Last week DivX released their 10-Q and while I was able to find the time to tune into their conference call, I didnât get a chance to read through the actual document until this past weekend.
In the filing I didnât find any bombshells or new lawsuits, but there were a few details on some of DivXâs recent acquisitions that did reward my curiosity. According to the filing, DivX made two purchases over the last quarter.
In May 2007, the Company made an equity investment in a private corporation that aggregates and distributes art via its web community and facilitates an open forum where artists can exhibit their artwork and build community around that art in an effort to drive commerce. The Companyâs investment consisted of $3.5 million cash for which it received certain shares of the private corporationâs Series A Preferred Stock and entered into an advertising and marketing agreement. The Company has preliminarily allocated approximately $650,000 of the investment to the advertising and marketing agreement, based on its estimated fair value, and the remaining $2.9 million will be carried as an investment.
DivX doesnât name the actual artwork site in their filing, but since I already knew that they had purchased a piece of DeviantArt, this one wasnât hard to figure out. Originally, I had thought that they were only partially behind the $3.5 million investment, but according to the filing, it looks like they put in all of the cash. DivX doesnât disclose how much of a stake they got for their money, but they do disclose that it is less than 20%.
