<PAGE>

================================================================================

                       Securities And Exchange Commission
                            Washington, D. C. 20549

                              ---------------------
                                   FORM 10-K
                              ---------------------

[_] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                                      OF 1934

[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                  ACT OF 1934

       For the transition period from July 1, 1998 to December 31, 1998

                         Commission File No.  0-25681


                         INTELLIGENT LIFE CORPORATION
              (exact name of registrant specified in its charter)

           Florida                                        65-0423422
 (State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)

       11811 U.S. Highway One, Suite 101
       North Palm Beach, Florida                             33408
 (Address of principal executive offices)                 (zip code)

      Registrant's telephone number, including area code:  (561) 630-1200

                             ---------------------

          Securities registered pursuant to Section 12(b) of the Act:

                                      None

                             ---------------------

          Securities registered pursuant to Section 12(g) of the Act:

                    Common Stock, par value $0.01 per share

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   Yes        No  X
                                                ---       ---

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]

     The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based upon the average of the closing bid and ask quotations for
the Common Stock on June 30, 1999 as reported by the Nasdaq National Market, was
approximately $25,011,940.  The shares of Common Stock held by each officer and
director and by each person known to the company who owns 5% or more of the
outstanding Common Stock have been excluded in that such persons may be deemed
to be affiliates.  This determination of affiliate status is not necessarily a
conclusive determination for other purposes.  As of June 30, 1999, Registrant
had outstanding 13,440,988 shares of Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                     None.

<PAGE>


                                    Part 1

Item 1.  BUSINESS

  EXCEPT FOR HISTORICAL INFORMATION, THE FOLLOWING DESCRIPTION OF THE COMPANY'S
BUSINESS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE OUTCOME OF THE EVENTS DESCRIBED IN THESE FORWARD-LOOKING
STATEMENTS IS SUBJECT TO RISKS AND ACTUAL RESULTS COULD DIFFER MATERIALLY. THE
SECTIONS ENTITLED "RISK FACTORS THAT COULD IMPACT FUTURE OPERATING RESULTS,"
"MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" AND "BUSINESS" AS WELL AS THOSE DISCUSSED ELSEWHERE IN THIS ANNUAL
REPORT CONTAIN A DISCUSSION OF SOME OF THE FACTORS THAT COULD CONTRIBUTE TO
THESE DIFFERENCES.

Overview

  Intelligent Life Corporation is one of the leading publishers of personal
finance content on the Internet. Our six web sites include bankrate.com, the
web's most complete source for banking, credit and interest rate information,
the Whiz.com, which provided personal financial content for those new to the
topic and Consejero.com, a spanish-language site focusing on personal finance
and investing topics. Our online operations are the principal focus of our
activities today. Prior to 1995, our principal businesses were the publication
of print newsletters and syndication of bank and credit product research to
newspapers and magazines. In 1995, we introduced the Consumer Mortgage Guide,
which is an advertisement for newspapers consisting of product and rate
information in tabular form from local mortgage companies that pay a weekly fee
for inclusion in the table.

  In fiscal 1996, we commenced our online operations by displaying our research
through an Internet site, bankrate.com. By putting our information online, we
were able to create new revenue opportunities through the sale of graphical and
hyperlink advertising associated with our rate and yield tables. In fiscal 1997,
we determined that we would concentrate principally on our online operations.
Since that time, we would have significantly expanded the scope and depth of
bankrate.com and made investments in four new online Internet web sites, the
Whiz.com, Bankrate.com en Espanol, Consejero.com and CPNet.com.

  In order to focus on our online activities, we have reduced the number of
print newsletters we publish from five to three and eliminated active marketing
of our print publications. We have also ceased marketing Consumer Marketing
Guide as a separate product. We now provide this product to newspapers as a part
of a broader relationship that is primarily directed toward online activities.

  We believe that the recognition of our research is a leading source of
independent, objective information on banking and credit products is essential
to our success. As a result, we have sought to maximize distribution of our
research to gain brand recognition as a research authority. We are currently
seeking to build greater brand awareness at all of our web sites and reach a
greater number of online users.

  We publish our data online through our principal web site, bankrate.com, and
through distribution (or syndication) arrangements with more than 70 web site
operators. Information is presented for over 123 geographic markets and
nationally, and includes data regarding mortgage and home equity loans, credit
cards, automobile loans, checking accounts, ATM fees and yields on savings
instruments. Our unique information, which is compiled by 40 researchers, is
accompanied by extensive editorial content designed to assist consumers with
their decision-making process. Due to the average per capita income, level of
education and professional status of bankrate.com's audience, we believe this
audience, which may search for information by product and geographic area using
this web site, represents a desirable group of target customers for our
advertisers.

  We are currently using the resources of bankrate.com to create new online
publications that provide personal finance information to additional targeted
audiences. These publications include: theWhiz.com, which targets an audience
that is younger, more female and more ethnically diverse than typical personal
finance publications; Consejero.com, which targets a Spanish-speaking audience;
CPNet.com, which targets the college market; and Garzarelli.com, a subscription-
based service. Our goal is to develop a broad base of loyal users of our network
of web sites who believe our information can improve their personal financial
lives.

Our Opportunity

   We believe many purchasers of financial products and services are relatively
uniformed with respect to these products and services, and often rely upon
personal relationships when making such purchases. We also believe many of these
products and services are not well explained and alternatives are not typically
presented when mentioned to consumers through traditional media. As the sale of
many of these products and services moves to the web, where there is little
personal contact we believe that consumers will seek sources of independent
objective information such as bankrate.com to facilitate and support their
buying decisions. Because of the interactive nature of the internet, where web
technology allows us to display extensive research on financial products and
services that was previously unavailable to consumers, we believe we are able to
provide a superior vehicle to educate consumers about how to best select and
purchase such products and services.

   We believe the majority of the financial information available on the web is
oriented toward investment advice and providing business news and financial
market information, rather than personal and consumer finance data. Our
publications are targeted to fulfil the market need for personal and consumer
finance information.

   By expanding our comparative data regarding financial products and related
editorial content, we are creating a unique web-based service designed to enable
our audience to keep abreast of personal fiance developments and better manage
their financial affairs. As a result, we believe we can assemble a loyal base of
users made up of targeted audiences that are attractive to advertisers.

  We believe that advertising spending by financial producers and services
components is growing relatively rapidly as compared to advertising spending in
other categories.  According to Advertising Age, advertising spending by
financial products and services companies grew at an annual rate of 17% from
1996 to 1997.

  We believe Intelligent Life will benefit significantly from the anticipated
growth in Internet usage and spending on Internet advertising, direct marketing
and electronic comments.  The following table highlights anticipated growth in
these areas.


                     Internet Growth In the United States

<TABLE>
<CAPTION>
                                                     1998       2000      2003
                                                    ------     ------    ------
                                                            in millions
     <S>                                            <C>       <C>       <C>
     Number of Internet users                           67         92       123
     Advertising spending                           $1,873    $ 4,352   $ 7,672
     Direct marketing spending                      $  190    $   632   $ 1,335
     Electric commerce                              $7,100    $15,600   $37,500
     -------------
     Source:  Jupiter Communications, LLC
</TABLE>

Strategy

   Our objective is to create a series of online publications that are trusted
sources of editorial content for consumers in the area of personal finance.
Elements of our strategy include:

   Increase Awareness of our Publications. We intend to aggressively promote our
online publications. Developing greater awareness of our brand names should
increase traffic and increase the value of our web sites to potential
advertisers and web sites with which we may enter into distribution
arrangements. Historically, we have had relatively low levels of promotional
expenditures. With the proceeds of this offering, we anticipate increasing our
market efforts substantially.

   Expanding Existing Online Publications. We plan to expand and improve our
existing online publications by including additional editorial and research
content. Recent additions to bankrate.com include information regarding 30 year
jumbo mortgages, VA mortgages, money market accounts, credit unions, Year 2000
issues and bank ratings. We expect forthcoming additions will include new
content in the areas of investment and insurance on theWhiz.com and
Consejero.com.

   Grow Distribution Relationships.  We intend to pursue new and expand existing
distribution relationships in order to increase site traffic and raise the
profile of our brand names.  In particular, we intend to focus on increasing the
number of distribution relationships we have for theWhiz.com and Consejero.com.

   Add New Online Publications. We intend to use our expertise in producing
online research and editorial content to develope new online publications
similar in concept to bankrate.com in complementary areas such as property and
casualty insurances and tax planning. In addition to developing publications
internally and in order to accelerate our growth, we intend to pursue
acquisitions of personal finance companies and products that will extend our
network of web sites.

  Provide High Value Added Selections in Advertisers.  Delivering audiences to
our advertisers on a targeted demographic basis, segmented by geographic region
and product of interest, provides high value added marketing solutions to
advertisers.  By expanding the breadth and depth of our online publications
adding to our advertising inventory, we believe we will be able to expand the
scope of our services,thereby increasing sales to existing advertisers and
attracting new advertisers.

Bankrate.com

  Bankrate.com, our flagship web site, provides editorial and research
information on banking and credit products to assist consumers in making
informed financial decisions. Bankrate.com has its roots in our print
publications and content syndication activities, which have provided surveys of
interest rate data to consumers and institutions for over 16 years. Our online
surveys have been expanded to include data on 46 products collected from more
than 3,500 institutions nationwide. This information is gathered and presented
by metropolitan area, which provides more valuable information to consumers than
aggregated national information and allows advertisers to target prospective
customers geographically. Media Metrix, Inc., an independent research firm,
lists bankrate.com as the business site with the twenty-first and fifteenth
highest volume of traffic during the third and fourth calendar quarters,
respectively, of 1998, with 1.1 million and 1.3 million unique visitors. We
believe that bankrate.com compares favorably to sites producing original
editorial content on personal finance subjects in terms of pages viewed by a
visitor during each visit. Bankrate.com may be compared to sites producing
original editorial content on personal finance subjects during the third and
fourth calendar quarters of 1998 as follows:

            Comparison of Personal Finance Editorial Sites in 1998

<TABLE>
<CAPTION>
                                                  Third Quarter                       Fourth Quarter
                                                  -------------                       --------------
                                                                 Average                              Average
                                          Unique                  Pages        Unique                  Pages
                                        Visitors(1)   Reach(2)  Viewed(3)    Visitors(1)   Reach(2)  Viewed(3)
                                       -------------  --------  ----------  -------------  --------  ----------
                                        (thousands)                          (thousands)
<S>                                    <C>            <C>       <C>         <C>            <C>       <C>
Money (Pathfinder)...................       1,964       3.7%          5          1,783       3.3%         16
Bankrate.com.........................       1,070       2.0          26          1,323       2.4          21
Forbes...............................         917       1.7          15            860       1.6          70
</TABLE>

                                      -2-
<PAGE>

<TABLE>
<S>                                           <C>       <C>          <C>           <C>       <C>          <C>
Business Week........................         680       1.3          15            897       1.7           6
Red Herring..........................         652       1.2           3            436       0.8           9
Fortune (Pathfinder).................         592       1.1          17            828       1.5          10
Smart Money (Wall Street Journal)....         484       0.9          20            261       0.5          52
Kiplinger's..........................         279       0.5           5            189       0.3          20
</TABLE>

Source of Data: Media Metrix, Inc.

(1)  Unique Visitors means the estimated number of different web users that
     visited the site over the course of the reporting period.
(2)  Reach means the number of unique web users that visited the site at least
     once over the course of the reporting period, expressed as a percentage of
     the total web audience.
(3)  Average pages viewed means the average number of pages visited during the
     reporting period per user. Page means a single screen view of textual and
     graphical information.

     Bankrate.com also distributes electronic newsletters daily and weekly to
approximately 90,000 subscribers covering topics such as mortgages, credit
cards, banking, small businesses, CD rates and Federal Funds rates. We also
maintain message boards where visitors can post questions for members of the
Bankrate.com community to answer. Topics parallel the channels offered by
Bankrate.com.

Distribution Arrangements

     A significant portion of the traffic to bankrate.com, as well as our other
web sites, is attributable to the distribution (or syndication) arrangements we
have with other web site operators. Our distribution arrangements fall into two
categories: (1) those in which we establish a "co-branded" site with another web
site operator, and (2) those in which we provide content to the other operator's
web site together with a hyperlink to our own site. We have found co-branding to
be more effective in driving traffic to our sites.

     Co-branded sites are created pursuant to agreements with other web site
operators. Generally, agreements relating to co-branded sites provide for us to
host, sell and serve advertisements to and collect revenues from the co-branded
sites. Under these agreements, the other operators are typically paid 38%-40% of
revenues generated by the related co-branded sites.

     Under distribution arrangements that do not include co-branded sites, we
contract to provide content in exchange for a fee. The content identifies
bankrate.com as its source and typically includes a link to Bankrate.com. We
have arrangements such as these with Yahoo!, SecureTax.com, Microsoft's
MoneyCentral, CNNfn, Standard & Poor's and other web sites.

     The table below lists parties with which we have distribution agreements as
of June 30, 1999:


Access Atlanta              Fiera Inc.              Providence Online
America Online              Forbes                  RealTimes
American Banker             Go Carolinas            Realtor.com
AT&T Worldnet               Go Hamptons Roads       San Antonio Express
Austin 360                  Go PBI                  San Diego Insider
Auto-by-Tel                 Hispanic Online         ScarsdaleNet.com
Auto Connect                HomeFair                SecureTax.com
Auto Site                   Housenet.com            Sign on San Diego
Black Families              Houston Chronicle       Sign on San Diego en Espanol
Bloomberg Ltd.              Inman New Features      Smackem.com
Business Today              Inside New Orleans
Business Week Enterprise
Business Week Online



                                      -3-
<PAGE>

<TABLE>
<S>                         <C>                             <C>
CarBuyer.com                Intellichoice                   Smart Money Magazine
CarPrices.com               Kiplinger's                     SoFla.com
Classified Ventures         MarketWatch.com                 Spring Street
CNNfn.com                   Microsoft Network (Carpoint &   Standard & Poor's
Columbus Dispatch           Money Central)                  Tegris
Compare.net                 Milwaukee Journal Sentinel      US News & World Report
Compuserve                  MindSpring                      Yahoo! (Loan Center & Tax Center)
Concerto Technologies       Money Magazine                  Your New House
Credit Info Corp            Monster Board                   YUPI Internet
Discover Omaha              Motley Fool                     Zack's
Dollar Stretcher            NandoNet                        ZDTV.com
Edmunds                     Oxygen
Family Money                Netscape
</TABLE>

Financial Product Research

  Our research staff is made up of 40 people who track weekly comparative
information on 46 financial products and services, including checking accounts,
consumer loans, lines of credit, mortgages, certificates of deposit, savings
accounts, credit cards, money market accounts and online accounts. We cover both
personal and small business accounts offered through individual offices and on
the internet by banks, thrifts, credit unions, credit card issuers, mortgage
bankers and mortgage brokers. We estimate that over 150,000 items of data are
gathered each week for over 123 markets across the United States and Puerto Rico
from over 3,500 institutions. The information obtained includes not only rates
and yields but related data such as lock periods, fees, points, and loan sizes
for mortgages and grace period, late penalties, cash advance fees, minimum
payments and terms and conditions for credit cards.

  We adhere to a strict methodology in developing our markets and our
institutional survey group. The market universe includes the 100 largest U.S.
markets, as defined by the U.S. Census Bureau's Metropolitan Statistical Area
categories, along with the largest market in each state that does not include
one of the largest 100 markets. We provide a comparative analysis of data by
market as well as on a national basis.

  Institutions in the survey group include the largest banks and thrifts within
each market area based on total deposits. The number of institutions tracked
within a given market is based on product availability and number of
institutions in the market area. In each of the largest 50 markets, ten
institutions are tracked. In each of the smaller markets, four or more
institutions are tracked. The institutions included in the survey group are
verified, and adjusted if necessary, on a quarterly basis using FDIC data.
Credit unions are not included in the market survey group since product
availability is based on membership. The largest 50 U.S. credit unions are
tracked as a separate survey group for comparison purposes.

  All products included in our database have closely defined criteria so that
information provided by institutions is truly comparative in nature. Data
undergo three levels of quality control prior to being accepted for inclusion in
the database. The first level is automatically performed by our editing
software, which identifies unusual changes. The second level is visual proofing,
which is performed by a researcher who gathers rates from institutions through
surveys. The researcher reviews the surveys to determine whether there have been
any changes in the data on a weekly basis. If there has been a change that is
outside of a specified range, the researcher verifies that the data is correct
by calling the institution. Once the data are verified, they are forwarded to a
senior researcher for review. The third level is a dedicated quality control
staff consisting of senior researchers reviewing each market to ensure that the
data have been correctly updated and correctly entered into our databank. The
quality control staff reviews each market for overall accuracy and consistency
of all fees and related information disclosed to consumers. The staff also
reviews the comparability of products, institutional accuracy and survey
accuracy. In addition, anonymous shopping, in which we place calls to
institutions in order to obtain rate information without identifying ourselves
as bankrate.com, is performed on a weekly basis to validate data. Institutions
providing invalid data are contacted by our quality

                                      -4-
<PAGE>

control staff to ensure that future information will be accurate. Institutions
listed in our tables on Bankrate.com that purchase hyperlinks to their own sites
or other advertising must comply with the same criteria for product listings
that apply to other institutions and quotes or they are removed. The criteria
for product listings consists of specific attributes, such as loan size and
term, that are used to define each type of financial instrument in order to
ensure uniformity in the products that are compared. No special offers are
listed on our internet sites. All of our new research employees are provided
with a four-week program of classroom and on-the-job training to ensure
consistency of data-gathering and validation techniques.

  We are aware of the potential conflict of interest resulting from the sale of
advertising to financial institutions while providing independent and objective
research. However, no such conflicts of interests have compromised or are
expected to compromise our ability to provide independent and objective
research.

  At the end of each weekly survey, data are archived as part of our 16 year old
cumulative historical data file. This file provides a unique resource for our
financial analysts and editorial team in developing trend graphs, charts and
narrative analysis.

Editorial Content

  In addition to our research department, we maintain an editorial staff of 18
senior editors and 21 full-time reporters. We also have relationships with over
30 freelance writers. Most of our editorial staff are experienced journalists
with newspaper or broadcast outlet experience. For example, the reporters and
editors of bankrate.com have professional journalistic work experience ranging
from 1 to 20 years, with an average of ten years of experience. Our editorial
staff produces original online content such as "A good deal of credit insurance
may be bad for consumers" and "Do your homework before trying to buy that
foreclosed home." We believe the quality of our original content plays a
critical role in attracting visitors to our sites and cobranded partners to
Intelligent Life.

  While the majority of the content within our web sites is original and
produced internally, we also include third-party content. This content is
acquired under advertising revenue-sharing agreements which allow us to
incorporate relevant information on our web site that would otherwise require
additional resources for us to produce. An example of this type of arrangement
is the incorporation in bankrate.com of financial calculators created and owned
by SmartMoney.

Print Publications

We continue to sell traditional print publications to absorb part of the cost of
creating research and original content. These publications are as follows:

  Consumer Mortgage Guide. Consumer Mortgage Guide began publication in May 1995
and generates revenue through the sale of mortgage rate listings in major
metropolitan newspapers across the United States. We enter into agreements with
the newspapers under which the newspapers provide us with print space in which
we publish the mortgage rate listings at no charge. In turn, we sell advertising
with the listings and split revenue with the newspapers on a percentage basis.

  Newsletters. We publish three newsletters: 100 Highest Yields and Jumbo Flash
Report, which target individual consumers, and Bank Rate Monitor, which targets
an institutional audience. These newsletters provide rate information with
minimal editorial content.

theWhiz.com

  theWhiz.com provides original content about personal finance that is easy to
understand and entertaining. We believe traditional and online personal finance
publications and web sites target white males over 40 years

                                      -5-
<PAGE>

old with relatively high incomes, who are interested in investing. theWhiz.com
is designed to address the personal finance needs of a younger, more female and
more ethnically diverse audience. As with bankrate.com, theWhiz.com is divided
into channels, each of which includes original editorial content. All of
theWhiz.com's stories are archived and easily accessible via our archive home
page and site map.

  theWhiz.com also has a community section which encourages readers to interact
with other visitors, theWhiz.com's staff and financial experts. Our "Talk to
theWhiz" forum allows readers to get expert advice on questions like "Can a
credit repair agency help me with my student loan debt?" The questions and
answers are archived so that new readers can research their interests. If the
answer isn't there, readers can fill out an e-mail form and submit their
question.

