SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q/A

                                   (Mark One)

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended October 31, 2000

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

           For the transition period from ____________ to ____________

                          Commission File Number 0-9747

                       EXCALIBUR TECHNOLOGIES CORPORATION

             (Exact name of registrant as specified in its charter)



                  Delaware                              85-0278207
         (State or other jurisdiction of                (I.R.S. Employer
         incorporation or organization)                 Identification No.)


         1921 Gallows Road, Suite 200, Vienna, Virginia       22182
           (Address of principal executive offices)         (Zip Code)


       Registrant's telephone number, including area code: (703) 761-3700



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 the  filing
requirements for the past 90 days. Yes |X| No __

As of December 8, 2000,  15,115,224 shares of the registrant's Common Stock, par
value $.01 per share, were outstanding.


<PAGE>





                       EXCALIBUR TECHNOLOGIES CORPORATION

                          QUARTERLY REPORT ON FORM 10-Q
                     FOR THE QUARTER ENDED OCTOBER 31, 2000

                                TABLE OF CONTENTS

                          PART I. FINANCIAL INFORMATION

<TABLE>
<CAPTION>

Item 1.       Financial Statements:                                                        Page
<S>           <C>                                                                          <C>

              Consolidated Balance Sheets
              October 31, 2000 (unaudited) and January 31, 2000.............................3

              Consolidated Statements of Operations and Comprehensive Loss (unaudited)
              Three and nine months ended October 31, 2000 and 1999.........................4

              Consolidated Statements of Cash Flows (unaudited)
              Nine months ended October 31, 2000 and 1999...................................5

              Notes to Consolidated Financial Statements....................................6


Item 2.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations....................................................10



                           PART II. OTHER INFORMATION

Items 1. - 6. .............................................................................17

Signatures    .............................................................................18

</TABLE>


<PAGE>


                       EXCALIBUR TECHNOLOGIES CORPORATION
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except per share data)

<TABLE>
<CAPTION>

                           ASSETS                                   October 31, 2000     January 31, 2000
                                                                      (Unaudited)
<S>                                                                    <C>                <C>

Current Assets:
     Cash and cash equivalents........................................$     10,129         $     10,884
     Short term investments...........................................         142                  178
     Accounts receivable, net of allowance for doubtful
          accounts of $1,100 and $830, respectively...................      17,434               14,254
     Prepaid expenses and other ......................................       4,309                2,354
                                                                      --------------       --------------
           Total current assets.......................................      32,014               27,670

Equipment and leasehold improvements, net of accumulated
   depreciation of $8,487 and $7,594, respectively....................       2,103                1,766
Other assets..........................................................         984                1,251
                                                                      --------------       --------------
         Total assets.................................................$     35,101         $     30,687
                                                                      ==============       ==============

            LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
     Accounts payable.................................................       2,922                1,982
     Accrued expenses.................................................       1,684                2,474
     Deferred revenues................................................       5,076                3,926
                                                                      --------------       --------------
           Total current liabilities..................................       9,682                8,382

Shareholders' Equity:
     5%  Cumulative convertible preferred stock, $0.01 par value, preference
         in liquidation $10 per share plus dividends, 1,000 shares
         authorized; 27 shares issued and outstanding.................         271                  271
     Common stock, $0.01 par value, 40,000 shares authorized; 15,228
         and 14,646 shares issued and outstanding.....................         152                  146
     Additional paid-in capital.......................................      83,261               78,024
     Accumulated deficit .............................................     (58,183)             (56,138)
     Accumulated other comprehensive income (loss)....................         (82)                   2
                                                                      --------------       --------------
         Total shareholders' equity...................................      25,419               22,305
                                                                      --------------       --------------
         Total liabilities and shareholders' equity                   $     35,101         $     30,687
                                                                      ==============       ==============

</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


<PAGE>


                       EXCALIBUR TECHNOLOGIES CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             AND COMPREHENSIVE LOSS
                                   (unaudited)
                      (in thousands, except per share data)

<TABLE>
<CAPTION>

                                                             Three Months Ended                  Nine Months Ended
                                                                October 31,                         October 31,
                                                          2000             1999                2000             1999
                                                      --------------   --------------      --------------   --------------
<S>                                                   <C>              <C>                 <C>              <C>

Revenues:
    Software.......................................   $     10,601     $      7,003        $    28,106      $    21,413
    Maintenance....................................          1,703            1,363              4,956            3,783
                                                      --------------   --------------      --------------   --------------
                                                            12,304            8,366             33,062           25,196
                                                      --------------   --------------      --------------   --------------

Expenses:
    Cost of software revenues......................          2,404            1,229              5,238            3,510
    Cost of maintenance revenues...................            345              542              1,079            1,618
    Sales and marketing............................          5,547            4,064             16,554           11,708
    Research and product development...............          2,934            2,173              8,466            7,035
    General and administrative.....................          1,558            1,369              4,105            4,081
                                                      --------------   --------------      --------------   --------------
                                                            12,788            9,377             35,442           27,952
                                                      --------------   --------------      --------------   --------------

Operating loss.....................................           (484)          (1,011)            (2,380)          (2,756)

Other income (expenses):
     Interest income, net..........................            109               55                336              179
     Write-off of investment in affiliate..........             --               --                 --             (471)
                                                      --------------   --------------      --------------   --------------
Net loss...........................................           (375)            (956)            (2,044)          (3,048)
Dividends on preferred stock.......................              3                3                 10               10
                                                      --------------   --------------      --------------   --------------
Net loss applicable to common shareholders.........   $       (378)    $       (959)       $    (2,054)     $    (3,058)
                                                      ==============   ==============      ==============   ==============

Basic and diluted net loss per common share........   $      (0.02)    $      (0.07)       $     (0.14)     $     (0.21)
Weighted-average number of common shares
outstanding........................................         15,144           14,363             14,926           14,215
Other comprehensive income (loss):
Net loss...........................................           (375)            (956)            (2,044)          (3,048)
     Foreign currency translation adjustment.......            (29)              18                (84)              89
                                                      --------------   --------------      --------------   --------------
Comprehensive loss.................................   $       (404)    $       (938)       $    (2,128)     $    (2,959)
                                                      ==============   ==============      ==============   ==============

