DoubleClick, a leading Internet advertising solutions company, to sell
banner ads on a non-exclusive basis, through a new network tailored to
serve promising startups, such as 3DStockCharts.com. The DART system and
ad manage interface, will provide a means to generate reports based on
verifiable traffic statistics. This valuable traffic data will be used
to analyze traffic patterns and the system can also be used to project
the effectiveness of proposed ad campaigns. 3DStockcharts is also in
discussions with a leading ad agency for site promotion, ad
representation and content syndication services.
The Company filed a patent for a three dimensional (3D) display
mechanism for real-time order book information over the Internet.
WebData.com
WebData.com reaches knowledge workers and consumers looking for facts
and figures, research and reference through http://www.WebData.com. It
was launched in December 1998. Www.WebData.com is an Internet database
portal specializing in the cataloging, searching and comparison of
online content from web sites with databases. It is for everyone who
uses the Internet to do research, reference and find facts and figures.
Additionally, it features comparison-shopping. WebData.com provides the
ability to search and browse high-quality interactive databases found on
the Internet, for free, from a single location. All databases are
reviewed for excellence and approved by our site librarian. The
databases cover a broad range of topics from Business to Shopping,
Travel and Stocks with 8,500 different queries, from over 6,000 high
quality online databases. Features include 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.
WebData 4D(tm), 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 www.WebData.com that
provides consolidated results from searching across multiple shopping,
auction, classified and database sites. ExperSearch is powered by
Enchilada(tm), 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's Team Content was created to research and increase the
number of quality database sites listed in WebData. Team Content is lead
by a full time librarian. In addition to finding new information, Team
Content is focused on enhancing the existing web site, content, editors,
and the user interface. Tasks include finding quality databases,
detecting trends of popular topics, signing up the new database sites as
Partners, QA, Editor program, and overall site grooming. There are 15 editors
that provide input on high quality database sites. Team Content
participates in the revenue stream by handling all the merchant
affiliate relationships. Currently there are 60 merchant affiliates. If
a user goes to the ecommerce site through www.WebData.com and purchases
a product, a percentage of the sale (average 6%) is paid to the Company.
Team Traffic is responsible for establishing high search engine rankings
and the actual counting of site traffic. WebData.com averages 2,000
unique visitors a day, which generates approximately 300,000 page views
per month while showing approximately 139,000 ads per month.
In June, 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 now features World Almanac Facts on its
WebData.com Internet site. 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.
While there is no certainty that WebData.com and 3DStockCharts.com can
generate substantial ad revenue from banner ads, overall ad revenues on
the web are projected to reach $3.3B from $1.2B in 1999. 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. The Company 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. There
are over 100 members in the WebDataNetwork.
Experclick
On February 4, 2000, the Company incorporated, in the state of Delaware,
ExperClick, its newest incubated property. The company is currently building
the management and technical teams. The company has a patent pending on the
ExperClick technology.
eCustomize.com
The Company has developed a commerce web portal focusing on custom made
products ranging from clothing, furniture and equipment, from
automobiles and coffee mugs to chocolate and vacations. The technology
is based on WebData.com database portal and WebData 4D(tm) single entry
shopping interface. Users visiting eCustomize.com will be able to
browse and search for a variety of items, by entering specifications,
logos or personalized information to make a selection or purchase, and
check on competitive pricing and purchase specialty products. A key
feature of WebData 4D, utilized by eCustomize.com, is the ability to key
in product search information once and compare results from different
web sites simply by clicking on different vendors' site logos. This
allows the user to view a list of related products retrieved from the
different web sites, and easily search out and find the exact product or
service that they require. The Company entered into an agreement with a
third party to assume an 80% ownership. The project has an operational
prototype, and the domain name eCustomize.com.
ExperData.com
The Company owns Experdata.com, a database web-hosting site. This site
is uniquely focused on hosting ecommerce, business to business, dynamic,
database-enabled Web sites for real-world applications. The Company is
fully equipped to deliver high bandwidth connections, fast file servers,
top quality support services, site development and database expertise.