  Since theWhiz.com publishes content on personal finance and lifestyle topics
and is not intended simply to provide objective information, we expect to use
theWhiz.com as a platform for electronic commerce.

Other Online Publications

  Consejero.com

  Consejero.com provides personal finance information in Spanish and serves as a
consumer guide to understanding local and international financial issues.
Consejero.com features country-specific personal content for the United States
as well as Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama,
Puerto Rico, Spain and Venezuela. Spanish is the second most common language
found on the internet, yet we believe that little useful content on financial
topics in Spanish currently exists on the internet. We aim to satisfy the need
for such data and capitalize on the anticipated rapid growth of Internet use by
people who speak Spanish.

  Consejero.com provides twice-daily news and feature articles written by
established journalists working from major cities in Latin America and Spain.
The topics are picked from day-to-day issues consumers face in their particular
countries. The site also provides general and entertainment news acquired
through arrangements with traditional media. We also expect to add the
capability to conduct transactions with advertisers.

  Consejero.com also includes information provided by bankrate.com en Espanol,
an extension of bankrate.com. Bankrate.com en Espanol provides the same
information and many of the services of bankrate.com in Spanish but with
supplementary articles and tables to facilitate understanding for those who may
not be familiar with U.S. financial products and terms yet must maneuver in a
mostly English-language financial system. Both Consejero.com and bankrate.com en
Espanol intend to enter into distribution and cobranding agreements with the
small but growing number of internet companies that are emerging to serve
Spanish-speaking markets in the United States, Latin America and Europe to
enhance our brand recognition and content distribution.

  CPNet.com

  Through CPNet.com, our online network of college newspaper web sites, we
provide online content and advertising management to hundreds of college
newspapers across the country. CPNet.com includes news articles and feature
articles covering events and issues of interest to college students. Topics
include current events, lifestyle and entertainment as well as topics that
reflect college life. In addition to creating advertising relationships that
will allow us to offer an integrated outlet for advertisers seeking to reach the
college market, this gives us the ability to develop user relationships that
allow us to cross-promote our publications to our consumers. We believe that
college students use the internet more than many other segments of the
population. We believe that this network will be highly attractive to
advertisers since very few online publications offer a mechanism for national
advertisements to reach college students with one advertisement purchase.
CPNet.com aims to fulfill this market need.

                                      -6-
<PAGE>

  Garzarelli.com and Possible Future Publications

  We intend to use our online expertise and relationships to launch new online
publications. In October 1998, we launched a new electronic subscription site
for Wall Street investment advisor Elaine Garzarelli called Garzarelli.com. We
are responsible for the site's design, electronic subscription fulfillment,
partner linking, site management and advertising sales. Ms. Garzarelli owns the
internet site address, selects the content of the site and has the sole
authority to determine whether the content can be distributed to other websites.
The subscription revenues generated from Garzarelli.com are divided between us
and Ms. Garzarelli. We receive 17% of subscription revenues, and she receives
the remainder.  We also receive 50% of all advertising revenues from
Garzarelli.com.  Our agreement with Ms. Garzarelli extends until August 2000 and
renews automatically on an annual basis.  However, this agreement may be
terminated by Intelligent Life or Ms. Garzarelli at any time with 90 days' prior
notice.

  In addition, in March 1999 we entered into a letter of intent with MECA
Software, LLC to create a new personal finance destination site and transaction
platform using the name "Managing Your Money" and the internet address MYM.com.
MYM.com is expected to offer record-keeping tools and financial calculators as
well as editorial content regarding personal finance issues such as home buying,
investing and retirement planning. MECA is expected to provide a royalty-free
license to the name "Managing Your Money" for use in this site and to provide
support for site development. Intelligent Life is expected to provide editorial
content and site design services. Intelligent Life is also expected to be
responsible for selling advertising on the site. MECA and Intelligent Life will
share the initial expenses of this operation equally. The structure of the joint
venture is subject to the negotiation of a definitive agreement that will
address additional terms, such as revenue sharing arrangements. The letter of
intent expired on July 5, 1999. Since entering into the letter of intent, MECA
was acquired by CFI ProServices, Inc. which subsequently changed its name
Concentrex Incorporated. We cannot be certain at this time if another agreement
will be negotiated.

Consumer Marketing

  Prior to December 31, 1998 our expenditures on marketing and promotion
were limited to a distribution or syndication strategy where we have relied on
our co-branded distribution network to increase traffic to our web sites. This
approach was supplemented with public relations activities and limited direct-
response expenditures. In addition, Intelligent Life's history of providing
editorial content to newspapers and broadcasters has earned bankrate.com a high
level of awareness among journalists. As a result, bankrate.com is often cited
as an authority on banking and credit products in an editorial context.

  Beginning in January 1999 we initiated a direct-response marketing campaign
which consisted of placing banner advertising on third party web sites either by
purchasing or bartering advertising impressions. Our strategy is to purchase
advertising at either a fixed cost per clickthrough or at a low CPM. We believe
that the advertising proceeds from one of our visitors generally allow us to
recover much of the per visitor cost of placing our advertising. If the majority
of this cost can be recovered on an initial visit, we may build a substantial
base of repeat users at a low cost. We anticipate the majority of our future
advertising and promotional expenditures will be allocated to web-based
advertising.

Advertising Sales

  Our advertising sales staff consists of 21 salespeople and support
staff. Six salespersons are located in our North Palm Beach corporate
headquarters, with the remainder in four satellite offices in New York, Chicago,
San Francisco and Los Angeles. Each salesperson is responsible for a designated
geographic area covering the Southeast, MidAtlantic, New England, Great Lakes,
Midwest, Great Plains, Northwest or Southwest regions of the United States.
Salespeople sell advertising related to all of our publications. We believe our
sales force is highly effective.

                                      -7-
<PAGE>

  Our salespeople present advertising solutions to potential advertisers using
inventory created by our own web sites and co-branded web sites. We believe this
combined network of sites enhances value for advertisers and direct marketers by
(1) alleviating the need to purchase a series of advertising campaigns from
numerous web publishers, (2) providing advertisers and direct marketers with
access to a wide variety of business and personal finance online content, and
(3) providing targeted access to internet users with desirable demographics.
Advertisers and direct marketers can enhance the effectiveness of their
campaigns by customizing advertising delivery on our networks within a
particular content channel or across an entire network.

Advertising Alternatives

Our advertisers can target prospective customers using three different
approaches:

  . targeting specific geographic and product areas, for example, mortgage rates
    in Atlanta;

  . targeting specific product channels, for example, all borrowers interested
    in the home equity channel; or

  . general rotation throughout a particular site, such as bankrate.com.

  Our most common graphical advertisement sizes are banners, which are
prominently displayed at the top of a page (486 x 60 pixels) and badges, which
are smaller than banners and less visible (125 x 125 pixels). Banners and badges
are offered for general rotation or specific sites. List prices may vary
depending upon the quantity of advertisements purchased by an advertiser and the
length of time an advertiser runs an advertisement on our sites. List prices for
banner and badge advertisements with premium placement may be as low as $30 CPM
and as high as $90 CPM. Discounts and commissions are available based upon the
volume of advertisements purchased. For example, for purchases of more than
75,000 advertisement views, a volume based discount on the list price may be
available.

  We also sell posters, which are oversize advertisements that contain more
information than traditional advertisements. We position posters on certain
pages so that they dominate the page. The actual price averages $75 CPM.
Advertisers may also purchase sponsorship positions on the bankrate.com home
page and the main page for each product channel. The cost of the sponsorship is
based on banner rates for impressions received. Advertisers can also sponsor an
entire channel. In addition, we offer a reference bar above all rate tables. A
reference bar is an advertising feature that contains tab references for
consumers on such topics as insurance, credit reports, credit problems and
moving rates. Users who click on the tabs are taken to an advertiser's web site
for answers to their particular questions or needs. The cost of the
advertisement is based on banner rates for number of impressions.

  Providing effective tools for managing advertising campaigns is essential to
maintaining advertising relationships. We use a state-of-the-art program under
license that allows our advertisers to monitor their spending on our web sites
in real-time for impressions received and clickthrough ratios generated.

  Hyperlinks

  Financial institutions that are listed in our rate tables have the opportunity
to hyperlink their listings. By clicking on the hyperlink, users are taken to
the institution's web site. A substantial benefit to advertisers with the
hyperlink rate listing is that the hyperlinks are in fixed placement on the rate
pages and are shown every time a user accesses a page. In contrast, banner
advertisements are rotated based on the number of impressions purchased.
Hyperlink fees are sold for three-month periods. The number of hyperlinked rate
listings that can be added to a rate page is limited only by the number of
institutions listed, while banner positions are limited by space available. The
actual rates for hyperlinks are $45 CPM.

                                      -8-
<PAGE>

  Rate Alert E-Mail Sponsorships

  We issue weekly updates on mortgage rates via e-mail to customers who have
requested this free service. Rate alerts are issued for credit card and savings
account updates on a less-frequent basis. Advertisers can sponsor the e-mails
with text listings that are hyperlinked to their web site. Banner advertisements
to be included with each e-mail are under development. The cost for sponsoring a
rate alert is $0.25 per subscriber.

  Chat Room Sponsorships

  We offer advertisers chat rooms in Bankrate.com and theWhiz.com in which they
may promote their spokespeople or products and acquire valuable real-time
feedback from consumers. In these chat rooms, a moderator from theWhiz.com's
staff screens questions from visitors. The advertiser or host then answers
questions and receives "virtual focus group" feedback from users. We generally
charge advertisers $6,000 per session.

Advertisers

  We market to local advertisers targeting a specific audience in a city or
mortgagebot.com state and also to national advertisers targeting the entire
country. No advertiser accounts for more than 10% of our revenues. As of June
30, 1999, we had approximately 232 advertisers. A representative sample of our
national and regional advertisers includes:

     Aames Home Loans               Household Finance
     American Express               Intuit
     American Home Loans            Mortgagebot.com
     Auto-by-Tel                    Master Card
     Capital One Bank               Mackinac Savings
     Countrywide Home Loans         Microsoft
     Crestar Mortgage               Mortgage Expo
     Downey Savings                 NationsBank
     Mortgage.com                   NetBank
     First Union                    NextCard
     Next Direct                    Pacific Shore Funding
     GMAC                           Providian Financial
                                    Superior Bank
                                    USA Today
                                    ZDTV

  All of the listed advertisers have been our customers for at least six months
and are representative of the types of industries, as well as national and
regional scope of our advertising base.

Competition

  Intelligent Life competes for advertising revenues across the broad category
of personal finance information provided in traditional media such as
newspapers, magazines, radio and television and in the developing market for
online financial publications. There are many competitors that have
substantially greater resources than Intelligent Life. Our online competition
includes the following:

  . personal finance sections of general interest sites such as Yahoo! and
    America Online;

  . personal finance destination sites such as MoneyCentral, Forbes, Business
    Week, Fortune, Smart Money, Kiplinger's and Money.com; and

  . e-commerce sites that provide bank and credit product information such as e-
    Loan and GetSmart.

                                      -9-
<PAGE>

  Competition in the online segment is generally directed at growing users and
revenue using marketing and promotion to increase traffic to our web sites. We
believe that original content and objective product information differentiate us
from our competitors.

Operations

  Our principal office in North Palm Beach, Florida is where our proprietary web
sites are hosted and all of our network operations are controlled. Internet
access is maintained through multiple T-1 connections with Cable & Wireless PLC.
The computer equipment used to operate our web sites is powered by
uninterruptible power supply units and a generator.


Proprietary Rights

  Our proprietary intellectual property consists of our unique research and
editorial content. We rely primarily on a combination of copyrights, trademarks,
trade secret laws, our user policy and restrictions on disclosure to protect
this content.

Employees

  As of June 30, 1999, we had 164 full-time leased employees, of which 50 were
in product and content development, 32 in sales and marketing, 56 in editorial,
and 26 in administration. We have never had a work stoppage and none of our
employees are represented under collective bargaining agreements. We consider
our employee relations to be good. Our employees are legally employed by Vincam.
Human Resources, Inc., and work for us under an employee leasing arrangement.
See "Management Employee Leasing."

Risk Factors that Could Impact Future Operating Results

We have a history of losses

  We have incurred net losses in each of our last three fiscal years and had a
net loss for the three-month period ended March 31, 1999 of approximately
$6,027,000. We had an accumulated deficit of approximately $16,772,070 as of
March 31, 1999. We also have a limited history of operations in the rapidly
evolving online business environment and have little experience forecasting our
revenues. Therefore, we believe that period-to-period comparisons of our
financial results should not be relied on as an indication of our future
performance. We anticipate that we will incur operating losses and negative cash
flows in the foreseeable future due to high levels of planned expenditures to
enhance our services, develop new content, build brand awareness through
aggressive marketing campaigns and hire personnel to support our growth. We may
also incur significant additional costs related to the acquisition of businesses
or technologies to respond to the constant change in

                                      -10-
<PAGE>

our industry. These costs could have an adverse impact on our future financial
condition and results of operations.

Our success depends upon Internet advertising revenue

     We expect to derive approximately 75% of our revenues for the
foreseeable future through the sale of advertising space on our Internet web
pages. Any factors that limit the amount advertisers are willing to spend on
advertising on our web sites could have a material adverse effect on our
business. These factors may include; (1) lack of standards for measuring web
site traffic or effectiveness of web site advertising; (2) lack of established
pricing models for internet advertising; (3) failure of traditional media
advertisers to adopt internet advertising; (4) introduction of alternative
advertising sources; and (5) a lack of significant growth in web site traffic.

     The Internet is a new medium for advertising and its effectiveness is
unproven. Demonstrating the effectiveness of advertising on our web sites is
critical to our ability to generate advertising revenue. Currently, there are no
widely accepted standards to measure the effectiveness of internet advertising,
and we cannot be certain that such standards will develop sufficiently to
support our growth through internet advertising.

     Currently, a number of different pricing models are used to sell
advertising on the internet. Pricing models are typically either CPM-based (cost
per thousand) or performance-based. We predominantly utilize the CPM-based
model, which is based upon the number of advertisement impressions. The
performance based, or per click, model is payable on each individual click even
though it may take multiple advertisement impressions to generate one click. We
cannot predict which pricing model, if any, will emerge as the industry
standard. Therefore, it is difficult for us to project our future advertising
rates and revenues. For instance, banner advertising, which is currently our
primary source of online revenue, may not be an effective advertising method in
the future. If we are unable to adapt to new forms of internet advertising and
pricing models, our business could be adversely affected.

     Financial services companies account for a majority of our advertising
revenues. We will need to sell advertising to customers outside of the financial
services industry in order to significantly increase our revenues. To date,
relatively few advertisers from industries other than the technology and
financial services industries have devoted a significant portion of their
advertising budgets to internet advertising. If we do not attract advertisers
from other industries, our business could be adversely affected.

Our success depends upon interest rate activity and mortgage refinancing

     Approximately 84% and 81% of our advertisement views and page views,
respectively, are attributable to the bankrate.com site. Given that this site
provides interest rate information for mortgages and other loans, credit cards
and savings accounts, visitor traffic to this site increases with interest rate
movements and decreases with interest rate stability. Factors that have caused
significant visitor fluctuations in the past have been Federal Reserve actions
and general market conditions affecting home mortgage interest rates.
Approximately 18% of visits to bankrate.com are to its mortgage pages.
Accordingly, the level of traffic to bankrate.com is heavily dependent on
interest rates and mortgage refinancing activity. A slowdown in mortgage
refinancings could have a material adverse effect on our business.

     We believe that as we continue to develop web sites of broader interest,
the percentage of overall site traffic seeking mortgage information will
decline. To accelerate the growth of traffic to our other sites, we are working
with our syndication partners to program web sites other than Bankrate.com more
intensively, and we are promoting these sites aggressively. We cannot assure you
that we will be successful in these efforts.

Our success depends upon establishing and maintaining distribution arrangements

                                      -11-
<PAGE>

     Our business strategy includes the distribution of our content through the
establishment of co-branded web pages with high-traffic business and personal
finance sections of online services and web sites. A co-branded site is
typically a custom version of our web sites with the graphical look and feel,
and navigation, of the other web site. Providing access to these co-branded web
pages is a significant part of the value we offer to our advertisers. We compete
with other Internet content providers to maintain our current relationships with
other web site operators and establish new relationships. In addition, as we
expand our personal finance content, some of these web site operators may
perceive us as a competitor. As a result, they may be unwilling to promote
distribution of our banking and credit content. For example, in June 1999, we
learned that Quicken.com, which accounted for approximately 6% of our total site
traffic during the three months ended March 31, 1999, would not be renewing its
distribution agreement with us. We cannot assure you that our distribution
arrangements will attract a sufficient number of users to support our current
advertising model. In May 1999, 55% of the traffic to our web sites originated
from the web sites of operators with whom we have distribution arrangements. Our
business could be adversely affected if we do not establish and maintain
distribution arrangements on favorable economic terms.

Our success depends upon increasing brand awareness of our web sites

     Although Intelligent Life Corporation and its predecessors have been in
business since 1976, we commenced our internet operations by introducing
Bankrate.com in 1995. Due to the limited operating history of our internet
operations, it is important that we develop brand awareness of our web sites in
order for them to be attractive to advertisers. The importance of our brand
recognition will increase as competition in the internet advertising market
increases. As a result, developing and maintaining awareness of our web sites by
promoting our brand names is critical to maintaining our growth. As competing
web sites become established on the Internet, the cost of developing brand
awareness increases significantly.

     Successfully promoting and positioning our web sites and brand names will
depend largely on the effectiveness of our marketing efforts and our ability to
develop favorable traffic patterns to our web sites.

     Therefore, we may need to increase our financial commitment to creating and
maintaining brand awareness among users. We intend to use a portion of the
proceeds of this offering to increase our marketing efforts and promote our
brand awareness. If we fail to successfully promote our web sites and brand
names or if we incur significant expense in doing so, it could have a material
adverse effect on our business.

Our markets are highly competitive

     We compete for Internet advertising revenues with a number of finance-
related web sites, such as MarketWatch.com, CNNfn.com and Quicken.com, and
traditional publishers and distributors of personal finance content such as
MSNBC, CNN, Money Magazine and USA Today. In addition, new competitors may
easily enter this market as there are few barriers to entry. Many of our
existing competitors, as well as a number of potential new competitors, have
longer operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than us. Many
competitors also have complementary products or services that drive traffic to
their web sites. Increased competition could result in lower web site traffic,
advertising rate reductions, reduced margins or loss of market share, any of
which would adversely affect our business. We cannot be certain that we will be
able to compete successfully against current or future competitors.

Our web sites may encounter technical problems and service interruptions

     In the past, our web sites have experienced significant increases in
traffic in response to interest rate movements and other business or financial
news events. The number of our users has continued to increase over time, and we
are seeking to further increase our user base. As a result, our internet servers
must accommodate spikes in demand for our web pages in addition to potential
significant growth in traffic.

                                      -12-
<PAGE>

Our web sites have in the past and may in the future experience slower response
times or interruptions as a result of increased traffic or other reasons. These
delays and interruptions resulting from failure to maintain internet service
connections to our site could frustrate users and reduce our future web site
traffic, which could have a material adverse effect on our business.

     All of our communications and network equipment is located at our corporate
headquarters in North Palm Beach, Florida. Any system failure at this location
could lead to interruptions or delays in service for our web sites, which could
have a material adverse effect on our business. Our operations are dependent
upon our ability to protect our systems against damage from fires, hurricanes,
earthquakes, power losses, telecommunications failures, break-ins, computer
viruses, hacker attacks and other events beyond our control. Although we
maintain business interruption insurance, it may not adequately compensate us
for losses that may occur due to failures of our systems.

We rely on the protection of our intellectual property

     Our intellectual property consists of the content of our web sites and
print publications. We rely on a combination of copyrights, trademarks, trade
secret laws and our user policy and restrictions on disclosure to protect our
intellectual property. We may also enter into confidentiality agreements with
our employees and consultants and seek to control access to and distribution of
our proprietary information. Despite these precautions, it may be possible for
other parties to copy or otherwise obtain and use the content of our web sites
or print publications without authorization. A failure to protect our
intellectual property in a meaningful manner could have a material adverse
effect on our business.