</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


<PAGE>


                       EXCALIBUR TECHNOLOGIES CORPORATION
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                            For the Nine Months Ended October 31,
                                                                                   2000                 1999
                                                                             ----------------   ----------------
<S>                                                                           <C>                <C>

Cash Flows from Operating Activities:
     Net loss................................................................ $      (2,044)     $      (3,048)
     Adjustments to reconcile net loss to net cash used in
        operating activities:
           Depreciation and amortization.....................................         1,066              1,126
           Bad debt expense..................................................           270                340
           Write-off of investment in affiliate..............................             -                471
     Changes in operating assets and liabilities:
           Accounts receivable...............................................        (4,233)            (3,612)
           Prepaid expenses and other assets.................................        (1,851)               348
           Accounts payable and accrued expenses.............................           299               (160)
           Deferred revenues.................................................         1,322                (36)
                                                                             ----------------   ----------------
     Net cash used in operating activities...................................        (5,171)            (4,571)
                                                                             ----------------   ----------------

Cash Flows from Investing Activities:
     Purchases of equipment and leasehold improvements.......................        (1,329)              (706)
     Purchase of investments, net of sales and maturities....................            36               (178)
                                                                             ----------------   ----------------
     Net cash used in investing activities...................................        (1,293)              (884)
                                                                             ----------------   ----------------
Cash Flows from Financing Activities:
     Gross proceeds from the issuance of common stock........................           258              5,145
     Proceeds from the exercise of stock options.............................         4,978              1,207
     Issuance costs in connection with issuance of common stock..............             -               (342)
                                                                             ----------------   ----------------
     Net cash provided by financing activities...............................         5,236              6,010
                                                                             ----------------   ----------------
Effect of Exchange Rate Changes on Cash......................................           473                 62
                                                                             ----------------   ----------------
Net Increase (Decrease) in Cash and Cash Equivalents.........................          (755)               617

Cash and Cash Equivalents, beginning of period...............................        10,884              5,851
                                                                             ----------------   ----------------
Cash and Cash Equivalents, end of period..................................... $      10,129     $        6,468
                                                                             ================   ================

</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


<PAGE>


                       EXCALIBUR TECHNOLOGIES CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                October 31, 2000

(1)      THE COMPANY

The  consolidated   financial  statements  include  the  accounts  of  Excalibur
Technologies Corporation ("Excalibur") and its wholly owned subsidiaries.  These
entities  are  collectively  referred  to  hereinafter  as  the  "Company."  All
significant inter-company transactions and accounts have been eliminated.

The Company designs, develops, markets and supports high performance,  accurate,
scalable and secure search- powered software solutions. Excalibur offers a suite
of intelligent search solutions for corporate  intranets,  Internet  e-commerce,
online  publishing,  application  service  providers  ("ASP")  and the  original
equipment  manufacturer  ("OEM")  market  that  enables  individuals  to quickly
capture, analyze, index, catalog, access, navigate,  retrieve, publish and share
relevant information residing on an enterprise's networks, intranets,  extranets
and the Internet. The Company offers consulting,  training,  product maintenance
and systems  implementation  services in support of its software  products.  The
Company  licenses its software  products  directly to commercial  businesses and
government  agencies  throughout  North  America,  Europe and other parts of the
world and also  distributes  its software  products to end users through license
agreements with value-added resellers,  systems integrators,  original equipment
manufacturers, application service providers and other strategic partners.

The Company  incurred a net loss of $2.0  million in the nine month period ended
October 31,  2000 and has  incurred  cumulative  losses of  approximately  $12.5
million over the last three fiscal years. The accumulated deficit at October 31,
2000 was $58.2  million.  The Company's  operations are subject to certain risks
and uncertainties including, among others: the dependence upon the timing of the
closing on sales of large software licenses; actual and potential competition by
entities with greater financial  resources,  experience and market presence than
the Company;  rapid technological  changes; the success of the Company's product
marketing  and  product  distribution  strategies;  the  risks  associated  with
acquisitions and international expansion; the need to manage growth; the need to
retain key personnel and protect intellectual  property; and the availability of
additional capital financing on terms acceptable to the Company.

On May 1, 2000, the Company and Intel Corporation jointly announced an agreement
to form a new company, to be named Convera Corporation,  that will enable owners
of branded high-value content to produce and securely sell their audio and video
content  over the  Internet.  The  Company  will  combine  its  entire  business
operations with Intel's  Interactive Media Services division,  which is composed
of three operating units,  intellectual property assets and other assets used by
that division. In addition,  Intel will contribute approximately $155 million in
cash to the new  company,  $150 million of which will be paid at closing and the
balance of which will be  payable  in 2001 to fund  retention  bonuses to former
Intel  employees.  The assets to be  contributed  by Intel's  Interactive  Media
Services Division include a broad set of technical capabilities,  14 patents and
patent  applications in the area of content  security,  source code  components,
non-exclusive  licenses to  additional  source code  components  and other Intel
patents and patent applications, Intel's rights under certain customer contracts
and  technical  employee  resources  in key areas,  primarily  in  software  and
engineering. In exchange for these contributions,  Intel will receive 49% of the
new  company's   voting  stock  and  60%  of  the  new  company's  equity  on  a
fully-diluted  basis.  Excalibur  shareholders  and present  option holders will
receive  51% of the new  company's  voting  stock  and 40% of the new  company's
equity on a fully-diluted basis in exchange for their Excalibur stock. Excalibur
shareholders  will  receive one share of stock in the new company for each share
they hold of  Excalibur.  The  transaction  is  subject to the  approval  of the
stockholders of the Company and other customary closing  conditions.  Details of
this  agreement and additional  information  are contained in the Company's Form
8-K filed with the  Securities and Exchange  Commission  ("SEC") on May 3, 2000,
the Company's definitive proxy statement filed with the SEC on November 21, 2000
and other related filings with the SEC made by the Company subsequent to the May
1 announcement.  A shareholders'  meeting is scheduled for December 21, 2000 to,
among other things, approve this combination.


(2)      SIGNIFICANT ACCOUNTING POLICIES

Financial Statement Presentation

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  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

These consolidated  financial statements are unaudited and have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission  regarding  interim  financial  reporting.  Accordingly,  they do not
include all of the  information  and  footnotes  required by generally  accepted
accounting  principles for complete  financial  statements,  and it is suggested
that these  consolidated  financial  statements be read in conjunction  with the
consolidated  financial  statements,  and the  notes  thereto,  included  in the
Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2000.
In the opinion of  management,  the  consolidated  financial  statements for the
fiscal  periods  presented  herein include all  adjustments  that are normal and
recurring  which are  necessary for a fair  presentation  of the results for the
interim  periods.  The results of  operations  for the  nine-month  period ended
October 31, 2000 are not  necessarily  indicative  of the results for the entire
fiscal year ending January 31, 2001.

