Prospectus Summary
You should read the following summary together with the more detailed information regarding our company and the common stock being sold in this offering and our financial statements and the related notes appearing elsewhere in this prospectus.
GetThere.com
Our Business
GetThere.com is a leading provider of Internet-based travel procurement and supply solutions primarily for businesses and travel suppliers. Our Internet- based solutions are designed to reduce current inefficiencies in the travel procurement and supply process by decreasing the role of intermediaries, such as travel agents, by providing customers with valuable travel information and by streamlining the internal procurement and supply processes of our customers. We derive our revenues primarily by processing travel-related transactions such as booking and ticketing reservations. Our solutions include ITN Global Manager for businesses, ITN FlightRez for travel suppliers, and our solution for Internet-based content and electronic commerce providers and travel agencies, which we refer to as ePartners. Our customers include businesses with significant travel expenditures such as Chevron, Credit Suisse First Boston, Nike, PeopleSoft and Texas Instruments, travel suppliers such as United Air Lines, Lauda Airlines and National Airlines, and ePartners such as Cendant, CNN Interactive, TRIP.com and TRAVEL.com. We have recently entered into commercial relationships with American Express Travel Related Services and Northwest Airlines. In addition, we have recently entered into non-binding letters of intent with America West Airlines and Air Canada to implement our solutions on their Web sites. See "--Recent Developments."
ITN Global Manager is an Internet-based travel reservation and booking solution designed to enable our business customers to:
Reduce costs: ITN Global Manager is designed to enable businesses to reduce travel-related costs by decreasing the role of intermediaries and by providing the information needed to enforce the use of preferred travel suppliers, to negotiate better rates with travel suppliers and to monitor travel-related purchases.
Increase productivity: ITN Global Manager is designed to enable businesses to increase productivity by streamlining their internal travel procurement processes and by reducing the number of individuals involved.
Provide real-time data analysis and reporting: ITN Global Manager is designed to enable businesses to collect, analyze and report their current and historical travel data for planning and strategic purposes.
ITN FlightRez is an Internet-based travel reservation and booking solution designed to enable our travel supplier customers to:
Increase revenue opportunities: ITN FlightRez is designed to enable travel suppliers to increase revenue opportunities by enabling them to sell directly to travelers over the Internet, by providing the information necessary to develop personalized direct marketing capabilities and by enhancing their ability to sell unused capacity.
Reduce sales and distribution costs: ITN FlightRez is designed to enable travel suppliers to reduce sales and distribution costs by allowing travel suppliers to sell directly to travelers over the Internet, to further automate reservation processes and to use the Internet to distribute travel-related information.
Enhance customer service and increase customer loyalty: ITN FlightRez is designed to enable travel suppliers to enhance customer service and increase customer loyalty by providing travelers with the ability to redeem award travel online and to easily access travel-related information.
In addition, our solution for ePartners is designed to enable Internet-based content and electronic commerce providers and travel agencies to quickly and easily offer travel-related goods and services online.
Our Market Opportunity In 1998, there were approximately 1.4 billion total airline passengers worldwide as reported by the International Airtransport Association. According to the American Express 1998 Survey of Business Travel Management, U.S. businesses in 1998 completed 154 million air travel transactions and U.S. business expenditures for airline tickets, car rentals and lodging exceeded $122 billion. Forrester Research estimates that online expenditures for business travel will grow from $5 billion in 1999 to $38 billion in 2003.
The current market for the procurement and supply of travel-related goods and services is characterized by numerous inefficiencies that contribute to higher costs. These inefficiencies are largely the result of the involvement of multiple intermediaries and limited access by businesses and travel suppliers to valuable travel-related information. These inefficiencies make it more difficult for businesses to negotiate favorable contracts with travel suppliers, monitor employee compliance with corporate travel policies and direct purchases to preferred travel suppliers. These inefficiencies also limit the ability of travel suppliers to establish personalized relationships with customers, minimize excess capacity and maximize the effectiveness of affinity programs, such as frequent flier programs. In addition, the labor intensive nature of the travel procurement and supply processes decreases productivity and contributes to higher costs.