     Because we license some of our data and content from other parties, we
may be exposed to infringement actions if such parties do not possess the
necessary proprietary rights. Generally, we obtain representations as to the
origin and ownership of licensed content and obtain indemnification to cover any
breach of any such representations. However, such representations may not be
accurate and such indemnification may not be sufficient to provide adequate
compensation for any breach of such representations.

     Any future infringement or other claims or prosecutions related to our
intellectual property could have a material adverse effect on our business. Any
such claims, with or without merit, could be time-consuming, result in costly
litigation and diversion of technical and management personnel or require us to
introduce new content or trademarks, develop new technology or enter into
royalty or licensing agreements. Such royalty or licensing agreements, if
required, may not be available on acceptable terms, if at all.

We may face liability for information on our web sites

     Much of the information published on our web sites relates to the
competitiveness of financial institutions' rates, products and services. We may
be subjected to claims for defamation, negligence, copyright or trademark
infringement or other theories relating to the information we publish on our web
sites. These types of claims have been brought, sometimes successfully, against
online services as well as print publications. Our insurance may not adequately
protect us against these types of claims.

Future government regulation of the Internet is uncertain and subject to change

     As Internet commerce continues to evolve, increasing regulation by federal
or state agencies or foreign governments may occur. Such regulation is likely in
the areas of user privacy, pricing, content and quality of products and
services. Additionally, taxation of Internet use or electronic commerce
transactions may be imposed. Any regulation imposing fees for Internet use or
electronic commerce transactions could result in a decline in the use of the
internet and the viability of internet commerce, which could have a material
adverse effect on our business.

Our ownership is heavily concentrated in our management

                                      -13-
<PAGE>

     Our officers and directors beneficially own approximately 67% of
Intelligent Life's outstanding common stock. Peter C. Morse, our largest
shareholder, beneficially owns approximately 41% of Intelligent Life's
outstanding common stock. As a result, our officers and directors will be able
to exercise control over all matters requiring shareholder approval. In
particular, these controlling shareholders will have the ability to elect all of
our directors and approve or disapprove significant corporate transactions. This
control could be used to prevent or significantly delay another company or
person from acquiring or merging with us.

Our rapid growth may strain our operations

     Since we began our Internet operations in 1995, we have expanded our
operations significantly, and we intend to continue to do so. Our future
expansion may place a significant strain on our management. To manage the
expected growth of our operations and personnel, we must expand and improve our
existing management, operational and financial systems. If we fail to expand and
improve these systems in a timely manner, this failure could have a material
adverse effect on our business.

Our new managers must work together effectively as a team

     We have recently added key managerial, technical and operations personnel.
For example, our President and Chief Executive Officer was hired in 1997, our
Senior Vice President--Administration was hired in 1998, our Senior Vice
President--Marketing was hired in 1999, and our Executive Vice President-
Strategy and Acquisitions was hired in 1999. We are also significantly
increasing our employee base. These new personnel must integrate themselves into
our daily operations and work effectively as a team in order for us to be
successful. We cannot be certain that this will occur in all instances.

Our success depends upon management and key employees

     Our success depends largely upon retaining the continued services of our
executive officers and other key management and developing personnel as well as
hiring and training additional employees. We have a number of key employees on
whom we depend and who may be difficult to replace. Specifically, we rely on
William P. Anderson, III, our President and Chief Executive Officer, and our key
employees, Sara Campbell Taylor, Edward V. Blanchard, Jr., Peter W. Minford, G.
Cotter Cunningham and Robert J. DeFranco. All of our employees are employed by
the Vincam Group under an employee leasing contract. This contract has a one-
year term which expires on December 31, 1999. Beginning January 1, 2000, all of
our personnel will become employees of Intelligent Life Corporation. A failure
to retain our current key employees or to hire enough qualified employees to
sustain our growth could have a material adverse effect on our business.

Our Articles of Incorporation and Bylaws, as well as Florida law, may prevent or
delay a future takeover

     Our Articles of Incorporation and Bylaws may have the effect of delaying or
preventing a merger or acquisition, or making such a transaction less desirable
to a potential acquirer, even when shareholders may consider the acquisition or
merger favorable. For example, our Articles of Incorporation and Bylaws provide
that: (1) the board of directors has the authority, without shareholder
approval, to issue up to 10,000,000 shares of preferred stock and to determine
the rights (including voting rights) associated with such preferred stock (which
issuance may adversely affect the market price of the common stock and the
voting rights of the holders of common stock): (2) the board of directors is
classified and directors have three-year terms: (3) cumulative voting for the
election of directors is prohibited; (4) approval by 66 2/3% of the shareholders
is required for material amendments to the Articles of Incorporation or Bylaws:
and (5) certain procedures must be followed before matters can be proposed by
shareholders for consideration at shareholder meetings. Florida law also
contains "control share acquisition" and "affiliate transaction" provisions that
may also delay, prevent, or discourage an acquisition of or merger with
Intelligent Life Corporation.

                                      -14-
<PAGE>

We have broad discretion in the use of proceeds from our initial public offering

     The net proceeds from the sale of common stock in our initial public
offering will become part of our general working capital and we may use these
funds in a variety of ways, including increasing our sales and marketing
activities, increasing our content development activities and pursuing strategic
acquisitions and partnerships. We will have considerable discretion in the
application of the net proceeds to these uses. In addition, the timing of our
use of the net proceeds will depend on a number of factors, including the amount
of our future revenues.

We may encounter difficulties with future acquisitions

     A part of our business strategy is to acquire web sites and other content
providers that will be complementary to our current activities. Any acquisitions
may present a number of potential risks that could result in a material adverse
effect on our business. These risks include the following; failure to integrate
the technical operations and personnel in a timely and cost-effective manner;
failure to retain key personnel of the acquired company; and assumption of
unexpected material liabilities. In addition, we cannot assure you that we will
be able to identify suitable acquisition candidates that are available for sale
at reasonable prices. We may finance future acquisitions using the proceeds from
our initial public offering.

     We may also finance future acquisitions with debt financing, which would
increase our debt service requirements, or through the issuance of additional
common or preferred stock, which could result in dilution to our shareholders.
We cannot assure you that we will be able to arrange adequate financing on
acceptable terms.

Our results of operations may fluctuate significantly

     Our results of operations may fluctuate significantly in the future as a
result of several factors, many of which are beyond our control. These factors
include; (1) changes in fees paid by advertisers; (2) traffic levels on our web
sites, which can fluctuate significantly as a result of financial news events;
(3) changes in the demand for internet products and services; (4) changes in fee
or revenue-sharing arrangements with our distribution partners; (5) our ability
to enter into or renew key distribution agreements; (6) the introduction of new
Internet advertising services by us or our competitors; (7) changes in our
capital or operating expenses as we expand our operations; and (8) general
economic conditions.

     Our future revenues and results of operations may be difficult to forecast
due to these factors. As a result, we believe that period-to-period comparisons
of our results of operations may not be meaningful, and you should not rely on
past periods as indicators of future performance.

     In future periods, our results of operations may fall below the
expectations of securities analysts and investors, which could adversely affect
the trading price of the common stock.

Our stock price may be volatile in the future

     We cannot predict whether a trading market for our common stock will
develop or how liquid that market might become. The initial public offering
price of our common stock was determined by negotiations with our underwriters
and may not be indicative of prices that will prevail in the trading market. The
stock prices and trading volume of Internet-related companies have been
extremely volatile of late. Accordingly, our stock prices may be volatile as
well. In addition, following periods of downward volatility in the market price
of a company's securities, class action litigation is often brought against the
company. Downward volatility of our stock prices could lead to class action
litigation, resulting in substantial costs and a diversion of our management's
attention and resources.

                                      -15-
<PAGE>

We may experience year 2000 problems

     The Year 2000 computer problem refers to the potential for system and
processing failures of date-related data as a result of computer-controlled
systems using two digits rather than four to define the applicable year. For
example, software programs that have time-sensitive components may recognize a
date represented as "00" as the year 1900 rather than the year 2000. This could
result in system failure, causing disruptions to our operations.

     We may be affected by Year 2000 issues related to non-compliant internal
systems developed by us or by third-party vendors. We have received written
certifications from all manufacturers of our third-party systems that they are
Year 2000 compliant. We are not currently aware of any material systems that
contain embedded chips that are not Year 2000 compliant, or that we will not be
able to bring into compliance in a timely fashion. We have completed the
inventory and testing of our mission critical hardware systems, including the
routers and servers by which we provide services to our customers. Additionally,
all of our mission critical operating software has been tested based upon the
representations provided by the manufacturers as well as our own internal
criteria. All of the mission critical hardware and software passed our
predetermined Year 2000 criteria for compliance. Failure of our systems to be
Year 2000 compliant could result in an inability of users to view our sites,
which would have a material adverse effect on our business. Such failures could
also require substantial time and effort on the part of management.

     In addition, there can be no assurance that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside of our control will be Year 2000 compliant. The failure by such entities
to be Year 2000 compliant could result in a systemic failure beyond our control,
such as a prolonged Internet, telecommunications or electrical failure, which
could also prevent us from delivering our services to customers, decrease the
use of the Internet or prevent users from accessing our Web sites which could
have a material adverse effect on our business, results of operations and
financial condition.


ITEM 2.        PROPERTIES

   Our principal administrative, sales, marketing and research facilities are
located on approximately 14, 000 square feet of leaased office space in North
Palm Beach, Florida.

ITEM 3.        LEGAL PROCEEDINGS

   Intelligent Life is not a party to any material legal proceeding.

ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

               None.


                                    PART II


ITEM 5.        MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
               MATTERS

          The Company's Common Stock has been traded on the Nasdaq National
Market under the symbol "ILIF" since May 13, 1999. Prior to that time there was
no established market for the shares.

          The price per share reflected in the table below represents the range
of low and high closing sale prices for the Company's Common Stock as reported
by the Nasdaq National Market for the periods indicated:



    Year Ended December 31, 1999             High Price         Low Price
    ----------------------------             ----------         ---------
    Second Quarter (through June 30, 1999)    $15.000             $5.250


          The closing sale price of the Company's Common Stock as reported by
the Nasdaq National Market on June 30, 1999 was U.S. $6.563.

          The number of shareholders of record of the Company's Common Stock as
of June 30, 1999, was approximately 2,128.

                                      -16-
<PAGE>

          The Company has never paid cash dividends on its capital stock. The
Company currently intends to retain any earnings for use in the business and
does not anticipate paying any cash dividends in the foreseeable future.


ITEM 6.        SELECTED FINANCIAL DATA

          The selected financial data set forth below should be read in
conjunction with the financial statements, including the notes thereto, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in Item 7. of this Form 10-K. The statement of operations
data for the years ended June 30, 1994 and 1995, and the balance sheet data as
of June 30, 1994 and 1995, are derived from unaudited financial statements not
included in this Form 10-K. The statement of operations data for the years ended
June 30, 1996, 1997 and 1998, and for the six-month period ended December 31,
1998, and the balance sheet data as of June 30, 1996, 1997, 1998 and December
31, 1998, are derived from, and are qualified by reference to, the audited
financial statements included elsewhere in this Form 10-K. The statement of
operations data for the six-month period ended December 31, 1997 are derived
from unaudited financial statements. In the opinion of management, the unaudited
financial statements have been prepared on a basis consistent with the audited
financial statements which appear elsewhere in this Form 10-K, and include all
adjustments, consisting only of normal recurring adjustments, necessary for the
fair presentation of the financial position and results of operations for such
unaudited periods.

<TABLE>
<CAPTION>

                                                                                                             Six Months Ended
                                                             Year Ended June 30,                               December 31,
                                       ----------------------------------------------------------------  -------------------------
Statement of Operations Data:             1994        1995         1996         1997          1998           1997          1998
                                         ------      ------       ------       ------        ------         ------        ------
(In thousands, except share and per
 share data)

<S>                                    <C>          <C>          <C>          <C>           <C>           <C>          <C>
Revenue:
  Online publishing                    $        -   $        -   $       70   $      485    $    1,282    $      508   $    1,809
  Print publishing and licensing              871        1,109        1,558        2,058         2,559         1,180        1,660
                                       ----------   ----------   ----------   ----------    ----------    ----------   ----------
    Total revenue                             871        1,109        1,628        2,543         3,841         1,688        3,469
                                       ----------   ----------   ----------   ----------    ----------    ----------   ----------

Cost of Operations:
  Online publishing                             -            -           18          582           862           321          979
  Print publishing and licensing              668          884          971        1,186         1,962           957        1,101
  Sales                                         -            -           96           90           665           117          817
  Marketing                                    14           23           34            1           145            18          305
  Product research                            258          274          508          721         1,216           493          916
  General and administrative                  288          404          522          768         1,663           696          871
  Depreciation and amortization                95           89           98           74            67            25           98
  Stock based compensation                      -            -            -            -            89             -          669
                                       ----------   ----------   ----------   ----------    ----------    ----------   ----------
    Total cost of operations                1,323        1,654        2,247        3,422         6,669         2,627        5,756
                                       ----------   ----------   ----------   ----------    ----------    ----------   ----------
  Loss from operations                       (452)        (545)        (619)        (879)       (2,828)         (939)      (2,287)
  Other income (expense)                      (13)        (410)         (53)         (77)           46            35          192
                                       ----------   ----------   ----------   ----------    ----------    ----------   ----------
  Loss before income taxes                   (465)        (955)        (672)        (956)       (2,782)         (904)      (2,095)
  Income taxes                                  -            -            -            -             -             -            -
                                       ----------   ----------   ----------   ----------    ----------    ----------   ----------
  Net loss                                   (465)        (955)        (672)        (956)       (2,782)         (904)      (2,095)
  Conversion of non redeemable
   convertible
    Series A Preferred Stock to
     redeemable                                 -            -            -            -             -             -       (4,438)
                                       ----------   ----------   ----------   ----------    ----------    ----------   ----------
   Net loss applicable to common
     stock                             $     (465)  $     (955)  $     (672)  $     (956)   $   (2,782)   $     (904)  $   (6,533)
                                       ==========   ==========   ==========   ==========    ==========    ==========   ==========

  Basic and diluted net loss per share $    (0.10)  $    (0.19)  $    (0.13)  $    (0.20)   $    (0.72)   $    (0.24)  $    (1.63)
  Weighted average shares outstanding
   used in basic and diluted per-share
   calculation                          4,824,170    5,000,000    5,000,000    4,743,590     3,846,200     3,846,200    4,018,700
</TABLE>

<TABLE>
<CAPTION>

                                                                                                    As of
                                                            As of June 30,                       December 31,
Balance Sheet Data:                     1994         1995        1996        1997        1998        1998
                                       ------       ------      ------      ------      ------      ------
    (In thousands)
<S>                                    <C>        <C>          <C>         <C>         <C>         <C>
Cash and cash equivalents              $     -    $     (4)    $     -     $ 1,763     $   910     $  1,633
Working capital                           (424)       (597)     (1,649)        887         164          658
Total assets                               695         273         311       2,193       1,768        3,099
Obligations under capital leases,
  long-term                                379         700           -           -          14          263
Redeemable preferred stock                   -           -           -           -           -       12,198
Total stockholders' equity (deficit)      (140)     (1,096)     (1,508)      1,035         657      (10,985)
</TABLE>

ITEM 7.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with the financial
statements and related notes contained in this Form 10-K. The following
discussion contains forward-looking statements that involve risks and
uncertainties. Intelligent Life's fiscal year previously ended on June 30. The
fiscal year ended June 30, 1996 is referred to as fiscal 1996, the fiscal year
ended June 30, 1997 is referred to as fiscal 1997 and the fiscal year ended June
30, 1998 is referred to as fiscal 1998.

Overview

     Intelligent Life is the leading provider of independent, objective research
regarding consumer banking and credit products and a significant publisher of
original editorial content relating to personal finance matters. We provide this
information through our Internet sites bankrate.com, theWhiz.com, Consejero.com
and CPNet.com and in print through Bank Rate Monitor and Consumer Mortgage
Guide. Our online operations are the principal focus of our activities today.
Prior to 1995, our principal businesses were the publication of print
newsletters and syndication of bank and credit product research to newspapers
and magazines. In 1995, we introduced the Consumer Mortgage Guide, which is an
advertisement for newspapers consisting of product and rate information in
tabular form from local mortgage companies that pay a weekly fee for inclusion
in the table.

     In fiscal 1996, we commenced our online operations by displaying our
research through an internet site, bankrate.com. By putting our information
online, we were able to create new revenue opportunities through the sale of
graphical and hyperlink advertising associated with our rate and yield tables.
In fiscal 1997, we determined that we would concentrate principally on our
online operations. Since that time, we have significantly expanded the scope and
depth of bankrate.com and made investments in four new online publications:
theWhiz.com, bankrate.com en Espanol, Consejero.com and CPNet.com. These new
publications accounted for 12% of total online revenues for the fiscal year
ended June 30, 1998 and 2% of total online revenues for the six months ended
December 31, 1998.

     In order to focus on our online activities, we have reduced the number of
print newsletters we publish from five to three and eliminated active marketing
of our print publications. We have also ceased marketing Consumer Mortgage Guide
as a separate product. We now provide this product to newspapers as a part of a
broader relationship that is primarily directed toward online activities.

     We believe that recognition of our research as the leading source of
independent, objective information on banking and credit products is essential
to our success. As a result, we have sought to maximize distribution of our
research to gain brand recognition as a research authority. We are currently
seeking to increase traffic to Bankrate.com in order to build our brand
awareness and reach among online users.

     On April 12, 1999 our Board of Directors approved changing our fiscal
year-end to December 31.

The following are descriptions of the revenue and expense components of our
statement of operations:

     Online publishing revenue represents the sale of advertising, sponsorships
and hyperlinks in connection with our web sites. Such advertising is sold to
advertisers according to the cost per thousand impressions, or CPM, the
advertiser receives. The amount of advertising we sell is a function of (1) the
number of advertisements we have per page, (2) the number of visitors viewing
our pages, and (3) the capacity of our sales force. Revenue from advertising
sales is invoiced monthly based on the expected number of advertisement
impressions, or number of times that an advertisement is viewed. Revenue is
recognized monthly based on the percentage of impressions received to the total

                                      -17-
<PAGE>

number of impressions purchased. Revenue for impressions that have been invoiced
but not delivered is deferred. Hyperlinks to various third-party web sites are
sold for a fixed monthly fee, which is recognized as revenue in the month
earned. For our revenue sharing distribution arrangements with web site
operators, revenue is recorded on a gross basis, with payments for our
distribution arrangements being included in online publishing costs.

     In June 1999, we were advised by Quicken.com that it would not be renewing
its distribution agreement with us. Quicken.com accounted for approximately 6%
of our total site traffic during the three months ended March 31, 1999.
Management does not believe that the loss of this distribution partner will have
a material adverse impact on future results of operations.

     Print publishing and licensing revenue represents advertising revenue from
the sale of advertising in Consumer Mortgage Guide rate tables, newsletter
subscriptions, and licensing of research information. We charge a commission for
placement of Consumer Mortgage Guide in a print publication. Advertising revenue
and commission income is recognized when Consumer Mortgage Guide runs in the
publication. Revenue from our newsletters is recognized ratably over the period
of the subscription, which is generally up to one year. Revenue from the sale of
research information is recognized ratably over the contract period.

     Online publishing costs represent expenses directly associated with the
creation of online publishing revenue. These costs include contractual revenue
sharing obligations resulting from our distribution arrangements (distribution
payments), editorial costs, and allocated overhead. Distribution payments are
made to web site operators for visitors directed to our web sites. These costs
increase with gains in traffic to our sites. Editorial costs relate to writers
and editors who create original content for our online publications and
associates who build web pages. These costs have increased as we have added
online publications and co-branded versions of our sites under distribution
arrangements. These sites must be maintained on a daily basis.

     Print publishing and licensing costs represent expenses directly associated
with print publishing revenue. These costs include contractual revenue sharing
obligations with newspapers related to Consumer Mortgage Guide, personnel costs,
printing and allocated overhead.

     Sales costs represent direct selling expenses, principally for online
advertising, and include sales commissions, personnel costs and allocated
overhead.

     Marketing costs represent expenses associated with expanding brand
awareness of our products and services to consumers and include advertising,
including banner advertising, marketing and promotion costs.

     Product research costs represent expenses related to gathering data on
banking and credit products and include compensation and benefits, facilities
costs, telephone costs and computer systems expenses.