ExperData hosts over 30 sites.
WebBase Software
WebBase still continues to be the Company's premier software product.
It is the basis for most of the consulting revenue and software sales.
WebBase provides users the tools to develop easy access to database
information over the Internet. It includes full server capabilities and
can interface with any of 50 database formats including Microsoft
Access, Excel and SQL Server, Sybase SQL Server, Oracle, dBase, Paradox,
and Btrieve. WebBase provides for solutions ranging from simple access,
to real estate listing, to complex enterprise-wide information system
applications in human resources, finance, and sales. It allows existing
databases to be enhanced through the addition of hypertext links into
other Internet publications. Full details about WebBase may be found on
our web site, http://www.expertelligence.com.
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. The
Company has spent the last eleven years combining Internet programming
experience with real world business process understanding to produce
well-engineered Internet, Intranet and Extranet applications.
ExperForms Software
ExperForms, based on WebBase, is revolutionary new software that
converts scanned forms into complete web sites. It creates database and
all the web forms necessary to add, update, search and view any web
browser on the Intra or Internet. It is also resold through one of the
Company's strategic partners, CAERE Corporation. The Company has
participated with CAERE in major trade shows and other joint marketing
activities this year allowing the Company to receive industry wide
exposure.
E-Merge Software
E-Merge, a WebBase add-on allows users to conveniently send email
directly from their WebBase web server. E-Merge dynamically creates
emails from databases.
WebberActive Software
WebberActive is a dynamic HTML editor and channel creation tool targeted
directly at Microsoft and Netscape software standards.
Webber32 Software
Webber32 is a free HTML editor and validation tool the Company
distributes internationally to introduce potential customers to the
Company. It is downloaded free at over 20 popular Internet sites.
Time 0
On March 6, 1999 the Company announced an 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, extends 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. ExperSearch, which is powered by
Enchilada, is an advanced searching capability provided with WebData.com,
which gives consolidated search 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, look and feel,
and also provides users with the option of integrating results from many
sites.
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 trademarks "The Internet IS the
Database", WebData.com, 3DStockCharts.com, ExperClick, and "Get Your
Facts Straight at WebData.com".
On January 5, 2000, the Company announced the appointment of Mr. Charles
"Chuck" House, to the Board of Directors. Mr. House served with
Hewlett-Packard from 1962 to 1991, first, as a member of the technical
staff, and then as founder and later as general manager of HP's Logic
System division. He then served for 10 years as corporate engineering
director and general manager of HP's Software Engineering Systems
division. Mr. House has also served as a senior vice president of
Informix Software, senior vice president of Veritas Software and
president and general manager of Spectron Microsystems. Today, he is
executive vice-president for research at Intel's Dialogic Division.
On January 14, 2000, the Company announced the appointment of Mr.
William J. Van Beurden, to the Board of Directors. Mr. Van Beurden is
President and Chairman of Van Beurden Insurance Services, Inc., one of
the top 50 insurance brokers in the US. Mr. Van Beurden is also Chairman
of KRM Risk Management, a wholesale insurance brokerage and Chairman of
TotalPay, Inc. a payroll solutions provider. KRM provides insurance and
financial products to over three million employees and 15,000
businesses. TotalPay is one of nations fastest growing payroll
services, providing payroll solutions to over 60,000 employees. The
Company sold $1,000,000 of unregistered common stock, in a private placement
with Mr. Van Beurden.
The Company has nineteen full time employees. Additional contract workers
are hired as necessary to complete specific projects.
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. The Company did not
experience any Y2K related problems.
CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
DECEMBER 31, 1999 AND 1998
The Company's revenues consist of product revenues, (including licensing of its
software), consulting, ad revenues and other services.
Revenues for the three month period ended December 31, 1999 was $58,694. This
figure was up 10% from a comparable figure last year, of $52,512. This
increase is a result of increased software sales, of the Companys flagship
product, Webbase, and consulting work performed for clients. The Company
expects that ad revenues, from its incubated websites, should begin in the
next quarter.
