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 March 31, 2000
[ ] 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 March 31, 2000 2,343,140
<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 March 31, 2000
and September 30, 1999 3
Consolidated Statement of Operations for the 3 and 6 months
ended March 31, 2000 4
Consolidated Statement of Cash Flows for the 3 and 6 months
ended March 31, 2000 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 3/31/00 at 09/30/99
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $3,091,129 $ 331,309
Accounts receivable, net 56,179 39,074
Inventory 45,839 46,536
Prepaid exp. and other current assets 57,388 35,537
Prepaid Royalties 32,785 32,785
Deferred tax asset-current 220,808 114,000
Total current assets $3,504,128 $ 599,241
Product development costs, net 565,604 575,571
Property and equipment, net 493,542 387,914
Organizational Costs, net 37,023 0
Deferred tax asset-non-current 687,000 687,000
Other non-current assets 113,434 5,295
Total assets $5,400,731 $2,255,021
LIABILITIES & STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $ 79,463 $ 66,853
Accrued vacation 75,409 79,915
Other accrued expenses (2,211) 0
Total current liabilities $152,661 $ 146,768
Non Controlling Interest in Net Assets $860,328 0
Stockholders' equity:
Preferred stock, no par value.
Authorized 1,000,000 shares;
Issued and outstanding, 0 shares $ 0 $ 318,487
as of March 31, 2000 and 159,244
as of September 30, 1999
Common stock, no par value.
Authorized 20,000,000 shares; Issued and
Outstanding 2,343,140 shares as of
December 31,1999 and 1,734,451 as of
September 30, 1999 $8,734,877 $ 5,338,890
Retained earnings (Accumulated deficit) $(4,377,135) $(3,549,124
Net stockholders' equity $4,387,742 $ 2,108,253
Total liabilities and stockholders equity $5,400,731 $ 2,255,021
<FN>
See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ExperTelligence, Inc
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months For the six months
ended March 31, ended March 31,
(unaudited) (unaudited)
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenues $ 110,310 $ 40,019 $ 169,004 $ 92,531
Operating costs and
expenses
Cost of Sales $ 32,065 $ 27,710 $ 51,629 $ 66,101
Sales & Marketing 69,010 51,238 121,117 78,698
General & Administration 549,729 142,229 933,924 229,066
Research & Development 102,394 28,387 154,671 51,758
Total operating costs
& expenses $ 753,198 $ 249,564 $ 1,261,341 $ 425,623
Profit/(loss) from
operations $ (642,888) $(209,545) $(1,092,336) $(333,092)
Other expense (income)
Interest expense $ 0 $ 0 $ 0 $ 0
Interest income (11,489) ( 4,356) (19,580) ( 4,820)
Gain/Loss on Fixed Assets 0 0 0 0
Income Tax 0 0 800 800
Deferred Tax Expense (17,968) (64,815) 106,808) (117,322)
Other (17,334) 0 (28,682) 0
Total other expense(income) $ (46,800) $ (69,171) $ (154,270) $(121,342)
Net income (loss) $ (596,087) $(140,374) $ (938,066) $(211,750)
NonControlling Interest Net Loss (88,754) 0 (139,672) 0
Controlling Interest Net Loss (507,333) 0 (798,394) 0
Net income (loss) per share $ (.22) $ (.07) $ (.34) $ (.11)
<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 For the six months
ended March 31, ended March 31,
(unaudited) (unaudited)
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss) for the
period ending March 31, $(596,087) $ (140,374)$ (938,066) $(211,750)
Adjustments to reconcile
net income (loss) to net cash
used by operating activities:
Depreciation and amortization $ 54,805 18,763 $ 103,513 $ 37,699
Decrease (increase) in accounts
receivable (26,927) (6,102) (21,663) 24,189
Decrease (increase) in
inventory 210 205 697 4,485
Decrease (increase) in prepaid
expenses 5,935 21,988 (666) (12,295)
Decrease (increase) in other
current assets (18,185) (3,075) (18,185) (3,300)
Increase (decrease) in accounts
payable & accrued expenses (15,567) (5,077) 6,276 (50,877)
Increase (decrease) in
deferred revenue 0 0 0 0
Total adjustments $ 271 $ 26,702 $ 69,973 (99)
Net cash provided (used) by
operating activities $(595,815) $ (113,672) $(868,093) $ (212,042)
Cash flows from investing activities:
(Increase) decrease in product
development costs $ (19,106) $ (68,660) $ (3,413) $ (134,618)
Purchase of property and
equipment (101,156) (23,264) $(192,078) (21,723)
(Increase)decrease in
organizational costs (9,051) 0 (40,707) 0
(Increase)Decrease in
Deferred Tax Assets (17,968) (64,815) $(106,808) (117,322)
(Increase)Decrease in
other assets ( 32,747) (375,000) (106,249) (375,000)
Net cash provided (used)
investing activities $ (180,028) $ (531,739) $(449,255) $(648,663)
Cash flows from financing activities:
Proceeds from issuance of
common stock 3,277,500 1,562,000 4,077,500 1,687,000
Net cash provided (used) by
financing activities $3,277,500 $1,562,000 $4,077,500 $1,687,000
Net increase(decrease) in cash $2,501,657 $ 916,589 $2,760,152 $ 826,488
Cash and cash equivalents as
of beginning of period $ 589,804 $ 40,048 $ 331,309 $ 130,149
Cash and cash equivalents as
of period end $3,091,461 $ 956,637 $3,091,461 $ 956,637
</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.'s, financial position as of March 31, 2000 and results of
operations and changes in financial position for the three and six months
ended March 31, 2000.
