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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(AMENDMENT NO. 3)
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BREAKAWAY SOLUTIONS, INC.
(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $.000125 PER SHARE
(TITLE OF CLASS OF SECURITIES)
105372 10 5
(CUSIP NUMBER)
HENRY N. NASSAU, ESQ.
MANAGING DIRECTOR AND GENERAL COUNSEL
INTERNET CAPITAL GROUP, INC.
THE 600 BUILDING
435 DEVON PARK DRIVE
WAYNE, PA 19087
(610) 989-0111
(NAME, ADDRESS AND TELEPHONE NUMBER OF
PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS)
COPY TO:
CHRISTOPHER G. KARRAS, ESQ.
DECHERT
4000 BELL ATLANTIC TOWER
1717 ARCH STREET
PHILADELPHIA, PENNSYLVANIA 19103-2793
(215) 994-4000
APRIL 9, 2001
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
IF THE FILING PERSON HAS PREVIOUSLY FILED A STATEMENT ON SCHEDULE 13G TO
REPORT THE ACQUISITION WHICH IS THE SUBJECT OF THIS SCHEDULE 13D, AND IS FILING
THIS SCHEDULE BECAUSE OF RULE 13d-1(e), 13d-1(f) OR 13d-1(g), CHECK THE
FOLLOWING BOX |_|
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1) NAME OF REPORTING PERSON INTERNET CAPITAL GROUP, INC.
SS. OR I.R.S. IDENTIFICATION 23-2996071
NO. OF ABOVE PERSON
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2) CHECK THE APPROPRIATE BOX (a) |_|
IF A MEMBER OF A GROUP (b) |_|
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3) SEC USE ONLY
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4) SOURCE OF FUNDS OO
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5) CHECK BOX IF DISCLOSURE OF
LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
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6) CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
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NUMBER OF SHARES 7) SOLE VOTING
BENEFICIALLY OWNED BY POWER 0
REPORTING PERSON WITH ------------------------------------------
8) SHARED VOTING
POWER 47,093,432(1)
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9) SOLE DISPOSITIVE
POWER 0
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10) SHARED DISPOSITIVE
POWER 47,093,432(1)
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11) AGGREGATE AMOUNT BENEFICIALLY
OWNED BY EACH REPORTING PERSON 47,093,432
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12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES |_|
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13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 57.0%
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14) TYPE OF REPORTING PERSON CO
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1. Includes 14,285,720 warrants held by ICG Holdings, Inc. to purchase the
same number of shares of the Issuer's common stock. Also includes 142,858
shares of the Issuer's Series A Preferred Stock owned by ICG Holdings, Inc.
that are initially convertible into 14,285,800 shares of the Issuer's
common stock.
2
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1) NAME OF REPORTING PERSON ICG HOLDINGS, INC.
SS. OR I.R.S. IDENTIFICATION 51-0396570
NO. OF ABOVE PERSON
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2) CHECK THE APPROPRIATE BOX (a) |_|
IF A MEMBER OF A GROUP (b) |_|
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3) SEC USE ONLY
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4) SOURCE OF FUNDS WC
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5) CHECK BOX IF DISCLOSURE OF
LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) |_|
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6) CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
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NUMBER OF SHARES 7) SOLE VOTING
BENEFICIALLY OWNED BY POWER 0
REPORTING PERSON WITH ------------------------------------------
8) SHARED VOTING
POWER 47,093,432(1)
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9) SOLE DISPOSITIVE
POWER 0
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10) SHARED DISPOSITIVE
POWER 47,093,432(1)
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11) AGGREGATE AMOUNT BENEFICIALLY
OWNED BY EACH REPORTING PERSON 47,093,432(1)
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12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES |_|
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13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11) 57.0%
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14) TYPE OF REPORTING PERSON CO
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1. Includes 14,285,720 warrants to purchase the same number of shares of the
Issuer's common stock. Also includes 142,858 shares of the Issuer's Series
A Preferred Stock that are initially convertible into 14,285,800 shares of
the Issuer's common stock.
3
This Amendment No. 3 to Schedule 13D ("Amendment No. 3") relates to a
Schedule 13D filed with the Securities and Exchange Commission ("SEC") on
January 26, 2001, Amendment No. 1 to Schedule 13D ("Amendment No. 1") filed with
the SEC on January 26, 2001 and Amendment No. 2 to Schedule 13D ("Amendment No.
2") filed with the SEC on February 23, 2001. This Amendment No. 3 amends and
supplements Amendment No. 2. Information in the Schedule 13D, Amendment No. 1
and Amendment No. 2 remains in effect except to the extent that it is superseded
by the information contained in this Amendment No. 3. Information given in
response to each item shall be deemed to be incorporated by reference in all
other items. Capitalized terms used but not defined in this Amendment No. 3
shall have the meanings ascribed to such terms in the Schedule 13D, Amendment
No. 1 and Amendment No. 2.
