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Digital Lava, Inc.
10850 Wilshire Boulevard, Suite 1260, Los Angeles, CA 90024 * (310) 470-1149
Business Description The company is a leading provider of video publishing software products and services for corporate training, communications, distance learning, research and other applications.
Offering
Information

Company has
gone public

Trading As  DGV (AMEX) Industry  High-Tech (SIC 7371)
Type of Stock Offered  Common Shares Filing Date  10/23/1998
Domestic Shares Offered  2,400,000 Offer Date  02/16/1999
Foreign Shares Offered  0 Filing Price  $7.50
Company Shares  2,400,000 Offer Price  $7.50
Selling Shrhldrs Shares  0 Gross Spread  $0.627
Gross Proceeds  $18,000,000 Selling  $0.330
Expenses  - - Reallowance  $0.100
Post-IPO Shares  4,353,758 Employees  14
Primary
Underwriting
Group
Underwriter NameParticipationUnderwriter Phone
Dirks & Company, Inc. Lead Manager (212) 832-6700
Income
Statement
and
Cash Flow
Summary
  Prior
Audited
Income
Latest
Unaudited
Income
  Full Year Audited Figures 6 Months Ending
Figures in U.S. millions except per share data       12/31/1996 12/31/1997 06/30/1997 06/30/1998
Revenues   - - - 0.000 0.565 0.286 0.392
Income from Oper.   - - - -1.944 -3.321 -1.670 1.971
Net Income   - - - -2.385 -4.245 -2.198 -2.780
E.P.S   - - - -91.690 -30.700 -16.550 -18.530
Revenue Growth (%)      - - - -   37.02
Net Income Growth (%)      - - - -   -
Oper. Profit Margin (%)    - - - - - 502.82 -
Net Profit Margin (%)    - - - - - - -
Cash Flow - Oper.     -2.20 -0.83 -1.16
Cash Flow - Inv.     -0.06 -0.05 -0.02
Cash Flow - Fin.     2.42 1.19 1.05
Balance Sheet
Summary
and
Financial
Ratios
Balance sheet as of: 06/30/1998 Financial Ratios
Total Assets    0.93 Current Assets    0.82 Current Ratio    0.12
Total Liab.    6.60 Current Liab.    6.60 Debt Ratio    711.19%
Total Equity    -5.67 Working Cap.    -5.78 Debt to Equity Ratio    -
Cash    0.04    Return on Assets   -
Use Of
Proceeds
The proceeds from the proposed offering will be used for product development, sales and marketing, repayment of indebtedness, facilities and other capital expenditures, expansion of internal operations, working capital and general corporate purposes.
Legal Counsel
Registrar
Auditor
Issuer's Law Firm  Ehrenreich & Krause
Bank's Law Firm  Orrick, Herrington & Sutcliffe
Registrar/Transfer Agent  American Stock Transfer & Trust Co
Auditor  Pricewaterhouse Coopers LLC
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Industry
Competition
The market for software and services for the Internet and intranets is relatively new, constantly evolving and intensely competitive. The Company expects that competition will intensify in the future. Many of the Company's current and potential competitors have longer operating histories, greater name recognition and significantly greater financial, technical and marketing resources than the Company. The Company's principal competitors in the development and distribution of video publishing solutions include Eloquent, Inc., Veon, Inc., Vsoft, Inc., VStream, Inc., LiveNote, Inc., Adobe Systems, Inc. and Visionary Information Systems, Inc. The Company also competes or may compete with computer-based training (CBT) software companies including Macromedia, Inc., Asymetrix Corporation, and Allen Communications, Inc. The Company also competes or may compete with more general purpose audio and video streaming software companies including Microsoft, RealNetworks, VDOnet Corporation, Xing Technology Corporation, Cubic VideoComm, Inc., Motorola, Inc., Vosaic LLC and Oracle Corporation. The Company's vPrism and VideoVisor software also competes indirectly with delivery systems for multimedia content other than audio and video, such as Flash by Macromedia and Enliven by Narrative Communications Corp. Many of such competitors have longer operating histories, greater name recognition and significantly greater financial, technical and marketing resources than the Company. As a result, such competitors may be able to develop products comparable or superior to the Company's or adapt more quickly to new technologies or evolving customer requirements.
Additional
Underwriter
Compensation
Warrant to purchase 120,000 shares/units at a nominal price.
Warrant
Information
# of Units  1,200,000
Unit Ticker  - - Unit Price  $15.00
Warrant Ticker  LVW Warrant Price  $0.10
Warrant Exercise Date  - - Warrant Exercise Price  - -
Warrant Expiration Date  - -
Warrant Detachable  Yes Warrant Detach Date  - -
Warrant Callable  No
Unit Composition 2 Common Shares + 1 Warrant
Warrant Entitlement 1 Common Share

Last updated: 09/29/1999 3:51:08 AM
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