Revenue Recognition

Revenue  from the sale of  software  licenses  is  recognized  upon  shipment of
product, provided that the fee is fixed and determinable, persuasive evidence of
an arrangement  exists and collection of the resulting  receivable is considered
probable.  Software revenues include revenues from licenses, training and system
implementation  services.  Training and systems implementation services are sold
as part of a  bundled  software  license  agreement  as  well as  separately  to
customers who have  previously  purchased  software  licenses.  When training or
systems  implementation  services that are not essential to the functionality of
the software are sold as part of a bundled license agreement,  the fair value of
these  services,  based  on  the  price  charged  for  the  services  when  sold
separately, is deferred and recognized when the services are performed.

Customization  work is sometimes  required to ensure that the Company's software
functionality   meets  the   requirements   of  its   customers.   Under   these
circumstances, the Company's revenues are derived from fixed price contracts and
revenue is recognized  using the  percentage  of completion  method based on the
relationship  of actual costs  incurred to total costs  estimated to be incurred
over the duration of the contract.  Estimated  losses on such contracts would be
charged  against  earnings  in the period such  losses are  identified.  No such
losses have been incurred on such contracts to date.

Historically,  the Company has not experienced  significant returns or exchanges
of its products  from direct  sales to  customers.  Revenue  related to customer
support  agreements  is  deferred  and  recognized  ratably  over  the  term  of
respective agreements.  Customer support agreements generally include bug fixes,
telephone  support and product upgrades on a when and if available  basis.  When
the  Company  provides a  software  license  and the  related  customer  support
arrangement for one bundled price, the fair value of the customer support, based
on the price  charged for that element  separately,  is deferred and  recognized
ratably over the term of the respective agreement.

Cash, Cash Equivalents and Short Term Investments

The Company considers all highly liquid  investments  purchased with an original
maturity  of  three  months  or less to be cash  equivalents.  Cash  equivalents
consist of funds deposited in money market accounts.  Consequently, the carrying
amount of cash and cash  equivalents  approximates  fair  value.  The balance of
short term investments at October 31, 2000 consisted of a certificate of deposit
pledged to collateralize a letter of credit required for a leased facility.

Net Loss Per Common Share

Basic loss per common share is computed by dividing net loss available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted loss per common share includes the potential dilution that would
occur if securities or other  contracts to issue common stock were  exercised or
converted  into  common  stock.  Under the  treasury  stock  method,  options to
purchase  1,900,466  and  1,696,108  shares of  common  stock for three and nine
months ended October 31, 2000,  respectively,  and 271,800  shares of cumulative
convertible  preferred stock that were  outstanding at October 31, 2000 were not
included in the  computation  of diluted loss per share as their effect would be
anti-dilutive.  As a result, the basic and diluted loss per common share amounts
are identical.

Income Taxes

Deferred taxes are provided utilizing the liability method, whereby deferred tax
assets are recognized for deductible  temporary  differences  and operating loss
and tax credit  carryforwards  and deferred tax  liabilities  are recognized for
taxable temporary differences. Temporary differences are the differences between
the reported amounts of assets and liabilities and their tax bases. Deferred tax
assets and  liabilities  are adjusted for the effects of changes in tax laws and
rates on the date of  enactment.  Deferred tax assets are reduced by a valuation
allowance  when, in the opinion of  management,  it is more likely than not that
some portion or all of the deferred tax assets will not be realized. The Company
has provided a full valuation allowance against its net deferred tax asset as of
October 31, 2000 and January 31, 2000, respectively.


(3)      CAPITALIZATION

During the nine months ended October 31, 2000, the Company issued 572,000 shares
of common stock upon the exercise of options resulting in total cash proceeds of
$4,978,000.  Additionally  the Company  issued  9,000  shares of common stock to
participants  of the employee  stock purchase plan resulting in cash proceeds of
$258,000.


(4)      SEGMENT REPORTING

The Company  aligns its business  into two  operating  segments.  The  Excalibur
Applications  Group develops,  markets and services the Excalibur  RetrievalWare
suite of products and focuses on large corporations and government organizations
building knowledge  management  intranets and portals, as well as Internet based
e-commerce and online  service  businesses.  The Excalibur  Media Services Group
develops,  markets and  services the video  product  line and provides  software
products and services primarily to original equipment  manufacturers ("OEM") and
application  service  providers  ("ASP") focusing on internet and intranet video
content  management.  Media Services Group revenues are generated primarily from
OEM and ASP transactions, which may involve development and customization by the
Company.  While OEM deals are a significant  component of the Applications Group
revenues,  the majority of revenue is generated from licensing the RetrievalWare
suite of products directly to corporations and government organizations building
intranets and Internet based e-commerce and online service businesses.

The Company does not identify or allocate assets by operating segment.

The following chart  represents  revenues and expenses (in thousands of dollars)
attributable  to the  Applications  Group and Media Services Group for the three
and  nine-month  periods  ended  October  31, 2000 and 1999.  Expenses  for each
segment consist of direct and allocated expenses.