     General and administrative costs represent compensation and benefits for
administration, advertising management, accounting and finance, facilities
expenses, professional fees and non-allocated overhead.

     Depreciation and amortization represents the cost of capital asset
acquisitions spread over their expected useful lives. These expenses are spread
over three to seven years and are calculated on a straight line basis.

     Stock based compensation represents expenses associated with stock grants
to our officers and employees as additional compensation for their services.

Other income (expense) is comprised of interest income and expense and gains and
losses on the sale

Results of Operations

     We have compared our financial results for the year ended June 30, 1996,
1997 and 1998 as well as the six months ended December 31, 1997 and 1998.

The following tables displays our results of operations expressed as a
percentage of total revenues:

<TABLE>
<CAPTION>
                                                                                            Six Months Ended
                                               Year Ended June 30,                            December 31,
                                    ----------------------------------------           -------------------------
                                       1996           1997           1998                 1997           1998
                                       ----           ----           ----                 ----           ----
<S>                                 <C>               <C>            <C>               <C>               <C>
</TABLE>

                                      -18-
<PAGE>

<TABLE>
<S>                                      <C>           <C>              <C>                 <C>            <C>
Revenue:
   Online publishing............            4.3%         19.1%            33.4%               30.1%          52.1%
   Print publishing revenue.....           95.7          80.9             66.6                69.9           47.9
                                         ------        ------           ------              ------         ------
       Total revenue............          100.0         100.0            100.0               100.0          100.0
Cost of Operations:
   Online publishing............            1.0          22.9             22.4                19.0           28.2
   Print publishing and                    59.6          46.6             51.1                56.7           31.7
    licensing...................
   Sales........................            6.0           3.5             17.3                 6.9           23.6
   Marketing....................            2.1           0.0              3.8                 1.1            8.8
   Product research.............           31.2          28.4             31.7                29.2           26.4
   General and administrative...           32.1          30.3             43.3                41.2           25.1
   Depreciation and amortization            6.0           2.9              1.7                 1.5            2.8
   Stock based compensation.....            0.0           0.0              2.3                 0.0           19.3
                                         ------        ------           ------              ------         ------
Total costs of operations.......          138.0         134.6            173.6               155.6          165.9
                                         ------        ------           ------              ------         ------
Loss from operations............          (38.0)        (34.6)           (73.6)              (55.6)         (65.9)
Other income (expense)..........           (3.3)         (3.0)             1.2                 2.1            5.5
                                         ------        ------           ------              ------         ------
       Net loss.................          (41.3)%       (37.6)%          (72.4)%             (53.5)%        (60.4)%
                                         ======        ======           ======              ======         ======
</TABLE>

Six Months Ended December 31, 1998 Compared to Six Months Ended December 31,
1997

     Revenues

          Total revenue increased to $3,469,000 for the six months ended
December 31, 1998 from $1,688,000 for the six months ended December 31, 1997,
representing a 106% increase.

          Online publishing revenue increased to $1,809,000 for the six months
ended December 31, 1998 from $508,000 for the six months ended December 31,
1997, representing a 256% increase. This increase was due primarily to a higher
level of advertising sales and higher advertising rates. The higher advertising
sales were facilitated by an increase in advertising inventory resulting from an
increase in the number of distribution arrangements as well as higher overall
internet traffic.

          Print publishing and licensing revenue increased to $1,660,000 for the
six months ended December 31, 1998 from $1,180,000 for the six months ended
December 31, 1997, representing a 41% increase. This increase resulted from the
sale of a higher number of advertisements for Consumer Mortgage Guide, which
resulted primarily from growth in the number of participating newspapers.

     Cost of Operations

          Online publishing costs increased to $979,000 for the six months ended
December 31, 1998 from $321,000 for the six months ended December 31, 1997,
representing a 205% increase. The increase was due to greater revenue sharing
obligations and personnel costs related to expanded online publishing
operations.

          Print publishing and licensing costs increased to $1,101,000 for the
six months ended December 31, 1998 from $957,000 for the six months ended
December 31, 1997, representing a 15% increase. The increase resulted from
higher payments to newspapers principally because of higher revenues from
Consumer Mortgage Guide.

          Sales costs increased to $817,000 for the six months ended December
31, 1998 from $117,000 for the six months ended December 31, 1997, representing
a 598% increase. The increase was primarily the result of an increase in sales
personnel, opening of sales offices in California and New York and
implementation of a more aggressive sales commission structure.

          Marketing costs increased to $305,000 for the six months ended
December 31, 1998 from $18,000 for the six months ended December 31, 1997
representing a 1,594% increase. The increase resulted from hiring a public
relations firm to promote our online activities, creating and producing sales
materials for online advertising and purchasing banner advertising to test the
effectiveness of using such advertising to increase visitors to Bankrate.com.

          Product research costs increased to $916,000 for the six months ended
December 31, 1998 from $493,000 for the six months ended December 31, 1997,
representing a 86% increase. The increase resulted from additional personnel
relating to an expanded number of products in which we conduct research and
additional quality control personnel.

                                      -19-
<PAGE>

     General and administrative costs increased to $871,000 for the six months
ended December 31, 1998 from $695,000 for the six months ended December 31,
1997, representing a 25% increase. The increase was principally related to
expenses incurred to allow for anticipated growth, including additional
compensation and benefits for new personnel, facilities costs and professional
costs.

     Depreciation and amortization increased to $98,000 for the six months ended
December 31, 1998 from $25,000 for the six months ended December 31, 1997,
representing a 292% increase. The increase was mainly attributable to higher
expenses for software, computer systems and components.

     Stock-based compensation increased by $669,000 as a result of shares issued
in conjunction with the hiring of our President and Chief Executive Officer and
stock issued to Christy Heady as part of an employment agreement with
Intelligent Life entered into in conjunction with the purchase of theWhiz.com.

     In December 1998, we sold one of our print publications, Bank Advertising
News, resulting in a gain of $186,000 which is included in other income
(expense). The sale was the result of management's assessment that this
publication no longer fit our strategy.

Year Ended June 30, 1998 Compared to Year Ended June 30, 1997

 Revenues

     Total revenue increased to $3,841,000 in fiscal 1998 from $2,543,000 in
fiscal 1997, representing a 51% increase.

     Online publishing revenue increased to $1,282,000 in fiscal 1998 from
$485,000 in fiscal 1997, representing a 164% increase. This increase was due to
more advertisements being sold, higher advertising rates and an increase in
inventory available for sale. A change of site design for Bankrate.com to allow
for a larger number of advertisements per page also contributed to the revenue
growth.

     Print publishing and licensing revenue increased to $2,559,000 in fiscal
1998 from $2,058,000 in fiscal 1997, representing a 24% increase. The increase
resulted from the sale of a higher number of advertisements for Consumer
Mortgage Guide, which resulted primarily from growth in the number of
participating newspapers.

 Cost of Operations

     Online publishing costs increased to $862,000 in fiscal 1998 from $582,000
in fiscal 1997, representing a 48% increase. The increase resulted from higher
payments made under distribution arrangements and additional editorial staff.

     Print publishing and licensing costs increased to $1,962,000 in fiscal 1998
from $1,186,000 in fiscal 1997, representing a 65% increase. The increase was
substantially a result of higher payments to newspapers given the higher level
of Consumer Mortgage Guide revenues.

     Sales costs increased to $665,000 in fiscal 1998 from $90,000 in fiscal
1997, representing a 639% increase. The increase was due to additional sales
staff, higher commissions resulting from increased revenues and higher
commission rates for our online sales staff.

     Marketing costs increased to $145,000 in fiscal 1998 from $1,485 in fiscal
1997, representing a 9,664% increase. The increase was due to the hiring of a
public relations firm to promote our expanded online activities and the costs of
creating and producing sales materials for online advertising. Additional costs
were incurred in fiscal 1998 when we purchased such advertising to test its
effectiveness in increasing visitors to bankrate.com.

     Product research costs increased to $1,216,000 in fiscal 1998 from $721,000
in fiscal 1997, representing a 69% increase. The increase was principally
related to the addition of 20 local markets in which we conducted research and
an expansion in the number of products for which we gathered data.

                                      -20-
<PAGE>

     General and administrative costs increased to $1,663,000 in fiscal 1998
from $768,000 in fiscal 1997, representing a 117% increase. The increase was
principally related to the hiring of new senior management, expansion of office
space and additional professional fees.

     Depreciation and amortization decreased to $67,000 in fiscal 1998 from
$74,000 in fiscal 1997, representing a 9% decrease.

Year Ended June 30, 1997 Compared to Year Ended June 30, 1996

  Revenues

      Total revenue increased to $2,543,000 in fiscal 1997 from $1,628,000 in
fiscal 1996, representing a 56% increase.

     Online publishing revenue increased to $485,000 in fiscal 1997 from $70,000
in fiscal 1996, representing a 593% increase. In fiscal 1996, Intelligent Life
initiated its online publishing operations. In fiscal 1997, Intelligent Life
conducted online publishing operations for the full year.

     Print publishing and licensing revenue increased to $2,058,000 in fiscal
1997 from $1,558,000 in fiscal 1996, representing a 32% increase. The increase
resulted from the sale of a higher number of advertisements for Consumer
Mortgage Guide, which resulted primarily from growth in the number of
participating newspapers.

 Cost of Operations

     Online publishing costs increased to $582,000 in fiscal 1997 from $16,000
in fiscal 1996. The increase was primarily due to higher payments made under
distribution arrangements resulting from growth of online publishing revenue.

     Print publishing and licensing costs increased to $1,186,000 in fiscal 1997
from $971,000 in fiscal 1996, representing a 22% increase. The increase was
primarily due to higher payments to newspapers due to growth in Consumer
Mortgage Guide revenues.

     Sales costs decreased to $90,000 in fiscal 1997 from $98,000 for fiscal
1996, representing an 8% decrease. The decrease was primarily due to reduced
sales costs while we were changing the focus of our operations.

     Marketing costs decreased to $1,485 in fiscal 1997 from $34,000 in fiscal
1996, representing a 96% decrease. The decrease was due to suspension of
marketing activities in anticipation of increased online activities.

     Product research costs increased to $721,000 in fiscal 1997 from $508,000
in fiscal 1996, representing a 42% increase. The increase was due to conducting
research in a greater number of local markets.

     General and administrative costs increased to $768,000 in fiscal 1997 from
$522,000 in fiscal 1996, representing a 47% increase. The increase was
principally related to recruiting costs associated with identifying and
retaining a new President and Chief Executive Officer, implementing a new
accounting system and the costs associated with the acquisition of MoneyWhiz,
which subsequently became theWhiz.com.

     Depreciation and amortization was $74,000 in fiscal 1997, compared to
$98,000 in fiscal 1996, representing a decrease of 24%. The decrease was
principally related to the elimination of amortization of certain subscription
costs and depreciation related to certain assets.

Quarterly Results of Operations

     The following table presents certain unaudited quarterly statement of
operations data for each of our last ten quarters through the period ending
December 31, 1998. The information has been derived from our unaudited and
audited financial statements. In the opinion of our management, the unaudited
financial statements have been prepared on a basis consistent with the financial
statements which appear elsewhere in this Form 10-K and include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair statement
of the financial position and results of

                                      -21-
<PAGE>

operations for such unaudited periods. Historical results are not necessarily
indicative of results to be expected in the future.

<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                            ----------------------------------------------------------------------------------
                                             Sept. 30   Dec. 31   Mar. 31   June 30   Sept. 30   Dec. 31   Mar. 31   June 30
                                               1996       1996      1997      1997      1997       1997      1998      1998
                                               ----       ----      ----      ----      ----       ----      ----      ----
Revenues                                                                                 in thousands
<S>                                          <C>        <C>       <C>       <C>       <C>        <C>       <C>       <C>
 Online publishing.........................     $  58     $  88     $ 166    $  173     $  224    $  284    $  328   $   446
 Print publishing and licensing............       488       490       515       565        592       588       622       757
                                                -----     -----     -----    ------     ------    ------    ------   -------
    Total revenue..........................       546       578       681       738        816       872       950     1,203
Cost of Operations:
 Online publishing.........................        89       144       154       195        115       206       210       331
 Print publishing and licensing............       288       277       278       343        448       510       536       468
 Sales.....................................        25        23        18        24         47        70       139       409
 Marketing.................................         0         0         0         1          7        11        47        80
 Product research..........................       174       186       162       199        210       283       286       437
 General and administrative................        99        88        93       488        284       411       422       546
 Depreciation and amortization.............        13        17        20        24          4        21        21        21
 Stock based compensation..................         0         0         0         0          0         0         0        89
                                                -----     -----     -----    ------     ------    ------    ------   -------
    Total costs of operations..............       688       735       725     1,274      1,115     1,512     1,661     2,381
                                                -----     -----     -----    ------     ------    ------    ------   -------
    Loss from operations...................      (142)     (157)      (44)     (536)      (299)     (640)     (711)   (1,178)
Other income (expense).....................       (15)      (16)      (31)      (15)        18        17         8         3
                                                -----     -----     -----    ------     ------    ------    ------   -------
    Net loss...............................     $(157)    $(173)    $ (75)   $ (551)    $ (281)   $ (623)   $ (703)  $(1,175)
                                                =====     =====     =====    ======     ======    ======    ======   =======

<CAPTION>
                                           ----------  -------
                                            Sept. 30   Dec. 31
                                              1998       1998
                                              ----       ----
Revenues
<S>                                         <C>        <C>
 Online publishing.........................  $   817   $   992
 Print publishing and licensing............      766       894
                                             -------   -------
    Total revenue..........................    1,583     1,886
Cost of Operations:
 Online publishing.........................      458       521
 Print publishing and licensing............      495       606
 Sales.....................................      442       375
 Marketing.................................       49       256
 Product research..........................      435       481
 General and administrative................      426       445
 Depreciation and amortization.............       42        56
 Stock based compensation..................      409       260
                                             -------   -------
    Total costs of operations..............    2,756     3,000
                                             -------   -------
    Loss from operations...................   (1,173)   (1,114)
Other income (expense).....................        5       187
                                             -------   -------
    Net loss...............................  $(1,168)  $  (927)
                                             =======   =======
</TABLE>

Liquidity and Capital Resources

     We have funded Intelligent Life using capital raised from shareholders. As
of December 31, 1998, we had working capital of $658,000 and cash and cash
equivalents of $1,633,000.

     Cash used in operating activities during the six months ended December 31,
1998 was $1,207,000 and during the years ended June 30, 1998, 1997 and 1996 was
$2,761,000, $834,000 and $345,000, respectively. The cash used in operating
activities was for funding operating losses arising from the expansion of
Bankrate.com and the creation of four new online publications.

     Cash used in investing activities during the six months ended December 31,
1998 was $27,000 and during the years ended June 30, 1998, 1997 and 1996 was
$407,000, $91,000 and $40,000, respectively. The cash used in investing
activities was primarily for purchases of computer equipment and office
furniture.

     Cash from financing activities during the six months ended December 31,
1998 was $1,957,000 and during the years ended June 30, 1998, 1997 and 1996 was
$2,316,000, $2,687,000 and $385,000, respectively. These financing activities
consisted primarily of issuances of preferred stock. In September 1997, we
completed a private placement of Series A Preferred Stock, totalling 42,308
shares, resulting in gross proceeds of $2,750,000. In October 1997 and June
1998, we completed additional private placements of 24,228 shares of Series A
Preferred Stock, resulting in gross proceeds of $1,575,000. In November 1998, we
completed a private placement of 17,575 shares of Series B Preferred Stock,
resulting in gross proceeds of $1,982,000. Each share of Series A and Series B
Preferred Stock is convertible into 50 shares of common stock.

     Peter C. Morse, a director of Intelligent Life and a principal stockholder,
made loans to Intelligent Life during the years ended June 30, 1997 and 1998 in
the amounts of $687,000 and $200,000, respectively. Interest rates for the loans
were between 6.5% and 7%. The loans have subsequently been contributed to
capital.

     We have experienced significant increases in our capital expenditures which
is consistent with our overall business strategy. We anticipate that
expenditures will continue to increase in the foreseable future as we continue
to evaluate potential investments in our business, technology and products. We
believe that our existing liquidity and capital resources supplemented with the
proceeds from the sale of our common stock in our initial public offering will
be sufficient to satisfy our cash requirements for the foreseeable future. To
the extent that such amounts are insufficient, we will be required to raise
additional funds through equity or debt financing. If adequate funds are not
available or not available on acceptable terms, our ability to fund our planned
expansion, take advantage of unanticipated opportunities or otherwise respond to
competitive pressures would be significantly limited. There can be no mistake.
There can be no assurances that we will be able to raise such funds on favorable
terms or, at all.

     We received approximately $41.1 million in net proceeds from the sale of
common stock in our initial public offering, which was completed on May 13,
1999. These proceeds were invested in short-term cash equivalent investments. As
of June 30, 1999, approximately $1.8 million was utilized for advertising and
marketing, insurance costs, hiring of additional personnel and fixed asset
purchases.

                                      -22-
<PAGE>

     We believe that the cash used in operating activities, cash flows used in
investing activities and cash flows from financing activities line items from
our statement of cash flows as well as the total current assets and total
current liabilities line items from our balance sheet are the leading indicators
of our liquidity and capital resources.

Recent Accounting Pronouncements

     In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued
and was adopted by Intelligent Life as of July 1, 1998. SFAS 130 establishes
standards for reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements. This statement requires
that an enterprise (1) classify items of other comprehensive income by their
nature in financial statements and (2) display the accumulated balance of other
comprehensive income separately from retained earnings and additional paid-in
capital in the equity section of statements of financial position. Comprehensive
income is defined as the change in equity during the financial reporting period
of a business enterprise resulting from nonowner sources. Comprehensive income
equals the net loss for all periods presented.

     In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise
with Related Information," was issued. SFAS No. 131 establishes standards for
the way public business enterprises report information about operating segments
in annual financial statements and requires those enterprises to report selected
information about operating segments in interim financial reports issued to
stockholders. SFAS No. 131 is effective for financial statements for periods
beginning after December 31, 1997. Intelligent Life has adopted SFAS No. 131 as
of January 1, 1998.

     In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," was issued. SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in the statement of operations unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges allows a derivative's
gains and losses to offset related results on the hedged item in the statement
of operations, and requires that a company formally document, designate, and
assess the effectiveness of transactions that receive hedge accounting. SFAS No.
133 is effective for fiscal years beginning after June 15, 1999. A company may
also implement the provision of SFAS No. 133 as of the beginning of any fiscal
quarter after issuance. SFAS No. 133 cannot be applied retroactively, and must
be applied to (1) derivative instruments and (2) certain derivative instruments
embedded in hybrid contracts that were issued acquired, or substantively
modified after December 31, 1997. Intelligent Life has not yet adopted SFAS No.
133 and presently does not have any derivative instruments.

Noncash Charges

     During the first calendar quarter of 1999, we granted options to purchase
shares of common stock at exercise prices that were less than the fair market
value of the underlying shares of common stock. This will result in total
noncash compensation expense of approximately $5,900,000 over the period that
these options vest, which is generally three to four years. The noncash
compensation expense was approximately $1,893,000 for the first calendar quarter
of 1999. We also incurred a one-time noncash financing charge during the first
calendar quarter of 1999 of approximately $2,656,000 relating to a convertible
promissory note that was converted into fully paid Series B Preferred Stock on
April 9, 1999.

Income Taxes

     Intelligent Life's effective tax rate differs from the statutory federal
income tax rate, primarily as a result of the uncertainty regarding Intelligent
Life's ability to utilize its net operating loss carryforwards. Due to the
uncertainty surrounding the timing or realization of the benefits of its net
operating loss carryforwards in future tax returns,

                                      -23-
<PAGE>

Intelligent Life has placed a valuation allowance against its otherwise
recognizable deferred tax assets. At December 31, 1998, Intelligent Life had
approximately $5,300,000 of net operating loss carryforwards for tax reporting
purposes available to offset future taxable income. Intelligent Life's net
operating loss carryforwards expire from 2012 through 2018. The Tax Reform Act
of 1986 imposes substantial restrictions on the utilization of net operating
losses and tax credits in the event of an "ownership change" of a corporation.
Due to the change in Intelligent Life's ownership interests in the third quarter
of 1997, future utilization of Intelligent Life's net operating loss
carryforwards will be subject to certain limitations or annual restrictions. See
Note 8 of the notes to the financial statements appearing elsewhere in this
Form 10-K.

