|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 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 000-28105
GETTHERE Inc. (Exact name of registrant as specified in its charter)
|
|
|
|
|
|
4045 Campbell Avenue
Menlo Park, California 94025
(Address of principal executive offices including zip code)
(650) 752-1500
(Registrant's telephone number, including area code)
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 reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ]
Although the registrant has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the period that the registrant was required to file such reports, the registrant did not become subject to such filing requirements until the registration of certain shares of its common stock pursuant to a registration statement on Form S-1 was declared effective by the Securities and Exchange Commission on November 22, 1999.
On September 1, 2000, 35,118,411 shares of the registrant's common stock were issued and outstanding.
GetThere Inc.
Report On Form 10-Q For The
Quarter Ended July 31, 2000
INDEX
| PART I. Financial Information | Page No. |
| Item 1. Financial Statements (unaudited): |
|
|
Condensed Consolidated Balance Sheets as of July 31, 2000 and January 31, 2000 |
|
|
Condensed Consolidated Statements of Operations for the Three and Six Months ended July 31, 2000 and 1999 |
|
|
Condensed Consolidated Statements of Cash Flows for the Six Months ended July 31, 2000 and 1999 |
|
| Notes to Condensed Consolidated Financial Statements |
|
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
|
| Item 3. Quantitative and Qualitative Disclosures About Market Risk |
|
| PART II. Other Information |
|
| Item 1. Legal Proceedings |
|
| Item 2: Changes in Securities and Use of Proceeds |
|
| Item 3: Defaults Upon Senior Securities |
|
| Item 4: Submission of Matters to a Vote of Security Holders |
|
| Item 5: Other Information |
|
| Item 6. Exhibits and Reports on Form 8-K |
|
| Signatures |
|
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements
GETTHERE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
July 31, January 31,
2000 2000
------------- -------------
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents ...................... $69,523 $78,314
Short-term investments ......................... 29,580 69,932
Restricted cash.................................. 696 805
Accounts receivable, net ........................ 4,828 3,134
Prepaid expenses and other current assets ...... 2,219 631
------------- -------------
Total current assets ......................... 106,846 152,816
Property and equipment, net ...................... 11,540 9,640
Other assets ..................................... 483 815
Long-term investments ............................ 21,059 --
Intangible assets ................................ 21,670 10,907
------------- -------------
Total assets ............................... $161,598 $174,178
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable ............................... $1,841 $1,894
Accrued liabilities ............................ 5,750 5,639
Deferred revenue ............................... 3,298 2,402
Capital lease obligations, current ............. 3,581 3,484
------------- -------------
Total current liabilities .................... 14,470 13,419
Capital lease obligations, long-term ............. 3,334 4,347
------------- -------------
Total liabilities ............................ 17,804 17,766
------------- -------------
Stockholders' equity:
Common stock .................................... 5 5
Additional paid-in capital ..................... 261,362 256,871
Note receivable from stockholders .............. (5,172) (2,528)
Unearned compensation .......................... (17,556) (24,311)
Accumlated other comprehensive loss ............ (146) (195)
Accumulated deficit ............................ (94,699) (73,430)
------------- -------------
Total stockholders' equity .................... 143,794 156,412
------------- -------------
Total liabilities and stockholders' equity .. $161,598 $174,178
============= =============
See accompanying notes to condensed consolidated financial statements.
GETTHERE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Six Months Ended
July 31, July 31,
--------------------- ---------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Revenues:
Transaction ...................... $7,330 $2,932 $13,433 $4,862
Professional service ............. 452 356 984 736
---------- ---------- ---------- ----------
Total revenues ................. 7,782 3,288 14,417 5,598
Cost of revenues ................... 4,696 2,318 9,024 3,973
---------- ---------- ---------- ----------
Gross profit ....................... 3,086 970 5,393 1,625
Operating expenses:
Research and development ......... 2,641 946 4,657 1,819
Sales and marketing .............. 3,641 2,032 6,534 3,612
General and administrative ....... 6,469 4,597 12,341 6,973
Stock-based compensation ......... 3,022 5,893 7,297 9,416
---------- ---------- ---------- ----------
Total operating expenses ....... 15,773 13,468 30,829 21,820
---------- ---------- ---------- ----------
Loss from operations ............... (12,687) (12,498) (25,436) (20,195)
Interest income (expense), net ..... 2,130 (137) 4,167 (149)
---------- ---------- ---------- ----------
Net loss ........................... (10,557) (12,635) (21,269) (20,344)
Accretion of series B, C, and E
redeemable convertible preferred
stock ............................ 0 (102) 0 (204)
---------- ---------- ---------- ----------
Net loss attributable to common
stockholders ...................... ($10,557) ($12,737) ($21,269) ($20,548)
========== ========== ========== ==========
Basic and diluted net loss per
share ............................ ($0.33) ($3.17) ($0.68) ($5.05)
========== ========== ========== ==========
Shares used in computing basic and
diluted net loss per share ....... 31,588 4,019 31,293 4,071
========== ========== ========== ==========
See accompanying notes to condensed consolidated financial statements.
GETTHERE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended
July 31,
------------------------
2000 1999
----------- -----------
(unaudited) (unaudited)
Cash Flows From Operating Activities:
Net loss ....................................... ($21,269) ($20,344)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization ................ 3,986 1,828
Common stock issued for services............... 0 1,625
Amortization of unearned compensation ........ 7,297 7,791
Provision for doubtful accounts................ 0 115
Non cash interest expense...................... 0 175
Changes in assets and liabilities:
Accounts receivable ........................ (1,436) 345
Restricted cash.............................. 109 (805)
Accounts payable ........................... (191) 2,264
Accrued liabilities ........................ (98) 564
Deferred revenue ........................... 368 48
Prepaid expenses and other assets .......... (1,173) (459)
----------- -----------
Net cash used in operating activities...... (12,407) (6,853)
----------- -----------
Cash Flows From Investing Activities:
Purchase of property and equipment ............. (2,864) (5,234)
Acquisition of business.......................... (13,743) (800)
Net proceeds from sale of investments ........... 19,293 4,299
----------- -----------
Net cash provided by (used in)
investing activities .................... 2,686 (1,735)
----------- -----------
Cash Flows From Financing Activities:
Proceeds from borrowing on capital lease
obligations .................................. 186 4,308
Principal payments on capital lease obligations . (1,102) (707)
Payment on bank borrowings ..................... -- (94)
Proceeds from exercise of stock options.......... 1,846 119
----------- -----------
Net cash provided by
financing activities .................... 930 3,626
----------- -----------
Net Decrease in Cash and Cash Equivalents ........ (8,791) (4,962)
Cash and Cash Equivalents at Beginning of Period . 78,314 8,268
----------- -----------
Cash and Cash Equivalents at End of Period ....... $69,523 $3,306
=========== ===========
See accompanying notes to condensed consolidated financial statements.
GETTHERE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. The Company and Basis of Presentation
GetThere is a leading provider of Internet-based business-to-business travel procurement and supply solutions primarily for businesses and travel suppliers. The Company is incorporated in Delaware and began operations in 1995. It operates in a single business segment providing Internet-based services.
The preparation of consolidated 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 reported results of operations during the reporting period. Actual results could differ from those estimates.
The unaudited condensed consolidated financial statements have been prepared by the Company and reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending January 31, 2001. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with the Securities and Exchange Commission's rules and regulations. These unaudited condensed consolidated financial statements and footnotes included herein should be read in conjunction with the Company's audited consolidated financial statements and footnotes for the year ended January 31, 2000, included in the Company's Annual Report on Form 10-K, as amended and filed with the Securities and Exchange Commission on June 29, 2000.
Note 2. Net Loss Per Share
The following table presents the calculation of basic and diluted net loss per common share (in thousands, except share and per share data):
Three Months Ended Six Months Ended
July 31, July 31,
------------------------- -------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Net loss attributable to common
stockholders ................ ($10,557) ($12,737) ($21,269) ($20,548)
Basic and diluted:
Weighted-average shares of
common stock outstanding ... 33,397,548 6,276,075 33,073,180 5,423,907
Less: Weighted-average common
shares subject to repurchase (1,809,849) (2,256,921) (1,780,189) (1,352,820)
------------ ------------ ------------ ------------
Weighted-average shares used
in computing basic and diluted
net loss per common share .. 31,587,699 4,019,154 31,292,991 4,071,087
Basic and diluted net loss per
share ....................... ($0.33) ($3.17) ($0.68) ($5.05)
We have excluded all warrants, outstanding stock options and shares subject to repurchase by the Company from the calculation of diluted net loss per common share because all such securities are anti-dilutive for the periods presented. The total numbers of shares excluded from the calculation of diluted loss per share are as follows:
Three Months Ended Six Months Ended
July 31, July 31,
------------------------- -------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Weighted average effect of
common stock equivalents:
Common stock options......... 2,803,250 2,689,582 3,558,149 3,197,445
Shares of common stock
subject to repurchase .... 1,809,849 2,256,921 1,780,189 1,352,820
Shares issuable pursuant to
warrants to purchase common
and convertible preferred
stock .................... 7,009,224 3,772,171 7,009,224 3,772,171
Shares of convertible
preferred stock on an "as
if converted" basis........ 3 11,731,314 3 11,731,314
------------ ------------ ------------ ------------
11,622,326 20,449,988 12,347,565 20,053,750
------------ ------------ ------------ ------------
Note 3. Comprehensive Income
The following table presents the calculation of comprehensive loss (in thousands).
