Artificial Life Announces Execution of Turn Around Plan and Cost Cut Program

New corporate strategy: focus on US business and intellectual property

licensing



Apr 24, 2001, 01:00 ET from Artificial Life, Inc.

    BOSTON, April 25 /PRNewswire Interactive News Release/ -- Artificial Life,
 Inc (Nasdaq:   ALIF) announced today that it has installed a turn around plan
 and already started execution on it.  The corporate goal is to provide for an
 immediate operational consolidation of the company and to cut costs on a
 global basis of over 50% of its operational expenses.  The company also
 announced an expansion of its business strategy.
     Artificial Life has started effecting layoffs and re-negotiations of
 compensation packages with its management and staff in all business units and
 subsidiaries to cut operational expenses by more than 50% on a global basis.
     The execution of the expense reduction will have consequences for the
 corporate management.  The company terminated its contract with Manfred Esser,
 the former managing director of its Russian subsidiary.  The managing director
 of the Swiss operation, Manuel Ebner, has resigned.
     In addition the company is seeking to reduce its ownership in its Russian
 subsidiary and intends to reduce global R&D expenses as its core technologies
 are now market ready and should require less development resources in the
 future.  The transfer and reduction of ownership in the Russian subsidiary is
 expected to result in an anticipated net cost reduction of more then 6 Mio.
 USD for fiscal 2001. The company is in negotiation with a Swiss investor for
 the partial divestiture its Russian operations.
     "Our goal is to turn the company into a strong and profitable enterprise
 as soon as possible. We have planned this for fiscal 2001 since our IPO and we
 are determined to prove that we can do this. Business units that do not
 contribute to a positive cash flow by  the end of this year will be thoroughly
 evaluated as to the merit of their activities to the organization overall, and
 may be shut down or drastically reduced. It is important for us to establish a
 solid financial basis for the company, to become cash flow positive for all
 business units and to center our activities in regions and business areas that
 promise the highest return in a short time. We will reduce our global
 expansion efforts, combine and consolidate our European operations, and focus
 more than in the past on our home turf, the US market. However, we will
 maintain a small presence in Asia (Hong Kong) as we expect strong growth there
 soon," said Artificial Life CEO Eberhard Schoneburg.
     To achieve profitability in fiscal 2001 the company announced that it
 intends to expand its revenue potential as part of a new business strategy. In
 addition to the usual sales of its product suites it will from now on offer to
 interested clients, companies and partners the opportunity to license its
 unique and patent pending intellectual property and algorithms for natural
 language processing, financial service applications and mobile computing. This
 will give regional and OEM partners the opportunity to include Artificial Life
 technology in their own products and services. The company is currently in
 negotiations to license its technology on an OEM basis to Swiss and German
 companies.
     "Our new approach to allow partners and interested companies to include
 our leading and award winning technology into their products and services has
 created a lot of interest in a very short time frame. Therefore, we believe
 that this is the right way to go to accelerate our sales on a global basis
 without the standard lead time delays" concluded Eberhard Schoneburg.
     The company also announced that its founder and CEO Eberhard Schoneburg
 has made additional direct cash infusions for debt and equity of approximately
 $400,000, bringing the aggregate of such contributions for the year to
 approximately 1 million USD.  Further, the Company continues to seek
 additional necessary short term funding as previously disclosed and is
 currently in negotiation with several potential private and institutional
 investors.
 
     About Artificial Life
     Founded in 1994, Artificial Life, Inc. (Nasdaq:   ALIF) develops, markets,
 and supports intelligent software robots for the Internet.  The company offers
 uniquely conversational bot-based products for customer service, consultative
 selling, Web-based learning, Web site navigation, automated e-mail response,
 and financial portfolio management. Major customers of the Artificial Life
 Group include, among others, Pioneer Investment Management, Inc., Credit
 Suisse First Boston, UBS, Advance Bank, Eagle Star, and MobilCom. The Company
 recently won a Massachusetts Interactive Media Council (MIMC) award in the
 category of "Enabling Technologies-User Applications"
     Artificial Life, Inc. is headquartered in Boston, Massachusetts, U.S.A,
 and maintains subsidiaries in Switzerland, Germany, Russia, and Hong Kong.
 Detailed information about Artificial Life, Inc. and its products is available
 at http://www.artificial-life.com.
 