<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------
                                Applications Group        Media Services Group              Total
----------------------------------------------------------------------------------------------------------
                                Three months ended         Three months ended         Three months ended
                                   October 31,                October 31,                October 31,
                                2000         1999          2000        1999           2000         1999
                           -------------------------  -------------------------  -------------------------
<S>                         <C>          <C>           <C>         <C>            <C>          <C>
Total Revenues              $   9,178    $   7,549     $   2,586   $     817      $  11,373    $   9,070
Operating Expenses              9,670        7,310         3,118       2,067         11,508        9,346
                           -------------------------  -------------------------  -------------------------
Operating Income (Loss)     $      48    $     239     $    (532)  $  (1,250)     $    (135)   $    (276)
                           -------------------------  -------------------------  -------------------------

-----------------------------------------------------------------------------------------------------------
</TABLE>


<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------
                                Applications Group        Media Services Group              Total
----------------------------------------------------------------------------------------------------------
                                 Six months ended           Six months ended           Six months ended
                                     July 31,                   July 31,                   July 31,
                                2000         1999          2000        1999           2000         1999
                           -------------------------  -------------------------  -------------------------
<S>                         <C>          <C>           <C>         <C>            <C>          <C>
Total Revenues              $  18,391    $  13,715     $   2,367   $   3,115      $  20,758    $  16,830
Operating Expenses             16,552       13,860         6,103       4,715         22,655       18,575
                           -------------------------  -------------------------  -------------------------
Operating Income (Loss)     $   1,839    $    (145)    $  (3,736)  $   (1,600)    $  (1,897)   $  (1,745)
                           -------------------------  -------------------------  -------------------------

-----------------------------------------------------------------------------------------------------------
</TABLE>

Major Customers

In the  current  quarter,  revenues  derived  from sales to agencies of the U.S.
Government  were  approximately  $1.3 million,  or 11.2% of total  revenues.  No
single  customer  accounted  for 10% or more of the  Company's  revenues for the
quarter ended July 31, 2000.


<PAGE>


(5)      RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities."  This
statement,  as amended by SFAS No. 137 and SFAS No. 138, 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.  The
statement  also  requires  that  changes  in  the  derivative's  fair  value  be
recognized in earnings  unless specific hedge  accounting  criteria are met. The
Company  believes  the  adoption of SFAS Nos.  133,  137 and 138,  which will be
effective for the quarter ending April 30, 2001, will not have a material effect
on the financial statements.

In December 1999, the SEC released Staff Accounting  Bulletin No. 101,  "Revenue
Recognition  in  Financial  Statements."  This  bulletin,  as  amended  by Staff
Accounting   Bulletin  No.  101B,   establishes  more  clearly  defined  revenue
recognition  criteria than previously existing accounting  pronouncements and is
effective for the Company for the quarter  ending  January 31, 2001. The Company
is  evaluating  the full impact of this  bulletin to determine the impact on its
financial position, results of operations and cash flows but does not anticipate
that it will have a material effect.

In March 2000, FASB issued  Interpretation (FIN) No. 44, "Accounting for Certain
Transactions  Involving Stock  Compensation -- An  Interpretation of APB Opinion
No. 25." This  Interpretation  clarifies  (a) the  definition  of  employee  for
purposes of applying Opinion 25, (b) the criteria for determining whether a plan
qualifies as a non-compensatory  plan, (c) the accounting consequence of various
modifications  to the terms of a previously fixed stock option or award, and (d)
the  accounting  for an  exchange  of stock  compensation  awards in a  business
combination.  This  Interpretation  was  effective  July 1,  2000,  but  certain
conclusions in this Interpretation cover specific events that occur after either
December  15,  1998,  or  January  12,  2000.  The  Company  does not expect the
application of FIN 44 to have a material impact on financial position or results
of operations.


(6)      LINE OF CREDIT

The Company has available a $3,000,000  line of credit under an agreement with a
bank which expires on September 20, 2000. Up to $250,000 of borrowings may be in
the  form of  letters  of  credit.  The  line of  credit  is  collateralized  by
substantially  all corporate  assets.  Borrowings  under the line of credit bear
interest at the  lender's  prime rate (9.5% at July 31, 2000) plus up to 1%. The
agreement  requires the Company to comply with certain financial  covenants that
are computed on a monthly basis and prohibits additional  borrowings without the
bank's  approval.  The Company was in compliance  with all covenants at July 31,
2000.  As of July 31, 2000,  no borrowings  were  outstanding  under the line of
credit.


<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

Overview

The  statements  contained  in this  report that are not purely  historical  are
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the  Securities  Exchange Act of 1934,  including
without  limitation  statements  about  the  Company's  expectations,   beliefs,
intentions or strategies  regarding the future. All  forward-looking  statements
included in this report are based on information available to the Company on the
date  hereof  and  the  Company   assumes  no  obligation  to  update  any  such
forward-looking  statements.  The  forward-looking  statements  contained herein
involve  risks and  uncertainties.  The  Company's  actual  results could differ
materially  from those  anticipated  in these  forward-looking  statements  as a
result of certain factors, including those set forth in this report.

The Company  principally  earns  revenues  from the  licensing  of its  software
products to commercial  businesses  and  government  agencies  throughout  North
America,  Europe and other parts of the world. The Company licenses its software
to end users directly and also distributes its software products through license
agreements with value-added  resellers,  system integrators,  original equipment
manufacturers,  application  service  providers  and other  strategic  partners.
Revenues are provided  under  software  licenses with new customers and from the
related  sale  of  product  maintenance,  training  and  implementation  support
services. Additions to the number of authorized users, upgrades to newer product
versions  and the  renewal  of product  maintenance  arrangements  by  customers
pursuant to existing  licenses  also  provide  revenues  to the  Company.  Under
software  maintenance  contracts,  customers are  typically  entitled to receive
telephone  support,  software bug fixes and new releases of particular  software
products when and if they are released.

The Company  aligns its business  into two  operating  segments.  The  Excalibur
Applications  Group develops,  markets and services the Excalibur  RetrievalWare
suite of products and focuses on large corporations and government organizations
building knowledge  management  intranets and portals, as well as Internet based
e-commerce and online  service  businesses.  The Excalibur  Media Services Group
develops,  markets and  services the video  product  line and provides  software
products and services primarily to original equipment  manufacturers ("OEM") and
third party  application  service  providers  ("ASP")  focusing on Internet  and
intranet video content  management.  Media Services Group revenues are generated
primarily  from OEM and ASP  transactions,  which may  involve  development  and
customization by the Company. While OEM deals are a significant component of the
Applications Group revenues, the majority of revenue is generated from licensing
the  RetrievalWare  suite of products  directly to  corporations  and government
organizations  building  intranets  and  Internet  based  e-commerce  and online
service businesses.

The following chart  represents  revenues and expenses (in thousands of dollars)
attributable  to the  Applications  Group and Media Services Group for the three
and six month  periods  ended July 31, 2000 and 1999.  Expenses for each segment
consist of direct and allocated expenses.