We believe that there is a significant market opportunity for a comprehensive Internet-based travel solution that addresses the current inefficiencies related to the procurement and supply of travel-related goods and services.
Our Strategy
Our objective is to be the leading provider of Internet-based procurement and supply solutions for travel and other indirect goods and services. Key elements of our strategy are to:
Expand our customer base: We intend to increase our penetration of businesses with significant travel expenditures, travel suppliers and ePartners by enhancing our sales and marketing capabilities, enhancing the functionality of our solutions and leveraging our relationships within the travel industry.
Increase adoption rates of our solutions by our business customers: We intend to increase adoption rates of our ITN Global Manager solution by assisting our business customers in developing internal programs that encourage the use of our solution and by enhancing the content and information available through our solution.
Aggressively pursue other travel markets: We plan to address the substantial opportunities presented by small-to-medium sized businesses and international markets by continuing to build our sales and marketing capabilities and by pursuing strategic partnerships, such as our recent strategic relationship with American Express.
Extend our technology leadership: We intend to continue to develop new features and functionality for our solutions to maintain and extend our position as a technology leader.
Leverage technology and relationships into markets for other indirect goods and services: We believe that our technology can be extended to address markets for other indirect goods and services and that we can leverage our customer relationships to gain entry into these markets.
Recent Developments
On September 14, 1999, we entered into an agreement with American Express Travel Related Services Company, Inc. under which American Express has agreed to promote and sell customized, co-branded versions of our Internet-based travel procurement solutions to its customers and potential customers. American Express will promote and market these solutions to large, middle market and small businesses. In addition, commencing January 27, 2000, American Express will exclusively use our solutions for the procurement and supply of travel on its consumer Web sites, such as www.americanexpress.com. We have also agreed to transfer the rights to the domain names www.itn.net and www.itn.com to American Express. See "Business--Relationship with American Express."
On August 27, 1999, we entered into an agreement with Northwest Airlines to develop a Web site through which Northwest Airlines intends to offer low fare tickets. In addition, we issued a warrant to Northwest Airlines that becomes exercisable if and when we enter into a definitive travel supplier agreement for Northwest Airlines' primary Web site, www.nwa.com, and this Web site adopts our solution. See "Description of Capital Stock--Warrants."
On August 27, 1999, we entered into a non-binding letter of intent with America West Airlines to implement our solution on America West Airlines' Web site, www.americawest.com.
On September 14, 1999, we entered into a non-binding letter of intent with Air Canada to implement our solution on Air Canada's Web site, www.aircanada.ca.
In August and September 1999, we agreed to sell:
. an aggregate of 1,875,423 shares of series C preferred stock to American Express, America West Airlines and Air Canada;
. an aggregate of 5,041,077 shares of series E preferred stock to American Express, United Air Lines, through its wholly owned subsidiary Covia LLC, America West Airlines, Air Canada, MeriTech Capital and ITN Joint Venture;
. a warrant to purchase up to 375,000 shares of common stock to American Express;
. warrants to purchase up to an aggregate of 2,786,821 shares of series C preferred stock to United Air Lines and Northwest Airlines; and . warrants to purchase up to an aggregate of 2,160,046 shares of series E preferred stock to American Express, America West Airlines and Air Canada.
The sale of securities to American Express and United Air Lines is subject to the filing and termination of the waiting period under the Hart-Scott-Rodino Act.
For a description of these transactions, see "Business--Customers," "Business--Relationship with American Express," "Certain Transactions" and Note 11 of Notes to Financial Statements.
