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SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K/A

|ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2001

OR

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

Commission File No. 0-30043

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divine, inc.(Exact name of Registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

36-4301991(I.R.S. Employer
Identification Number)1301 North Elston Avenue,
Chicago, Illinois(Address of Principal Executive Offices)

60622(Zip Code)


Registrant's telephone number, including area code: (773) 394-6000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

|Title of Each Class                             |  | Name of Exchange On Which Registered
|----------------------------------------------- |  | ------------------------------------
|Class A Common Stock, par value $.001 per share |  | Nasdaq National Market              

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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 such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý    No o

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K/A or any amendment to this
Form 10-K/A. ý

The aggregate market value of the voting stock of the registrant held by stockholders who were not affiliates (as defined by regulations of the Securities and
Exchange Commission) of the registrant was approximately $183,189,352 at March 27, 2002 (based on the closing sale price on the Nasdaq National Market, Inc. ("Nasdaq") on
March 27, 2002). At March 27, 2002 the registrant had issued and outstanding an aggregate of 457,145,645 shares of class A common stock.

Documents Incorporated by Reference

Those sections or portions of the registrant's proxy statement for the Annual Meeting of Stockholders to be held on May 21, 2002,
described in Part III hereof, are incorporated by reference in this report.

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EXPLANATORY NOTE

divine is hereby amending its Annual Report on Form 10-K for the year ended December 31, 2001 solely to correct a clerical error in the reported
cash flows from operating activities for the year ended December 31, 2000. The reported "Net gain on stock transactions of associated companies" for the year ended December 31, 2000
should have been $(4,375,000). The correct amount was reflected in divine's Annual Report on Form 10-K for the year ended December 31, 2000, as previously filed. This
Form 10-K/A includes the revised page of the Consolidated Statements of Cash Flows.