Three Months Ended Six Months Ended
July 31, July 31,
------------------------- -------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Net loss ...................... ($10,557) ($12,635) ($21,269) ($20,344)
Unrealized gain on securities .. 180 -- 49 --
------------ ------------ ------------ ------------
Comprehensive loss ............ ($10,377) ($12,635) ($21,220) ($20,344)
============ ============ ============ ============
Note 4. Significant Accounting Policies
Revenue Recognition
All revenues arise from providing Internet-based services. Transaction revenues are largely derived from on-line orders, hosting fees, advertising, and traveler support services. Hosting fees are charged to gain access to the Company's on-line travel reservation service. Support fees are charged to customers who elect to utilize traveler support services, and are earned on either a fixed monthly basis or per minute of call time used. Revenues from on-line hotel and car reservations are recognized when the commission is received. Commission revenues from on-line air travel reservations are recognized upon the completion of the transaction. Completion is generally defined as either the placement of an order with a third-party supplier or the fulfillment of an order by printing and delivering tickets, depending upon the nature of the agreement with the customer. Hosting fees are recognized monthly when invoiced. Advertising revenues are primarily derived from advertising contracts in which the Company is obligated to provide a minimum number of "impressions" or times that an advertisement is viewed. Advertising revenues are recognized as a percentage of completion of the guaranteed minimum number of impressions is achieved, provided that no significant obligations remain. If obligations remain, revenues from advertising are deferred until such obligations are fulfilled. Revenues from traveler support services are recognized as the services are performed.
Professional service revenues are primarily derived from fees for implementation and customization of customer web sites utilizing the Company's technology. These fees are recognized over the term of the agreement for standard implementations or on a percentage of completion basis for custom development projects. Payments received in advance of the performance of services are recorded as deferred revenue. Provisions are made in full for any contracts during the period in which a loss on a particular contract becomes probable.
Capitalization of Internal Use Software Costs
Research and development costs include expenses incurred by the Company to maintain, monitor and manage the Company's web site. The Company recognizes web site development costs in accordance with Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use", and Emerging Issues Task Force in Issue No. 00-02, "Accounting for Web Site Development Costs." As such, the Company expenses all costs incurred that relate to the planning and post implementation phases of development. Costs incurred in the development phase are capitalized and recognized over the product's estimated useful life if the product is expected to have a useful life beyond six months. Costs associated with repair or maintenance of the existing site or the development of web site content are included in research and development expense in the accompanying consolidated statements of operations. During the six months ended July 31, 2000, the Company capitalized $981,000 and amortized $280,000 of web-site development costs.
Stock-based Compensation
The Company accounts for stock-based employee compensation arrangements in accordance with the provisions of Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees" using the multiple option approach and complies with the disclosure provisions of Statement of Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock- Based Compensation." The Company accounts for equity instruments issued to non-employees in accordance with the provisions of SFAS 123 and the Emerging Issues Task Force in Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or In Conjunction with Selling, Goods or Services."
In connection with certain stock option grants the Company recognized unearned compensation which is being amortized over the vesting periods of the related options, usually four years. The total unearned compensation recorded by the Company from August 7, 1995 (inception) through July 31, 2000 was $47,611,000. The fair value per share used to calculate unearned compensation was derived by reference to the preferred stock values and initial public offering price, reduced by a nominal discount factor. Future compensation charges are subject to reduction for any employee who terminated employment prior to the expiration of such employee's option vesting period. The amortization of unearned compensation during the six months ended July 31, 2000 and 1999, was $7.3 million and $9.4 million, respectively. Additionally, the Company recorded unearned compensation for restricted common stock granted to service providers, which is being amortized over the related vesting period.
Note 5. Acquisitions
In June 2000, the Company acquired the assets and liabilities of Automated Travel Systems, Inc. (ATS) in a cash transaction. ATS develops faring system technology designed to improve the booking process. The total consideration paid was approximately $13.7 million in cash. The excess of the purchase price over the fair value of the net assets acquired is approximately $13.1 million and is being amortized over two to three years. The fair value of the net assets acquired was based on preliminary estimates and may be revised at a later date. The acquisition was accounted for using the purchase method of accounting.
The following unaudited pro forma summary presents the consolidated results of operations as if the acquisitions had occurred at the beginning of each of the periods presented and does not purport to be indicative of the results that would have been achieved had the acquisition been made as of those dates nor the results which may occur in the future.
Three Months Ended Six Months Ended
July 31, July 31,
------------------------- -------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Net revenue...................... $8,447 $4,195 $14,878 $6,606
Net loss......................... ($11,389) ($13,604) ($22,715) ($21,445)
Basic and diluted net loss per
share ........................ ($0.36) ($3.38) ($0.73) ($5.27)
Note 6. Subsequent Events
In August 2000, the Company acquired Plansite Corporation, d/b/a AllMeetings.com (AllMeetings) in a cash and stock transaction. AllMeetings develops technology designed to streamline the meeting planning process, enabling users to search thousands of properties to receive hotel information, send electronic RFPs, and obtain results ranked by an overall meeting budget. The total consideration was approximately $23 million, consisting of approximately $9.4 million in cash and $13.6 million in common stock. The acquisition will be accounted for using the purchase method of accounting in August 2000. As a result, the condensed consolidated financial statements as of July 31, 2000 do not include the operating results of AllMeetings.
On August 11, 2000, the Company sold the travel agency applications of ATS to Cornerstone Information Systems, Inc. The sales price was $200,000 plus 70% of the customer service and maintenance payments for the first year and 25% of such payments for the year thereafter.
On August 28, 2000, Sabre Holdings Corporation (Sabre) entered into a definitive agreement with the Company to acquire the Company by commencing an all cash tender offer for all outstanding shares of GetThere common stock at $17.75 per share, aggregating $757 million, to be followed by a merger of a Sabre subsidiary with the Company. The agreement was unanimously approved by the Company's board of directors. The tender offer commenced on September 11, 2000, and the transaction is expected to close in the fourth calendar quarter of 2000, subject to regulatory clearance and customary closing conditions.
On August 28, 2000 all of the Company's Series D1, D2 and D3 preferred stock converted into common stock.
Note 7. Commitments
In June 2000, as a result of the acquisition of ATS, the Company assumed an operating lease for approximately 6,000 square feet in New York, New York, which expires in July 2003. The rent expense over the remaining term of the lease will aggregate $278,000.
In August 2000, as a result of the acquisition of AllMeetings, the Company assumed an operating lease for 2,095 square feet in Henderson, Nevada, which expires in March 2001. The rent expense over the remaining term of the lease will aggregate $17,000.
In August 2000, the Company entered into an operating lease for 27,853 square feet in Sunrise, Florida, which expires in December 2005. The rent expense over the term of the lease will aggregate $2.2 million.
Note 8. Recent Pronouncements
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. SFAS No. 133 is effective for all fiscal quarters beginning with the quarter ending July 31, 1999. In July 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133" which deferred the effective date until the fiscal quarter ended July 31, 2000. The adoption of SFAS No. 133 is not expected to have a material effect on the Company's results of operations, financial position or cash flows.
In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements." SAB 101 summarizes certain of the SEC's views in applying generally accepted accounting principles (GAAP) to revenue recognition in financial statements. The Company is required to adopt SAB 101 in fiscal year 2001. The Company does not expect that the adoption of SAB 101 will have a material effect on the financial position or results of operations.
In April 2000, FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock Compensation - an interpretation of APB Opinion No. 25" ("FIN 44") was issued. FIN 44 clarifies the application of APB No. 25 for only certain issues. Among other issues, FIN 44 clarifies the definition of employee for purposes of applying APB No. 25, the criteria for determining whether a plan qualifies as a non-compensatory plan, the accounting consequences of various modifications to the terms of a previously fixed stock option or award, and the accounting for an exchange of stock compensation awards in a business combination. FIN 44 is 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 adoption of certain of the conclusions of FIN 44 covering events occurring during the period after December 15, 1998 or January 12, 2000 did not have a material effect on the Company's financial position and results of operations. The Company does not expect that the adoption of the remaining conclusion will have a material effect on the financial position or results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In addition to historical information, the information in this discussion and analysis contains forward-looking statements. Words such as "may", "will", "should", "estimate", "predict", "potential", "continue", "strategy", "believe", "anticipate", "plan", "expect", "intend" and similar expressions are intended to identify forward-looking statements. These statements are based upon current expectations that involve risks and uncertainties, and our actual results and the timing of certain events may differ significantly from the results discussed in forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this Item 2, including the section entitled "Risk Factors". Readers should not place undue reliance on these forward-looking statements, and we undertake no obligation to revise or publicly release the results of any revision to them. Readers are urged to also review the risk factors contained in other documents filed with the Securities and Exchange Commission ("SEC") from time to time, including our Annual Report on Form 10-K, as amended and filed with the SEC on June 29, 2000.
