Verticalnet Draws New Funding

Private placement brings in $6.7 million from institutional investors

Private placement brings in $6.7 million from institutional investors

Malvern, PA — January 23, 2004 — Verticalnet, a provider of strategic sourcing and supply management solutions, today announced that it had completed a private placement of the company's common stock with several institutional investors.

Verticalnet said it had sold 3,323,855 shares of common stock for $2.02 per share. Gross proceeds were approximately $6.7 million, or approximately $6.2 million net of expenses. The institutional investors also received warrants to purchase 830,964 shares of common stock at $3.72 per share.

In a statement, the solution provider said that the funds would be used for general corporate and strategic purposes, including, but not limited to, acquisitions, joint ventures, software development arrangements or other similar transactions.

In addition, Verticalnet has binding agreements to sell an additional $1.0 million of common stock at $2.02 and issue warrants to purchase an additional 118,684 shares at $3.72. The company expects to receive proceeds of approximately $0.9 million net of expenses from the sale of these additional shares. The company warned that although it expects to close on these additional shares, there is no assurance that the sale of these additional shares will be completed.

"The shares of common stock have not been registered under the Securities Act of 1933 and may not be subsequently offered or sold by the investors absent registration or an applicable exemption from the registration requirements," the company said in a statement. Verticalnet has agreed to file a registration statement covering the resale of the securities issued in this transaction.