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divine, inc.  CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                     |                                                                                                                        |                                                                                                          |          |                                        |                                                     | Period from
May 7, 1999
(inception)
through
December 31,
1999 |         
|---------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------- | -------- | -------------------------------------- | --------------------------------------------------- | ------------------------------------------------------------- | --------
|
|
|
|Cash flows from operating activities:                |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|                                                     | Net loss                                                                                                               |                                                                                                          | $        | (369,824                               | )                                                   | $                                                             | (470,319
|                                                     | Adjustments to reconcile net loss to net cash used in operating activities:                                            |                                                                                                          |          |                                        |                                                     |                                                               |         
|                                                     |                                                                                                                        | Depreciation and amortization                                                                            |          |                                        | 29,661                                              |                                                               |         
|                                                     |                                                                                                                        | Acquired technology: in-process research and development                                                 |          |                                        | 13,741                                              |                                                               |         
|                                                     |                                                                                                                        | Extraordinary gain                                                                                       |          |                                        | (12,032                                             | )                                                             |         
|                                                     |                                                                                                                        | Stock-based compensation                                                                                 |          |                                        | 9,667                                               |                                                               |         
|                                                     |                                                                                                                        | Noncash compensation expense from the forgiveness of notes receivable from the exercise of stock options |          |                                        | 2,310                                               |                                                               |         
|                                                     |                                                                                                                        | Other noncash compensation expense                                                                       |          |                                        | 654                                                 |                                                               |         
|                                                     |                                                                                                                        | Bad debt expense                                                                                         |          |                                        | 23,379                                              |                                                               |         
|                                                     |                                                                                                                        | Equity in losses of associated companies                                                                 |          |                                        | 19,604                                              |                                                               |         
|                                                     |                                                                                                                        | Net gain on stock transactions of associated companies                                                   |          |                                        | (667                                                | )                                                             |         
|                                                     |                                                                                                                        | Impairment charges                                                                                       |          |                                        | 111,519                                             |                                                               |         
|                                                     |                                                                                                                        | Minority interest                                                                                        |          |                                        | (4,270                                              | )                                                             |         
|                                                     |                                                                                                                        | Gain on the sale of assets                                                                               |          |                                        | (539                                                | )                                                             |         
|                                                     |                                                                                                                        | Realized loss on other than temporary impairment of available-for-sale securities, net                   |          |                                        | 12,280                                              |                                                               |         
|                                                     |                                                                                                                        | Realized gain on sale of associated companies                                                            |          |                                        | (7,397                                              | )                                                             |         
|                                                     |                                                                                                                        | Changes in assets and liabilities, excluding effects from acquisitions:                                  |          |                                        |                                                     |                                                               |         
|                                                     |                                                                                                                        |                                                                                                          |          | Restricted cash                        |                                                     |                                                               | (30,923 
|                                                     |                                                                                                                        |                                                                                                          |          | Accounts receivable                    |                                                     |                                                               | (6,801  
|                                                     |                                                                                                                        |                                                                                                          |          | Deferred offering costs                |                                                     |                                                               |        
|                                                     |                                                                                                                        |                                                                                                          |          | Prepaid expenses                       |                                                     |                                                               | (2,913  
|                                                     |                                                                                                                        |                                                                                                          |          | Deferred publisher costs               |                                                     |                                                               | (190,885
|                                                     |                                                                                                                        |                                                                                                          |          | Other current assets                   |                                                     |                                                               | (3,371  
|                                                     |                                                                                                                        |                                                                                                          |          | Accounts payable                       |                                                     |                                                               | 2,729   
|                                                     |                                                                                                                        |                                                                                                          |          | Publisher payables                     |                                                     |                                                               | 35,198  
|                                                     |                                                                                                                        |                                                                                                          |          | Accrued expenses and other liabilities |                                                     |                                                               | (5,652  
|                                                     |                                                                                                                        |                                                                                                          |          | Deferred revenue                       |                                                     |                                                               | 136,660 
|                                                     |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|                                                     |                                                                                                                        |                                                                                                          |          |                                        | Net cash used in operating activities               |                                                               |         
|                                                     |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|Cash flows from investing activities:                |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|                                                     | Additions to property and equipment                                                                                    |                                                                                                          |          | (11,781                                | )                                                   |                                                               | (45,676 
|                                                     | Acquisitions, deconsolidation, and divestiture of ownership interests in associated companies, including cash acquired |                                                                                                          |          | 86,348                                 |                                                     |                                                               | (174,002
|                                                     | Capitalized acquisition costs                                                                                          |                                                                                                          |          | (16,830                                | )                                                   |                                                               |        
|                                                     | Sale of ownership interests in associated companies                                                                    |                                                                                                          |          | 26,247                                 |                                                     |                                                               | 1,990   
|                                                     | Purchase of available-for-sale securities                                                                              |                                                                                                          |          |                                       |                                                     |                                                               | (4,181  
|                                                     | Proceeds from the sale of property and equipment                                                                       |                                                                                                          |          | 1,357                                  |                                                     |                                                               |        
|                                                     | Purchase of real estate options                                                                                        |                                                                                                          |          | (5,750                                 | )                                                   |                                                               |        
|                                                     | Net issuance (repayment) on notes receivable                                                                           |                                                                                                          |          | (131                                   | )                                                   |                                                               | 3,936   
|                                                     |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|                                                     |                                                                                                                        |                                                                                                          |          |                                        | Net cash provided by (used in) investing activities |                                                               |         
|                                                     |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|Cash flows from financing activities:                |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|                                                     | Proceeds from the issuance of preferred stock, net of issuance costs                                                   |                                                                                                          |          |                                       |                                                     |                                                               | 230,720 
|                                                     | Proceeds from initial public offering, net of issuance costs                                                           |                                                                                                          |          |                                       |                                                     |                                                               | 109,244 
|                                                     | Proceeds from private placements concurrent with initial public offering                                               |                                                                                                          |          |                                       |                                                     |                                                               | 218,597 
|                                                     | Net repayments of notes payable to associated companies                                                                |                                                                                                          |          |                                       |                                                     |                                                               | (101,187
|                                                     | Proceeds from issuance of notes payable                                                                                |                                                                                                          |          | 17,605                                 |                                                     |                                                               |        
|                                                     | Change in current notes receivable                                                                                     |                                                                                                          |          | (1,571                                 | )                                                   |                                                               |        
|                                                     | Issuance of shares under Employee Stock Purchase Plan                                                                  |                                                                                                          |          | 1,098                                  |                                                     |                                                               | 763     
|                                                     | Proceeds from the issuance of common stock, net of issuance costs                                                      |                                                                                                          |          |                                       |                                                     |                                                               |        
|                                                     | Issuance of long-term debt                                                                                             |                                                                                                          |          |                                       |                                                     |                                                               | 2,643   
|                                                     | Repayment of long-term debt                                                                                            |                                                                                                          |          | (421                                   | )                                                   |                                                               | (2,140  
|                                                     | Proceeds from the exercise of stock options                                                                            |                                                                                                          |          | 19                                     |                                                     |                                                               | 4,261   
|                                                     | Repurchase and cancellation of exercised stock options                                                                 |                                                                                                          |          | (64                                    | )                                                   |                                                               | (1,233  
|                                                     | Purchase of treasury stock and cash placed in escrow for future purchase of treasury stock                             |                                                                                                          |          | (5,627                                 | )                                                   |                                                               |        
|                                                     | Capital raising costs of subsidiaries and payment of fractional shares                                                 |                                                                                                          |          |                                       |                                                     |                                                               | (251    
|                                                     | Proceeds from repayments of notes receivable from the exercise of stock options                                        |                                                                                                          |          | 260                                    |                                                     |                                                               |        
|                                                     |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|                                                     |                                                                                                                        |                                                                                                          |          |                                        | Net cash provided by financing activities           |                                                               |         
|                                                     |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|Effect of exchange rates on cash                     |                                                                                                                        |                                                                                                          | (940     | )                                      |                                                     |                                                              |         
|Net (decrease) increase in cash and cash equivalents |                                                                                                                        |                                                                                                          | (148,053 | )                                      |                                                     | 89,692                                                        |         
|Cash and cash equivalents at beginning of period     |                                                                                                                        |                                                                                                          | 252,533  |                                        |                                                     | 162,841                                                       |         
|                                                     |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|Cash and cash equivalents at end of period           |                                                                                                                        | $                                                                                                        | 104,480  |                                        | $                                                   | 252,533                                                       |         
|                                                     |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|Supplemental disclosures:                            |                                                                                                                        |                                                                                                          |          |                                        |                                                     |                                                               |         
|                                                     | Interest paid                                                                                                          |                                                                                                          | $        | 1,142                                  |                                                     | $                                                             | 1,467   
|                                                     | Noncash financing and investing activities:                                                                            |                                                                                                          |          |                                        |                                                     |                                                               |         
|                                                     |                                                                                                                        | Issuance of notes payable, common stock, options, and warrants in conjunction with acquisitions          |          |                                        | 284,415                                             |                                                               |         
|                                                     |                                                                                                                        | Repayment of note payable from issuance of common stock                                                  |          |                                        | 6,875                                               |                                                               |         
|                                                     |                                                                                                                        | Issuance of notes receivable from exercise of stock options                                              |          |                                        |                                                    |                                                               |         
|                                                     |                                                                                                                        | Retirement of notes receivable from exercise of stock options                                            |          |                                        |                                                    |                                                               |         
|                                                     |                                                                                                                        | Issuance of stock in exchange for service credit or stock                                                |          |                                        |                                                    |                                                               |         