Cost of Sales consists primarily of service personnel, software
amortization and provision for inventory.
Cost of Sales were $19,564 (33% of revenue) for the three month period ending
December 31, 1999. This figure is down 49% from a comparable figure, last
year of $38,132. This decrease is due to the reallocation of service personnel
to the launching of 3DStockcharts.com.
Sales and marketing consists of sales personnel, advertising and
promotion.
Sales and marketing expenses were $52,107 (89% of revenue) for the three month
period ended December 31, 1999. This figure is up 64% over a comparable
figure last year of $31,744. 3DStockCharts.com has retained the services of
S&S Public Relations of Chicago, a full service media relations firm that
specializes in creating public relations programs designed to increase sales
and sell-through for the technology sector.
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 $384,195 (654% of revenue) for the
three month period ended December 31, 1999. General and administrative
expenses were up 464% from a comparable figure of last year, of $84,841. This
increase is directly attributable to the start up of 3DStockcharts .com and
the Company's decision to retain separate facilities. This included increased
staffing and independent communication services. 3DStockCharts has developed
close working relationships with hosting services that are critical to the
Company's operations. Stealth Communications in New York City provides hosting
services for several servers that comprise one of two geographic server
clusters in 3DStockChart's system. The second cluster of servers is hosted on
the west coast at the Westnet ISP facility in Santa Barbara. Both Stealth and
Westnet also provide the bandwidth needed to serve up the company's charts
from these servers. A one time commission expense of $50,400 was paid by the
Company, for the placement of funds.
Research and Development expense consists primarily of the cost of
research and development personnel.
Research and development expenses were $52,277 (89% of revenue) for the three
month period ended December 31, 1999. This figure is up 223% from a comparable
figure last year of $23,371. This is due to the hiring of a Chief Technology
Advisor and Senior Systems Administrator/Programmer for 3DStockCharts.com.
Loss from operations for the three months ended December 31,
1999, were $(449,449). This figure is up from a loss of (123,576) for the
same period last year. This increase represents management's decision to
diversify its revenue streams by completing and bringing to market,
3DStockCharts.com and WebData.com. The Company feels that in redirecting its
team and leading Internet technologies to it's incubated web properties that
the Company is much better poised to ride the Internet growth wave.
Deferred tax expense decreased and increased proportionately with income
for the three month period ended December 31, 1999. These numbers are a
result of the change in accounting policy, which took effect FY94, and are
not actual cash expenses.
CONSOLIDATED LIQUIDITY
At December 31, 1999 the Company reported working capital of $771,027
which is up 58% from $452,473 at September 30, 1999. This increase is
due to the raising of $1,000,000 for 3DStockcharts.com. Net
stockholder's equity of $2,566,271 was up 18% from $2,108,253 on
September 30, 1999. Subsequent to December 31, 1999, on January 12, 2000, the
Company sold $1,000,000 of unregistered common stock.
Accounts receivable of $30,810 was down at December 31, 1999 from the
September 30, 1999, figure of $39,074. It is believed that all receivables
will be collected.
Net product development costs were $553,189 and $575,571 for the
period ending December 31, 1999 and September 30, 1999, respectively.
This 4% decrease reflects the transfer of capitalized software to
3DStockCharts.com. Management continues to believe in the commercial
viability of all products for which research costs are capitalized.
Accounts payable was $73,839 at December 31, 1999 compared to $66,853 at
September 30, 1999.
Accrued vacation was $73,159 at December 31, 1999 compared to $79,915 at
September 30, 1999.
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
Subsequent to December 31, 1999, on January 12, 2000, the Company sold 250,000
shares of unregistered common stock, at $4.00 per share, in a private placement
to Van Beurden Insurance Services, Inc.
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
None.
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)
February 14, 2000, Denison Bollay, President and Chairman of the Board
(signature)
February 14, 2000 Robert Reali, Secretary
(signature)
<PAGE>
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