     "Safe Harbor" Statement under the Private Securities Litigation Reform Act
 of 1995:
     Statements in this press release regarding Artificial Life, Inc.'s
 business that are not historical facts are "forward-looking statements" that
 involve risks and uncertainties.  For a discussion of such risks and
 uncertainties, which could cause actual results to differ from those contained
 in the forward-looking statements, see "Risk Factors" in the Company's Annual
 Report or Form 10-K for the most recently ended fiscal year.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X51975434
 
 

SOURCE Artificial Life, Inc.
    BOSTON, April 25 /PRNewswire Interactive News Release/ -- Artificial Life,
 Inc (Nasdaq:   ALIF) announced today that it has installed a turn around plan
 and already started execution on it.  The corporate goal is to provide for an
 immediate operational consolidation of the company and to cut costs on a
 global basis of over 50% of its operational expenses.  The company also
 announced an expansion of its business strategy.
     Artificial Life has started effecting layoffs and re-negotiations of
 compensation packages with its management and staff in all business units and
 subsidiaries to cut operational expenses by more than 50% on a global basis.
     The execution of the expense reduction will have consequences for the
 corporate management.  The company terminated its contract with Manfred Esser,
 the former managing director of its Russian subsidiary.  The managing director
 of the Swiss operation, Manuel Ebner, has resigned.
     In addition the company is seeking to reduce its ownership in its Russian
 subsidiary and intends to reduce global R&D expenses as its core technologies
 are now market ready and should require less development resources in the
 future.  The transfer and reduction of ownership in the Russian subsidiary is
 expected to result in an anticipated net cost reduction of more then 6 Mio.
 USD for fiscal 2001. The company is in negotiation with a Swiss investor for
 the partial divestiture its Russian operations.
     "Our goal is to turn the company into a strong and profitable enterprise
 as soon as possible. We have planned this for fiscal 2001 since our IPO and we
 are determined to prove that we can do this. Business units that do not
 contribute to a positive cash flow by  the end of this year will be thoroughly
 evaluated as to the merit of their activities to the organization overall, and
 may be shut down or drastically reduced. It is important for us to establish a
 solid financial basis for the company, to become cash flow positive for all
 business units and to center our activities in regions and business areas that
 promise the highest return in a short time. We will reduce our global
 expansion efforts, combine and consolidate our European operations, and focus
 more than in the past on our home turf, the US market. However, we will
 maintain a small presence in Asia (Hong Kong) as we expect strong growth there
 soon," said Artificial Life CEO Eberhard Schoneburg.
     To achieve profitability in fiscal 2001 the company announced that it
 intends to expand its revenue potential as part of a new business strategy. In
 addition to the usual sales of its product suites it will from now on offer to
 interested clients, companies and partners the opportunity to license its
 unique and patent pending intellectual property and algorithms for natural
 language processing, financial service applications and mobile computing. This
 will give regional and OEM partners the opportunity to include Artificial Life
 technology in their own products and services. The company is currently in
 negotiations to license its technology on an OEM basis to Swiss and German
 companies.
     "Our new approach to allow partners and interested companies to include
 our leading and award winning technology into their products and services has
 created a lot of interest in a very short time frame. Therefore, we believe
 that this is the right way to go to accelerate our sales on a global basis
 without the standard lead time delays" concluded Eberhard Schoneburg.
     The company also announced that its founder and CEO Eberhard Schoneburg
 has made additional direct cash infusions for debt and equity of approximately
 $400,000, bringing the aggregate of such contributions for the year to
 approximately 1 million USD.  Further, the Company continues to seek
 additional necessary short term funding as previously disclosed and is
 currently in negotiation with several potential private and institutional
 investors.
 
     About Artificial Life
     Founded in 1994, Artificial Life, Inc. (Nasdaq:   ALIF) develops, markets,
 and supports intelligent software robots for the Internet.  The company offers
 uniquely conversational bot-based products for customer service, consultative
 selling, Web-based learning, Web site navigation, automated e-mail response,
 and financial portfolio management. Major customers of the Artificial Life
 Group include, among others, Pioneer Investment Management, Inc., Credit
 Suisse First Boston, UBS, Advance Bank, Eagle Star, and MobilCom. The Company
 recently won a Massachusetts Interactive Media Council (MIMC) award in the
 category of "Enabling Technologies-User Applications"
     Artificial Life, Inc. is headquartered in Boston, Massachusetts, U.S.A,
 and maintains subsidiaries in Switzerland, Germany, Russia, and Hong Kong.
 Detailed information about Artificial Life, Inc. and its products is available
 at http://www.artificial-life.com.
 
     "Safe Harbor" Statement under the Private Securities Litigation Reform Act
 of 1995:
     Statements in this press release regarding Artificial Life, Inc.'s
 business that are not historical facts are "forward-looking statements" that
 involve risks and uncertainties.  For a discussion of such risks and
 uncertainties, which could cause actual results to differ from those contained
 in the forward-looking statements, see "Risk Factors" in the Company's Annual
 Report or Form 10-K for the most recently ended fiscal year.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X51975434
 
 SOURCE  Artificial Life, Inc.