The Offering
Common stock offered by GetThere.com....... shares Common stock to be outstanding after the offering.................................. shares Use of proceeds............................ Working capital, purchase of property and equipment and other general corporate purposes. See "Use of Proceeds." Proposed Nasdaq National Market symbol..... GTHR The number of shares to be outstanding after this offering is based on:
. 7,663,730 shares of our common stock outstanding as of July 31, 1999;
. 11,731,314 shares of our common stock issuable upon conversion of our series A, B and C preferred stock outstanding as of July 31, 1999;
. 6,916,500 shares of our common stock issuable upon conversion of our series C and E preferred stock issued after July 31, 1999;
. one share of our series D3 preferred stock;
. conversion of a promissory note of $1.65 million plus accrued interest into 133,100 shares of our series E preferred stock; and . 407,852 shares of our common stock issuable upon the exercise of outstanding warrants which would otherwise terminate upon the completion of this offering.
The number of shares outstanding after this offering excludes:
. 12,491,190 shares of our common stock reserved for issuance under our 1996 stock plan, of which 3,781,810 shares are subject to options outstanding as of July 31, 1999, with a weighted average exercise price of $1.33 per share;
. 872,325 shares of our common stock subject to options granted after July 31, 1999, with a weighted average exercise price of $7.00 per share;
. 7,704,503 shares of our common stock issuable upon exercise of outstanding warrants, with a weighted average exercise price of $10.62 per share;
. one share each of our authorized series D1 and D2 preferred stock;
. 5,000,000 shares of our common stock reserved for issuance under our 1999 stock incentive plan;
. 2,500,000 shares of our common stock reserved for issuance under our 1999 employee stock purchase plan; and . 750,000 shares of our common stock available for issuance under our 1999 directors' stock option plan, of which options to purchase an aggregate of 250,000 shares of our common stock will be issued upon the effectiveness of this offering.
See "Capitalization," "Management--Employee Benefit Plans" and Notes 6, 7, 8 and 11 of Notes to Financial Statements.
Summary Financial Information The following table summarizes the statement of operations and balance sheet data for our business. For a more detailed explanation of this financial data, see "Selected Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements located elsewhere in this prospectus. The pro forma data reflects the following assumptions:
. receipt of approximately $72.6 million in proceeds from the issuance of our series C and series E preferred stock in August and September 1999;
. conversion of all shares of series A, B, C and E preferred stock into 18,647,814 shares of our common stock upon the completion of this offering;
. issuance of one share of our series D3 preferred stock;
. conversion of a promissory note of $1.65 million plus accrued interest into 133,100 shares of series E preferred stock; and . issuance of 407,852 shares of our common stock upon the exercise of outstanding warrants which would otherwise terminate upon the completion of this offering.
In addition, the pro forma as adjusted balance sheet data assumes the sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share, after deducting estimated underwriting discounts, commissions and offering expenses, and the application of the resulting net proceeds.
Fiscal Year Ended Six Months Ended
January 31, July 31,
1997 1998 1999 1998 1999
(unaudited)
(In thousands, except per share data)
Statement of Operations Data: Total revenues.................. $ 582 $ 3,001 $ 6,447 $ 2,709 $ 5,598 Gross profit.................... 448 1,321 2,155 1,086 1,625 Loss from operations............ (3,470) (6,328) (15,822) (6,410) (20,195) Net loss........................ $(3,427) $(6,358) $(15,636) $(6,479) $(20,329) Net loss per share: Basic and diluted............. $ (1.21) $ (1.81) $ (3.97) $ (1.70) $ (5.00) Weighted average shares....... 2,827 3,537 3,957 3,823 4,071 Pro forma net loss per share: Basic and diluted............. $ (1.05) $ (1.25) Weighted average shares....... 14,917 16,199
As of July 31, 1999
Pro
Pro Forma As
Actual Forma Adjusted
(In thousands, unaudited)
Balance Sheet Data: Cash, cash equivalents and short-term investments.. $ 6,541 $80,022 $ Working capital (deficit).......................... (2,203) 71,278 Total assets....................................... 18,939 92,420 Long-term obligations, net of current portion...... 7,014 5,364 Redeemable convertible preferred stock and warrants.......................................... 36,094 -- Total stockholders' equity (deficit)............... (34,369) 76,856