ITEM 1. SECURITY AND ISSUER
This Amendment No. 3 relates to the acquisition of (a) warrants to purchase
up to 14,285,720 shares of Common Stock, at an exercise price of $.70 per
Warrant, of the Issuer (the "Warrants") and (b) 142,858 shares of the Issuer's
Series A Preferred Stock, $.0001 par value (the "Preferred Stock"), which is
initially convertible into 14,285,800 shares of the Common Stock.
The exercise price of the Warrants and the number of shares of Common Stock
underlying the Warrants are subject to adjustment upon certain events as
described in the Warrants. The form of the Warrant is filed as Exhibit 1 hereto,
and the terms of which are incorporated herein by reference. The Preferred Stock
is convertible into Common Stock on the terms set forth in the Certificate of
Designation of the Series A Preferred Stock, which is filed as Exhibit 2 hereto,
and the terms of which are incorporated herein by reference.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
On April 6, 2001, the Equity Financing of the Issuer closed. Pursuant to
the terms of the Series A Purchase Agreement, at the closing ICGH purchased (a)
142,858 shares of the Preferred Stock for $10,000,060 and (b) the Warrants for
$142.86. At the Closing, ICGH delivered the notes held by it evidencing
indebtedness under the Debt Financing to the Issuer for cancellation, and the
outstanding amount of such notes, $9,146,359.47, including accrued interest
thereon, was applied to the purchase price of the Preferred Stock purchased
by ICGH at the Closing.
ITEM 4. PURPOSE OF TRANSACTION
ICGH acquired the Warrants and the Preferred Stock in connection with, and
as consideration for, the Equity Financing.
Pursuant to the terms of a Closing Agreement dated April 6, 2001 (the
"Closing Agreement"), which is filed as Exhibit 3 hereto and the terms of which
are incorporated herein by reference, the Issuer increased the size of its Board
of Directors to seven members, and
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elected the following persons to the Issuer's Board: Wayne Weisman, E.
Talbot Briddell, Gerald Marcus, William Loftus and Henry Nassau.
Except as set forth above, the Reporting Persons have not formulated any
plans or proposals of the types referred to in clauses (a) through (j) of Item 4
of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a)-(b) Before the exercise of any part of the Warrants or the conversion
of any shares of Preferred Stock, ICGH may be deemed to be the beneficial
owner of 15,276,096 shares of Common Stock (or 28.3% of the outstanding
Common Stock). ICGH may be deemed to be the beneficial owner of the Common
Stock underlying the Warrants and the Preferred Stock, which would, if fully
exercised in the case of the Warrants and converted in the case of the
Preferred Stock, give ICGH an additional 31,817,326 shares of Common Stock (or
57.0% of the outstanding Common Stock). The 15,276,096 shares of Common Stock
presently held by ICGH were contributed to ICGH by ICG, ICGH's sole
stockholder, pursuant to the terms of contribution agreements between ICG and
ICGH dated December 29, 1999 and April 6, 2000. Because ICGH is a
wholly-owned subsidiary of ICG, ICG may be deemed to be the beneficial owner
of the Common Stock underlying the Warrants and the Preferred Stock, with ICG
and ICGH sharing the power to exercise the Warrants and convert the Preferred
Stock, and upon exercise of any part of the Warrants or conversion of the
Preferred Stock, to vote and dispose of the shares of Common Stock underlying
the same.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Except for the right to receive Common Stock upon exercise of the Warrants,
the right to convert the Preferred Stock into Common Stock and the transactions
described in Item 4, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) among the Reporting Persons, the Directors or
Executive Officers, or among any of such persons and any other person, with
respect to any securities of the Issuer, including but not limited to transfer
or voting of any securities of the Issuer, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Warrants to Purchase up to 14,285,800 Shares of Common Stock
of Breakaway Solutions, Inc.
Exhibit 2 Certificate of Designation for Series A Preferred Stock
Exhibit 3 Closing Agreement dated April 6, 2001
Exhibit 4 Joint Filing Agreement between ICG and ICGH
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SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certify that the information set forth in this
statement is true, complete and correct.
Dated: April 11, 2001 INTERNET CAPITAL GROUP, INC.
By: /s/ Henry N. Nassau
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Name: Henry N. Nassau
Title: Vice President and Secretary
ICG HOLDINGS, INC.
By: /s/ Henry N. Nassau
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Name: Henry N. Nassau
Title: Vice President and Secretary
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