Overview
GetThere is a leading provider of Internet-based business-to-business travel procurement and supply solutions. We were incorporated in August 1995 as Internet Travel Network Inc., changed our name to GetThere.com, Inc. in July 1999, and changed our name again to GetThere Inc. in June 2000. In 1995 we launched our www.itn.net Web site, an Internet-based travel reservation system targeted at consumers and small businesses. In response to interest from Internet-based content and electronic commerce providers and travel agencies, we began to offer travel services for these companies' Web sites. In 1996, we introduced our service to businesses. In 1997, we introduced our service to travel suppliers. In 1998, we continued to expand our customer base of businesses, and we expanded our relationship with United Air Lines to include on-line offerings of unused capacity and the ability to provide on-line one-way ticket upgrades. In 1999, we continued to expand our relationship with United Air Lines by offering on-line frequent flier mileage redemption. In 2000, we combined our previous offerings to businesses, travel suppliers and Internet-based content and electronic commerce providers into a new service called the GetThere Marketplace.
In September 1999, we entered into an agreement with American Express Travel Related Services Company, Inc. ("American Express") under which it agreed to promote and sell our Internet-based travel procurement services to its customers and potential customers. In January 2000, we transferred our www.itn.net Web site to American Express in order to increase our focus on the business-to-business market.
We generate revenues primarily from processing travel-related transactions, such as booking and ticketing reservations, and performing professional services. These revenues are generated from business customers, travel suppliers and other customers using our GetThere Marketplace. Transaction revenues are comprised primarily of per transaction fees charged to businesses and travel suppliers, and commissions earned in connection with making on-line travel related reservations and providing related traveler support services for customers seeking technical and travel assistance. In addition, our transaction revenues include fees received from computer reservation system companies for making travel reservations on their computer reservation system, hosting fees charged to gain access to our services and the sale of advertising on the Web sites of some of our customers. Transaction revenues are recognized as the transactions occur or when the commission is received or, with respect to hosting fees, when invoiced. In the case of advertising, we recognize revenues on a per impression basis after a specified minimum number of impressions have been delivered. Professional service revenues primarily consist of implementation and customization fees associated with the deployment and on-going customization of our solutions. Professional service revenues are recognized over the term of the underlying contract for standard implementations and on a percentage of completion basis for custom development work.
Our gross margins are affected by numerous factors, such as the mix of transaction revenues and professional service revenues, and the mix of transaction revenues from our customers. We generally receive higher gross margins from transaction revenues than from professional service revenues and higher gross margins from business customers than from travel supplier customers. Our gross margins are also affected by personnel and infrastructure expenditures, which are expected to increase substantially in the future. As a result, our gross margins may decrease unless we are able to significantly increase our revenues.
Stock-based compensation represents the difference between the deemed fair value of our common stock on the date options were granted or stock was issued and the exercise or purchase price of our options or stock. This amount is included as a reduction of stockholders' equity and is amortized over the vesting period of the individual options or stock, generally four years.
United Air Lines, one of our principal stockholders through its wholly owned subsidiary Covia LLC, directly accounted for $5.5 million and $1.8 million, or approximately 38.3% and 32.6%, of our total revenues for the six months ended July 31, 2000 and 1999, respectively.
We have experienced and expect to continue to experience seasonality in our business, reflecting seasonal fluctuations in the travel industry and Internet usage. Business travel bookings typically decline during the fourth quarter of each calendar year due to decreased business travel during the holiday season. Furthermore, consumer travel bookings typically increase during the second quarter of each calendar year in anticipation of summer travel. Internet usage and the rate of growth of such usage typically decline during the summer.
On June 22, 2000, we acquired Automated Travel Systems, Inc. ("ATS") in a cash transaction. The total consideration was approximately $13.7 million. ATS develops faring system technology designed to improve the booking process.
On August 11, 2000, we acquired Plansite Corporation d/b/a AllMeetings.com ("AllMeetings") in a cash and stock transaction. The total consideration was approximately $23 million, consisting of approximately $9.4 million in cash and $13.6 million in common stock. AllMeetings develops technology designed to streamline the meeting planning process, enabling users to search thousands of properties to receive hotel information, send electronic RFPs, and obtain results ranked by an overall meeting budget.
On August 28, 2000, we entered into an agreement with Sabre Holdings Corporation ("Sabre") providing for Sabre to commence an all cash tender offer for all outstanding shares of GetThere common stock at $17.75 per share, aggregating $757 million, to be followed by a merger of a Sabre subsidiary with GetThere. The agreement was unanimously approved by our board of directors. The tender offer commenced on September 11, 2000, and the transaction is expected to close in the fourth calendar quarter of 2000, subject to regulatory clearance and customary closing conditions.
On August 28, 2000 all of the Company's Series D1, D2 and D3 preferred stock converted into common stock.
Results of Operations
The following table sets forth certain statements of operations data as a percentage of revenues for the periods indicated. The data has been derived from the unaudited condensed consolidated financial statements contained in this Form 10-Q which, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position and results of operations for the interim periods. The operating results for any interim period should not be considered indicative of results for any future period. This information should be read in conjunction with the Financial Statements and Notes thereto included in the Company's Form 10-K. The following table sets forth our results of operations as a percentage of revenues:
Three Months Ended Six Months Ended
July 31, July 31,
--------------------- ---------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Revenues:
Transaction ...................... 94.2% 89.2% 93.2% 86.9%
Professional service ............. 5.8% 10.8% 6.8% 13.1%
---------- ---------- ---------- ----------
Total revenues ................. 100.0% 100.0% 100.0% 100.0%
Cost of revenues ................... 60.3% 70.5% 62.6% 71.0%
---------- ---------- ---------- ----------
Gross profit ....................... 39.7% 29.5% 37.4% 29.0%
Operating expenses:
Research and development ......... 33.9% 28.8% 32.3% 32.5%
Sales and marketing .............. 46.8% 61.8% 45.3% 64.5%
General and administrative ....... 83.1% 139.8% 85.6% 124.6%
Stock-based compensation ......... 38.8% 179.2% 50.6% 168.2%
---------- ---------- ---------- ----------
Total operating expenses ....... 202.7% 409.6% 213.8% 389.8%
---------- ---------- ---------- ----------
Loss from operations ............... -163.0% -380.1% -176.4% -360.8%
Interest income (expense), net ..... 27.4% -4.2% 28.9% -2.7%
---------- ---------- ---------- ----------
Net loss ........................... -135.7% -384.3% -147.5% -363.4%
========== ========== ========== ==========
Comparison of Three Months Ended July 31, 1999 and 2000
Revenues. Revenues increased 136.7% from $3.3 million for the three months ended July 31, 1999 to $7.8 million for the three months ended July 31, 2000, due primarily to an increase in the number of transactions from businesses, travel suppliers and Internet-based content and electronic commerce providers. Transaction revenues increased 150.0% from $2.9 million for the three months ended July 31, 1999 to $7.3 million for the three months ended July 31, 2000. This was primarily due to an increase in the number of transactions processed which resulted from increased use of our services by our existing customers, the addition of new customers, and the growth in hosting revenues from new and existing customers. The number of transactions grew 149.7% from 304,000 for the three months ended July 31, 1999 to 760,000 for the three months ended July 31, 2000. Professional service revenues increased 27.0% from $356,000 for the three months ended July 31, 1999 to $452,000 for three months ended July 31, 2000. This increase was primarily due to increased number of implementations.
In March 2000, United Air Lines notified us that because its call centers have excess capacity, it intends to transfer most of the support activities we currently perform for it back to United. The transfer will likely commence in November 2000 and continue through March 2001. During the three months ended July 31, 2000, we recognized $1.4 million of support revenue from United Air Lines. The anticipated loss of this support revenue could have a material impact on our revenues.
Cost of Revenues. Our cost of revenues increased from $2.3 million, or 70.5% of revenues for the three months ended July 31, 1999 to $4.7 million, or 60.3% of revenues for the three months ended July 31, 2000. This increase resulted primarily from the hiring and training of additional personnel for customer support, professional services, data center operations, and costs associated with integrating our dedicated traveler support center. Our gross margins increased from 29.5% for the three months ended July 31, 1999 to 39.7% for the three months ended July 31, 2000, reflecting economies of scale as we increase our transactions and revenue over a cost base which is partially fixed. We expect our cost of revenues will increase in absolute dollars for the foreseeable future.