Year 2000 Compliance

     The Year 2000 computer problem refers to the potential for system and
processing failures of date-related data as a result of computer-controlled
systems using two digits rather than four to define the applicable year. For
example, software programs that have time-sensitive components may recognize a
date represented as "00" as the year 1900 rather than the year 2000. This could
result in a system failure causing disruptions to our operations.

     Our internal information technology and non-information technology systems
are generally licensed from third parties rather than being internally
developed. Our research and subscription systems are two of the major
information technology systems that have been internally developed. No non-
information technology systems have been internally developed. We have received
written certifications from all manufacturers of third-party systems that they
are Year 2000 compliant. We have completed the inventory and testing of our
mission critical hardware systems, including the routers and servers by which we
provide services to our customers.

     Additionally, all of our mission critical operating software has been
tested by the manufacturers as well as internally tested. All of the mission
critical hardware and software passed our predetermined Year 2000 criteria for
compliance.

     Our business is also dependent upon the computer-controlled systems of
third parties such as suppliers, customers and service providers. A systemic
failure outside of our control, such as a prolonged loss of internet,
telecommunications, electrical or telephone services could prevent users from
accessing our web sites, which could have a material adverse effect on our
business.

     To date, we have spent approximately $350,000 on Year 2000 compliance
issues, including the purchase of hardware and the cost of a third-party
consultant. Based on our current assessment, we do not anticipate that
additional costs associated with the Year 2000 issue will have a material
adverse effect on our business. We do not currently anticipate having to develop
a contingency plan for handling a Year 2000 problem that is not detected and
corrected prior to its occurrence.

     There is general uncertainty inherent in the Year 2000 computer problem.
The consequences of Year 2000 failures could have a material adverse effect on
our business. In particular, unforeseen Year 2000 computer problems could
require substantial time and effort on the part of management.

     In addition, there can be no assurance that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside of our control will be Year 2000 compliant. The failure by such entities
to be Year 2000 compliant could result in a systemic failure beyond our control,
such as a prolonged Internet, telecommunications or electrical failure, which
could also prevent us from delivering our services to our customers, decrease
the use of the Internet or prevent users from accessing our Web sites which
could have a material adverse effect on our business, results of operations and
financial condition.

     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Interest Rate Risk

     The primary objective of our investment strategy is to preserve principal
while maximizing the income we receive from investments without significantly
increasing risk. To minimize this risk, to date were have maintained our
portfolio of cash equivalents in short-term and overnight investments which are
not subject to market risk as the interest paid on such investments fluctuates
with the prevailing interest rates. As of June 30, 1999 all of our cash
equivalents mature in less than one year.

Exchange Rate Sensitivity

     Our exposure to foreign currency exchange rate fluctuations is minimal to
none as we do not have any revenues denominated in foreign currencies.
Additionally, we have not engaged in any derivative or hedging transactions to
date.

                                      -24-
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                            PAGE
<S>                                                                         <C>
Reports of Independent Auditors.........................................

Balance Sheets as of June 30, 1997 and 1998, and December 31, 1998 and
 December 31, 1998 (Unaudited)-pro forma................................

Statements of Operation for the Years Ended June 30, 1996, 1997 and
 1998 and the Six-Month Periods Ended December 31, 1997 (Unaudited)
 and 1998...............................................................

Statements of Redeemable Stock and Stockholders' Equity (Deficit) for
 the Years Ended June 30, 1996, 1997 and 1998, the Six-Month Period
 Ended December 31, 1998 and the Six-Month Period Ended December 31,
 1998 (Unaudited)-pro forma.............................................

Statements of Cash Flows for the Years Ended June 30, 1996, 1997 and
 1998, and the Six-Month Periods Ended December 31, 1997 (Unaudited)
 and 1998...............................................................

Notes to Financial Statements...........................................
</TABLE>

                         INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
Intelligent Life Corporation:

     We have audited the accompanying balance sheets of Intelligent Life
Corporation as of June 30, 1998 and December 31, 1998, and the related
statements of operations, redeemable stock and stockholders' equity (deficit),
and cash flows for the year ended June 30, 1998 and the six-month period ended
December 31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Intelligent Life Corporation
as of June 30, 1998 and December 31, 1998, and the results of its operations and
its cash flows for the year ended June 30, 1998 and the six-month period ended
December 31, 1998 in conformity with generally accepted accounting principles.

                                    KPMG LLP

Atlanta, Georgia
July 2, 1999

                         INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Intelligent Life Corporation:

     We have audited the accompanying balance sheet of Intelligent Life
Corporation (formerly, Bank Rate Monitor, Inc.), as of June 30, 1997, and the
related statements of operations, redeemable stock and stockholders' equity
(deficit), and cash flows for the two years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Intelligent Life Corporation
(formerly, Bank Rate Monitor, Inc.) as of June 30, 1997, and the results of its
operations and its cash flows for the two years then ended in conformity with
generally accepted accounting principles.


                                                  Thomas & Clough Co., P.A.


Palm Beach, Florida
July 23, 1998


Intelligent Life Corporation
Balance Sheets

<TABLE>
<CAPTION>
                                                                           June 30,             December 31,    December 31,
                                                                      1997           1998           1998            1998
                                                                  ------------    ----------    ------------   -------------
                                                                                                                 (Unaudited)
                                                                                                                 (pro forma)
                                                                                                                  (Note 12)
<S>                                                               <C>             <C>           <C>             <C>
           Assets
Cash and cash equivalents                                          $ 1,762,828    $   910,427   $  1,633,100    $ 44,080,100
Accounts receivable, net of allowance for doubtful accounts
  of $31,346 and $23,946 at June 30, 1997 and 1998,
  respectively, and $24,847 at December 31, 1998                       280,064        322,515        538,536         538,536
Other current assets                                                     1,432         27,960        109,488         109,488
                                                                   -----------    -----------   ------------    ------------
     Total current assets                                            2,044,324      1,260,902      2,281,124      44,728,124

Furniture, fixtures and equipment, net                                 142,490        505,275        813,659         813,659
Intangible assets, net of accumulated amortization of
  $146,496 and $152,433 at June 30, 1997 and 1998,
  respectively and $152,976 at December 31, 1998                         5,945          1,722          4,569           4,569
                                                                   -----------    -----------   ------------    ------------

     Total assets                                                  $ 2,192,759    $ 1,767,899   $  3,099,352    $ 45,546,352
                                                                   ===========    ===========   ============    ============

     Liabilities, Redeemable Stock and
        Stockholders' Equity (Deficit)

Liabilities:
  Accounts payable                                                 $   374,005    $   205,791   $    308,667    $    308,667
  Accrued expenses                                                     287,726        406,658        588,212         588,212
  Deferred revenue                                                     495,535        476,120        612,660         612,660
  Current portion of obligations under capital leases                        -          8,011        113,405         113,405
                                                                   -----------    -----------   ------------    ------------
     Total current liabilities                                       1,157,266      1,096,580      1,622,944       1,622,944

Obligations under capital leases, long-term                                  -         14,237        263,009         263,009
                                                                   -----------    -----------   ------------    ------------
     Total liabilities                                               1,157,266      1,110,817      1,885,953       1,885,953
                                                                   -----------    -----------   ------------    ------------

Commitments and contingencies

Redeemable Convertible Series A preferred stock, noncumulative,
  par value $.01 per share, liquidation value $65 per share,
  stated at redemption value -- 90,000 shares authorized;
  89,612 shares issued and outstanding at December 31, 1998;
  no shares issued or outstanding pro forma at December 31, 1998             -              -     10,215,768               -
Redeemable Convertible Series B preferred stock, noncumulative,
  par value $.01 per share, liquidation value $114 per share,
  stated at redemption value -- 30,000 shares authorized;
  17,575 shares issued and outstanding at December 31, 1998; no
  shares issued or outstanding pro forma at December 31, 1998                -              -      1,982,535               -
Redeemable Common Stock:
  Redeemable common stock, par value $.01 per share, redemption
    value $0.52 per share -- 454,170 shares issued and outstanding
    at June 30 and December 31, 1998, respectively; no shares
    issued or outstanding pro forma at December 31, 1998                     -        236,168        236,168               -
  Loan receivable for redeemable common stock                                -       (236,168)      (236,168)              -
Stockholders' equity (deficit):
  Preferred stock, 10,000,000 shares authorized and undesignated,
    pro forma                                                                -              -              -               -
    Convertible Series A preferred stock, noncumulative, par value
    $.01 per share, liquidation value $65 per share -- 90,000 shares
    authorized; 53,846 and 89,612 shares issued and
    outstanding at June 30, 1997 and 1998, respectively              3,462,108      5,777,627              -               -
  Common stock, par value $.01 per share -- 100,000,000 shares
    authorized; 3,846,200 shares issued and outstanding at
    June 30, 1997 and 1998; 4,053,200 and 13,440,988 shares issued
    and outstanding at December 31, 1998 and December 31, 1998
    pro forma, respectively                                             38,462         38,462         40,532         134,410
Additional paid in capital                                                   -        354,253              -      59,096,425
Unamortized stock compensation expense                                       -       (265,690)      (280,690)        (60,000)
Accumulated deficit                                                 (2,465,077)    (5,247,570)   (10,744,746)    (15,510,436)
                                                                   -----------    -----------   ------------    ------------
    Total stockholders' equity (deficit)                             1,035,493        657,082    (10,984,904)     43,660,399
                                                                   -----------    -----------   ------------    ------------
    Total liabilities stockholders' equity (deficit)               $ 2,192,759    $ 1,767,899   $  3,099,352    $ 45,546,352
                                                                   ===========    ===========   ============    ============
</TABLE>

See accompanying notes to financial statements.

                                     -25-
<PAGE>

Intelligent Life Corporation
Statements of Operations


<TABLE>
<CAPTION>
                                                                                                     Six months ended
                                                                 Year ended June 30,                    December 31,
                                                            1996           1997         1998         1997          1998
                                                        -----------    ---------    -----------    ----------   ----------
                                                                                                   (Unaudited)
<S>                                                     <C>            <C>          <C>            <C>          <C>
Revenue:
  Online publishing                                     $   70,406     $  484,511    $ 1,281,284   $  507,717    $ 1,808,877
  Print publishing and licensing                         1,557,595      2,058,045      2,559,293    1,180,522      1,660,314
                                                        ----------     ----------    -----------   ----------    -----------
     Total revenue                                       1,628,001      2,542,556      3,840,577    1,688,239      3,469,191
                                                        ----------     ----------    -----------   ----------    -----------
Cost of operations:
  Online publishing                                         16,476        582,399        862,007      321,216        978,964
  Print publishing and licensing                           971,331      1,185,969      1,961,714      957,447      1,100,693
  Sales                                                     97,640         89,848        665,007      117,300        817,403
  Marketing                                                 33,686          1,485        145,632       18,124        304,919
  Product research                                         507,975        720,508      1,215,888      493,257        915,961
  General and administrative expenses                      522,056        767,957      1,663,728      695,191        871,057
  Depreciation and amortization                             97,668         73,754         66,666       25,088         98,491
  Noncash stock based compensation                               -              -         88,563            -        669,000
                                                        ----------     ----------    -----------   ----------    -----------
                                                         2,246,832      3,421,920      6,669,205    2,627,623      5,756,488
                                                        ----------     ----------    -----------   ----------    -----------
      Loss from operations                                (618,831)      (879,364)    (2,828,628)    (939,384)    (2,287,297)
                                                        ----------     ----------    -----------   ----------    -----------

Other income (expense):
  Interest income                                                -          2,141         52,351       35,269         18,924
  Interest expense                                         (56,193)       (85,870)        (6,216)           -        (12,433)
  Other                                                      2,584          7,473              -            -        185,588
                                                        ----------     ----------    -----------   ----------    -----------
      Other income (expense), net                          (53,609)       (76,256)        46,135       35,269        192,079
                                                        ----------     ----------    -----------   ----------    -----------
  Loss before income taxes                                (672,440)      (955,620)    (2,782,493)    (904,115)    (2,095,218)

Income taxes                                                     -              -              -            -              -
                                                        ----------     ----------    -----------   ----------    -----------
      Net loss                                          $ (672,440)    $ (955,620)   $(2,782,493)  $ (904,115)   $(2,095,218)

Charge for conversion of nonredeemable convertible
   Series A preferred stock to redeemable                        -              -              -            -     (4,438,141)
                                                        ----------     ----------    -----------   ----------    -----------
Net loss applicable to common stock                     $ (672,440)    $ (955,620)   $(2,782,493)  $ (904,115)   $(6,533,359)
                                                        ==========     ==========    ===========   ==========    ===========
Basic and diluted net loss per share                    $    (0.13)    $    (0.20)   $     (0.72)  $    (0.24)   $     (1.63)
                                                        ==========     ==========    ===========   ==========    ===========
Weighted average shares outstanding used in
   basic and diluted per-share calculation               5,000,000      4,743,590      3,846,000    3,846,200      4,018,700
                                                        ==========     ==========    ===========    =========    ===========
Pro forma provision for
   income taxes                                                  -              -
                                                        ==========     ==========
Pro forma net loss                                      $ (672,440)    $ (955,620)
                                                        ==========     ==========
Pro forma net loss
   per share                                            $     (.13)    $     (.20)
                                                        ==========     ==========

</TABLE>

See accompanying notes to financial statements.

                                     -26-
<PAGE>

Intelligent Life Corporation
Statements of Redeemable Stock and Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>
                                     Redeemable               Redeemable
                                Convertible Series A      Convertible Series B         Redeemable Common Stock
                                  Preferred Stock           Preferred Stock                                   Note
                               Shares        Amount        Shares       Amount      Shares       Amount     Receivable
<S>                            <C>         <C>            <C>       <C>             <C>      <C>            <C>
Balances,  June 30, 1995            -     $       -           -     $      -            -   $        -     $        -

 Stockholder loans
  contributed to capital            -             -           -            -            -            -              -

Net loss for the period             -             -           -            -            -            -              -
                            ---------    ----------     -------    ---------   ----------   ----------     ----------

Balances, June 30, 1996             -             -           -            -            -            -              -

 Stockholder loans
  contributed to capital            -             -           -            -            -            -              -

 Exchange of common
   stock for preferred
   stock by principal
   stockholder                      -             -           -            -            -            -              -

 Issuance of
   preferred stock,
   net of issuance costs            -             -           -            -            -            -              -

 Net loss for the period            -             -           -            -            -            -              -

 Reclassification of
  accumulated deficit
  to additional paid in
  capital due to
  change from
  S corporation to
  C corporation                     -             -           -            -            -            -              -
                            ---------    ----------     --------   ---------   ----------   ----------     ----------

Balances, June 30, 1997             -             -           -            -            -            -              -

 Issuance of
  preferred stock,
  net of issuance costs             -             -            -           -            -            -              -

 Stockholder loans
  converted to
  preferred stock                   -             -            -           -            -            -              -

 Redeemable common
  stock issued                      -             -            -           -      454,170      236,168       (236,168)

 Compensation expense
  related to common
  stock vesting                     -             -            -           -            -            -              -

 Net loss for the
  period                            -             -            -           -            -            -              -
                            ---------    ----------     --------   ---------   ----------   ----------     ----------

Balances, June 30, 1998             -             -            -           -      454,170      236,168       (236,168)

 Issuance of common
  stock                             -             -            -           -            -            -              -

 Compensation expense
  related to common
  stock grants                      -             -            -           -            -            -              -

 Issuance of
  preferred stock,
  net of issuance
  costs                             -             -       17,575   1,982,535            -            -              -

 Conversion of
  nonredeemable
  convertible Series A
  preferred stock to
  redeemable                   89,612    10,215,768            -           -            -            -              -

 Net loss for the
  period                            -             -            -           -            -            -              -
                            ---------    ----------     --------   ---------   ----------   ----------     ----------

Balances, December 31,
 1998                          89,612    10,215,768       17,575   1,982,535      454,170      236,168       (236,168)

 Conversion of Series A
  and Series B
  preferred
  stock to common
  stock (Note 12)
  (Unaudited)                 (89,612)  (10,215,768)     (17,575) (1,982,535)           -            -              -

Issuance and
  conversion of
  promissory note to
  Series B preferred
  stock and
  conversion of
  Series B
  preferred stock to
  common stock
  including finance
  charge for
  beneficial
  conversion feature
  on the
  promissory note of
  $2,656,000 (Note
  12) (Unaudited)                   -             -            -           -            -            -              -

Forgiveness of note
  receivable for
  redeemable
  common stock,
  reclassification of
  redeemable
  common stock to
  common stock,
  cancellation of the
  put right associated
  with such shares and
  reacquisition of
  forfeited shares
  and associated
  compensation charge
  of $1,782,000 (Note
  12) (Unaudited)                   -             -            -           -     (454,170)    (236,168)       236,168

Initial public
  offering of common
  stock (Note 12)
  (Unaudited)                       -             -            -           -            -            -              -
                            ---------    ----------      -------    --------   ----------   ----------     ----------
Balances, December 31,
  1998 (pro forma)
  (Note 12) (Unaudited)             -    $        -      $     -    $      -            -   $        -     $        -
                            ---------    ----------      -------    --------   ----------   ----------     ----------

</TABLE>
<TABLE>
<CAPTION>

                                                                                                    Unamortized
                               Convertible Series A                                   Additional       Stock
                                 Preferred Stock              Common Stock              Paid in    Compensation   Accumulated
                               Shares       Amount         Shares        Amount        Capital       Expense        Deficit

<S>                         <C>          <C>             <C>          <C>           <C>           <C>          <C>
Balances,  June 30, 1995            -       $       -     5,000,000    $   50,000     $   275,000     $       -   $(1,420,537)

 Stockholder loans
  contributed to capital            -               -             -             -         260,000             -             -

Net loss for the period             -               -             -             -               -             -      (672,440)
                            ---------      -----------    ---------    ----------     -----------     ---------   -----------

Balances, June 30, 1996             -               -     5,000,000        50,000         535,000             -    (2,092,977)

 Stockholder loans
  contributed to capital            -               -             -             -       1,536,922             -             -

 Exchange of common
   stock for preferred
   stock by principal
   stockholder                 23,076       1,499,940    (1,153,800)      (11,538)     (1,488,402)            -             -

 Issuance of
   preferred stock,
   net of issuance costs       30,770       1,962,168             -             -               -             -             -

 Net loss for the period            -               -             -             -               -             -      (955,620)

 Reclassification of
  accumulated deficit
  to additional paid in
  capital due to
  change from
  S corporation to
  C corporation                     -               -             -             -        (583,520)            -       583,520
                            ---------      ----------   -----------   -----------     -----------     ---------   -----------

Balances, June 30, 1997        53,846       3,462,108     3,846,200        38,462               -             -    (2,465,077)

 Issuance of
  preferred stock,
  net of issuance costs        28,074       1,815,519             -             -               -             -             -

 Stockholder loans
  converted to
  preferred stock               7,692         500,000             -             -               -             -             -

 Redeemable common
  stock issued                      -               -             -             -         354,253      (354,253)            -

 Compensation expense
  related to common
  stock vesting                     -               -             -             -               -        88,563             -

 Net loss for the
  period                            -               -             -             -               -             -    (2,782,493)
                            ---------      ----------   -----------   -----------     -----------     ---------   -----------

Balances, June 30, 1998        89,612       5,777,627     3,846,200        38,462         354,253      (265,690)   (5,247,570)

 Issuance of common
  stock                             -               -       207,000         2,070         266,930      (269,000)            -

 Compensation expense
  related to common
  stock grants                      -               -             -             -         415,000       254,000             -

 Issuance of
  preferred stock,
  net of issuance
  costs                             -               -             -             -               -             -             -

 Conversion of
  nonredeemable
  convertible Series A
  preferred stock to
  redeemable                  (89,612)     (5,777,627)            -             -      (1,036,183)            -    (3,401,958)

 Net loss for the
  period                            -               -             -             -               -             -    (2,095,218)
                            ---------      ----------   -----------   -----------     -----------     ---------   -----------

Balances, December 31,
 1998                               -               -     4,053,200        40,532               -      (280,690)  (10,744,746)

 Conversion of Series A
  and Series B
  preferred
  stock to common
  stock (Note 12)
  (Unaudited)                       -               -     5,359,350        53,593      12,144,710             -             -