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------
                             Applications Group    Media Services Group      Applications Group    Media Services Group
                             ------------------    --------------------      ------------------    --------------------
                             Three months ended     Three months ended        Six months ended       Six months ended
                                  July 31,               July 31,                 July 31,               July 31,
                               2000      1999         2000      1999          2000       1999        2000       1999
                            ---------------------  ---------------------    ---------------------  ---------------------
<S>                         <C>        <C>         <C>        <C>           <C>        <C>         <C>        <C>

Total Revenues              $   9,729  $   6,865   $   1,644  $   2,205     $  18,391  $  13,715    $   2,367  $   3,115
Operating Expenses              8,392      6,832       3,116      2,514        16,552     13,860        6,103      4,715
                            ---------------------  ---------------------    ---------------------  ---------------------
Operating Income (Loss)     $   1,337  $      33   $  (1,472) $    (309)    $   1,839  $    (145)   $  (3,736) $  (1,600)
                            ---------------------  ---------------------    ---------------------  ---------------------

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

</TABLE>


<PAGE>


On May 1, 2000, the Company and Intel Corporation jointly announced an agreement
to form a new company, to be named Convera Corporation,  that will enable owners
of branded high-value content to produce and securely sell their audio and video
content  over the  Internet.  The  Company  will  combine  its  entire  business
operations with Intel's  Interactive Media Services division,  which is composed
of three operating units,  intellectual property assets and other assets used by
that division. In addition,  Intel will contribute approximately $155 million in
cash to the new  company,  $150 million of which will be paid at closing and the
balance of which will be  payable  in 2001 to fund  retention  bonuses to former
Intel  employees.  The assets to be  contributed  by Intel's  Interactive  Media
Services Division include a broad set of technical capabilities,  14 patents and
patent  applications in the area of content  security,  source code  components,
non-exclusive  licenses to  additional  source code  components  and other Intel
patents and patent applications, Intel's rights under certain customer contracts
and  technical  employee  resources  in key areas,  primarily  in  software  and
engineering. In exchange for these contributions,  Intel will receive 49% of the
new  company's   voting  stock  and  60%  of  the  new  company's  equity  on  a
fully-diluted  basis.  Excalibur  shareholders  and present  option holders will
receive  51% of the new  company's  voting  stock  and 40% of the new  company's
equity on a fully-diluted basis in exchange for their Excalibur stock. Excalibur
shareholders  will  receive one share of stock in the new company for each share
they hold of  Excalibur.  The  transaction  is  subject  to  regulatory  review,
approval  of the  stockholders  of  the  Company  and  other  customary  closing
conditions.  Details of this agreement and additional  information are contained
in the  Company's  Form 8-K filed with the  Securities  and Exchange  Commission
("SEC") on May 3, 2000, the Company's preliminary proxy statement filed with the
SEC on  August  14,  2000 and  other  related  filings  with the SEC made by the
Company  subsequent to the May 1  announcement.  The  transaction is expected to
close in the fall of 2000.

As disclosed in Item 5 of this form 10-Q,  on  September  13, 2000,  the Company
announced that Intel and the National  Basketball  Association  ("NBA")  entered
into an agreement to be assigned to Convera  Corporation  whereby  Intel and the
NBA will develop and distribute  interactive NBA content,  ultimately  including
enhanced broadband  programming and interactive game broadcasts.  As part of the
NBA  agreement,  the NBA will receive a 10% equity stake in Convera  Corporation
after giving effect to the Company's  combination with Intel's Interactive Media
Services  division.   The  transaction  with  the  NBA  is  subject  to  certain
conditions, including approval by the NBA Board of Governors.


Results of Operations

Revenues

Total revenues  increased 25% in the second quarter of the current year over the
second quarter last year.  Software  revenues  (licenses and services  revenues)
from Excalibur  RetrievalWare increased 47% in the second quarter of the current
year to $8.4 million from $5.7 million in the second  quarter of the prior year.
RetrievalWare  revenues  represented  84% of  software  revenues  in the  second
quarter of the current  year  compared to 72% in the second  quarter  last year.
Software  revenues from the Screening Room product decreased 26% to $1.6 million
in the current  quarter  from $2.2  million in the second  quarter of last year.
Revenues from Screening Room  represented 16% of software  revenues  compared to
28% in the second  quarter last year. Due to the Company's  transition  from the
EFS product line to RetrievalWare,  no EFS revenue was recognized in the current
year compared to $21 thousand in the second quarter last year.

Total software  revenues  increased 27% in the second quarter this year to $10.0
million  from $7.9  million  in the second  quarter  last  year.  North  America
software  revenues  decreased 7% in the second quarter to $5.9 million from $6.4
million  in the  second  quarter  last  year.  International  software  revenues
increased  171% to $4.0 million in the current  quarter from $1.5 million in the
second quarter of the prior year.

For the six months ended July 31, 2000,  total revenues were $20.8  million,  an
increase  of  23%  over  total  revenues  of  $16.8  million  reported  for  the
corresponding  period last year.  Software  revenues from  RetrievalWare for the
first half of the current  fiscal year increased 36% to $15.4 million from $11.3
million for the first half of last fiscal year. Software revenues from Screening
Room for the six month period ended July 31, 2000  decreased 31% to $2.1 million
from $3.1 million in the same period last year.


<PAGE>


Total  software  revenues  for the six  months  ended  July 31,  2000 were $17.5
million,  an  increase  of 21% over total  software  revenues  of $14.4  million
reported for the  corresponding  period last year.  Software revenues from North
America  for the first six  months of the  current  year  increased  7% to $11.7
million from $11.0  million in the  comparable  period last year.  International
software  revenues  increased  68% to $5.8 million in the six month period ended
July 31, 2000 from $3.4 million for the first half of last year.

The charts below  summarize the  components of revenues and expenses,  including
the amounts  expressed as a percentage of total revenues,  for the three and six
month periods  ended July 31, 2000 and 1999,  and the  percentage  change in the
amounts between fiscal periods (dollars in thousands).