Research and Development. Research and development expenses increased from $946,000, or 28.8% of revenues for the three months ended July 31, 1999 to $2.6 million or 33.9% of revenues for the three months ended July 31, 2000. The increase in dollars was primarily due to the addition of personnel and equipment to support the continued development of our services, which was partially offset by an increase in capitalization of internal use software and web-site development costs. We believe that continued research and development expenditures are necessary to maintain our competitive position and meet our strategic goals, and therefore we expect that these costs will continue to increase in absolute dollar amounts in future periods.
Sales and Marketing. Sales and marketing expenses increased from $2.0 million or 61.8% of revenues for the three months ended July 31, 1999 to $3.6 million or 46.8% of revenues for the three months ended July 31, 2000. The increase in dollars was primarily due to the addition of personnel, increased promotional expenditures, and increased expenses associated with the sale and distribution of our services. We believe these expenses will continue to increase in absolute dollar amounts in future periods as we expect to continue to expand our sales and marketing efforts.
General and Administrative. General and administrative expenses consist of payroll and related expenses for management, accounting and administrative personnel, depreciation of equipment and software, insurance, recruiting, professional services, facilities and other general corporate expenses. General and administrative expenses increased from $4.6 million or 139.8% of revenues for the three months ended July 31, 1999 to $6.5 million or 83.1% of revenues for the three months ended July 31, 2000. This increase in dollars was due primarily to an increase in the number of employees focused on general and administrative functions, recruiting costs, depreciation and other general corporate expenses. We expect general and administrative expenses to increase in absolute dollars in future periods.
Stock-Based Compensation. We recorded aggregate amortization of stock-based compensation of $5.9 million for the three months ended July 31, 1999 and $3.0 million for the three months ended July 31, 2000.
Interest Income (Expense), Net. Net interest income (expense), includes income from our cash investments, net of expenses related to our financing obligations. Net interest expense of $137,000 for the three months ended July 31, 1999 increased to net interest income of $2.1 million for the three months ended July 31, 2000. The increase is primarily attributable to higher invested cash balances as a result of our private equity placements and our initial public offering during the third and fourth quarters of fiscal 2000.
Comparison of Six Months Ended July 31, 1999 and 2000
Revenues. Revenues increased 157.5% from $5.6 million for the six months ended July 31, 1999 to $14.4 million for the six months ended July 31, 2000, due primarily to an increase in the number of transactions from businesses, travel suppliers and Internet-based content and electronic commerce providers. Transaction revenues increased 176.3% from $4.9 million for the six months ended July 31, 1999 to $13.4 million for the six months ended July 31, 2000. This was primarily due to an increase in the number of transactions processed which resulted from increased use of our services by our existing customers, the addition of new customers, and the growth in hosting revenues from new and existing customers. The number of transactions grew 153.0% from 539,000 for the six months ended July 31, 1999 to 1,363,000 for the six months ended July 31, 2000. Professional service revenues increased 33.7 % from $736,000 for the six months ended July 31, 1999 to $984,000 for six months ended July 31, 2000. This increase was primarily due to increased number of implementations.
Cost of Revenues. Our cost of revenues increased from $4.0 million, or 71.0% of revenues for the six months ended July 31, 1999 to $9.0 million, or 62.6% of revenues for the six months ended July 31, 2000. This increase resulted primarily from the hiring and training of additional personnel for customer support, professional services, data center operations, and costs associated with integrating our dedicated traveler support center. Our gross margins increased from 29.0% for the six months ended July 31, 1999 to 37.4% for the six months ended July 31, 2000, reflecting economies of scale as we increase our transactions and revenue over a cost base which is partially fixed. We expect our cost of revenues will increase in absolute dollars for the foreseeable future.
Research and Development. Research and development expenses increased from $1.8 million, or 32.5% of revenues for the six months ended July 31, 1999 to $4.7 million or 32.3% of revenues for the six months ended July 31, 2000. The increase in absolute dollars was primarily due to the addition of personnel and equipment to support the continued development of our services, which was partially offset by an increase in capitalization of internal use software and web-site development costs, net of amortization, of $702,000. We believe that continued research and development expenditures are necessary to maintain our competitive position and meet our strategic goals, and therefore we expect that these costs will continue to increase in absolute dollar amounts in future periods.
Sales and Marketing. Sales and marketing expenses increased from $3.6 million or 64.5% of revenues for the six months ended July 31, 1999 to $6.5 million or 45.3% of revenues for the six months ended July 31, 2000. The increase in absolute dollars was primarily due to the addition of personnel, increased promotional expenditures, and increased expenses associated with the sale and distribution of our services. We believe these expenses will continue to increase in absolute dollar amounts in future periods as we expect to continue to expand our sales and marketing efforts.
General and Administrative. General and administrative expenses consist of payroll and related expenses for management, accounting and administrative personnel, depreciation of equipment and software, insurance, recruiting, professional services, facilities and other general corporate expenses. General and administrative expenses increased from $7.0 million or 124.6% of revenues for the six months ended July 31, 1999 to $12.3 million or 85.6% of revenues for the six months ended July 31, 2000. This increase was due primarily to the increase in costs associated with our new facility, an increase in the number of employees focused on general and administrative functions, recruiting costs, depreciation and other general corporate expenses. We expect general and administrative expenses to increase in absolute dollars in future periods.
Stock-Based Compensation. We recorded aggregate amortization of stock-based compensation of $9.4 million for the six months ended July 31, 1999 and $7.3 million for the six months ended July 31, 2000.
Interest Income (Expense), Net. Net interest income (expense), includes income from our cash investments, net of expenses related to our financing obligations. Net interest expense of $149,000 for the six months ended July 31, 1999 increased to net interest income of $4.2 million for the six months ended July 31, 2000. The increase is primarily attributable to higher invested cash balances as a result of our private equity placements and our initial public offering during the third and fourth quarters of fiscal 2000.
Liquidity and Capital Resources
We have financed our operations primarily through our initial public offering, private sales of capital stock, bank loans and equipment leases. As of July 31, 2000, we had $120.2 million in cash, cash equivalents and investments, and $92.3 million in working capital.
Net cash used in operating activities was $12.4 million for the six months ended July 31, 2000, primarily attributable to our net loss of $21.3 million and an increase in accounts receivable and prepaid expenses of $2.6 million, partially offset by depreciation and amortization of $4.0 million, amortization of unearned compensation of $7.3 million, and an increase in deferred revenue of $368,000. Net cash used in operating activities was $6.9 million for the six months ended July 31, 1999 and was attributable primarily to our net loss of $20.3 million, partially offset by depreciation and amortization of $1.8 million, amortization of unearned compensation of $9.4 million, and an increase in accounts payable and accrued liabilities of $2.8 million resulting from increased expenses.
Net cash provided by investing activities of $2.7 million for the six months ended July 31, 2000 was primarily attributable to net proceeds from the sale of investments of $19.2 million, partially offset by purchases of property and equipment of $2.9 million, and $13.7 million used for the acquisition of Automated Travel Systems, Inc. Net cash used in investing activities of $1.7 million for the six months ended July 31, 1999 was primarily attributable to $5.2 million for purchases of property and equipment, and $800,000 for the acquisition of the assets of our Florida call center, partially offset by the conversion of $4.3 million of short-term investments into cash.
Net cash provided by financing activities for the six months ended July 31, 2000 of $930,000 was attributable to proceeds from the exercise of stock options of $1.8 million, partially offset by principle payments on capital lease obligations of $1.1 million. Net cash provided by financing activities for the six months ended July 31, 1999 of $3.6 million was primarily attributable to $3.6 million of capital lease net borrowings.
Computer equipment is our largest category of purchases of property and equipment, and we expect to continue to invest significantly in computer equipment to support the growth in the number of transactions we process and the amount of data we store in our systems. We have established data center operations in Sterling, Virginia and in Santa Clara, California at Exodus Communications, an external service provider, to improve our disaster recovery capabilities and add additional processing capability to better serve our customers in the eastern portion of the United States and Europe. The expansion of our data center operations and the Texas engineering development center will increase our future expenditures for property and equipment. We also have two equipment lease lines. One line is for $2.1 million and is fully drawn. Our other line is for $5.8 million, $5.2 million of which was used July 31, 2000.
We expect to experience significant growth in our operating expenses in the foreseeable future, particularly in research and development, sales and marketing, and general and administrative expenses. As a result, we expect operating expenses and purchases of property and equipment will constitute the majority of the future use of our cash resources. In addition, we may use our cash resources to acquire or make investments in complementary products, technologies or businesses. We believe our current cash resources will be sufficient to meet our working capital and operating expenditures for at least the next 12 months. In the future, we may need to obtain additional equity or debt financing to meet our cash resource needs. In the event that additional financing is required, it is uncertain whether or not we would be able to obtain financing on acceptable terms.
RISK FACTORS
In addition to other information in this Form 10-Q, the following risk factors should be carefully considered in evaluating GetThere and its business because such factors currently may have a significant impact on GetThere's business, operating results and financial condition.
