##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 000-25269
 
 VERTICALNET, INC.
 (Exact name of registrant as specified in its charter)
 
 Pennsylvania
    
    23-2815834(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)400 CHESTER FIELD PARKWAYMALVERN, PENNSYLVANIA
    
    19355(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code: (610) 240-0600
 
 þ o
  o o þ
 o þ




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##### 



VERTICALNET, INC.
 FORM 10-Q
 For the Quarterly Period Ended September 30, 2007
 TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial Statements.
    
    
    1Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    
    25Item 3. Quantitative and Qualitative Disclosures About Market Risk.
    
    
    36Item 4. Controls and Procedures.
    
    
    37PART II. OTHER INFORMATIONItem 1. Legal Proceedings.
    
    
    37Item 1A. Risk Factors.
    
    
    37Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    41Item 3. Defaults Upon Senior Securities.
    
    
    41Item 4. Submission of Matters to a Vote of Security Holders.
    
    
    41Item 5. Other Information.
    
    
    42Item 6. Exhibits.
    
    
    43SIGNATURES
    
    
    44Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   ii




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Condensed Consolidated Financial Statements
 VERTICALNET, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2007
    
    
    2006(unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    642
    
    
    $
    2,809Accounts receivable, net
    
    
    3,476
    
    
    
    3,877Prepaid expenses and other current assets
    
    
    1,148
    
    
    
    778Total current assets
    
    
    5,266
    
    
    
    7,464Property and equipment, net
    
    
    348
    
    
    
    920Goodwill
    
    
    9,765
    
    
    
    9,709Other intangible assets, net
    
    
    1,308
    
    
    
    2,184Other assets
    
    
    127
    
    
    
    416Total assets
    
    $
    16,814
    
    
    $
    20,693Liabilities and Shareholders EquityCurrent liabilities:Current portion of long-term debt, convertible notes, and other
non-current liabilities
    
    $
    5,623
    
    
    $
    2,170Accounts payable and accrued expenses
    
    
    5,701
    
    
    
    5,698Deferred revenues
    
    
    3,391
    
    
    
    3,756Total current liabilities
    
    
    14,715
    
    
    
    11,624Non-current portion of deferred revenues
    
    
    1,489
    
    
    
    857Long-term debt and other non-current liabilities
    
    
    25
    
    
    
    5,270Total liabilities
    
    
    16,229
    
    
    
    17,751Series B Convertible Preferred Stock
    
    
    147
    
    
    
    Commitments and contingencies (see Notes 2, 5, 6, 7 and 8)Shareholders equity:Preferred stock $.01 par value, 35,000,000 shares authorized, 8,700,000 shares
issued at September 30, 2007 and 10,000,000 shares authorized and none issued at December 31, 2006
    
    
    
    
    
    
    Common stock $.01 par value, 15,000,000 shares authorized, 1,613,549
shares issued at September 30, 2007 and 2,678,571 shares
authorized, 1,171,586 shares issued at December 31, 2006
    
    
    129
    
    
    
    94Additional paid-in capital
    
    
    1,234,903
    
    
    
    1,230,501Accumulated other comprehensive (loss) income
    
    
    32
    
    
    
    (33
    )Accumulated deficit
    
    
    (1,233,821
    )
    
    
    (1,226,815
    )1,243
    
    
    
    3,747Treasury stock at cost, 1,173 shares at September 30, 2007 and December 31, 2006
    
    
    (805
    )
    
    
    (805
    )Total shareholders equity
    
    
    438
    
    
    
    2,942Total liabilities and shareholders equity
    
    $
    16,814
    
    
    $
    20,693
   1




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##### Table of Contents



VERTICALNET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Software and software related
    
    $
    1,671
    
    
    $
    2,343
    
    
    $
    4,890
    
    
    $
    5,774Services
    
    
    1,367
    
    
    
    1,830
    
    
    
    4,981
    
    
    
    6,500Total revenues
    
    
    3,038
    
    
    
    4,173
    
    
    
    9,871
    
    
    
    12,274Cost of revenues:Cost of software and software related
    
    
    345
    
    
    
    529
    
    
    
    1,053
    
    
    
    1,702Cost of services
    
    
    904
    
    
    
    1,047
    
    
    
    3,178
    
    
    
    4,131Amortization of acquired technology and customer contracts
    
    
    117
    
    
    
    272
    
    
    
    617
    
    
    
    768Total cost of revenues
    
    
    1,366
    
    
    
    1,848
    
    
    
    4,848
    
    
    
    6,601Gross profit
    
    
    1,672
    
    
    
    2,325
    
    
    
    5,023
    
    
    
    5,673Operating expenses:Research and development
    
    
    824
    
    
    
    1,201
    
    
    
    2,811
    
    
    
    4,074Sales and marketing
    
    
    1,172
    
    
    
    1,630
    
    
    
    3,804
    
    
    
    5,464General and administrative
    
    
    1,276
    
    
    
    1,547
    
    
    
    3,645
    
    
    
    4,885Litigation and settlement costs
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    1,032Restructuring charges (reversals)
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    195Impairment charge for goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,877Amortization of other intangible assets
    
    
    86
    
    
    
    201
    
    
    
    288
    
    
    
    660Total operating expenses
    
    
    3,358
    
    
    
    4,564
    
    
    
    10,548
    
    
    
    26,187Operating loss
    
    
    (1,686
    )
    
    
    (2,239
    )
    
    
    (5,525
    )
    