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------
                                                  Components of Revenue and Expenses              Increase/
                                                                                                  (Decrease)
                                                     Three Months Ended July 31,
                                                   2000                        1999
                                              $       % of total          $       % of total            %
                                                       revenues                    revenues
                                          ------------------------    ------------------------    -----------
<S>                                       <C>           <C>           <C>           <C>             <C>
Revenues:

  RetrievalWare                           $ 8,375        74 %         $ 5,685        63 %            47  %
  Screening Room                            1,618        14             2,177        24             (26)
  EFS                                           -         -                21         0            (100)
                                          ------------------------    ------------------------    -----------
Total Software                              9,993        88             7,883        87              27
Maintenance                                 1,380        12             1,187        13              16
                                          ------------------------    ------------------------    -----------
     Total revenues                       $11,373       100 %         $ 9,070       100 %            25  %

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

Expenses:

  Costs of sales                          $ 2,009        18 %         $ 1,791        20 %            12  %
  Sales and marketing                       5,439        48             3,749        41              45
  Research and product development          2,843        25             2,372        26              20
  General and administrative                1,217        11             1,434        16             (15)
                                          ------------------------    ------------------------    -----------
     Total expenses                       $11,508       101 %         $ 9,346       103 %            23  %
                                          ------------------------    ------------------------    -----------

--------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------
                                                  Components of Revenue and Expenses              Increase/
                                                                                                  (Decrease)
                                                       Six Months Ended July 31,
                                                   2000                        1999
                                              $       % of total          $       % of total            %
                                                       revenues                    revenues
                                          ------------------------    ------------------------    -----------
<S>                                       <C>           <C>           <C>           <C>             <C>
Revenues:

  RetrievalWare                           $15,387        74 %         $11,329        68 %            36  %
  Screening Room                            2,118        10             3,061        18             (31)
  EFS                                           -         -                21         0            (100)
                                          ------------------------    ------------------------    -----------
Total Software                             17,505        84            14,411        86              21
Maintenance                                 3,253        16             2,419        14              34
                                          ------------------------    ------------------------    -----------
     Total revenues                       $20,758       100 %         $16,830       100 %            23  %
                                          ------------------------    ------------------------    -----------

Expenses:

  Costs of sales                          $ 3,568        17 %         $ 3,358        20 %             6  %
  Sales and marketing                      11,008        53             7,643        45              44
  Research and product development          5,532        27             4,862        29              14
  General and administrative                2,547        12             2,712        16              (6)
                                          ------------------------    ------------------------    -----------
     Total expenses                       $22,655       109 %         $18,575       110 %            22  %
                                          ------------------------    ------------------------    -----------

--------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>


The  Company   primarily  sells  to  three  markets:   corporations   and  large
organizations   with   intranets,   on-line   content   providers  and  Internet
e-businesses,  and the OEM market.  The revenue increase over the second quarter
of last year was driven by an  increase in sales to the  intranet  or  knowledge
management market. Noteworthy licensing arrangements that were signed during the
second quarter of the current year include  Deutsche Post, Bell Atlantic,  USDA,
and Nikoyo (HK) Limited.  Sales to the intranet or knowledge  management  market
were 50% of license revenues in the second quarter compared to 31% in the second
quarter last year.  For the six months ended July 31, 2000,  intranet sales were
40%, consistent with the same period last year.

For three months ended July 31, 2000,  23% of license  revenues  were  generated
from  sales to the  on-line  content  providers  compared  to 22% in the  second
quarter last year.  For the six months ended July 31, 2000,  sales to the online
services  market were 32%  compared to 21% in the  comparable  period last year.
Noteworthy licensing  arrangements that were signed during the second quarter of
the  current  year in the  online  services  market  included  webADTV,  Chicago
Tribune,  Wiznet and InterGraph.  There are now approximately 90 customers using
Excalibur  products  to  power  online   information   services  and  e-commerce
applications.

OEM revenues comprised 27% of second quarter license revenues compared to 46% in
the  comparable  quarter last year.  For the six months ended July 31, 2000, OEM
sales were 27% of license revenues compared to 39% for the six months ended July
31, 1999. The decrease is mainly due to the  completion of the StorageTek  joint
development agreement in the second quarter last year.

Software  maintenance and customer support revenues  increased 16% in the second
quarter of the  current  year to $1.4  million  from $1.2  million in the second
quarter last year. For the six months ended July 31, 2000, software  maintenance
and customer support revenues increased 34% to $3.3 million from $2.4 million in
the same  period  last year.  The  increase  was  attributable  primarily  to an
increase in the number of RetrievalWare customers.

Operating Expenses

Costs of sales  increased  12% to $2.0  million  in the  second  quarter  of the
current year from $1.8 million in the second  quarter last year.  Costs of sales
expressed  as a percentage  of total  revenues  were 18% in the current  quarter
compared  to 20% in the  second  quarter  last  year For the six  months  of the
current year,  costs of sales  increased 6% to $3.6 million from $3.4 million in
the first six months of last year,  representing  17% and 20% of total revenues,
respectively.  The increase in costs of sales is  attributable  to growth in the
costs of software  revenues,  primarily royalty expense,  in line with increased
sales volume this year.  Costs of maintenance  decreased for the quarter and six
months ended July 31, 2000 due to changes  implemented  in the fourth quarter of
fiscal 2000 that  streamlined the customer support  organization,  thus reducing
overall costs of maintenance.

Sales and marketing expenses increased 45% in the quarter ended July 31, 2000 to
$5.4 million from $3.7 million in the second quarter last year, representing 48%
and 41% of total revenues, respectively. For the first half of the current year,
sales and  marketing  expenses  increased 44% to $11.0 million from $7.6 million
for the  corresponding  period  last  year,  representing  53% and 45% of  total
revenues,  respectively.  The increase in expenses was due to the opening of the
Company's  sales  office in  Germany,  overall  growth  in sales  and  marketing
personnel, and higher sales commissions, in line with higher revenues this year.
The Company also  experienced a growth in marketing  program  expenses this year
due to a corporate advertising and branding campaign.

Total research and product  development  costs  increased 20% to $2.8 million in
the second  quarter of the current  year  compared to $2.4 million in the second
quarter  last year.  Research  and  product  development  costs  expressed  as a
percentage of total revenues were 25% in the current quarter  compared to 26% in
the second  quarter last year.  For the six months  ended July 31,  2000,  total
research and  development  costs increased 14% to $5.5 million from $4.9 million
for the first half of last  year,  representing  27% and 29% of total  revenues,
respectively.  The  increase  in absolute  dollars is largely  due to  increased
investment in both the text and video product lines as the Company  continued to
make enhancements to its RetrievalWare and Screening Room products. In the first
quarter of this year,  the Company  announced  support for the Arabic,  Chinese,
Dutch, Italian,  Japanese and Korean languages,  making RetrievalWare one of the
most comprehensive  international  search products  available.  The Company also
announced the release of Screening  Room Version 2.2. The Screening Room upgrade
release provides enhancements for video ingestion and capture, added scalability
capabilities, new user interfaces and published APIs for user customization.