Risks Related to Our Business
It is difficult to evaluate our business because our business model is evolving. It is difficult to accurately forecast our revenues, and we have limited meaningful historical financial data on which to plan operating expenses. In addition, the revenues and income potential of our business and market are unproven. If we are unable to accomplish the following, we may not become commercially successful:
We will devote a significant amount of our resources to satisfy our obligations under our agreement with American Express. Our agreement with American Express is likely to require the use of a significant amount of our resources, including our management and technical personnel. This could impair our ability to develop other aspects of our business, which could seriously harm our results of operations if we are unable to generate a significant amount of revenues from our agreement with American Express. In addition, we are required to reimburse American Express a portion of its fees if we do not deliver a minimum number of unique users to American Express.
We have incurred significant net losses to date and expect to continue to incur net losses for the foreseeable future. Since our inception we have incurred significant net losses and negative cash flow. We expect net losses and negative cash flow to continue for the foreseeable future, and we may never be profitable. We incurred net losses of $21.3 million for the six months ended July 31, 2000. As of July 31, 2000, we had an accumulated deficit of $94.7 million. We anticipate that our losses will increase significantly from current levels as we continue to increase our operating expenses in each of our operating expense categories. In addition, we expect the rate at which these losses will be incurred will increase significantly from current levels. We expect these additional costs and expenses to be related to:
Unless we generate and sustain substantially higher revenues while maintaining reasonable expense levels, we will continue to incur significant net losses. Even if we increase revenues we may experience price competition or increased expenses, which would lower our gross margins or cause us to incur net losses. Furthermore, if we ever do achieve profitability or reduce our net losses, we may not sustain this result on a quarterly or annual basis in the future.
Our quarterly operating results may fluctuate in future periods and we may fail to meet expectations. We believe quarter- to-quarter comparisons of our revenues and operating results are not necessarily meaningful because of quarterly fluctuations, and that such comparisons may not be accurate indicators of future performance. Consequently, in future quarters our operating results may fall below the expectations of investors and, as a result, the price of our common stock may fall. The operating results of companies in the travel and electronic commerce industries have in the past experienced significant quarter-to-quarter fluctuations. We will likely experience similar fluctuations due to a number of factors, any of which, if not adequately addressed may adversely affect the long-term viability of our business. These factors include:
In addition, we expect our quarterly operating results to fluctuate due to factors beyond our control, including:
We currently expect that a majority of our revenues for the foreseeable future will come from fees paid to us by our business and airline supplier customers who access our GetThere Marketplace and from commissions earned from travel suppliers. The volume and timing of these fees and commissions are difficult to predict because the market for our services is in its infancy. As with other companies in our industry, our operating expenses, which include sales and marketing, research and development and general and administrative expenses, are based on our expectations of future revenues and are relatively fixed in the short term. As a result, a delay in generating or recognizing revenue for any reason could cause significant variations in our operating results from quarter to quarter and could result in greater than expected operating losses.
Our business is subject to seasonal fluctuations. We have experienced and expect to continue to experience seasonality in our business, reflecting seasonal fluctuations in the travel industry, Internet usage and advertising expenditures. This seasonality will cause quarterly fluctuations in our operating results and could significantly harm our business and operating results. Business travel bookings typically decline during the fourth quarter of each calendar year due to decreased business travel during the holiday season. Consumer travel bookings typically increase during the second quarter of each calendar year in anticipation of summer travel. Internet usage and the rate of such usage typically decline during the summer. In addition, advertising sales in traditional media, such as broadcast and cable television, generally decline in the first and third quarters of each year. Depending on the extent to which the Internet is accepted as an advertising medium, seasonality in the level of advertising expenditures could become more pronounced for Internet-based advertising.
Our results of operations will be harmed by charges associated with our payment of stock-based compensation and charges associated with other securities issuance by us. We expect to incur a significant amount of amortization in future periods, which will negatively effect our operating results. We amortized approximately $7.3 million of stock-based compensation for the six months ended July 31, 2000. We would incur additional amortization charges in the future if we were to issue new grants of stock-based compensation at below market value.
Our long and variable sales cycle depends upon factors outside our control and could cause us to expend significant time and resources prior to earning associated revenues. The typical sales cycle of our services is long and unpredictable, requires pre- purchase evaluation by a significant number of employees in our customers' organizations and involves a significant investment decision by our customers. These lengthy sales cycles will have a negative impact on the timing of our revenues, especially our realization of transaction revenues, and may cause our revenues and operating results to vary significantly from period to period. Our sales cycle is affected by the business conditions and budgetary cycles of each prospective customer. Many of our potential customers are large enterprises that generally take longer to make significant purchases. Moreover, a purchase decision by a potential customer typically requires the approval of several senior decision-makers. Our sales cycle for our larger business customers and travel suppliers is generally between six and nine months, although it has on occasion lasted significantly longer.
Many of our customers test the technical fit of our services prior to entering into a full service contract with us by undertaking a pilot program. Some of our pilot programs have taken over a year to complete and require us to commit significant resources with no certainty that a sale will result.
We have not yet reached a definitive agreement regarding providing our solutions for Northwest Airlines' primary Web site, www.nwa.com. We may not reach a definitive agreement with Northwest Airlines or successfully implement our services on its www.nwa.com Web site or we may not successfully implement our services to the America West Airlines' Web site.
Because implementation of our travel procurement and supply services is time consuming, there may be significant delays between the sale and deployment of our services. The implementation and deployment of our services require a significant commitment of resources by us and by our customers. Any delays may have a negative impact on our recognition of revenues, especially our recognition of transaction revenues, and could significantly harm our business and operating results. Prior to full implementation, most of our customers undertake a lengthy process to integrate our services into their systems. The timing of deployment depends upon the:
Because of the number of factors influencing the integration and deployment processes, we expect that the period between selling our services and the time our customers deploy applications based on our services will vary widely. We have experienced and expect to continue to experience delays in the deployment of our services.
The market for Internet-based travel procurement and supply services is highly competitive and we may not be able to compete effectively. The market for Internet-based travel procurement and supply services is new, highly competitive and rapidly evolving, and we expect competition to intensify in the future. Our failure to compete effectively would harm our business and operating results. Increased competition is likely to result in price reductions, reduced gross profits and loss of market share, any of which could harm our revenues and operating results. We currently or potentially may compete with a variety of companies. Our primary competition currently comes from or is anticipated to come from companies in the following categories:
Some of our competitors and potential competitors have longer operating histories and significantly greater financial resources and name recognition than we do. In addition, many of these companies have more technical, marketing and sales personnel and more established customer support and professional services organizations than we do. They may also enter into strategic or commercial relationships with larger, more established and well-financed companies.
Furthermore, as new participants enter the on-line travel procurement and supply market, we will face increased competition. Potential competitors, such as on-line providers of indirect goods and services, may incorporate on-line travel-related services into their existing product offerings. It is also possible that new competitors or alliances among our competitors may emerge and rapidly acquire significant market share. Our competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements than we can, which could cause our services to become obsolete.
American Express has developed a travel service with Microsoft that competes with our Global Manager service. American Express and Microsoft have developed the AXI travel management system, which is a service that provides a Web site for businesses that enables their employees to make travel-related reservations and to purchase airline tickets over the Internet. This service competes directly with our Global Manager service. If we are unable to compete effectively with the AXI travel management system, our business and results of operations would be adversely affected. Even though we have a business relationship with American Express to provide Web-based travel services on behalf of American Express, American Express is not precluded from selling and servicing the AXI travel management system or from continuing to work with Microsoft.
We rely on United Air Lines for a significant portion of our transaction revenues, and the termination of this relationship would adversely affect our business. United Air Lines, one of our principal stockholders, has been our primary travel supplier customer since November 1997. Any disruption of our relationship with United Air Lines could leave us with excess overhead, as well as with a loss of significant revenue, either of which would significantly harm our business and operating results as well as our reputation for providing services to travel suppliers. For the six months ended July 31, 2000, we derived approximately $5.5 million directly and $1.2 million indirectly from United Air Lines, accounting for an aggregate of approximately 47% of our total revenues. During this period, United Air Lines has also accounted for substantially all of our revenues from our travel supplier customers. Our services agreement with United Air Lines can be terminated by us or United Air Lines for any reason by providing the other party with notice 180 days prior to termination, but no such termination will be effective before January 1, 2002. In addition, as our primary customer, we dedicate a significant amount of our resources to United Air Lines.
In March 2000, United Air Lines notified us that because its call centers have excess capacity, it intends to transfer most of the support activities we currently perform for it back to United. The transfer will likely commence in November 2000 and continue through March 2001. During the six months ended July 31, 2000 and July 31, 1999 we recognized $2.8 million and $704,000 of support revenue, respectively, from United Air Lines. The anticipated loss of this support could have a material impact on our revenues.
We may not be able to significantly increase the use of our services after our services have been implemented by our customers. If the use of our services does not increase significantly, we may not be able to achieve or sustain growth in our business. Employees of our business customers and patrons of our travel supplier customers and other customers have been slow to increase the use of our services after implementation. The adoption of our services is largely outside of our control and primarily dependent on our customers' efforts and ability to promote the use of our services. Furthermore, any failure to increase the use of our services would limit our ability to increase revenues from customers, which would significantly harm our business and operating results.
