VERT Verticalnet (MM)

Verticalnet, Inc. (Nasdaq:VERT), a leading provider of on-demand supply management solutions, today announced completion of a private placement of $2.175 million in preferred stock financing, including $1.575 million in new capital and the conversion of $600,000 of debt financing previously announced on May 22, 2007. Kildare Capital, Inc. acted as exclusive placement agent for the Company. Several individual and institutional investors invested $2.175 million and the Company agreed to issue to the investors 8,700,000 shares of Series B Preferred Stock. The total transaction resulted in net proceeds to the Company of approximately $1.95 million after deducting the estimated offering costs and fees. The transaction provides that $600,000 of debt loaned to the Company in early May will automatically convert into the Series B Preferred Stock on a dollar-for-dollar basis. The Company intends to use the proceeds of the transaction for working capital, the repayment of its final two payments of senior secured convertible notes, and the partial repayment of the Company�s subordinated discount note. The Series B Preferred Stock includes an interest rate of 12% per annum, payable in kind, and is subject to redemption at the investor�s discretion after 24 months. The Company has agreed to seek at its annual meeting shareholder approval of a proposal to enable all the Series B Preferred Stock to be convertible into common shares, to allow Series B shareholders to be issued 4,350,000 warrants to be priced at the closing Nasdaq bid price on the day prior to the Closing and 4,350,000 warrants to be priced at $.70. Under the terms of the proposal, investors would be entitled to convert their shares of Series B Preferred Stock into common shares on a one-for-one basis, subject to adjustment based on subsequent financing criteria set forth in the terms of the Series B Preferred Stock. Upon achieving shareholder approval, all accrued interest on the Series B Preferred Stock would be deemed paid and the redemption feature would be eliminated. In the event the shareholders do not approve the proposal to enable all the Series B Preferred Stock to be convertible into common shares, a portion of the Series B Preferred Stock equal to 19.9% of the Company�s outstanding common stock will be convertible into the Company�s common stock, the redemption feature and interest will be retained and the holders of the Series B Preferred Stock will be granted warrants to purchase approximately 27.0 million shares of the Company�s common stock at an exercise price to be set on the day prior to the annual shareholders meeting. "Verticalnet is pleased to announce the infusion of additional capital from a mix of respected long-term investors as well as members of Verticalnet�s Board of Directors and co-founder," stated Nathanael Lentz, president and CEO of Verticalnet. "With this additional liquidity, the elimination of our senior convertible debt in early July, our continued focus on cost management, and our continued success in the market place, we believe that we are setting in motion the right actions for the next chapter in Verticalnet�s evolution." Neither the shares of Series B Preferred Stock nor the shares of common stock issuable as a result of any conversion of the Series B Preferred Stock have 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. Verticalnet has agreed to file a registration statement covering the resale of the shares of common stock issuable upon conversion of the Series B Preferred Stock issued in this transaction and upon exercise of the warrants to be issued in this transaction. 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 elimination of our senior convertible debt, continued focus on cost management, and continued success in the market place , as well as statements that are preceded by, followed by or include the words �believes,� �plans,� �intends,� �expects,� �anticipated,� �scheduled,� 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. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to, the continued availability and terms of equity and debt financing to fund our business, our reliance on the development of our enterprise software and services business, competition in our target markets, our ability to maintain our listing on The Nasdaq Capital Market, economic conditions in general and in our specific target markets, our ability to use and protect our intellectual property, and our ability to attract and retain qualified personnel, as well as those factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2006 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 which have been filed with the SEC. Verticalnet is making these statements as of June 4, 2007 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