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Verticalnet Completes New Debt Financing Arrangement and Announces a One-for-Seven Reverse SplitMALVERN, Pa. --(Business Wire)-- May 26, 2006 -- Verticalnet, Inc. (Nasdaq:VERT),a leading provider of on-demand supply management solutions, today announced it completed its debt financing and plans to effect a reverse stock split on June 12, 2006. Financing On May 15, 2006, Verticalnet, Inc. entered into a Note Purchase Agreement with an institutional investor. Under the terms of the Purchase Agreement, the investor agreed to loan the Company $4.0 million and the Company agreed to issue to the investor a senior subordinated discounted promissory note in the principal amount of $5.3 million. The Company issued the note on May 18, 2006. The transaction resulted in net proceeds to the Company of approximately $3.7 million, after deducting the estimated offering costs and fees. The Company intends to use these proceeds for working capital and general corporate purposes, subject to certain exceptions and limitations set forth in the note. "Verticalnet is pleased to announce the infusion of additional capital from a new, highly reputable investor in a form that does not dilute our existing shareholders," stated Nathanael Lentz, President and CEO of Verticalnet. "With additional liquidity, focused cost management, and recent go-to-market success, we believe that the business has adequate capital to see Verticalnet through to cash flow break-even in future quarters while enabling us to continue to invest in products and customer success." Reverse Stock Split The Company also announced that its Board of Directors had authorized a one-for-seven reverse split of its common stock, which was approved by the Company's shareholders at the 2006 Annual Meeting of Shareholders on May 19, 2006. In the reverse stock split, each seven shares of outstanding common stock will be combined into and automatically become one share of common stock. No fractional shares will be issued in connection with the reverse stock split. Any fractional shares resulting from the reverse stock split will be rounded up to the nearest whole share and no cash payment will be made in respect to such rounding. All outstanding options, warrants, convertible notes or other rights convertible into or exercisable for shares of common stock, will be adjusted in accordance with their terms and pursuant to the one-for-seven ratio. The Company anticipates that its common stock will begin trading on a split-adjusted basis when trading opens on June 12, 2006, with the interim ticker symbol "VERTD." After 20 days, the Company expects that the "D" designation will be removed, and its ticker symbol will revert back to "VERT." The Company's transfer agent will mail instructions to all shareholders of record as of the effective date of the reverse stock split, explaining the process for obtaining new post-split stock certificates. The Company is implementing the reverse stock split in order to meet the Nasdaq Capital Market's $1.00 per share minimum bid price requirement. The Company anticipates that following the reverse stock split, its common stock will trade at a price that is higher than the $1.00 per share minimum bid price. However, there can be no assurance that following the reverse stock split the Company will be able to meet all initial inclusion criteria for the Nasdaq Capital Market in Nasdaq Marketplace Rule 4310(c), or that the Company's common stock will continue to be listed on the Nasdaq Capital Market. About Verticalnet, Inc. Verticalnet is a leading provider of on-demand supply management solutions that enable companies to identify and realize sustained value across the supply management lifecycle. Going beyond traditional spend management and sourcing approaches, Verticalnet's solutions provide the visibility, insight and process control required to maximize the sustained value realization from supply management. Large enough to help customers attain supply management success worldwide, yet nimble enough to provide individual attention and remain focused on customer priorities, Verticalnet is helping Global 2000 companies and mid-market enterprises move their supply management efforts to the next level through an optimal blend of software, comprehensive services, and deep category knowledge and domain expertise. Cautionary Statement Regarding Forward-Looking Information This announcement contains forward-looking information that involves risks and uncertainties. Such information includes statements about the financing and the use of proceeds therefrom, that we believe that the business has adequate capital to see Verticalnet through to cash flow break-even in future quarters while enabling us to continue to invest in products and customer success, the pending reverse stock split, the ability to maintain the listing of the Company's common stock on the Nasdaq Capital Market and the ability to satisfy the $1.00 per share minimum bid price requirement set forth in Nasdaq Marketplace Rule 4310(c) if a reverse stock split is effected, as well as statements that are preceded by, followed by or include the words "believe," "plans," "intends," "expects, "anticipates," or similar expressions. For such statements, Verticalnet claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to, those factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2005 and the Quarterly Report on Form 10-Q for the for quarterly period ended March 31, 2006 which have been filed with the SEC. Verticalnet is making these statements as of May 26, 2006 and assumes no obligation to publicly update or revise any of the forward-looking information in this announcement. Verticalnet is a registered trademark or a trademark in the United States and other countries of Vert Tech LLC |