We have limited experience with widespread deployment of our travel procurement and supply services. If we cannot support large-scale deployments, our business and operating results will be significantly harmed. Only a limited number of our business and travel supplier customers have used our GetThere Marketplace services on a large scale. Our primary source of revenue is expected to come from transaction fees derived from the use of our GetThere Marketplace; therefore, our ability to support large numbers of transactions is critical to our success. Our ability to provide effective and timely support for our services depends on our ability to:
In addition, our customers require our GetThere Marketplace to be highly scalable. We must be able to rapidly accommodate a large increase in the number of users. If we are unable to achieve this level of scalability in a timely manner, our business and operating results could be significantly harmed.
We have experienced significant growth in our business in recent periods, and failure to manage our growth could strain our management and other resources. We may fail to successfully offer our services and develop new customer relationships, which could significantly harm our business and operating results. In addition, we are still integrating the operations of our recently acquired companies, ATS and AllMeetings. These efforts are expensive and put a significant strain on our management and other resources. We continue to increase the scope of our operations and grow our headcount substantially. At January 31, 1998, we had a total of 74 employees, and at July 31, 2000 we had a total of 410 employees. We expect to hire a significant number of new employees in the near future. This growth has placed, and our anticipated future operations will continue to place, a significant strain on our management, systems and resources and on our internal training capabilities. If we fail to effectively manage our growth, our business and operating results will be significantly harmed.
To manage future growth effectively, we must maintain and enhance our financial and accounting systems and controls, manage expanded operations and attract, train, integrate and retain key employees, including those in our engineering, operations, sales and marketing and support organizations. However, hiring qualified personnel in sales, marketing, administration and research and development, is very competitive in our industry, particularly in the San Francisco Bay Area, where we are headquartered, due to the high demand for people with the necessary technical skills and understanding of the Internet. We expect to face greater difficulty attracting these personnel with equity incentives as a public company than we did as a privately held company. We may not be able to attract, integrate, assimilate or retain highly qualified personnel in the future. Our business will not continue to grow and could be significantly harmed if we are unable to attract qualified personnel.
Our operating results are substantially dependent on the success of our GetThere Marketplace, and a reduction in sales or our inability to significantly increase sales of our services, would significantly harm our business. We expect to derive a substantial portion of our revenues from our GetThere Marketplace service, and we have not yet generated any profits from sales of these services. If we are unable to generate significant revenues from our GetThere Marketplace, or if we are unable to generate profits from these services, our business and operating results would be significantly harmed. We need to significantly increase sales of our services, including access to our GetThereMarketplace. Our services may not successfully compete with those of our competitors, and we may not be able to enhance our services or develop new services to meet customer needs. In addition, we have in the past offered equity rights to potential customers in connection with the sale of our services. In the future, we expect to decrease offering equity rights to potential customers, which may make sales of our services more difficult. Furthermore, businesses and travel suppliers may choose to develop their own Internet-based travel services.
We rely on suppliers of travel services and products for our revenues, and these suppliers are not obligated to use our services or pay us commissions. We are dependent on airlines, hotels, car rental companies and other providers of travel services in order to offer our business customers access to travel products and services. If these travel suppliers restrict our access to their products and services or otherwise make our services unnecessary or less attractive to travelers, we would experience significant harm to our business and operating results. None of these suppliers are obligated to sell their products or services through us. Some travel service providers may decide not to sell their services on-line or through our services. Some travel service providers have initiated direct on-line distribution channels and, in some cases, have offered reduced rates directly to major business customers.
Revenues derived from some of our customers are dependent on the commissions customarily paid by travel suppliers for purchases made through our travel procurement services. These travel suppliers are not obligated to pay any specified commissions or to pay commissions at all. As a result, travel suppliers may reduce current commission rates or eliminate such commissions entirely, which could significantly harm our business and operating results.
Our travel procurement services depend on our ability to access computer reservation systems. Our travel procurement services are limited to those travel suppliers whose services and products are available through the computer reservation systems we access. These travel suppliers may not continue to sell services or products through the computer reservation systems to which we have access. In addition, we may not be able to extend our existing relationships to a wider array of travel services or maintain or establish new relationships with computer reservation systems. Our failure to do so would significantly harm our business and operating results.
We currently transact a significant amount of our business through the Galileo International computer reservation system. If our agreement to use the Galileo International system were terminated, we would be unable to process travel transactions for a significant number of our customers. Our agreement with Galileo may be terminated by either party to the agreement if the other party becomes insolvent or ceases or suspends its operations, or if the other party fails to perform its obligations under the agreement and this failure continues for a period of 30 business days.
A decline in the travel industry will significantly harm our business. Our business and future growth are dependent on the travel industry. We currently derive substantially all of our revenues from our Internet-based travel procurement and supply services. Any decline in the travel industry would significantly harm our business and operating results. The travel industry is sensitive to changes in economic conditions and tends to decline during general economic downturns and recessions. The travel industry is also highly susceptible to events beyond our control, such as fuel price escalation, travel related accidents, extreme weather conditions, labor disputes, terrorist activities, the outbreak or threat of military hostilities and other adverse occurrences.
Our strategy to provide our services in the market for Internet-based procurement and supply of indirect goods and services is unproven and may fail. One of our strategies is to apply our existing expertise in the travel market to provide services for the Internet-based procurement and supply of other indirect goods and services. The pursuit of this strategy may cause us to expend significant time and resources on the development of new services. However, this strategy may not be successful. If we are unsuccessful, we may not be able to recover the costs and expenses associated with developing and implementing this strategy.
In addition, the time and attention of our management will have been diverted. Consequently, our business and operating results may be significantly harmed. In addition, the markets for Internet-based procurement and supply of indirect goods and services are extremely competitive. When and if we enter markets for the Internet-based procurement and supply of indirect goods and services other than travel, we may not be able to compete successfully. Several companies have been competing in the Internet-based procurement and supply of indirect goods and services markets for the past several years and consequently have a larger customer base than we do. We may not be successful in selling our services to their existing customers or competing for future customers. We expect that competition in these markets will intensify as current competitors expand their product offerings and new competitors enter these markets. Because there are relatively low barriers to entry in the electronic commerce market, competition from other established and emerging companies may develop in the future.
Our strategy to expand internationally may not succeed and makes us much more susceptible to risks from international operations. We intend to increase our international sales capabilities and operational presence. However, we may not succeed at this. Our international business activities are subject to a variety of risks, including:
The expansion of our international sales capability and operations will require significant capital and other resources, may divert the attention of our management and will further expose us to these risks. To date, we have not adopted a hedging program to protect us from risks associated with currency fluctuations. To the extent that we are unable to successfully expand internationally or manage the expansion of our business into international markets, our business and operating results could be harmed.
Our executive officers and certain key personnel are critical to our business, and many of these officers and key personnel may not remain with us in the future. The loss of one or more of our executive officers or other key personnel could significantly harm our business and operating results. Any of our officers or key personnel can quit at any time, and we cannot prevent them from joining our competitors or otherwise competing with us. If we are unable to retain or integrate any key personnel, or if any key personnel join a competitor or otherwise compete with us, our business and operating results could be significantly harmed. Our future success depends on the continued services and performance of our senior management and other key personnel, particularly Gadi Maier, our chairman, president and chief executive officer, and Ken Pelowski, our chief operating officer and chief financial officer. We do not have "key person" life insurance policies covering any of our employees.
We rely on Exodus Communications to host and maintain our systems. We rely on Exodus Communications to provide us with and maintain the facilities, power and climate control necessary to operate our computer hardware and software. If Exodus fails to adequately host or maintain our systems, our services could be disrupted and our business and operating results could be significantly harmed. Exodus currently provides these hosting and maintenance services for our computer hardware used to process travel-related transactions. Our agreement with Exodus has a term of six months and is automatically renewable for additional six- month terms. This agreement may be terminated by either party upon 60 days' notice to the other party.
We incorporate software licensed from third parties and any defects or significant interruption in the availability of these products could harm our business. We rely on third-party software for the development of our products and services. For example, we use Apache SSL Server software to configure presentation layers of each unique Web site, and our platforms are based on commercially supported versions of the UNIX operating system. Some of the software we license from third parties would be difficult to replace. This software may not continue to be available on commercially reasonable terms or at all. The loss or inability to maintain any of these technology licenses could result in delays in the sale of our services until equivalent technology, if available, is identified, licensed and integrated. Such delays could harm our business. We may not be able to replace the functionality provided by third-party software currently offered with our services if that software is found to be obsolete, defective or incompatible with future versions of our services or if that software is discontinued or upgraded in such a way that it becomes incompatible with our services. In addition, if this third-party software is not adequately maintained or updated it may become incompatible with our current services. The absence of, or any significant delay in, the replacement of third-party software could result in delayed or lost sales and increased costs and could harm our business and operating results.
