Inc –

SAN FRANCISCO – Inc., a provider of on-line direct marketing and loyalty programs, went public August 20, offering 5 million shares at $8 apiece. The company’s stock priced exactly at its filing price.

Underwritten by BancBoston Robertson Stephens, Bear, Stearns & Co. Inc., Salomon Smith Barney and Wit Capital Corp., the initial public offering left 23.7 million shares of stock outstanding.

There were no selling shareholders. Venture investors included Direct Marketing Technology Inc., S-7 Associates, Long Island Venture Fund, Primedia Ventures, Auber Investments Ltd., Applewood Associates, Targeted Marketing Systems Inc. and WS Investment Co. integrates targeted e-mail and Web-based direct marketing with on-line loyalty programs to create benefits for its advertising clients and consumer members. The company’s approach gives Internet consumers the opportunity to earn rewards by responding to on-line offers while simultaniously providing Web businesses with on-line customer acquisition and retention tools. plans to use the expected $36.2 million generated in the IPO to complete the purchase of technology used in operating its loyalty and rewards program. The company will also use the proceeds for general corporate purposes including working capital, branding, advertising, expanding membership, increasing its sales and marketing operations, funding points of liability and expanding network infrastructure. The company also will use some of the proceeds to acquire other companies, technologies or products that complement its business. has never generated a profit, losing $2.9 million in 1997 and $8.3 million in 1998.

Lawrence Phillips, founder and managing director of Primedia, joined the company’s board of directors in December 1998. – Selected Financial

(in thousands, except per share data)

November 7, 1996 (inception) Six Months Ended

through December 31, Year Ended December 31, June 30,

1996 1997 1998 1998 1999

Total revenue 151 1,286 306 3,938

Net loss -67 -2,889 -8,266 -2,508 -15,785

Net loss per share -0.08 -2.56 -4.37 -1.74 -4.7