Issuance and
  conversion of
  promissory note to
  Series B preferred
  stock and
  conversion of
  Series B
  preferred stock to
  common stock
  including finance
  charge for
  beneficial
  conversion feature
  on the
  promissory note of
  $2,656,000 (Note
  12) (Unaudited)                   -               -       339,200         3,392       3,659,608             -    (2,663,000)

Forgiveness of note
  receivable for
  redeemable
  common stock,
  reclassification of
  redeemable
  common stock to
  common stock,
  cancellation of the
  put right associated
  with such shares and
  reacquisition of
  forfeited shares
  and associated
  compensation charge
  of $1,782,000 (Note
  12) (Unaudited)                   -               -       189,238         1,893       1,880,107       220,690    (2,102,690)

Initial public
  offering of common
  stock (Note 12)
  (Unaudited)                       -               -     3,500,000        35,000      41,412,000             -             -
                            ---------      ----------   -----------   -----------     -----------     ---------   -----------
Balances, December 31,
  1998 (pro forma)
  (Note 12) (Unaudited)             -      $        -    13,440,988   $   134,410     $59,096,425     $ (60,000) $(15,510,436)
                            ---------      ----------   -----------   -----------     -----------     ---------   -----------

</TABLE>
<TABLE>
<CAPTION>

                                  Total
                               Stockholders'
                                 Equity
                                (Deficit)
                             ---------------
<S>                          <C>
Balances,  June 30, 1995     $  (1,095,537)

 Stockholder loans
  contributed to capital           260,000

Net loss for the period           (672,440)
                              ------------

Balances, June 30, 1996         (1,507,977)

 Stockholder loans
  contributed to capital         1,536,922

 Exchange of common
   stock for preferred
   stock by principal
   stockholder                           -

 Issuance of
   preferred stock,
   net of issuance costs         1,962,168

 Net loss for the period          (955,620)

 Reclassification of
  accumulated deficit
  to additional paid in
  capital due to
  change from
  S corporation to
  C corporation                          -
                              ------------

Balances, June 30, 1997          1,035,493

 Issuance of
  preferred stock,
  net of issuance costs          1,815,519

 Stockholder loans
  converted to
  preferred stock                  500,000

 Redeemable common
  stock issued                           -

 Compensation expense
  related to common
  stock vesting                     88,563

 Net loss for the
  period                        (2,782,493)
                              ------------

Balances, June 30, 1998            657,082

 Issuance of common
  stock                                  -

 Compensation expense
  related to common
  stock grants                     669,000

 Issuance of
  preferred stock,
  net of issuance
  costs                                  -

 Conversion of
  nonredeemable
  convertible Series A
  preferred stock to
  redeemable                   (10,215,768)

 Net loss for the
  period                        (2,095,218)
                              ------------

Balances, December 31,
 1998                          (10,984,904)

 Conversion of Series
  A and Series B
  preferred
  stock to common
  stock (Note 12)
  (Unaudited)                   12,198,303

Issuance and
  conversion of
  promissory note to
  Series B preferred
  stock and
  conversion of
  Series B
  preferred stock to
  common stock
  including finance
  charge for
  beneficial
  conversion feature
  on the
  promissory note of
  $2,656,000 (Note
  12) (Unaudited)                1,000,000

Forgiveness of note
  receivable for
  redeemable
  common stock,
  reclassification of
  redeemable
  common stock to
  common stock,
  cancellation of the
  put right associated
  with such shares and
  reacquisition of
  forfeited shares
  and associated
  compensation charge
  of $1,782,000 (Note
  12) (Unaudited)                        -

Initial public
  offering of common
  stock (Note 12)
  (Unaudited)                   41,447,000
                              ------------
Balances, December 31,
  1998 (pro forma)
  (Note 12) (Unaudited)       $ 43,660,399
                              ============
 </TABLE>
See accompanying notes to financial statements.

                             -27-
<PAGE>

<TABLE>
<CAPTION>

Intelligent Life Corporation
Statements of Cash Flows



                                                                                                             Six months ended
                                                                      Year ended June 30,                       December 31,
                                                              1996           1997           1998            1997           1998
                                                           ---------     ----------     -----------      ----------     ----------
                                                                                                         (Unaudited)

<S>                                                     <C>            <C>            <C>             <C>            <C>
Cash flows from operating activities:
 Net loss                                                  $ (672,440)    $ (955,620)    $(2,782,493)   $  (904,115)    $(2,095,218)
 Adjustments to reconcile net loss to net cash
   used in operating activities:
   Depreciation and amortization                               97,669         73,754          66,666         41,578          98,491
   Noncash stock compensation                                       -              -          88,563              -         669,000
   Changes in operating assets and liabilities:
     Increase in accounts receivable                          (98,062)      (109,793)        (42,451)        (5,228)       (216,021)
     (Increase) decrease in other current assets                2,401          7,480         (22,305)          (255)        (84,375)
     Increase (decrease) in accounts payable                  163,640         59,238        (168,214)      (272,167)        102,876
     Increase in accrued expenses                              70,618        218,705         118,932         49,062         181,554
     Increase (decrease) in deferred revenue                   90,747       (127,480)        (19,415)      (120,199)        136,540
                                                           ----------     ----------     -----------    -----------     -----------
       Total adjustments                                      327,013        121,904          21,776       (307,209)        888,065
                                                           ----------     ----------     -----------    -----------     -----------
       Net cash used in operating activities                 (345,427)      (833,716)     (2,760,717)    (1,211,324)     (1,207,153)
                                                           ----------     ----------     -----------    -----------     -----------
   Cash flows used in investing activities:
     Purchases of equipment                                   (39,643)       (90,501)       (407,203)      (276,575)        (26,875)
                                                           ----------     ----------     -----------    -----------     -----------
       Net cash used in investing activities                  (39,643)       (90,501)       (407,203)      (276,575)        (26,875)
                                                           ----------     ----------     -----------    -----------     -----------
   Cash flows from financing activities:
     Loans from stockholders                                  385,070        687,000         500,000         15,743               -
     Principal payments on capital lease obligations                -              -               -              -         (25,834)
     Proceeds from issuance of preferred stock                      -      2,000,045       1,815,519        822,665       1,982,535
                                                           ----------     ----------     -----------    -----------     -----------
       Net cash provided by financing activities              385,070      2,687,045       2,315,519        838,408       1,956,701
                                                           ----------     ----------     -----------    -----------     -----------

       Net increase (decrease) in cash and cash
         equivalents                                                -      1,762,828        (852,401)      (649,491)        722,673
   Cash and equivalents, beginning of period                        -              -       1,762,828      1,762,828         910,427
                                                           ----------     ----------     -----------    -----------     -----------
   Cash and equivalents, end of period                     $        -     $1,762,828     $   910,427    $ 1,113,337     $ 1,633,100
                                                           ==========     ==========     ===========    ===========     ===========

   Supplemental disclosures of cash flow information:
     Cash paid during the period for interest              $   25,600     $  113,200     $     6,216    $         -     $    12,433
                                                           ==========     ==========     ===========    ===========     ===========
   Supplemental schedule of noncash investing and
      financing activities:
     Accounts payable related to recapitalization
       and issuance of stock                               $        -     $   37,877     $         -    $         -     $         -
                                                           ==========     ==========     ===========    ===========     ===========
     Stockholder loans contributed to capital for
       preferred stock                                     $  260,000     $1,536,922     $   500,000    $         -     $         -
                                                           ==========     ==========     ===========    ===========     ===========
     Equipment acquired under capital leases               $        -     $        -     $    18,000    $         -     $   380,000
                                                           ==========     ==========     ===========    ===========     ===========

</TABLE>

  See accompanying notes to financial statements.

                                     -28-


<PAGE>

INTELLIGENT LIFE CORPORATION
NOTES TO FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

        The Company

     Intelligent Life Corporation (the "Company") is one of the leading
publishers of personal finance content on the Internet. The Company's six web
sites include bankrate.com, the web's most complete source for banking, credit
and interest rate information, theWhiz.com which provides personal financial
content for those new to the topic and Consejero.com, a Spanish-language site
focusing on personal finance and investing topics. The Company is organized
under the laws of the state of Florida.  Under the provision of the Internal
Revenue Code of 1986, as amended, the Company elected to be taxed as an S
Corporation.  On June 19, 1997, the Company ceased to be an S Corporation and
became a C corporation for income tax purposes.

     Basis of Presentation

     On May 13, 1999 the Company completed an initial public offering ("IPO") of
3,500,000 shares of the Company's common stock resulting in net proceeds of
approximately $41.1 million. Upon closing of the IPO, both classes of
outstanding redeemable convertible preferred stock converted to common stock at
50 shares of common stock for each share of redeemable convertible preferred
stock. Additionally, upon the effective date of the IPO, the Company's articles
of incorporation were further amended and restated to among other matters,
designate 10 million shares of preferred stock with respect to which the Board
will have the authority to designate rights and privileges.

     The unaudited financial statements of the Company for the six-month period
ended December 31, 1997 included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. In the opinion of management, the accompanying unaudited
financial statements for the six-month period ended December 31, 1997 reflect
all adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the results of its operations and its cash flows for the six-
month period ended December 31, 1997.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent gains and losses at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

        Cash and Cash Equivalents

     The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. The cost of
these investments approximates fair value.

        Fixed Assets

     Property and equipment are stated at cost and are depreciated on a
straight-line basis over the estimated useful lives of the assets which range
from three to seven years. Leasehold improvements are amortized on a straight-
line basis over the shorter of the lease term (if the Company does not retain
ownership of the property or has a bargain purchase option) or the estimated
useful lives of the improvements. Equipment under capital leases are stated at
the present value of the future minimum lease payments.
<PAGE>

     Intangible Assets

  Intangible assets consist primarily of trademarks. The cost of the trademarks
is being amortized over the estimated useful lives, which is approximately five
years, on a straight-line basis.

     Basic and Diluted Net Loss Per Share

  The Company computes net loss per share in accordance with the provisions of
Statement of Financial Standards No. 128, "Earnings per Share" ("FAS 128") and
Staff Accounting Bulletin No. 98 ("SAB 98"). Under FAS 128 and SAB 98, basic and
diluted net loss per share is computed by dividing the net loss available to
common stockholders for the period by the weighted average number of common
shares outstanding for the period. The calculation of diluted net loss per share
excludes common stock equivalents, consisting of outstanding stock options,
redeemable common stock and convertible preferred stock, as the effect of their
conversion to common stock would be antidilutive.

  Common stock equivalents that could potentially dilute basic earnings per
share in the future that were not included in diluted earnings per share because
their effect on periods presented was antidilutive total 5,693,155 at December
31, 1998.

     Stock-Based Compensation

  The Company accounts for stock-based compensation arrangements in accordance
with the provisions of Accounting Principles Board Opinion No. 25 ("APB 25"),
"Accounting for Stock Issued to Employees", and complies with the disclosure
requirements of Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation". Under APB 25, compensation cost, if any, for
fixed plan accounting, is recognized over the respective vesting period based on
the difference, on the grant date, between the fair value of the Company's
common stock and the grant price.

     Income Taxes

  Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.

     Revenue Recognition

  The Company generates revenue from two primary sources: online publishing, and
print publishing and licensing.

  The Company sells advertisements for its various Internet sites (including co-
branded sites) including banner and billboard advertisements. Advertising sales
are invoiced monthly based on the expected number of advertisement "impressions"
or the number of times the advertisement is viewed by users of the Company's
Internet sites. Revenue is recognized monthly based on the percentage of actual
impressions to the total number of impressions contracted. Revenue for
impressions invoiced but not delivered is deferred. The Company sells hyperlinks
to various third-party Internet sites that generate a fixed monthly fee, which
is recognized in the month earned. The Company is also involved in revenue
sharing arrangements with its online "partners" where the consumer uses
hyperlinks to link to co-branded sites principally hosted by the Company.
Revenue is effectively allocated to each partner based on the percentage of
advertisement views at each site. The allocated revenue is shared according to
the distribution agreements. Revenue is recorded gross and partnership payments
are recorded in cost of operations.
<PAGE>

  The Company sells advertisements for consumer mortgage rate tables. The rate
tables and advertising are published in various newspapers under revenue sharing
arrangements. Revenue is recognized when the tables are run in the respective
newspaper. Revenue is recorded gross and revenue sharing payments are recorded
in cost of operations. In addition, the Company earns subscription revenue from
the three newsletters. Revenue is recognized ratably over the period of the
subscription, which is generally up to one year. The Company also earns print
revenue through other means including licensing rate tables for insertion into
newspapers and by providing product rates and yields to financial institutions
for publication. Revenue is recognized ratably over the contract period.

  Barter transactions are recorded at the lower of estimated fair value of the
goods or services received or the estimated fair value of the advertisements
given. To date, barter transaction have been immaterial.

     Marketing

   includes advertising costs, which are charged to expense as
incurred.

     Recent Accounting Pronouncements

  In June 1997, Statement of Financial Accounting Standards No. 130 ("FAS 130"),
"Reporting Comprehensive Income", was issued and was adopted by the Company as
of July 1, 1998. FAS 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. This statement requires that an enterprise (a) classify
items of other comprehensive income by their nature in financial statements and
(b) display the accumulated balance of other comprehensive income separately
from accumulated deficit and additional paid in capital in the equity section of
statements of financial position. Comprehensive income is defined as the change
in equity during the financial reporting period of a business enterprise
resulting from non-owner sources. Comprehensive income approximates the net loss
for all periods presented.

  In June 1997, Statement of Financial Accounting Standards No. 131 ("FAS 131"),
"Disclosures About Segments of an Enterprise with Related Information" was
issued. FAS 131 established standards for the way public business enterprises
report information about operating segments in annual financial statements and
requires those enterprises to report selected information about operating
segments in interim financial reports issued to stockholders. FAS 131 is
effective for financial statements for fiscal years beginning after December 31,
1997. The Company has adopted FAS 131 as of January 1, 1998.

  In June 1998, Statement of Financial Accounting Standards No. 133 ("FAS 133"),
"Accounting for Derivative Instruments and Hedging Activities" was issued. FAS
133 establishes accounting and reporting standards for derivative instruments,
including derivative instruments embedded in other contracts, and for hedging
activities. FAS 133 is effective for all fiscal years beginning after June 15,
1999. This statement does not currently apply to the Company as the Company
currently does not have any derivative instruments or hedging activities.

NOTE 3 - CAPITALIZATION

     Stock Splits

  In June 1997 and August 1997, the Company authorized and executed a 100-for-1
and a 10-for-1 stock split, respectively. Additionally, on April 9, 1999, the
Company authorized and executed a 5 to 1 stock split, effected as a stock
dividend, of each issued and outstanding share of common stock. The information
in the accompanying financial statements has been retroactively restated to
reflect the effects of these stock splits and dividend.
<PAGE>

     Authorized Shares

  In April 1999, the Company amended and restated its certificate of
incorporation. As a result, the total number of shares which the Company is
authorized to issue is 100,120,000: 100,000,000 of these shares are Common
stock, each having a par value of :.01; and 120,000 shares are Preferred stock,
each having a par value of $.01, of which 90,000 shares are Series A Convertible
Preferred stock and 30,000 are Series B Convertible Preferred stock.

     Common Stock and Convertible Preferred Stock

  In 1996 and 1997, a director and then sole stockholder, Peter C. Morse
("Morse"), contributed loans due to him to additional paid in capital in the
aggregate amounts of $260,000 and $1,536,922, respectively.

  In June 1997, the Company and certain investors entered into a Series A
Preferred Stock Purchase Agreement ("the Agreement"). The Series A Preferred
Stock is voting, non-cumulative and preferred as to the first $4.55 per share
per year of funds legally available and declared by the Board of Directors, has
a liquidation preference above common stockholders of $65.00 per share, each
share is convertible into 50 shares of common stock at a conversion price of
$1.30, and has other rights and preferences. Pursuant to the Agreement,
investors acquired 30,770 shares of Series A Preferred Stock at $65.00 per
share. During 1997, Morse exchanged 1,153,800 shares of common stock for 23,076
shares of Series A preferred.

  In August and September 1997, 11,538 shares of Series A Preferred Stock were
issued at $65.00 per share, resulting in net proceeds to the Company of
$740,709.

  In October 1997, an additional 1,154 shares of Series A Preferred Stock were
issued at $65.00 per share, resulting in net proceeds to the Company of $75,000.
Investors agreed to acquire 23,074 shares of Series A Preferred Stock at $65.00
per share, resulting in net proceeds to the Company of $1,499,810. This purchase
included the contribution of loans due to Morse in the amount of $200,000 and
the contribution of $300,000 in loans due to other investors for an aggregate of
7,692 shares of Series A Preferred Stock.

  On November 24, 1998, the Series A Preferred Stock was converted from non-
redeemable Preferred Stock to redeemable Preferred Stock. This transaction was
treated as an extinguishment and the new instrument was recorded at fair value
on the conversion date. The difference between the fair value on the conversion
date and the carrying value was charged to equity.

  In November 1998, the Company and certain investors entered into a Series B
Preferred Stock Purchase Agreement. Pursuant to this agreement, 17,575 shares of
Series B Preferred Stock were issued at $113.80 per share, resulting in net
proceeds to the Company of $1,982,535. The Series B Preferred Stock is voting,
non-cumulative and preferred as to the first $8.00 per share per year out of
funds legally available and declared by the Board of Directors, has liquidation
preferences over the Series A Preferred and common stockholders of $113.80 per
share, each share is convertible into 50 shares of common stock at a conversion
price of $2.28, and has other rights and preferences.

  The redemption clause of the Series A and Series B Preferred Stock allows the
holders of 20% or more of the aggregate number of shares of common stock
issuable upon conversion of the Series A and Series B Preferred then outstanding
to redeem their shares on or after January 2, 2003, provided that the maximum
number of shares of Series A and Series B Preferred which the Company is
obligated to redeem does not exceed the aggregate of 35,729 shares prior to
January 3, 2004 and 71,458 shares prior to January 3, 2005, and thereafter the
Company is obligated to redeem all such shares outstanding as to which such
right has been exercised. The redemption price is equal to the greatest of (as
defined in the respective agreement) (x) the Series A liquidation preference or
Series B liquidation preference, applicable to such shares or (y) the fair
market value of such shares or (z) an amount per share  of Series A or Series B
Preferred equal to ten (10) times the net after tax earnings per share for the
most recently completed fiscal of the Company times the number of shares of
common stock issuable upon the conversion of one (1) share of Series A or Series
<PAGE>

B Preferred and the conversion price then  in effect. The Company is recording
accretion on the Series A and Series B Preferred Stock equal to the difference
between the net proceeds received and the redemption amount of approximately
$14,500,000 based on the estimated fair value at December 31, 1998 using the
interest method from the conversion date  for the Series A Preferred and
original issue date for the Series B Preferred through the final redemption date
of January 3, 2005. The accretion for the Series A and Series B Preferred for
the one month through December 31, 1998 is not significant and was not recorded.

     Restricted Stock Grants

  Effective August 1998, the Company entered into a Restricted Stock Grant
Agreement (the "Stock Agreement") with an employee of the Company (the
"Grantee") that provides for the issuance of restricted stock to the Grantee in
accordance with the 1997 Equity Compensation Plan (discussed in Note 4) in
satisfaction of certain obligations as described in an employment agreement
between the Company and the Grantee. The Company issued 207,000 shares of its
common stock to the Grantee in August 1998, subject to the restrictions set
forth in the Stock Agreement. Restrictions lapsed on 138,000 shares during the
six-month period ended December 31, 1998 and the remainder will lapse in 1999.
Total compensation expense to be recognized by the Company over the vesting
period amounts to $269,000 (based on estimated values from other transactions
involving sales of the Company's stock) of which $209,000 was recognized during
the six-month period ended December 31, 1998.

  In March 1998, the Company entered into a Restricted Stock Grant Agreement
(the "Grant Agreement") with an Officer of the Company (the "Officer") that
provides for the issuance of restricted stock to the Officer in accordance with
the 1997 Equity Compensation Plan (discussed in Note 4). On March 23, 1998, the
Company issued 454,170 shares of its common stock to the Officer for an
aggregate consideration of $236,168, which amount was paid by an interest-
bearing promissory note from the Officer. The Officer has a put right which
requires the Company to repurchase his shares at the same price he paid for the
shares including interest. Restrictions lapse as follows: 113,540 shares on July
1, 1998, and 9,460 shares on the first day of each month starting August 1, 1998
and ending July 1, 2001. In accordance with Emerging Issues Task Force 95-16,
this arrangement is being accounted for as a variable plan which requires
increases or decreases in stock based compensation expense based on increases or
decreases in the fair market value of the Company's common stock. Compensation
expense recognized during 1998 in accordance with FASB Interpretation No. 28
approximated $88,000 and $460,000 for the six-month period ended December 31,
1998 based on estimated values from other transactions involving sales of the
Company's stock.