The accounting policies followed by the Company are set forth
in Note 1 of the ExperTelligence, Inc. Annual Report to Stockholders dated
September 30, 1999 and are incorporated herein by reference.
2. Fixed assets are comprised of the following :
<TABLE>
<CAPTION>
3/31/00 9/30/99
<S> <C> <C>
Furniture & Fixtures $ 51,892 $ 36,630
Purchased Software 395,216 386,343
Equipment 613,192 445,250
Total 1,060,300 $868,223
Less :Accumulated depreciation 566,758 480,309
$ 493,542 $387,914
</TABLE>
3. The results of operations for the three and six months ended March 31,
2000 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 and State
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 and State 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, risks common to all Internet companies and
risks particular to the business and related Internet industry segments;
dependence upon and need to hire and keep key personnel; 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. ( the Company) is an incubator for creating,
building and operating intelligent Internet businesses. The new
businesses generally come from new ideas invented by the Company or
brought to the Company and passes the Company's qualification criteria
for incubation. The Company tends to focus on ideas that apply to
"internet hubs" that will potentially create value by connecting and
distributing information. Each idea that passes qualification is modeled
and prototyped. If the results of the testing suggest that the idea will
form the basis for a successful business, the Company forms and
capitalizes the new entity, recruits a management team, provides space in
the Company's facilities, and on-going strategic guidance and mentoring,
creative design, web development, accounting, legal and administrative
services.
ExperTelligence is also 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 created 3DStockCharts.com, the first 3D display of real-time
stock quotes and trading volume on the Web; WebData.com, a resource for facts
and figures on the Web; and ExperClick.com, the first efficient, electronic
auction and placement system where advertisers can match ads to targeted
consumers and websites.
3DStockCharts.com
On October 21, 1999, the Company announced the incorporation of
3DStockCharts.com a majority owned subsidiary based on its proprietary
technology. Mr. John McNamara was named President and CEO of
3DStockCharts.com. The Company sold a minority interest in
3DStockCharts.com to a group of private investors for $1,000,000.
The Company created 3DStockCharts.com, the first real-time 3D display of an
Electronic Communication Network, or ECN, for real-time computerized stock
"order books". It is located in Santa Barbara, California. 3DStockCharts.com
is also 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. Currently, the data is utilized from the
Island ECN. On January 12, 2000 3DStockCharts.com signed a contract with the
ECN Archipelago (http://www.tradearca.com) to show the first real time
integrated order book. April 3, 2000 was the launch of this test Web site with
the integrated book. The 3DStockCharts.com web site is generating over 11
million ad impressions per month with more than 60,000 registered users in the
first six months of operation. There is a link from the Island ECN web site
(http://www.Isld.com) directly to the http://www.3DStockCharts.com site.
On January 7, 2000, 3DStockCharts.com 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. In addition, on March 17,
2000, 3DStockCharts.com announced that it had signed an exclusive
agreement with Winstar Interactive Media for advertising representation.
Winstar is one of the country's leading Web property representation companies,
generating advertising sales, sponsorship packages and business partnership
programs for an elite group of branded publishers.
