Prospectus Summary
You should read the following summary together with the more detailed information regarding our company and our consolidated financial statements and notes to those statements appearing elsewhere in this prospectus.
AvantGo, Inc.
We provide mobile infrastructure software and services that extend the Internet and corporate applications beyond the desktop to handheld devices and Internet-enabled phones. Our software and services bridge the gap between the Internet, wireless and mobile technologies. Our AvantGo Enterprise software products enable access to critical information and applications from mobile devices to accelerate information flow between companies and their mobile employees, customers, suppliers and business partners. Our AvantGo Mobile Internet service, or AMI service, enables content providers and e-businesses to extend their user reach, foster repeat use and increase consumer loyalty. Our AMI service provides consumers with interactive and personalized Internet content and Web-based applications on mobile devices from over 400 content sources, or channels. To promote the use of our products and services, our software is bundled with offerings from leading mobile hardware and software providers, including Palm, Inc. and Microsoft Corp.
We license our AvantGo Enterprise software products to large global companies such as American Express Travel-Related Services, Inc., Ford Motor Company and McKessonHBOC. With our software products and services, our enterprise customers can increase employee productivity and streamline business processes such as billing, procurement, inventory control, manufacturing and customer relationship management.
Through our AMI service, we generate placement and advertising revenue and have revenue-sharing arrangements that provide the opportunity for us to earn commissions on e-commerce transactions. Our content provider and e-business customers use our AMI service and software to rapidly create a mobile infrastructure and instantly gain access to our AMI user base. This user base consists of over 700,000 registered users, of which over 475,000 have used our AMI service at least once in the last 90 days. Our AMI service, which initially offered channels from CNET, Inc., Excite, InfoWorld, Mercury Center, The New York Times and Wired Digital, currently offers over 400 channels of content and applications optimized for mobile devices.
Worldwide use of mobile communications is growing rapidly as mobile devices become more widely accessible and affordable. Many individuals, accustomed to accessing information, applications and services from the Internet and corporate intranets via a desktop PC, are now able to gain access to this information when away from their office or home. Dataquest estimates that there were approximately 217 million digital wireless subscribers worldwide at the end of 1998 and that this number will grow to approximately 828 million by the end of 2003, of which an estimated 102 million will be wireless data users. Businesses that choose to build mobile platforms face the challenge of integrating their existing systems with the hundreds of thousands of potential combinations of available mobile devices, applications and connectivity options.
Our AvantGo Enterprise products and AMI service provide several key common benefits to enterprises, content providers and e-businesses, including the ability to:
. Deliver sophisticated applications. Our software is designed to overcome mobile device limitations, including limited memory, processor performance and available network communications bandwidth. Using our software, mobile devices can store and display complex, table-formatted content and graphics, and collect data through innovative methods such as bar code scanning;
. Increase access to information. Our software is designed to keep information up-to-date and readily accessible, even when a network or wireless connection is unavailable; and . Develop and deploy mobile applications on an open, standards-based platform. Our software enables mobile devices to support applications that rely on existing Internet standards, such as hyper text mark-up language, or HTML, extensible mark-up language, or XML, secure sockets layer, or SSL, and JavaScript. As a result, software developers can build and deploy applications on mobile devices using the same development tools and publishing systems that they use for ordinary Web browsers and PCs.
Our objective is to be the leading provider of mobile infrastructure software and services that extend the reach of the Internet and corporate applications to mobile devices. Key elements of our strategy include the following:
. Increase compatibility through open standards, making it possible for Web-based applications to run on a variety of mobile devices over all connectivity options;
. Focus on the needs of enterprise customers by continuing to broaden the functionality of our products. For example, we recently acquired Globalware Computing, Inc. to enable our products to be used in conjunction with Lotus Notes;
. Increase the available applications, content and features of our products to expand our user base;
. Expand distribution of our products through relationships with device manufacturers, software developers, mobile device operating system vendors and wireless carriers; and . Establish cooperative relationships with Internet, wireless and mobile technology leaders to increase our revenue opportunities.
Acquisition of Globalware On May 26, 2000, we completed our acquisition of Globalware Computing, Inc., or Globalware. Globalware is a supplier of wireless synchronization software that enables much of the functionality of Lotus Notes to be used on handheld devices. We believe our acquisition of Globalware will enable us to provide a broader set of mobile applications to our enterprise customers. In this transaction, we acquired all of the outstanding securities of Globalware in exchange for 1,933,300 shares of our series E preferred stock. All shares of our series E preferred stock will convert automatically into shares of our common stock on a one-for-one basis upon the closing of this offering. We also assumed all outstanding options to purchase Globalware common stock. We have reserved 180,438 shares of our common stock for issuance upon the exercise of these options. This transaction has been accounted for under the purchase method of accounting.