NOTE 4 - STOCK OPTION PLAN

  During 1997, the Company adopted the 1997 Equity Compensation Plan (the
"Plan") to provide directors, officers, non-employee members of the Board of
Directors of the Company and certain consultants and advisors with the
opportunity to receive grants of incentive stock options, non-qualified stock
options and restricted stock. The Board of Directors has the sole authority to
determine who receives such grants, the type, size and timing of such grants,
and specify the terms of any noncompetition or other agreements relating to the
grants. The aggregate number of shares that may be issued under the Plan is
900,000; 46,550 shares are available for grant as of December 31,1998.

  The exercise price of any option grant shall be determined by the Board of
Directors and may be equal to, greater than, or less than the fair market value
of the stock on the grant date. Provided, however, that the exercise price shall
be equal to or greater than the fair market value of the stock on the date of
grant and an option may not be granted to an employee who at the time of the
grant owns more than 10 % of the total combined voting power of all classes of
stock of the Company, unless the exercise price is not less than 110 % of the
fair market value of the stock on the date of the grant.

  The per share weighted average fair value of stock options granted during the
year ended June 30, 1998 was approximately $.40 and for the six-month period
ended December 31, 1998 was between $.40 and $1.30 on the date of grant using
the Black-Scholes option pricing model (excluding a volatility
<PAGE>

assumption) with the following weighted average assumptions: expected dividend
yield of 0 %, risk-free interest rates of 4.76% to 5.67%, and expected lives of
5.5 years and 6 years.

  The Company applies APB Opinion No. 25 in accounting for its Plan. Had the
Company determined compensation cost based on the fair value at the grant date
for its stock options under FAS No. 123, the Company's net loss would have
increased to the pro forma amount indicated below:

<TABLE>
<CAPTION>
                                                                           Year Ended              Six Months Ended
                                                                  June 30, 1997    June 30, 1998   December 31, 1998
                                                                  --------------  ---------------  -----------------
<S>                                                               <C>             <C>              <C>
Net loss applicable to common stock
      As reported                                                 $     (955,620) $    (2,782,493) $      (6,533,359)
      Pro forma                                                   $     (955,620) $    (2,792,493) $      (6,548,359)
      Basic net loss per common share-as reported                 $        (0.20) $         (0.72) $           (1.63)
      Basic net loss per common share-pro forma                   $        (0.20) $         (0.73) $           (1.63)
</TABLE>


  Stock option activity during the years ended June 30, 1997 and 1998 and the
six-month period ended December 31, 1998 is as follows:

<TABLE>
<CAPTION>
                                        Number
                                          of            Weighted average
                                        Shares           exercise price
                                     ------------      ------------------
<S>                                  <C>               <C>
Balances, June 30, 1996
      Granted                                   -                       -
      Exercised                                 -                       -
      Forfeited                                 -                       -
      Expired                                   -                       -
Balances, June 30, 1997                         -                       -
      Granted                              89,530                   $1.30
      Exercised                                 -                       -
      Forfeited                                 -                       -
      Expired                                   -                       -
Balances, June 30, 1998                    89,530                   $1.30
      Granted                             102,750                   $1.30
      Exercised                                 -                       -
      Forfeited                                 -                       -
      Expired                                   -                       -
Balances, December 31, 1998               192,280                   $1.30
</TABLE>


  At December 31, 1998, the exercise price and weighted average remaining
contractual life of outstanding options was $1.30 and 9.6 years, respectively.

  At December 31, 1998, there were no options exercisable.

  The above table does not include the 661,170 shares of restricted stock issued
under the Plan discussed in Note 3 to the financial statements.
<PAGE>

NOTE 5 - FINANCIAL STATEMENT DETAILS

  Furniture, fixtures and equipment consists of the following:

<TABLE>
<CAPTION>
                                                                              Year Ended           Six Months Ended
                                                                    June 30, 1997  June 30, 1998   December 31, 1998
                                                                    -------------  -------------   -----------------
<S>                                                                 <C>            <C>             <C>
Furniture and fixtures                                              $      80,138  $     157,519   $         159,674
Computers and software, including assets under
  capital leases of $0, $0 and $379,887 respectively                      229,672        469,669             872,163
Equipment including assets under capital leases of
  $0, $17,950 and $17,950 respectively                                     11,882        106,735             108,417
Leasehold improvements                                                      1,596         12,879              12,879
                                                                    -------------  -------------   -----------------
                                                                          323,288        746,802           1,153,133
Less: accumulated depreciation and amortization,
  including amounts related to assets under capital
  Leases of $0, $496 and $31,194, respectively                           (180,798)      (241,527)           (339,474)
                                                                    -------------  -------------   -----------------
                                                                    $     142,490  $     505,275   $         813,659
                                                                    =============  =============   =================


Accrued expenses consists of the following:
                                                                              Year Ended           Six Months Ended
                                                                    June 30, 1997  June 30, 1998   December 31, 1998
                                                                    -------------  -------------   -----------------

Vacation                                                             $     15,070  $      72,523   $         129,050
Partner payments                                                            9,560         75,987              71,068
Commissions                                                               130,404        143,123             135,909
Payroll and related costs                                                  67,693         43,074              87,465
Other                                                                      64,999         71,951             164,720
                                                                    -------------  -------------   -----------------
                                                                    $     287,726  $     406,658   $         588,212
                                                                    =============  =============   =================
</TABLE>


NOTE 6 - RELATED PARTY TRANSACTIONS

  As a Director and majority stockholder, Morse is a related party. The Company
leases offices in South Florida from Bombay Holdings, Inc. ("Bombay") which is
wholly owned by Morse. Total rent paid to Bombay for the years ended June 30,
1997 and 1998 and the six-month period ended December 31, 1998 was $85,591,
$164,552 and $99,192, respectively. (see Note 9).

  During the six-month period ended December 31, 1998, the Company entered into
an additional lease with Bombay totaling $101,000 to be paid over a 19-month
period.

  Morse has from time to time advanced capital to the Company. Such loans for
the years ended June 30, 1997 and 1998 and for the six-month period ended
December 31, 1998 amounted to $687,000, $200,000 and $0, respectively. Interest
rates for the loans were 6.5% - 7%. During 1996 and 1997, certain stockholder
loans were contributed to capital (see Note 3).

  Morse Partners, Ltd., a partnership controlled by Morse advanced the Company
$138,750 for the year ended June 30, 1997. The amount has subsequently been
repaid.
<PAGE>

NOTE 7 - SALE OF PUBLICATION

  In December 1998, the Company sold substantially all of the assets, including
the intellectual property of one of its newsletters, Bank Advertising News. The
newsletter was sold for $125,000 in cash and  assumed liabilities of
approximately $80,000. The gain on the sale was $185,588, net of $16,524 of
selling expenses, and has been recorded in other income.

  Revenue for Bank Advertising News for the year ended June 30, 1998 and for the
six-month period ended December 31, 1998 was $178,270 and $82,953, respectively.
Cost of operations for Bank Advertising News for the year ended June 30, 1998
and for the six-month period ended December 31, 1998 was $57,445 and $53,138,
respectively. Net assets (liabilities) of Bank Advertising News at June 30, 1998
and date of sale were approximately $(120,000) and $(80,000), respectively.

NOTE 8 - INCOME TAXES

  The Company did not record any income tax expense during the years ended June
30, 1996 and 1997 because it was operating as an S Corporation. Further there
was no pro forma provision for income taxes for those years because the Company
reported operating losses.

  The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities at June 30, 1997 and 1998,
and December 31, 1998 are presented below.

<TABLE>
<CAPTION>
                                                                            Year Ended              Six Months Ended
                                                                   June 30, 1997   June 30, 1998    December 31, 1998
                                                                   -------------   -------------    -----------------
<S>                                                                <C>             <C>              <C>
Deferred tax assets:
  Net operating loss carryforward                                  $       9,811   $   1,196,975    $       1,983,228
  Intangible assets                                                      127,667         143,438              143,438
  Allowance for doubtful accounts                                              -           9,011                9,350
                                                                   -------------   -------------    -----------------
          Total gross deferred tax assets                                137,478       1,349,424            2,136,016
  Less valuation allowance                                              (137,478)     (1,349,424)          (2,136,016)
                                                                   -------------   -------------    -----------------
  Net deferred tax assets                                          $           -   $           -    $               -
     deferred                                                      =============   =============    =================
     tax assets
</TABLE>

     The valuation allowance for deferred tax assets as of June 30, 1997 and
1998, and at December 31, 1998 was $137,478, $1,349,424 and $2,136,016,
respectively. The net change in the total valuation allowance for the years
ended June 30, 1997 and 1998, and the six-month period ended December 31, 1998
was an increase of $137,478, $1,211,946 and $786,592, respectively. In assessing
the realizability of deferred tax assets, management considers whether it is
more likely than not that some portion or all of the deferred tax assets will
not be realized. The ultimate realization is dependent upon the generation of
future taxable income during the periods in which those temporary differences
become deductible. Management considers the scheduled reversal of deferred
income tax liabilities, projected future taxable income and tax planning
strategies in making this assessment.

     An increase in the valuation allowance offset the deferred tax asset caused
by net operating losses which are not currently usuable. This increase is the
principal difference between the expected amounts of tax benefits computed by
applying the statutory federal income tax rate to the Company's loss before
income taxes for the year ended June 30, 1998 and the six-month period ended
December 31, 1998. The Company recorded no tax benefit for these periods.

     At December 31, 1998, the Company had net operating loss carryforwards of
approximately $5,300,000 which expire beginning in 2012 through 2018. The amount
of net operating loss carryforwards may be limited if the Company has an
ownership change. In the event of an ownership change, the amount of taxable
income of a loss corporation for any postchange year which may be offset by
prechange losses shall not exceed the Internal Revenue Code Section 382
limitation for such year. Generally, an ownership change occurs if a 5%
stockholder or any equity structure shift increases the percentage of the stock
of the
<PAGE>

loss corporation owned by more than 50 percentage points over the lowest
percentage of stock of the loss corporation owned by such stockholders at any
time during a three-year look back testing period. The Section 382 limitation is
equal to the value of the old loss corporation (before the ownership change)
multiplied by the Federal long-term tax-exempt rate.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

     Leases

  Bombay is wholly owned by Morse. The Company leases office space from Bombay
under the terms of a lease agreement dated May 1, 1994 and amendments dated
September 1, 1997 and January 1, 1998. The lease includes renewal options for a
period of three years and requires the Company to pay a percentage of the common
maintenance charges. The lease payments are subject to an annual increase based
on the consumer price index of the Fort Lauderdale/Miami region. Offices in New
York and California are month-to-month leases.

  Total rent expense amounted to $85,591 and $164,552 for the years ended June
30, 1997 and 1998, and $109,872 for the six-month period ended December 31,
1998.

  Future minimum lease payment s under non-cancelable operating leases and
future minimum capital lease payments as of December 31, 1998 were:

<TABLE>
(CAPTION>
                                                                                     Operating       Capital
             Year ending December 31                                                   Leases         Leases
                                                                                    ------------  -------------
<S>                                                                                 <C>           <C>
1999                                                                                $    304,440  $    173,754
2000                                                                                     222,355       156,564
2001                                                                                      53,154       124,521
2002                                                                                       9,048         3,258
2003                                                                                           -             -
Thereafter                                                                                     -             -
                                                                                        --------  ------------
Total minimum lease payments                                                            $588,997       458,097
                                                                                        ========

Less amount representing interest at rates
  ranging from 7.6% to 22%                                                                             (81,683)
                                                                                                  ------------
Present value of net minimum capital lease payments                                                    376,414
Less current installments of obligations under current leases                                         (113,405)
                                                                                                  ------------
Obligations under capital leases, excluding current installments                                  $    263,009
                                                                                                 =============
</TABLE>

     Distribution Agreements

  The Company has various agreements with advertisers, content providers and
other web sites that require it to feature such parties exclusively in certain
sections of its Internet sites.

     Legal Proceedings

  The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's financial position, results of operations or liquidity.

NOTE 10 - SEGMENT INFORMATION

     The Company operates in two reportable business segments: online publishing
and print publishing and licensing. The online publishing segment is primarily
engaged in the sale of advertising, sponsorships and hyperlinks in connection
with our Internet web sites bankrate.com, theWhiz.com, Consejero.com and
CPNet.com. The print publishing and licensing segment is primarily engaged in
the sale of advertising in the Consumer Mortgage Guide rate tables, newsletter
subscriptions and licensing to research information. We also charge a commission
for the placement of the Consumer Mortgage Guide in a print publication. The
accounting policies of the segments are the same as those described in the
summary of significant accounting policies in Note 2.

     Although no one customer accounted for more than 10% of total revenue for
the six-month period ended December 31, 1998, the five largest customers
accounted for approximately 18% of total revenues for that period.

     Summarized segment information as of and for the six-month period ended
December 31, 1998 is presented below:

<TABLE>
<CAPTION>
                                                                 Print
                                                Online        Publishing
                                              Publishing    and Licensing          Other          Total
                                             ------------   -------------       ----------     -----------
<S>                                          <C>            <C>                 <C>            <C>
Revenue                                      $ 1,808,877    $   1,660,314       $        -     $ 3,469,191
Direct costs of operations                       978,964        1,100,693                -       2,079,657
Sales and marketing                            1,104,039                -           18,283       1,122,322
Product research                                 677,183          238,778                -         915,961
General and administrative expenses              454,179          416,878                -         871,057
Depreciation and amortization                     68,944           29,547                -          98,491
Noncash stock based compensation                       -                -          669,000         669,000
Other income (expense), net                            -          185,588            6,491         192,079
Net income (loss)                             (1,474,432)          60,006         (680,792)     (2,095,218)
Total assets                                   1,945,391        1,153,961                -       3,099,352
</TABLE>
<PAGE>

NOTE 11 - OTHER SUBSEQUENT EVENTS (UNAUDITED)

     Purchase of CPNet.com

  In January 1999, the Company purchased all of  the assets of CPNet.com,
excluding cash and real or personal property leases for $25,000 in cash. In
addition, the sellers were employed by the Company and granted 30,000 options
under the 1997 Equity Compensation Plan with an exercise price of $1.30. Based
on the estimated values from other stock transactions involving sales of the
Company's stock, the Company will incur a total stock compensation charge of
$45,000. CPNet.com's historical statements of operations are not material to the
Company.



     1997 Equity Compensation Plan

  In January 1999, the Company amended the 1997 Equity Compensation Plan (the
"Plan") to increase the number of shares of common stock of the Company
authorized for issuance under the Plan to 1,500,000 shares.

     1999 Equity Compensation Plan

  In March 1999, the Company's stockholders approved the 1999 Equity
Compensation Plan (the "1999 Plan") to provide designated employees of the
Company and its subsidiaries, certain consultants and non-employee members of
the Board of Directors of the Company with the opportunity to receive grants of
incentive stock options, nonqualified stock options and restricted stock. The
1999 Plan is authorized to grant options for up to 1,500,000 shares. In March
1999, the Company granted 358,500 shares to the Officer.

     Stock Options

  On March 2, 1999 and March 12, 1999 the Company granted 201,720 and 5,000
options, respectively, under the 1997 Equity Compensation Plan to purchase
common stock at $2.97 per share. These option vest over a 48 month period, and
accordingly the Company will recognize total compensation expense relating to
these option of approximately $1,620,000 ratably over the vesting period.
Effective with the completion of the Company's initial public offering of common
stock, the Company granted 472,500 options and the Board has authorized the
grant of another 25,000 options under the 1997 Equity Compensation Plan to
purchase common stock at the initial public offering price of $13.00 per share
which vest one-fourth after one year and the remaining equally over the next 36
months.

     Redeemable Common Stock

  On March 10,1999 the note receivable for the restricted stock grant to the
Officer (see Note 3) was forgiven, the unvested shares (264,932) were
effectively forfeited, the Officer's put right was cancelled, and certain other
changes were made. Accordingly, "fixed" option accounting treatment was
established on this date. The total charge for stock based compensation expense
relating to this restricted stock grant for the period from January 1, 1999
through March 9, 1999 was approximately $1,782,000. On March 9, 1999, the
Officer was also granted 358,500 options under the 1999 Equity Compensation Plan
to purchase 358,500 shares of common stock at $2.97 per share which vest over a
36 month period, and accordingly the Company will recognize total compensation
expense relating to these options of approximately $2,807,000, ratably over the
vesting period.

     Convertible Promissory Note

  On March 9, 1999, one of the Series B Preferred Stockholders loaned the
Company $1,000,000 bearing interest at 8%, due April 9, 1999. If unpaid on the
due date, the note was to convert into fully paid Series B Preferred Stock at a
conversion price of $2.97 per share. On April 9, 1999, the principal amount of
the loan plus accrued interest was converted into 6,784 shares of Series B
<PAGE>

Preferred Stock. The Company recorded a finance charge of $2,656,000
representing the difference between the estimated fair market value of the
common stock (as if the 6,784 shares were converted) and the $2.97 conversion
price.

     Change in Year-end

  On April 12, 1999, the Company's Board of Directors approved changing the
Company's fiscal year-end to December 31.

NOTE 12 - PRO FORMA (UNAUDITED)

  The unaudited pro forma December 31, 1998 balance sheet gives effect to the
following:

     .    Conversion of 89,612 and 17,575 shares of redeemable convertible
          Series A and Series B preferred stock, respectively, into 5,359,350
          shares of common stock.
     .    Issuance of the $1,000,000 promissory note on March 9, 1999,
          subsequent conversion to 6,784 shares of Series B Preferred Stock and
          conversion of the Series B Preferred Stock to 339,200 shares of common
          stock and the associated finance charge of approximately $2,656,000
          due to the beneficial conversion feature.
     .    Reclassification of 189,238 shares of redeemable common stock to
          common stock upon cancellation of the put right associated with such
          shares and upon forgiveness of a promissory note issued in
          consideration for 454,170 shares (264,932 shares of stock were
          reacquired) and the associated charge of approximately $1,782,000.
     .    Issuance of 3,500,000 shares of common stock in the Company's initial
          public offering with net proceeds to the Company of approximately
          $41.1 million.
<PAGE>

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

     None.

                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The directors and executive officers of the Company are as follows:

MANAGEMENT

Directors and Executive Officers

Our directors and executive officers and their ages as of the date of this
Form 10-K are as follows:

<TABLE>
<CAPTION>
Name and Address                                     Age    Position(s)
----------------                                    -----   -----------
<S>                                                 <C>     <C>
William P. Anderson, III..........................   50     President, Chief Executive Officer and Director
Edward Vermont Blanchard..........................   47     Executive Vice President - Strategy and Acquisitions
Sara Campbell Taylor..............................   41     Senior Vice President - Sales and Syndication
Peter W. Minford..................................   41     Senior Vice President - Administration
G. Cotter Cunningham..............................   36     Senior Vice President - Marketing
Bruns H. Grayson(1)...............................   51     Director
Peter C. Morse(2).................................   52     Director
Robert P. O'Block.................................   56     Director
Randall E. Poliner(1)(2)..........................   43     Director
</TABLE>

___________
(1)  Member of the Compensation Committee.
(2)  Member of the Audit Committee.

     William P. Anderson, III has served as President and Chief Executive
Officer of Intelligent Life and director since July 1997. From its creation to
June 1997, Mr. Anderson served as President and Chief Executive Officer of Block
Financial Corporation, a subsidiary of H&R Block, Inc. engaged in consumer
lending, software and online financial services delivery. From August 1992 to
September 1995, Mr. Anderson served as Chief Financial Officer of H&R Block,
Inc. From July 1973 to November 1991, Mr. Anderson worked at KPMG LLP in various
capacities including serving as partner-in-charge of the national corporate
finance practice within the management consulting department. Mr. Anderson is a
member of the Board of Directors of SecureTax.com, Inc., a privately held
company. Mr. Anderson holds a Bachelor of Mechanical Engineering from Auburn
University and an M.B.A. from Emory University.