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, find facts and figures and allows
consumers to do comparison-shopping. The databases cover a broad range
of topics from Business to Shopping, Travel and Stocks totaling more than
6,000 high quality online databases.
WebData 4D(tm), is a proprietary, patent pending technology that is utilized to
enable users to locate specific products or data. 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.
WebData.com averages 2,600 unique visitors a day, which generates
approximately 400,000 page views.
In June, 1999 the Company announced that it was incorporating portions of The
World Almanac and Book of Facts 1999 in a searchable format into WebData.com.
The Company now features World Almanac Facts on its WebData.com Internet site.
The Company intends to target other information and content sources to enhance
WebData.com.
WebData.com is the sponsor of EdWeb a new national educational resource for
students of all ages and teachers launching Summer 2000 by www.newspress.com.
Experclick.com
On February 4, 2000, the Company incorporated in the state of Delaware,
ExperClick.com. John Forge has been named President and Chief Executive
Officer. The Company is currently building the management and technical teams
and has three patents pending on the ExperClick technology.
ExperClick.com is the first Internet advertising exchange that allows
advertisers to efficiently and instantly sell their ads to targeted consumers
at maximum CPM values for themselves and web sites one impression at a time
in real-time. Unlike traditional advertising placement methods, ExperClick is
completely neutral favoring neither advertisers nor Web sites.
ExperClick enables advertisers to control their costs and Web sites to maximize
their revenues. ExperClick.com is the first electronic global
trading system for Internet advertising.
ExperData.com
The Company owns Experdata.com, a database web-hosting site. This site
is uniquely focused on hosting e-commerce, 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 listings, 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 Intranet 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.
In the business to business e-commerce 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 e-commerce 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 it's 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 it's 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. 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.
On February 16, 2000, the Company announced the appointment of Dr. Souhail
Toubia to its Board of Directors. Dr. Toubia is founder and co-owner of TMX
Engineering and Manufacturing. TMX is a Southern California leader in General
Commercial, Computer, Aerospace and Medical Manufacturing. Dr. Toubia has over
ten years experience funding a number of domestic and international companies.
The Company sold 166,667 shares of unregistered common stock, at $12 per share,
in a private placement to Dr. Toubia and a group of his investors.
On February 24, 2000, the company announced the appointment of Stephen Ketchum,
CEO of Onview.com to the Board of Directors. Mr. Ketchum was a Managing
Director of Donaldson, Lufkin & Jenrette's (DLJ) investment banking group. DLJ
is a leading integrated investment and merchant bank serving institutional,
corporate, government and individual clients. The Company feels that Mr.
Ketchum's appointment filled a critical role, given his expertise in corporate
finance and capital raising.
On March 1, 2000, the Company applied for listing on the NASDAQ SmallCap
Market.
The Company has eighteen full time employees. 3DStockCharts.com has nine
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.
Facility Enhancements
The Company has built a hosting facility in its corporate offices connected to
the Internet utilizing state of the art technology. The new structure
is nicknamed 'Stonehenge' due to its unique shape and connections. This new
facility is the template for the other facilities the Company and its Internet
based subsidiaries plan to build in the future to support bandwidth needs.
<PAGE>
CONSOLIDATED RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED
MARCH 31, 2000 AND 1999
The Company's revenues consist of product revenues, (including licensing of its
software), consulting, ad revenues and other services.
Revenues for the three and six month period ended March 31, 2000 was $110,310
and $169,004,respectively. These figures were up 64% and 55%, respectively,
from comparable figures last year of $40,019 and $92,531. This increase is a
result of increased software sales of WebBase, consulting work performed for
clients and ad revenues.
Cost of Sales consists primarily of developers, software amortization,
advertising commissions and provision for inventory.
Cost of Sales were $32,065 (29% of revenue) and $51,629 (30% of revenue) for
the three and six month periods ending March 31, 2000. These figures are up
14% and down 22%, respectively, from comparable figures last year of $27,710
and $66,101. The increase in the three month period is due to advertising
commissions and the decrease in the six month period is due to the reallocation
of service personnel.
Sales and marketing expense consists of sales personnel and advertising and
promotion costs.
Sales and marketing expenses were $69,010 (62% of revenue) and $121,117 (72% of
revenue) for the three and six month period ended March 31, 2000. These
figures are up 26% and 35% respectively over comparable figures last year of
$51,238 and $78,698. This increase relates to 3DStockCharts.com's retention of
S&S Public Relations of Chicago, a full service media relations firm for the
technology sector and its agreement with DoubleClick.