We may not be able to develop services that contain the features and functionality our customers demand. If we fail to accurately determine the features and functionality that our customers require and enhance our existing services or develop new services, our current and potential customers will not buy them. Any failure to develop services that contain the features and functionality our customers demand could harm our business and operating results. To date, we have designed our services based in large part on feedback from a limited number of current and potential customers. Therefore, the features and functionality of our services may not adequately satisfy future customer demands. Some of our customers may also require us to develop customized features or capabilities, which would increase our costs and consume our limited resources. In addition, we may not be able to develop customized features in a cost-effective manner.
If we do not respond to rapid technological changes by introducing new services, our services could become obsolete and our business would be seriously harmed. The development of our services entails significant technical, financial and business risks. We may not be able to successfully implement new technologies or adapt our services to customer requirements or emerging industry standards. The Internet and electronic commerce are characterized by:
Any of these factors could render our services obsolete.
If we fail to modify or improve our services in response to evolving industry standards, our services could rapidly become obsolete, which would harm our business and operating results. Uncertainties related to the timing and nature of new product announcements, introductions or modifications by vendors of operating systems, applications software and Internet browsers could harm our business and operating results.
If the protection of our trademarks and other proprietary rights is inadequate, our business could be harmed. Our means of protecting our proprietary rights may not be adequate. We rely on patent, trademark and copyright law, trade secret protection and confidentiality or license agreements with our employees, customers, partners and others to protect our proprietary rights. These legal protections afford only limited protection for our trade secrets and other intellectual property. In addition, effective patent, trademark, service mark, copyright and trade secret protection may not be available in every country in which we offer our services. Unauthorized parties may attempt to copy or otherwise obtain and use our solutions or technology and our competitors could independently develop similar technology.
We have filed applications for United States and European Union trademark registrations for "GetThere". We may not be able to secure these registrations. It is also possible that our competitors or others will adopt service names similar to ours, thereby impeding our ability to build brand identity and possibly leading to customer confusion. Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear. Therefore, we may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.
Policing unauthorized use of our intellectual property is difficult, and we cannot be certain that the steps we have taken will prevent misappropriation of our technology. Furthermore, litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets and domain names and to determine the validity and scope of the proprietary rights of others. If third-parties prepare and file applications in the United States that claim trademarks used or registered by us, we may oppose those applications and be required to participate in proceedings before the United States Patent and Trademark Office to determine priority of rights to the trademarks, which could result in substantial costs to us. Any litigation, arbitration or priority proceeding to protect our trademarks and other proprietary rights, even if not adverse, could result in substantial costs, diversion of development resources and diversion of technical and management personnel and could significantly harm our business and operating results.
Our business may be harmed if we are found to infringe proprietary rights of others. Third parties may claim infringement by us with respect to past, current or future proprietary rights. We expect that participants in our industry will be increasingly subject to infringement claims as the number of services and competitors in our industry segment grows. Any such claim, whether meritorious or not, could be time-consuming, result in costly litigation or arbitration and diversion of technical and management personnel or require us to develop non- infringing technology or to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to us, or at all, and could significantly harm our business and operating results.
We may be subject to potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of the term GetThere. Any claims or customer confusion related to our trademarks, or our failure to obtain trademark registration, would harm our business. We are aware of a pending trademark application in the European Union filed by a company for the mark GETTHERE!. We have discussed the rights related to this mark with this company, but we have not resolved this matter. If it is determined that this mark is validly held by this company, we may be unable to use the mark in the European Union, which could significantly harm our ability to expand our brand awareness and business operations in the European Union. We also use, and our customers use, trade names, trademarks and other similar intellectual property of travel suppliers on Web sites supported or hosted by us. This use may result in claims of infringement or misuse brought by the owners of this intellectual property. Any claims or disputes of this type may also damage the relationships we have with travel suppliers and preclude us from using travel supplier trade names and other intellectual property, either of which could significantly harm our business and operating results.
If we engage in acquisitions, we will incur a variety of costs, and the anticipated benefits of the acquisitions may never be realized. We recently acquired ATS and AllMeetings, and we might acquire or invest in other businesses and acquire other technologies, services or products that we believe are a strategic fit with our business. The process of integrating an acquired business, technology, service or product may result in unforeseen operating difficulties and expenditures and may divert significant management attention from the ongoing development of our business, which could impair our relationships with our current employees, customers and strategic partners. Moreover, we may be unable to maintain uniform standards, controls, procedures and policies in connection with any acquisition, and we may fail to realize the anticipated benefits of any acquisition. Future acquisitions or equity investments could result in potentially dilutive issuance of equity securities, a decrease of our cash, cash equivalents and short-term investments, the incurrence of debt, contingent liabilities and amortization expenses related to goodwill and other intangible assets, any of which could significantly harm our business and operating results.
In addition, recent proposed changes in the Financial Accounting Standards Board rules for merger accounting may affect our ability to make acquisitions and harm our business results if we complete any acquisitions. For example, elimination of the "pooling" method of accounting for mergers could increase the amount of goodwill that we would be required to record if we merge with another company, which would significantly harm our future operating results. Furthermore, accounting rule changes that reduce the availability of write-offs for in-process research and development costs in connection with an acquisition could result in the capitalization and amortization of such costs and negatively impact our operating results in future periods.
Software defects could impair our ability to provide our services to our customers. Complex proprietary technology like ours frequently contains defects or errors that may be detected only when the technology is in use. Further, we often render implementation, consulting and other technical services, which typically involve working with sophisticated software, computing and networking systems. From time to time, we experience software bugs, which disrupt our operations. We could fail to meet project milestones in a timely manner or meet customer expectations as a result of any defects or errors. Any defect or failure to meet project milestones for services could result in loss of or delay in revenues, loss of market share, failure to achieve market acceptance, diversion of development resources, harm to our reputation, increased insurance costs or increased service and warranty costs. To address these problems, we may need to expend significant capital and resources that may not have been budgeted, and such problems may divert technical and management personnel, which could significantly harm our business and operating results.
On-line security failures could harm our business and operating results. The secure transmission of confidential information over the Internet is a significant risk to electronic commerce, and any failure by us to provide effective security would lead to a loss of customers. Advances in computer capabilities, new discoveries in security technology, breakdowns in our security technology or other events or developments may result in a compromise or breach of the algorithms we use to protect customer and transaction data. Our servers are vulnerable to such security breaches, which could lead to interruptions in our business, delays in access to our solutions, loss of data or the inability to accept and confirm customer reservations. A third party that is able to circumvent our security systems could steal customer data or other confidential or proprietary information or cause interruptions in our operations or those of our customers, thus causing damage to our reputation and loss of customers. Security breaches could also expose us to a risk of loss or litigation and possible liability for failing to secure confidential or proprietary customer information. Our insurance coverage may not be adequate to reimburse us for losses caused by security breaches, and our security measures may not prevent security breaches. As a result, we may be required to expend a significant amount of financial and other resources to protect against security breaches or to alleviate any problems that they may cause. These issues may divert technical and management personnel. Security concerns and security breaches of our services, as well as the products and services of others, could significantly harm our business and operating results.
Our systems are subject to external events that may impact our ability to conduct our business operations. Currently, some of our systems are located in our facilities in Menlo Park, California and other systems are hosted by Exodus Communications in Santa Clara, California and Sterling, Virginia. Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, break-in, earthquake and similar events. Menlo Park and Santa Clara are located on a primary fault line. We currently do not have a disaster recovery plan and do not carry sufficient business interruption insurance to compensate us for losses that may occur.
Product liability claims could harm our business. Our customers utilize our services for their travel procurement and supply needs. Any errors, defects or other performance problems could result in financial or other damages to our customers and prompt them to bring a product liability claim against us. A product liability claim brought against us, even if unsuccessful, would likely result in substantial costs and diversion of resources, management and other personnel and could significantly harm our business and operating results.
If we experience significant credit card fraud, we will incur increased costs. If we fail to adequately control fraudulent credit card transactions, our revenues and results of operations would be harmed because we do not carry insurance against this risk. Under current credit card practices, we are liable for fraudulent credit card transactions because we do not obtain a cardholder's signature.
Our officers and directors and entities affiliated with our officers and directors beneficially own approximately 67% of our common stock. Our executive officers and directors and entities affiliated with our executive officers and directors, in the aggregate, beneficially own approximately 67% of our outstanding common stock as of September 1, 2000. If they act together, they will be able to influence matters requiring stockholder approval, including the election of directors and the approval of mergers or other business combination transactions. To the extent these stockholders can prevent the approval of a merger or acquisition, other stockholders may not be able to recognize a premium on their shares.
United Air Lines and American Express have significant influence over our management and business decisions. Covia LLC, a wholly owned subsidiary of United Air Lines and the beneficial owner of approximately 25% of our common stock as of September 1, 2000, has the right to elect and has elected two members to our board of directors.
American Express, the beneficial owner of approximately 13% of our common stock as of September 1, 2000, has the right to elect and has elected one member to our board of directors.