We were incorporated in Delaware in June 1997 under the name Bombardier Software, Inc., and changed our name to AvantGo, Inc. in January 1998. Our principal offices are located at 1700 S. Amphlett Blvd., Suite 300, San Mateo, California 94402, and our telephone number is (650) 638-3399. Our website is located at avantgo.com. The information on our website does not constitute a part of this prospectus.
"AvantGo" and the AvantGo logo are our trademarks and service marks. This prospectus also contains trademarks and service marks of other companies, which are the property of their respective owners.
The Offering
Common stock offered............ shares Common stock to be outstanding after this offering............ shares
Use of proceeds................. We intend to use the net proceeds of this offering for general corporate purposes, including investments in sales and marketing, general and administrative activities and product development.
Proposed Nasdaq National Market symbol......................... AVGO The number of shares of our common stock to be outstanding after this offering is based on the number of shares outstanding as of May 26, 2000, and excludes:
. 4,197,301 shares of our common stock issuable upon exercise of outstanding stock options under our 1997 stock option plan as of May 26, 2000, at a weighted average exercise price of $2.07 per share;
. 180,438 shares of our common stock issuable upon exercise of outstanding stock options assumed by us in connection with our acquisition of Globalware;
. 387,205 shares of our common stock reserved for issuance under our 1997 stock option plan as of May 26, 2000;
. 1,500,000 shares of our common stock initially reserved for issuance under our 2000 stock incentive plan;
. 350,000 shares of our common stock initially reserved for issuance under our 2000 employee stock purchase plan; and . 593,967 shares of our common stock issuable upon exercise of outstanding warrants, with a weighted average exercise price of $ per share.
Except as otherwise indicated, all information contained in this prospectus:
. assumes the conversion of all outstanding shares of our preferred stock into shares of our common stock on a one-to-one basis upon the closing of this offering;
. assumes the filing of our amended and restated certificate of incorporation;
. reflects the 2-for-1 stock split of our outstanding common and preferred stock in October 1999; and . assumes no exercise of the underwriters' over-allotment option.
Summary Consolidated Financial Data (in thousands, except per share data) The following financial data, other than the pro forma data, include the financial data of AvantGo and exclude the financial data of Globalware. Our pro forma consolidated statements of operations data give effect to our acquisition of Globalware, which closed on May 26, 2000, as if it occurred at the beginning of the pro forma periods presented.
Year Ended December 31, Three Months Ended March 31,
1998 1999 1999 1999 2000 2000
(pro forma) (pro forma)
(unaudited) (unaudited) (unaudited) (unaudited)
Consolidated Statement of Operations Data: Revenues................ $ 387 $ 2,889 $ 4,324 $ 228 $ 1,661 $ 2,377 Costs and expenses...... 3,038 12,417 18,815 1,343 9,309 10,895 Loss from operations.... (2,651) (9,528) (14,491) (1,115) (7,648) (8,518) Net loss................ $(2,603) $(9,215) $(14,152) $(1,108) $(7,431) $(8,318) Net loss per share: Basic and diluted....... $ (0.95) $ (2.11) $ (2.24) $ (0.31) $ (1.30) $ (1.09) Weighted average shares................. 2,735 4,377 6,310 3,612 5,704 7,637 Pro forma net loss per share: Basic and diluted....... $ (0.65) $ (0.41) Weighted average shares................. 14,272 18,044
March 31, 2000 Pro Forma Actual Pro Forma As Adjusted (unaudited) (unaudited)
Consolidated Balance Sheet Data: Cash and cash equivalents............ $30,424 $34,832 Working capital......... 33,329 37,569 Total assets............ 42,358 62,698 Long-term obligations, net of current portion................ 23 23 Total stockholders' equity................. 34,949 54,909
See Note 1 of Notes to Consolidated Financial Statements for information concerning the computation of pro forma net loss per share and the calculation of the number of shares used in that computation.
The Consolidated Balance Sheet pro forma data give effect to:
. the sale of 436,599 shares of series D preferred stock on April 7, 2000;
. our acquisition of Globalware, including a one-time charge for purchased in-process research and development; and . the conversion of all outstanding shares of our preferred stock into shares of common stock upon the closing of this offering.
The Consolidated Balance Sheet pro forma as adjusted data give effect to the foregoing and to the sale of shares of common stock in this offering at an assumed initial public offering price of $ per share, less underwriting discounts and commissions and estimated offering expenses.