See accompanying notes to consolidated financial statements.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, on May 9, 2002.

| | divine, inc.
| | ------------
| | By:         
| |             

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities indicated on May 9, 2002.

|Signature                                   |  | Title                                                                     
|------------------------------------------- |  | --------------------------------------------------------------------------
|Principal Executive Officer:                |  |                                                                           
|/s/ANDREW J. FILIPOWSKIAndrew J. Filipowski |  | Chairman of the Board and Chief Executive Officer                         
|Principal Financial and Accounting Officer: |  |                                                                           
|/s/MICHAEL P. CULLINANEMichael P. Cullinane |  | Executive Vice President, Chief Financial Officer, Treasurer, and Director
|A Majority of the Directors:                |  |                                                                           
|/s/PAUL L. HUMENANSKYPaul L. Humenansky     |  | President, Chief Operating Officer, and Director                          
|/s/TOMMY BENNETTTommy Bennett               |  | Director                                                                  
|/s/JOHN COOPERJohn Cooper                   |  | Director                                                                  
|/s/JAMES E. COWIEJames E. Cowie             |  | Director                                                                  
|/s/MICHAEL H. FORSTERMichael H. Forster     |  | Director                                                                  
|/s/ARTHUR W. HAHNArthur W. Hahn             |  | Director                                                                  
|/s/J. KEVIN NATERJ. Kevin Nater             |  | Director                                                                  

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