     Edward Vermont "Monty" Blanchard has served as Executive Vice President-
Strategy and Acquisitions since May of 1999. Mr. Blanchard is a former Managing
Director and co-head of the Financial Institutions Mergers & Acquisitions Group
at Merrill Lynch & Co., Inc. While at Merrill Lynch, Mr. Blanchard served as
strategic M&A Advisor for a number of the firm's large financial service clients
in the insurance, asset management, credit card, consumer and commercial
financial industries. In addition, he acted as a senior internal M&A Advisor and
negotiator for a number of Merrill Lynch's own acquisitions, including Smith New
Court (U.K.), Macintosh Securities (Australia), Mercury Asset Management (U.K.),
Midland Walwyn (Canada) and the takeover of selected former branches of Yamaichi
Securities in Japan. Mr. Blanchard has worked as an investment banker since 1979
and was employed at Merrill Lynch from 1966 to 1999. He has a B.A from Harvard
University and an M.B.A. from the University of North Carolina at Chapel Hill.

     Sara Campbell Taylor has served as Senior Vice President-Sales and
Syndication of Intelligent Life, responsible for advertising sales and
distribution arrangements, since May 1996. From January 1993 to June 1996, Ms.
Taylor served as Vice President-Asset Securitization for ABN Amro Securities,
Inc., an investment

                                     -25-
<PAGE>

banking firm. Ms. Taylor specialized in mergers and acquisitions, structured
finance and asset valuation. Ms. Campbell holds a B.S. in Finance from
Pennsylvania State University.

     Peter W. Minford has served as Senior Vice President-Administration of
Intelligent Life since February 1998. From August 1992 to February 1998, Mr.
Minford served as Senior Vice President-Administration at The Bank of Tampa. Mr.
Minford has held various senior management positions in commercial banking for
over 19 years including roles in credit administration, commercial lending,
general administration and operations. Mr. Minford holds a B.S. in Finance from
Florida State University and an M.B.A. from the University of South Florida.

     G. Cotter Cunningham has served as Senior Vice President-Marketing of
Intelligent Life since February 1999. From August 1997 to January 1999, Mr.
Cunningham was Vice President of Valentine McCormick Ligibel, Inc., an
advertising agency specializing in new media. From August 1992 to July 1997, Mr.
Cunningham was Vice President of Block Financial Corporation, where he created,
launched and directed the CompuServe Visa and WebCare Visa credit card programs.
Mr. Cunningham holds a B.S. in Economics from the University of Memphis and an
M.B.A. from Vanderbilt University's Owen Graduate School of Management.

     Bruns H. Grayson has served as director of Intelligent Life since June
1997. Since 1982, Mr. Grayson has been the managing partner of ABS Ventures, a
series of venture capital funds affiliated with BT Alex. Brown Incorporated. Mr.
Grayson is also a member of the Board of Directors of Anadigics, Inc., Dialog
Software, Inc., Formation Systems, Inc., i-Logix, Inc., Software Corporation of
America and Telogy Networks, Inc. Mr. Grayson holds a B.A. from Harvard
University, an M.A. from Oxford University and a J.D. from the University of
Virginia Law School. Mr. Grayson was a Rhodes Scholar in 1974.

     Peter C. Morse has served as a director of Intelligent Life since July
1993. Mr. Morse served as our President and Chief Executive Officer from July
1993 until July 1997 and served as our Chairman from July 1997 until April 1999.
Since 1982, Mr. Morse has served as President of Morse Partners, Ltd., a private
equity firm that acquires operating companies and provides expansion capital.
From 1986 to 1990, Mr. Morse was Chairman of FAO Schwarz, the national chain of
children's gifts stores. Mr. Morse has also held senior positions at Janney
Montgomery Scott, Inc., an investment banking firm. Mr. Morse holds a B.S.B.A.
from Georgetown University and an M.B.A. from Columbia University.

     Robert P. O'Block has served as a director since May 1999. Mr. O'Block is
currently a general partner of Freeport Center, a real estate and distribution
complex in Utah. He is also Chairman of the Board of Overseers of the Boston
Symphony and a member of the Board of the U.S. Ski Team. For 28 years, Mr.
O'Block, a former Director, was with McKinsey & Company, Inc., serving a wide
variety of business, nonprofit and public sector organizations in the United
States, Europe and the Far East. He has extensive experience in manufacturing,
electronics and financial services and has worked extensively over the past few
years with a number of the Harvard teaching hospitals in Boston, as well as the
Harvard Medical School. Since joining McKinsey & Company, Mr. O'Block has led
studies in financial restructuring; corporate, business unit and product
strategy; manufacturing operations; and organization. He started his career as a
member of the faculty of Harvard University where he performed research and
taught courses in the areas of production and operations of management, business
economics and real estate. He is a co-author of the books Urban Analysis and An
Economic Analysis of the Housing and Urban Development Act of 1968 (Harvard
business School Press, 1970) and has contributed to several other publications
and articles for professional journals. He is listed in Who's Who in Finance and
Industry and Who's Who in the World. Mr. O'Block received a bachelor's degree in
mechanical engineering from Purdue University and an M.B.A. from Harvard
Business School.

     Randall E. Poliner has served as a director of Intelligent Life since
November 1998. Since April 1993, Mr. Poliner has served as President of Antares
Capital Corporation, a private venture capital firm investing equity capital in
developmental and expansion stage companies. Mr. Poliner holds a Bachelor of
Electrical Engineering from the Georgia Institute of Technology, an M.S. from
Carnegie-Mellon University and an M.B.A. from Harvard Business School.

Terms of Directors

     Concurrently with the effective date of our initial public offering, the
Board of Directors was divided into three classes, with members serving for
staggered three-year terms. The Board will be comprised of one Class I director
(Mr. Poliner), two Class II directors (Messrs. Anderson and Grayson) and one
Class III director (Mr. Morse). At each annual meeting of shareholders, a class
of directors will be elected for a three-year term to succeed the directors of
the same class whose terms are then expiring. The terms of the initial Class I
directors, Class II directors and Class III directors will expire upon the
election and qualification of successor directors at the 2000, 2001 and 2002
annual meetings of shareholders, respectively. There are no family relationships
between any of the directors or executive officers of Intelligent Life.

Committees of the Board of Directors

                                     -26-
<PAGE>

     The members of the Audit Committee are Peter C. Morse (Chairman) and
Randall E. Poliner. The Audit Committee reviews the scope and timing of our
Audit services and any other services our independent auditors are asked to
perform, the auditor's report on our financial statements following completion
of their audit and their policies and procedures with respect to internal
accounting and financial control. In addition, the Audit Committee makes annual
recommendations to the Board of Directors for the appointment of independent
auditors for the following year.

     The members of the Compensation Committee are Bruns H. Grayson (Chairman)
and Randall E. Poliner. The Compensation Committee reviews and evaluates the
compensation and benefits of all our officers, reviews general policy matters
relating to compensation and benefits of employees of Intelligent Life and makes
recommendations concerning these matters to the Board of Directors. The
Compensation Committee also administers our stock option plans.

Compensation of Directors

     Neither employee nor non-employee directors receive compensation for
services performed in their capacity as directors. We reimburse each director
for reasonable out-of-pocket expenses incurred in attending meetings of the
Board of Directors and any of its committees.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is or will be an executive officer of
Intelligent Life.

ITEM 11.  EXECUTIVE COMPENSATION

     The following table sets forth the total compensation for the fiscal year
ended December 31, 1998 for our President and Chief Executive Officer. No other
executive officer of Intelligent Life received total annual salary and bonuses
for the fiscal year ended December 31, 1998 in excess of $100,000.

<TABLE>
<CAPTION>
                                                                            Long-Term
                                                       Annual              Compensation
                                                  Compensation(1)             Awards
                                                                         Restricted Stock        All Other
Name and Principal Position                    Salary         Bonus           Awards           Compensation
---------------------------                  ----------    ----------       ----------         ------------
<S>                                          <C>           <C>           <C>                   <C>
William P. Anderson, III,                    $ 298,000     $       0        $ 354,253(2)       $         0
  President and Chief Executive Officer
</TABLE>

(1)  In accordance with the rules of the Securities and Exchange Commission, the
     compensation set forth in the table does not include compensation in the
     form of perquisites or other personal benefits because such perquisites and
     other personal benefits constituted less than the lesser of $50,000 or 10%
     of the total annual salary and bonus for the named executive officer for
     such year.

(2)  Consists of the net value of a restricted stock award of 454,170 shares of
     common stock granted in exchange for a promissory note in the amount
     $236,168. No such shares were vested as of December 31, 1998. As of March
     10, 1999, 189,238 shares had vested, and the remaining shares had been
     reacquired by Intelligent Life. Accordingly, Intelligent Life recorded
     compensation expense relating to these shares of approximately $1,782,000
     in the quarter ended March 31, 1999. As a result of the reacquisition we
     cancelled $137,765 of the notes, and the remaining balance of the note,
     $98,403, was forgiven.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth information with respect to the beneficial
ownership of our common stock as of June 30, 1999, relating to: (1) each of our
directors; (2) our President and Chief Executive Officer; (3) all those known by
us to be beneficial owners of more than five percent of the outstanding shares
of common stock; and (4) all of our executive officers and directors as a group.

<TABLE>
<CAPTION>
                                                               Shares Beneficially Owned          Shares Beneficially
                                                                 Prior to Offering (1)          Owned After Offering(1)
                                                                Shares          Percent         Shares          Percent
                                                                ------          -------         ------          -------
<S>                                                            <C>              <C>             <C>             <C>
Peter C. Morse.............................................     5,488,800         55.2%         5,488,800         40.8%
   200 Four Falls Corporate Center, Suite 205
</TABLE>

                                     -27-
<PAGE>

<TABLE>
<CAPTION>
                                                               Shares Beneficially Owned          Shares Beneficially
                                                                 Prior to Offering (1)          Owned After Offering(1)
                                                                Shares          Percent         Shares          Percent
                                                                ------          -------         ------          -------
<S>                                                            <C>              <C>             <C>             <C>
   West Conshohocken, Pennsylvania 19428
Robert H. Lessin(2)........................................     1,276,900         12.8          1,276,900          9.5
   826 Broadway
   New York, New York 10003
Bruns H. Grayson(3)                                             1,264,950         12.7          1,264,950          9.4
   1 South Street, Suite 2150
   Baltimore, Maryland 21202
William P. Anderson, III(4)................................       209,154          2.1            209,154          1.6
   11811 U.S. Highway One, Suite 101
   North Palm Beach, Florida 33408
Randall E. Poliner(5)......................................       778,650          7.8            778,650          5.8
   7900 Miami Lakes Drive West
   Miami Lakes, Florida 33016
All directors and executive officers as a group
   (seven persons)(4)......................................     9,018,454         90.7          9,018,454         67.1
</TABLE>

__________
(1)  For purposes of calculating the percentage beneficially owned, the number
     of shares of common stock deemed outstanding prior to our initial public
     offering includes (1) 9,940,988 shares outstanding as of April 15, 1999 and
     (2) shares issuable upon the exercise of options which may be exercised
     within 60 days following April 15, 1999 ("Presently Exercisable Options").
     The number of shares of common stock deemed outstanding after our initial
     public offering includes the additional 3,500,000 shares that are being
     offered for sale in our initial public offering. Beneficial ownership id
     determined in accordance with the rules of the Securities and Exchange
     Commission that deem shares to be beneficially owned by any person or group
     that has or shares voting and investment power with respect to such shares.
     Presently Exercisable Options are deemed to be outstanding and to be
     beneficially owned by the person or group holding such options for the
     purpose of computing the percentage ownership of any other person or group.
(2)  Includes shares owned by BRM Holdings LLC. Mr. Lessin is a control person
     of BRM Holdings LLC and is the beneficial owner of such shares.
(3)  Consists of shares owned by ABS Ventures IV, L.P. and ABX Fund, L.P. Mr.
     Grayson is the managing member of each general partner of these limited
     partnerships. Mr. Grayson disclaims beneficial ownership of such shares.
(4)  Includes 19,916 shares of common stock issuable upon exercise of stock
     options that are exercisable within 60 days of April 15, 1999 and 12,500
     shares held by Mr. Anderson's children.
(5)  Consists of shares owned by Antares Capital Fund II Limited Partnership and
     ACF II Side Fund Limited Partnership. Mr. Poliner is President of Antares
     Capital Partners II, Inc., the general partner of such limited
     partnerships, and is a beneficial owner of such shares.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We entered into three lease agreements with Bombay Holdings, Inc. for our
principal corporate offices and facilities. Bombay is wholly owned by Peter C.
Morse, a director of Intelligent Life. The leases include renewal options and
require Intelligent Life to pay a percentage of the common maintenance charges.
Rent expense paid to Bombay was $99,192 for the six months ended December 31,
1998 and $164,552, $85,591 and $83,858 for the fiscal years ended 1998, 1997 and
1996, respectively. We believe that the terms of the lease agreements are no
less favorable to us than those that could have been obtained from unaffiliated
third parties.

     Mr. Morse made loans to Intelligent Life during the years ended June 30,
1997 and 1998 in the amounts of $687,000 and $200,000, respectively. Interest
rates for the loans were between 6.5% and 7%. The loans have subsequently been
contributed to capital.

     In June 1998, Mr. Morse acquired 10,769 shares of Series A Preferred Stock
from Intelligent Life for a purchase price of $65 per share, which was the price
paid by third parties in the same transaction. The aggregate purchase price was
$699,985. Immediately prior to completion of our initial public offering, these
shares of preferred stock were converted into 538,450 shares of common stock
having an aggregate value of $6,999,850 at the initial public offering price. In
November 1998, Mr. Morse acquired 527 shares of Series B Preferred Stock from
Intelligent Life for a purchase price of $114 per share, which was the price
paid by third parties in the same transaction. The aggregate purchase price was
$60,078. Immediately prior to completion

                                     -28-
<PAGE>

of our initial public offering, these shares of preferred stock were converted
into 26,350 shares of common stock having an aggregate value of $342,550 at the
initial public offering price.

     As part of a compensation package, we sold 454,170 shares of common stock
to William P. Anderson, III, our President and Chief Executive Officer,
effective when Mr. Anderson was hired in July 1997. In exchange for such shares,
Mr. Anderson executed a promissory note to us for $236,168, which was payable
over a ten-year term and bore interest at 6.42%. The stock sale was treated as a
variable option grant for accounting purposes with respect to the difference
between the purchase price of such shares of $2.97 per share and the fair market
value of such shares of $10.80 per share. Accordingly, compensation expense was
recorded, totaling approximately $2,282,000 through March 10, 1999. These shares
were subject to vesting provisions, which had lapsed as to 189,238 shares as of
March 10, 1999. On that date, Intelligent Life reacquired 264,932 shares of
unvested common stock from Mr. Anderson in exchange for cancellation of $137,765
of Mr. Anderson's promissory note. The remaining amount of the note, in the
amount of $98,403, was forgiven.

     On March 9, 1999, Intelligent Life issued Mr. Anderson options to acquire
358,500 shares of common stock at an exercise price of $2.97 per share. The fair
market value of such shares was $10.80 per share; accordingly we will incur a
stock compensation charge of approximately $2,807,000 relating to these options
over a three-year vesting period. The options are intended to qualify as
incentive stock options. The options vest in equal monthly installments.

     On March 9, 1999, Intelligent Life issued a promissory note to Antares
Capital Fund II Limited Partnership. Randall E. Poliner, a director of
Intelligent Life, is President of the general partner of Antares. Pursuant to
the note, Antares loaned Intelligent Life $1,000,000 at an interest rate of 8%,
which was payable on April 9, 1999. The amount borrowed under the note is being
used for general corporate purposes. On April 9, 1999, in accordance with the
terms of the note, the principal amount plus interest was automatically
converted into 6,784 shares of Series B Preferred Stock at a conversion price of
$148.40 per share. The fair market value of such shares was $10.80 per share;
accordingly we incurred a finance charge of approximately $2,656,000 for the
quarter ended March 31, 1999. Each share of Series B Preferred Stock was
converted into 50 shares of common stock immediately prior to completion of our
initial public offering. The aggregate value of the shares at conversion will be
$4,409,600, calculated at the initial public offering price.

     Our Board of Directors has adopted a resolution whereby all future
transactions with related parties, including any loans from us to our officers,
directors, principal stockholders or affiliates, must be approved by a majority
of the Board of Directors, including a majority of the independent and
disinterested members of the Board of Directors or a majority of the
disinterested stockholders and must be on terms no less favorable to us than
could be obtained from unaffiliated third parties.

                                     -29-
<PAGE>

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     See index on Item 8.

     2.   Financial Statement Schedules

     All financial statement schedules have been omitted since the required
information is not material or is included in the financial statements or notes
thereto.

(c)  Exhibits. The following exhibits are filed as part of, or are incorporated
     by reference into, this report on Form 10-K:

<TABLE>
<CAPTION>
   Exhibit
   -------
   Number                          Description
   ------      -----------------------------------------------------------------
   <S>         <C>
    3.1*       Amended and Restated Articles of Incorporation of the Company.

    3.2*       Restated Bylaws of the Company.

    4.1*       See exhibits 3.1 and 3.2 for provisions of the Amended and
               Restated Articles of Incorporation and Amended and Restated
               Bylaws of the Company defining rights of the holders of common
               stock of the Company.

    4.2*       Specimen Stock Certificate

   10.1*       Lease Agreement dated May 1, 1994, between Intelligent Life
               Corporation and Bombay Holdings, Inc. as amended.

   10.2*       Lease Agreement dated October 6, 1997, between Intelligent Life
               Corporation and Bombay Holdings, Inc.

   10.3*       Lease Agreement dated January 31, 1999, between Intelligent Life
               Corporation and Bombay Holdings, Inc.

   10.4*       Professional Employer Agreement dated February 25, 1999, between
               Intelligent Life Corporation and Viacom Human Resources, Inc.

   10.5*       Intelligent Life Corporation 1997 Equity Compensation Plan.

   10.6*       Intelligent Life Corporation 1999 Equity Compensation Plan.

   10.7*       Form of Stock Option Agreement under the 1997 Equity Compensation
               Plan.

   10.8*       Promisory Note, dated March 9, 1999, executed by Intelligent Life
               Corporation and payable to Antares Capital Fund II Limited
               Partnership.

   10.9*       Cancellation and Stock Repurchase Agreement, dated as of March
               10, 1999, by Intelligent Life Corporation in favor of William P.
               Anderson, III.

   10.10*      Agreement of Cancellation and Release, dated as of March 10, 1999,
               between Intelligent Life Corporation and William P. Anderson,
               III.

   10.11*      Incentive Stock Option Grant Agreement, dated as of March 10,
               1999, between Intelligent Life Corporation and William P.
               Anderson, III.

   10.12*      Executive Employment Agreement, dated as of March 10, 1999,
               between Intelligent Life Corporation and William P. Anderson,
               III.

   23.1        Consent of KPMG LLP
   23.2        Consent of Thomas & Clough Co., P.A.

   27          Financial Data Schedule
</TABLE>

___________________
*  Incorporated by reference to Exhibits filed in response to Item 16(a),
   "Exhibits" of the Company's Registration Statement on Form S-1 (File No. 333-
   74291) declared effective on May 13, 1999.

                                     -30-
<PAGE>

                                  SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.


                                    INTELLIGENT LIFE CORPORATION


                                    By:  /s/ William P. Anderson, III
                                         -------------------------------------
                                         William P. Anderson, III
                                         President and Chief Executive Officer
                                         (Principal Executive Officer) and
                                         Director

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.

         Signature                     Title                        Date


/s/ William P. Anderson, III  President, Chief Executive         July 9, 1999
----------------------------  Officer; Director (Principal
William P. Anderson, III      Executive Officer)


/s/ Peter W. Minford          Senior Vice President -            July 9, 1999
----------------------------  Administration and Chief
Peter W. Minford              Financial Officer


/s/ Robert J. DeFranco        Vice President-Finance and         July 9, 1999
----------------------------  Chief Accounting Officer
Robert J. DeFranco


/s/ Bruns H. Grayson          Director                           July 9, 1999
----------------------------
Bruns H. Grayson


/s/ Peter C. Morse            Director                           July 9, 1999
----------------------------
Peter C. Morse


/s/ Robert P. O'Block         Director                           July 9, 1999
----------------------------
Robert P. O'Block


/s/ Randall E. Poliner        Director                           July 9, 1999
----------------------------
Randall E. Poliner