<PAGE>


General and administrative  expenses decreased 15% in the second quarter to $1.2
million,  representing  11% of total revenues in the second quarter  compared to
$1.4 million, or 16% of total revenues,  in the second quarter of last year. For
the  first  half  of the  current  year,  general  and  administrative  expenses
decreased 6% to $2.5 million from $2.7 million for the corresponding period last
year, representing 12% and 16% of total revenues,  respectively. The decrease is
attributable to reduced travel and management information system expenses.

Net interest  income  increased to $133,000 and $228,000,  respectively,  in the
three and six month  periods  ended July 31,  2000 from  $66,000  and  $124,000,
respectively,  in the  comparable  periods  last  year due to a higher  level of
invested funds.


Liquidity and Capital Resources

In the six months ended July 31, 2000, the Company's  combined  balance of cash,
cash  equivalents  and  short-term  investments  increased to $11.8 million from
$11.1 million at January 31, 2000 as summarized  below (in  thousands).  At July
31,  2000,  investments  consisted  of  a  certificate  of  deposit  pledged  to
collateralize a letter of credit.





                             July 31,          January 31,
                               2000               2000              Change
                         ---------------    ---------------    ---------------
     Cash and cash
        Equivalents       $    11,695        $     10,884       $        811
     Short-term
        investments               142                 178                (36)
                         ---------------    ---------------    ---------------
     Total                $    11,837        $     11,062       $        775
                         ===============    ===============    ===============


During the six months  ended July 31,  2000,  cash of $2.4  million used to fund
operating activities was more than the net loss of $1.7 million primarily due to
an increase in accounts receivable,  prepaid expenses,  and other assets of $1.5
million.  Non-cash  charges  totaling  $0.9 million  included  depreciation  and
amortization of $0.7 million.

The Company's investing  activities used $0.9 million in the first six months of
the current year due to the purchase of equipment and leasehold improvements.

Cash provided by financing  activities was $3.9 million for the six months ended
July 31, 2000. Cash of approximately $3.7 million was provided from the exercise
of employee  stock  options and $0.2 million was  provided  from the issuance of
stock under the employee stock purchase plan

The Company has available a $3,000,000  line of credit under an agreement with a
bank which expires on September 20, 2000. Up to $250,000 of borrowings may be in
the  form of  letters  of  credit.  The  line of  credit  is  collateralized  by
substantially  all corporate  assets.  Borrowings  under the line of credit bear
interest at the  lender's  prime rate (9.5% at July 31, 2000) plus up to 1%. The
agreement  requires the Company to comply with certain financial  covenants that
are computed on a monthly basis and prohibits additional  borrowings without the
bank's approval.  As of July 31, 2000, no borrowings were outstanding  under the
line of credit.

The  Company's  balances of cash and cash  equivalents  at July 31, 2000 and its
funds generated from operations, if any, are expected to provide sufficient cash
to meet the  Company's  current  projected  needs  for the  foreseeable  future.
Historically,  the Company has used cash  provided  primarily  from sales of its
common  stock to fund its  operations.  If the  Company  fails  to  achieve  its
operating  plan for fiscal  year 2001,  the  Company's  balance of cash and cash
equivalents may be reduced substantially.  The Company may be required to pursue
additional  external  sources of financing to support its operations and capital
requirements.  There can be no assurance that external sources of financing will
be  available  to  fund  the  Company's  ongoing  operations  or  other  capital
requirements on terms acceptable to the Company.


<PAGE>


Factors That May Affect Future Results

The Company's  business  environment is  characterized  by intense  competition,
rapid technological  changes,  changes in customer requirements and emerging new
market segments.  Consequently,  to compete  effectively,  the Company must make
frequent  new  product  introductions  and  enhancements  while  protecting  its
intellectual  property,  retain its key personnel and deploy sales and marketing
resources  to take  advantage of new business  opportunities.  Future  operating
results  will be  affected  by the  ability of the Company to expand its product
distribution  channels and to manage the expected growth of the Company.  Future
results may also be impacted by the  effectiveness  of the Company in  executing
future  acquisitions  and integrating the operations of acquired  companies with
those of the Company.  Failure to meet any of these  challenges  could adversely
affect future operating results.

The Company's quarterly operating results have varied  substantially in the past
and are likely to vary  substantially  from quarter to quarter in the future due
to a variety of factors. In particular, the Company's period-to-period operating
results  are  significantly  dependent  upon the timing of the  closing of large
license  agreements.  In this regard, the purchase of the Company's products can
require a significant  capital  investment  from a potential  customer which the
customer  generally  views  as a  discretionary  cost  that can be  deferred  or
canceled due to budgetary or other  business  reasons and can involve long sales
cycles of six  months or more.  Estimating  future  revenues  is also  difficult
because the Company  ships its products  soon after an order is received and, as
such does not have a significant  backlog.  Thus, quarterly license fee revenues
are  heavily  dependent  upon a  limited  number of  orders  for large  licenses
received  and  shipped  within  the same  quarter.  Moreover,  the  Company  has
generally  recorded a  significant  portion of its total  quarterly  license fee
revenues in the third month of a quarter, with a concentration of these revenues
occurring in the last half of that third month.  This  concentration of revenues
is influenced by customer tendencies to make significant capital expenditures at
the end of a fiscal  quarter.  The Company  expects  these  revenue  patterns to
continue for the foreseeable  future.  Despite the  uncertainties in its revenue
patterns,  the Company's  operating expenses are based upon anticipated  revenue
levels  and  such  expenses  are  incurred  on an  approximately  ratable  basis
throughout  a  quarter.  As a result,  if  expected  revenues  are  deferred  or
otherwise  not  realized in a quarter for any reason,  the  Company's  business,
operating  results  and  financial  condition  would  be  materially   adversely
affected.

