Prospectus Summary
This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before investing in our class A common stock. You should read this entire prospectus carefully, including the risk factors and our financial statements, and the notes thereto.
divine interVentures, inc.
We are actively engaged in business-to-business, or B2B, e-commerce through our Internet Zaibatsu, a community of partner companies. These companies collaborate to provide cross-selling and marketing opportunities and support entrepreneurial initiatives, business growth and the sharing of information and business expertise. We manage, finance, operate and provide services to our partner companies, offering a turn-key solution for building successful B2B e- commerce businesses.
In addition to providing capital to our partner companies, we offer them a comprehensive array of infrastructure services, including web hosting and design, systems integration, information technology management and marketing and public relations. These services are designed to allow each of our partner companies to focus on its core competencies and accelerate the time-to-market of its products and services. We focus our efforts in geographic areas that we believe have a strong base of intellectual capital and entrepreneurial talent, but that have traditionally lacked sufficient infrastructure services and venture capital funding. We are initially seeking attractive opportunities primarily in the midwest and plan to address other underserved markets in the future.
We intend to capitalize on the significant growth in the B2B e-commerce market. Forrester Research, an independent research firm, estimates that the inter-company trade of goods and services over the Internet, commonly referred to as B2B e-commerce, will grow from $43.1 billion in 1998 to $1.3 trillion in 2003. In addition, according to the Gartner Group, an independent research firm, e-commerce related information technology investments are expected to account for 50% of the estimated $3.5 trillion in information technology spending in 2003. Today, many new companies, including spin-outs from traditional businesses, are being formed and funded to develop technologies and solutions to support the new B2B e-commerce market. B2B e-commerce solutions are being rapidly adopted to facilitate the continuous exchange of information among business partners to large customer audiences and to allow businesses to interact more efficiently with suppliers, distributors and service providers.
We establish and acquire interests in two categories of B2B e-commerce companies: market makers, which bring buyers and sellers together on Internet- based markets to exchange products, services and information, and infrastructure service providers, which offer software or services, such as consulting and systems integration. At December 10, 1999, we had established or acquired interests in the following 19 B2B e-commerce companies:
Market Makers Infrastructure Service Providers
Commerx, Inc. Blueridge Technologies, Incorporated
i-Street, Inc. buzz divine, inc.
The National Transportation Exchange, Inc.
comScore, Inc.
Neoforma.com, Inc. dotspot, inc.
PocketCard Inc. eXperience divine, inc.
TheExecClub.com, Inc. LiveOnTheNet.com, Inc.
Whiplash, Inc. OpinionWare.com, Inc.
OUTTASK.COM, Inc.
Sensoria, Inc.
Sequoia Software Corporation
Synetrics, Inc.
Xqsite, Inc.
Our principal executive offices are located at 4225 Naperville Road, Suite 400, Lisle, Illinois 60532, and our telephone number at that location is (630) 799-7500. Our web site is located at http://www.divine.com. None of the information contained in our web site or in those of our partner companies is part of this prospectus.
The Offering
Class A common stock offered...... shares Common stock to be outstanding after this offering:
Class A common stock............ shares Class B common stock............ shares Total........................... shares Use of proceeds................... To acquire interests in, and establish, partner companies and for general corporate and working capital purposes.
Proposed Nasdaq National Market DVIN symbol...........................
The number of shares of our common stock to be outstanding after the offering is based on the number of shares outstanding on , 1999. This number excludes the following:
. shares of class A common stock issuable upon the exercise of stock
options outstanding on , 1999, with a weighted average
exercise price of $ per share;
. shares of class A common stock reserved for grants that we may make in the future under our stock incentive plan; and . shares issuable upon the exercise of the underwriters' over-allotment option.
Except where we indicate differently, the information in this prospectus assumes:
. a for reverse split of our class A common stock and class B common stock to be effected before the completion of this offering;
. the conversion of our convertible preferred stock into shares of class A common stock and shares of class B common stock to be effected before the completion of this offering; and . no exercise by the underwriters of their over-allotment option.
Summary Financial Information You should read the following historical and unaudited pro forma financial information along with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included in this prospectus.
Period from May 7, 1999 (Inception) to September 30, 1999 (in thousands, except share and per share data)
Statement of Operations Data: Revenues........................................... $ 17 Total operating expenses........................... 1,490 Total other expense................................ (1) Net loss........................................... (1,474) Basic and diluted net loss per share............... (0.23) Shares used in computing basic and diluted net loss per share......................................... 6,695,918
As of September 30, 1999
Pro Pro Forma,
Actual Forma As Adjusted
(in thousands)
Balance Sheet Data: Cash and cash equivalents....................... $114,294 $369,448 $ Working capital................................. 111,846 344,870 Total assets.................................... 116,050 439,442 Total stockholders' equity...................... 112,006 407,947 The Pro Forma column reflects (1) our receipt of net proceeds of $295,941,159 from the sale of 296,241,159 shares of our convertible preferred stock from October through December 1999 and (2) our acquisitions of interests in partner companies from October through December 10, 1999. The Pro Forma, As Adjusted column further reflects the receipt of the estimated net proceeds of $ million from our sale of shares of class A common stock in this offering at an assumed initial public offering price of $ per share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses.
For an explanation of the determination of the number of shares used in computing basic and diluted net loss per share, see Note 1(f) of the notes to our financial statements.