We are subject to anti-takeover provisions that could delay or prevent an acquisition of our company. Provisions of our certificate of incorporation and bylaws and Delaware law could make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders. We have implemented a classified board.
The price of our stock will be volatile. The market price for our common stock is likely to be highly volatile, particularly since the market for Internet-related stocks has experienced extreme price and volume fluctuations. We expect our stock price to be subject to wide fluctuations as a result of a variety of factors, including factors beyond our control. Such factors include:
Because of this volatility, it is likely that we will fail to meet the expectations of our stockholders at some time in the future, resulting in a decline in our stock price.
We do not intend to pay any dividends. We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings for funding growth and, therefore, do not expect to pay any dividends in the foreseeable future.
Risks Related to the Electronic Commerce Market
Our business depends upon on-line travel procurement achieving market acceptance. The on-line market for travel products and services is in its infancy. Any failure to achieve acceptance of our on-line travel services could significantly harm our business and operating results. We may not be able to convince a large number of businesses to utilize on-line travel procurement methods instead of traditional methods. Furthermore, businesses that have implemented our on-line services experience low adoption rates by their employees. Specific factors that could prevent widespread business acceptance of on-line travel procurement methods include:
As a result of such factors, we may not be able to gain commercial acceptance of our on-line travel services.
Our revenues may decrease if Internet usage growth or Internet infrastructure development does not occur as projected. The use of the Internet as a means of transacting business is relatively new and has not been accepted by all customers in the markets we have targeted. As a result, the market may not accept products and services that rely on the Internet, such as ours. If the growth rate of Internet usage in our targeted markets is less than expected our revenues will suffer. The Internet as a means of conducting business may not continue to grow at a rate similar to its historical rate, if at all.
In addition, the Internet may not be accepted as a viable long-term commercial marketplace for a number of reasons, including potentially inadequate development of the necessary network infrastructure or delayed development of enabling technologies and performance improvements. Our success will depend, in large part, upon third parties maintaining the Internet infrastructure to provide a reliable network backbone with the speed, data capacity, security and hardware necessary for reliable Internet access and services. The recent growth in Internet traffic has caused frequent periods of decreased performance. The infrastructure may not be able to support these demands and the performance and reliability of the Internet may decline. If outages or delays on the Internet occur frequently or increase in frequency, overall Internet usage including usage of our services could grow more slowly or decline. Our ability to increase the speed and scope of our services to customers is ultimately limited by and depends upon the speed and reliability of both the Internet and our customers' internal networks. Furthermore, changes in, or insufficient availability of, telecommunications services to support the Internet also could result in slower response times and adversely affect usage of the Internet generally and by our customers in particular. Consequently, the emergence and growth of the market for our services depends upon improvements being made to the entire Internet infrastructure as well as to our individual customers' networking infrastructures to alleviate overloading and congestion. If these improvements are not made, the ability of our customers to utilize our services will be hindered, which will significantly harm our business and operating results.
Future regulation of the Internet may slow its growth, resulting in decreased demand for our solutions and increased costs of doing business. Laws governing the Internet remain largely unsettled, even in areas where there has been some legislative action. It may take years to determine whether and to what extent existing laws such as those governing intellectual property, privacy, libel and taxation apply to the Internet. In addition, the growth and development of the market for on-line commerce may prompt calls for more stringent consumer protection laws, both in the United States and abroad, the result of which may be to impose additional burdens on companies conducting business on-line. The adoption or modification of laws or regulations relating to the Internet could significantly harm our business and operating results.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We develop products in the United States and market our products in North America and Europe. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. As all sales are currently made in U.S. dollars, a strengthening of the dollar compared with other foreign currencies could make our products less competitive in foreign markets. Our interest income is sensitive to changes in the general level of U.S. interest rates, particularly since the majority of our investments are in cash equivalents and short-term instruments. Due to the short-term nature of our cash equivalents and short-term investments we believe there is no material risk exposure. We also believe there is no material risk exposure with our long-term investments. Any investments with a maturity date greater than 12 months are invested in high-quality corporate issues and, by policy, are limited by the amount of credit exposure to any one issuer. The Company protects and preserves its invested funds by limiting default, market and reinvestment risk. Therefore, no quantitative tabular disclosures are required.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
Not applicable.
ITEM 2. Changes in Securities and Use of Proceeds
(a) Changes in Securities
During the quarter ended July 31, 2000, we granted options to purchase 1,016,125 shares of common stock to employees, consultants, and other service providers of GetThere under our 1999 Stock Incentive Plan.
During the quarter ended July 31, 2000, employees, consultants, and other service providers of GetThere exercised options for 321,822 shares of common stock.
During the quarter ended July 31, 2000, warrants for 19,500 shares of common stock were exercised on a net basis. 1,494 shares of common stock were issued for these warrants.
On August 28, 2000 all of the Company's Series D1, D2 and D3 preferred stock converted into common stock.
(d) Use of Proceeds
GetThere completed the initial public offering of its common stock in November 1999. The shares of the common stock sold in the offering were registered under the Securities Act of 1933, as amended, on a Registration Statement on Form S-1 (No. 333-87161). The Securities and Exchange Commission declared the Registration Statement effective on November 22, 1999.
The offering commenced on November 23, 1999 and terminated on November 28, 1999 after we had sold all of the 5,750,000 shares of common stock registered under the Registration Statement (including 750,000 shares sold in connection with the exercise of the underwriters' over-allotment option). The initial public offering price was $16.00 per share for an aggregate initial public offering of $92.0 million.
We paid a total of $6.4 million in underwriting discounts and commissions and approximately $2.6 million has been or will be paid for costs and expenses related to the offering. None of the costs and expenses related to the offering were paid directly or indirectly to any director, officer, general partner of GetThere or their associates, persons owning 10 percent or more of any class of equity securities of GetThere or an affiliate of GetThere.
After deducting the underwriting discounts and commissions and the offering expenses the estimated net proceeds to GetThere from the offering were approximately $83.0 million. The net offering proceeds have been used for general corporate purposes, to provide working capital to develop products and to expand the Company's operations. Funds that have not been used have been invested in money market funds, certificate of deposits and other investment grade securities. We also may use a portion of the net proceeds to acquire or invest in businesses, technologies, products or services.
ITEM 3. Default Upon Senior Securities.
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders.
On June 23, 2000, we held our annual meeting of stockholders for the purpose of electing one Class I director and the Series D1, D2 and D3 directors of our board of directors, amending our Amended and Restated Certificate of Incorporation to change our name to "GetThere Inc.", and ratifying the appointment of PricewaterhouseCoopers LLP as our independent public accountants for the fiscal year ending January 31, 2001. The Series D1, D2 and D3 directors are elected by the holder of the respective Series D preferred stock. One share each of Series D1, D2 and D3 preferred stock has been issued.
All of our nominees for directors were elected as follows: Kenneth R. Pelowski (Class I director), 28,974,464 votes for and 9,374 votes withheld; Frederic F. Brace (Class D1 director), 1 vote for; Christopher D. Bowers (Class D2 director), 1 vote for; and Jonathan S. Linen (Class D3 director), 1 vote for.
The proposal to amend our Amended and Restated Certificate of Incorporation to change our name to "GetThere Inc." was approved as follows: 28,972,719 votes for, 8,626 votes against, and 2,493 votes abstaining.
The proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent public accountants for the fiscal year ending January 31, 2001 was approved as follows: 28,967,609 votes for, 3,043 votes against and 13,186 votes abstaining.
ITEM 5. Other Information.
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
| Exhibit Number | Description |
| 2.1 | Agreement and Plan of Merger, dated as of July 14, 2000, among the Company, GetThere.com Acquisition Corp., Plansite Corporation d/b/a AllMeetings.com, Brian Ashton, Glenn Bingham and Craig Martin, as amended by Amendment No. 1 thereto, dated as of July 27, 2000 (incorporated by reference to Exhibit 99.1 to the Form 8-K filed by the Company on August 25, 2000). |
| 3.1 | Certificate of Amendment of the Certificate of Incorporation of the Company. |
| 27.1 | Financial Data Schedule. |
_____________________
(b) Reports on Form 8-K have been filed with the Securities and Exchange Commission during the three months ended July 31,
2000.
On July 10, 2000, the Company filed a report on Form 8-K dated June 22,
2000, disclosing under Item 5 that the Company had issued a press release
announcing its acquisition of ATS.
On July 24, 2000, the Company filed a report on Form 8-K dated July 19,
2000, disclosing under Item 5 that the Company had issued a press release
announcing the execution of an Agreement and Plan of Merger for the
acquisition of AllMeetings.
On July 31, 2000, the Company filed a report on Form 8-K/A dated July 31,
2000, disclosing under Item 2 certain information relating to the
Company's pending acquisition of AllMeetings.
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.
| GETTHERE INC. |
| (Registrant) |
| By: | /s/ Kenneth R. Pelowski |
|
| |
| Kenneth R. Pelowski | |
| Chief Operating Officer and Chief Financial Officer |
|
|