General and Administrative expenses includes costs of administrative
salaries, employee benefits, facilities, depreciation, communications,
insurance, professional fees, shareholder expenses and other related
expenses associated with the overall operation of the Company.
General and administrative expenses were $549,729 (498% of revenue) and
$933,924 (553% of revenue) for the three and six month periods ended
March 31, 2000. General and administrative expenses were up 387% and 408%,
respectively, from comparable figures last year of $142,229 and $229,066.
This increase is largely attributable to the start up and increased cost
of operations and staffing, of 3DStockCharts.com. 3DStockCharts.com
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 in connection with
the raising of funds. Included in G & A is $86,000 of non-reimbursed contract
services provided 3DStockCharts.com from the Company.
Research and Development expense consists primarily of the cost of
research and development personnel.
Research and development expenses were $102,394 (93% of revenue) and $154,671
(92% of revenue) for the three and six month period ended
March 31, 2000. This figure is up 361% and 299% respectively from comparable
figures last year of $28,387 and $51,758. This is due primarily to the hiring
of a Chief
Technology Advisor, Senior Systems Administrator/Programmer and additional
research personnel for 3DStockCharts.com.
Loss from operations for the three and six month periods ended March 31, 2000,
were $(596,087) and $(938,066) respectively. This figure is up from losses
of $(140,374) and $(211,750) respectively for the same periods last year. The
Company feels that in redirecting its resources and leading Internet
technologies to it's incubated web properties that the Company is much better
poised to take advantage of business opportunities available on the Internet.
Deferred tax recovery increased proportionately with losses for the three and
six month periods ended March 31, 2000. These numbers are a result of the
change in accounting policy SFAS 109, which took effect FY94, and are not
actual cash expenses.
CONSOLIDATED LIQUIDITY
At March 31, 2000 the Company reported working capital of $3,351,467,
which is up 7,407% from $452,473 at September 30, 1999. This increase is
due to the sale of a minority position in 3DStockcharts.com for $1,000,000 and
the private placement of $3,000,000 of the Company's unregistered common
stock. Net stockholder's equity of $4,387,742 was up 208% from $2,108,253 on
September 30, 1999.
Accounts receivable of $56,179 was up at March 31, 2000 from the
September 30, 1999 figure of $39,074. This increase is due to consulting work
performed by ExperTelligence, Inc and advertising revenues related to
3DStockCharts.com. It is believed that all receivables will be collected.
Net product development costs were $565,604 and $575,571 for the
period ending March 31, 2000 and September 30, 1999 respectively.
This 2% decrease reflects management's decision to allow each subsidiary to
perform its own product development. Management continues to believe in the
commercial viability of all products for which research costs are capitalized.
Accounts payable was $79,463 at March 31, 2000 compared to $66,853 at
September 30, 1999. This 16% increase is directly attributable to the increase
of 3DStockCharts.com's operations.
Accrued vacation was $75,409 at March 31, 2000 compared to $79,915 at
September 30, 1999.
<PAGE>
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
None.
Item 5 - Other Information
Subsequent events:
3DStockCharts.com sold 1,525,637 shares of common stock at $1.96 per share.
The Company owns 8,000,000 shares of 3DStockCharts.com common stock.
On May 8, 2000 the Company announced Peter Bachmann, former President of
Spelling Entertainment, was named President of ExperTelligence and a
director of the Company, as well as a member of its newly created
Executive Committee; Michael Rollens, former chairman, CEO and
President of Hollywood.com, joined ExperTelligence as a member of
the Executive Committee and interim CEO of
its WebData.com business unit; and John Agoglia, former President of NBC
Enterprises, joined ExperTelligence as a member of the Executive Committee
and a director of ExperClick.com.
Item 6 - Exhibits and Reports on Form 8-K
(a) None
(b) Reports on Form 8-K
None
<PAGE>
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)
May 15, 2000, Denison Bollay, President and Chairman of the Board
(signature)
May 15, 2000 Robert Reali, Secretary
(signature)
May 15, 2000, Charles House, Director
(signature)
May 15, 2000, William Van Beurden, Director
(signature)
May 15, 2000, Dr. Souhail Toubia, Director
(signature)
May 15, 2000, Steve Ketchum, Director
(signature)
<PAGE>
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