As of January  31,  2000,  the  Company  had net  operating  loss  carryforwards
("NOLs") of approximately  $64.7 million.  The deferred tax assets  representing
the tax  benefits  of the  NOLs  have  been  offset  completely  by a  valuation
allowance due to the Company's lack of an earnings history. The Company incurred
a net  loss of $1.7  million  for  the six  months  ended  July  31,  2000.  The
accumulated  deficit of the  Company  at July 31,  2000 was $57.8  million.  The
realization  of the  benefits of the NOLs is  dependent  on  sufficient  taxable
income in future  fiscal  years.  Lack of  future  earnings,  or a change in the
ownership  of the  Company,  could  adversely  affect the  Company's  ability to
utilize the NOLs. Despite the NOL carryforwards, the Company may have income tax
liability in future years due to the application of the alternative  minimum tax
rules of the Internal Revenue Code.

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  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

The Company believes that inflation has not had a material effect on the results
of its operations to date.


Other Factors

EURO Conversion

On January 1, 1999, the exchange rates of eleven countries (Germany, France, the
Netherlands,  Austria,  Italy, Spain, Finland,  Ireland,  Belgium,  Portugal and
Luxembourg)  were fixed  amongst one another  and became the  currencies  of the
EURO.  The currencies of the eleven  countries will remain in circulation  until
mid-2002.  The EURO currency will be introduced on January 1, 2002.  The Company
does not expect future  balance sheets and statements of earnings and cash flows
to be materially impacted by the EURO Conversion.


<PAGE>


New Accounting Pronouncements

In June 1998, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities."  This
statement,  as amended by SFAS No. 137 and SFAS No. 138, 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.  The
statement  also  requires  that  changes  in  the  derivative's  fair  value  be
recognized in earnings  unless specific hedge  accounting  criteria are met. The
Company  believes  the  adoption of SFAS Nos.  133,  137 and 138,  which will be
effective for the quarter ending April 30, 2001, will not have a material effect
on the financial statements.

In December 1999, the SEC released Staff Accounting  Bulletin No. 101,  "Revenue
Recognition  in  Financial  Statements."  This  bulletin,  as  amended  by Staff
Accounting   Bulletin  No.  101B,   establishes  more  clearly  defined  revenue
recognition  criteria than previously existing accounting  pronouncements and is
effective for the Company for the quarter  ending  January 31, 2001. The Company
is  evaluating  the full impact of this  bulletin to determine the impact on its
financial position, results of operations and cash flows but does not anticipate
that it will have a material effect.

In March 2000, FASB issued  Interpretation (FIN) No. 44, "Accounting for Certain
Transactions  Involving Stock  Compensation -- An  Interpretation of APB Opinion
No. 25." This  Interpretation  clarifies  (a) the  definition  of  employee  for
purposes of applying Opinion 25, (b) the criteria for determining whether a plan
qualifies as a non-compensatory  plan, (c) the accounting consequence of various
modifications  to the terms of a previously fixed stock option or award, and (d)
the  accounting  for an  exchange  of stock  compensation  awards in a  business
combination.  This  Interpretation  was  effective  July 1,  2000,  but  certain
conclusions in this Interpretation cover specific events that occur after either
December  15,  1998,  or  January  12,  2000.  The  Company  does not expect the
application of FIN 44 to have a material impact on financial position or results
of operations.


Market Risk

The Company's market risk is principally confined to changes in foreign currency
exchange  rates and  potentially  adverse  effects of differing tax  structures.
International revenues from ETIL, the Company's foreign sales subsidiary located
in the United Kingdom,  were  approximately  38% of total revenues in the second
quarter  of the  current  year.  International  sales are made  mostly  from the
Company's  foreign  subsidiary and are typically  denominated in British pounds.
The Company's exposure to foreign exchange rate fluctuations arises in part from
intercompany  accounts in which  royalties on ETIL sales are charged to ETIL and
recorded as  intercompany  receivables on the books of the U.S.  parent company.
The  Company is also  exposed  to  foreign  exchange  rate  fluctuations  as the
financial results of ETIL are translated into U.S. dollars in consolidation.  As
exchange rates vary,  those results when  translated may vary from  expectations
and adversely impact overall expected profitability.


<PAGE>


                           PART II-- OTHER INFORMATION

Item 1.           Legal Proceedings                                       None.
------


Item 2.           Changes in Securities                                   None.
------


Item 3.           Defaults upon Senior Securities                         None.
------


Item 4.           Submission of Matters to Vote of Security Holders       None.
------


Item 5.           Other Information                                       None.
------

On September 11, 2000, the Company and Intel Corporation announced that the name
of the new company they will form to deliver  interactive media services will be
Convera Corporation.

On September 13, 2000, the Company  announced that its video content  management
technologies,  including  Excalibur  Screening  Room(R),  will  become part of a
solution delivered by Convera Corporation, the newly named company to be created
by the  Company  and the  Intel  Interactive  Media  Services  Division,  to the
National  Basketball  Association  ("NBA") as part of an agreement  announced by
Intel  Corporation  and the NBA.  Intel  and the NBA  announced  that  they have
entered into an agreement  whereby Intel and the NBA will develop and distribute
interactive NBA content, ultimately including enhanced broadband programming and
interactive  game  broadcasts.  Intel intends to assign the agreement to Convera
Corporation.  As part of the NBA  agreement,  the NBA will  receive a 10% equity
stake in Convera. The transaction with the NBA is subject to certain conditions,
including approval by the NBA Board of Governors.


Item 6.           Exhibits and Reports on Form 8-K
------

Two  reports on Form 8-K were filed  during  the second  quarter of fiscal  year
2001.

On May 3,  2000,  the  Company  filed a Form  8-K for  Item  5,  announcing  the
Agreement  and Plan of  Contribution  and Merger with Intel  Corporation  , Exca
Holdings,  Inc.,  a  wholly  owned  subsidiary  of the  Company  ("Newco"),  and
Excalibur  Transitory,  Inc., a wholly owned  subsidiary of Newco.  The Form 8-K
contained a brief  description of the terms of the proposed  merger and included
as an exhibit the Agreement and Plan of Contribution and Merger.

On July 19, 2000, the Company filed a Form 8-K for Item 4, reporting a change in
the Company's independent accounting firm.


<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                    EXCALIBUR TECHNOLOGIES CORPORATION

November 15, 2000                  By: /s/ Patrick C. Condo
                                    --------------------------
                                    Patrick C. Condo
                                    President and Chief Executive Officer
                                   (Principal Executive Officer)


November 15, 2000                  By: /s/ James H. Buchanan
                                    --------------------------
                                    James H. Buchanan
                                    Chief Financial Officer
                                   (Principal Financial and Accounting Officer)