    
    (20,514
    )Interest and other expense (income), net
    
    
    (297
    )
    
    
    1,145
    
    
    
    1,234
    
    
    
    1,489Net loss before preferred stock dividends
    
    
    (1,389
    )
    
    
    (3,384
    )
    
    
    (6,759
    )
    
    
    (22,003
    )Preferred stock  deemed dividends
    
    
    210
    
    
    
    
    
    
    
    247
    
    
    
    Net loss applicable to common shareholders
    
    $
    (1,599
    )
    
    $
    (3,384
    )
    
    $
    (7,006
    )
    
    $
    (22,003
    )Basic and diluted loss per common share
    
    $
    (.99
    )
    
    $
    (3.36
    )
    
    $
    (4.76
    )
    
    $
    (23.11
    )Basic and diluted weighted average common shares outstanding (Note 1)
    
    
    1,616
    
    
    
    1,008
    
    
    
    1,473
    
    
    
    952
   2




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VERTICALNET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
 Nine Months EndedSeptember 30,2007
    
    
    2006Operating activities:Net loss
    
    $
    (7,006
    )
    
    $
    (22,003
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    1,204
    
    
    
    1,839Stock-based compensation
    
    
    144
    
    
    
    1,414Impairment of goodwill
    
    
    
    
    
    
    9,877Accretion of promissory notes and non-cash interest
    
    
    639
    
    
    
    1,820Change in the fair value of derivative liabilities
    
    
    438
    
    
    
    (1,265
    )Loss on asset disposal
    
    
    316
    
    
    
    Amortization of deferred financing costs
    
    
    103
    
    
    
    467Prefered stock  deemed dividends
    
    
    247
    
    
    
    Other non-cash items
    
    
    1
    
    
    
    9Change in assets and liabilities, net:Accounts receivable
    
    
    401
    
    
    
    331Prepaid expenses and other assets
    
    
    288
    
    
    
    345Accounts payable and accrued expenses
    
    
    178
    
    
    
    1,479Deferred revenues
    
    
    267
    
    
    
    1,212Net cash used in operating activities
    
    
    (2,780
    )
    
    
    (4,475
    )Investing activities:Capital expenditures
    
    
    (39
    )
    
    
    (77
    )Acquisitions related payments
    
    
    
    
    
    
    (57
    )Restricted cash
    
    
    155
    
    
    
    155Net cash provided by investing activities
    
    
    116
    
    
    
    21Financing activities:Principal payments on long-term debt and obligations under capital leases
    
    
    (1,437
    )
    
    
    (1,364
    )Proceeds from issuance of senior subordinated discount note, net
    
    
    
    
    
    
    3,677Proceeds from issuance of preferred stock, net
    
    
    1,954
    
    
    
    Proceeds from exercise of restricted stock and issuance of common stock
    
    
    3
    
    
    
    11Net cash provided by financing activities
    
    
    520
    
    
    
    2,324Effect of exchange rate fluctuation on cash and cash equivalents
    
    
    (23
    )
    
    
    21Net decrease in cash and cash equivalents
    
    
    (2,167
    )
    
    
    (2,109
    )Cash and cash equivalents  beginning of period
    
    
    2,809
    
    
    
    4,576Cash and cash equivalents  end of period
    
    $
    642
    
    
    $
    2,467Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    561
    
    
    $
    260Supplemental schedule of non-cash investing and financing activities:Conversion of and payments on senior convertible promissory notes and
accrued interest into/with common stock
    
    $
    1,523
    
    
    $
    2,394Financed insurance policies
    
    
    570
    
    
    
    663Capital expenditures financed through capital lease arrangements
    
    
    
    
    
    
    42
   3




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VERTICALNET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (UNAUDITED)
(in thousands)
 AccumulatedAdditional
    

    
    Other
    

    
    
    
    

    
    
    
    

    
    TotalCommon Stock
    


    
    Paid-in
    

    
    Comprehensive
    

    
    Accumulated
    

    
    Treasury
    

    
    ShareholdersShares
    

    
    Amount
    


    
    Capital
    

    
    (Loss) Income
    

    
    Deficit
    

    
    Stock
    

    
    EquityBalance, January 1, 2007 (Note 1)

    
    
    1,172
    

    
    $
    94
    


    
    $
    1,230,501
    

    
    $
    (33
    )

    
    $
    (1,226,815
    )

    
    $
    (805
    )

    
    $
    2,942Exercise of stock options, non-vested
stock, and restricted units

    
    
    5
    

    
    
    
    


    
    
    3
    

    
    
    
    

    
    
    
    

    
    
    
    

    
    
    3Preferred stock  deemed dividends

    
    
    
    

    
    
    
    


    
    
    247
    

    
    
    
    

    
    
    
    

    
    
    
    

    
    
    247Reclass of net Warrant liabilities

    
    
    
    

    
    
    
    


    
    
    2,520
    

    
    
    
    

    
    
    
    

    
    
    
    

    
    
    2,520Conversion of and payments on senior
convertible promissory notes and
accrued interest into / with common
stock (Note 5)

    
    
    436
    

    
    
    35
    


    
    
    1,488
    

    
    
    
    

    
    
    
    

    
    
    
    

    
    
    1,523Issuance of non-vested stock

    
    
    1
    

    
    
    
    


    
    
    
    

    
    
    
    

    
    
    
    

    
    
    
    

    
    
    Stock-based compensation expense

    
    
    
    

    
    
    
    


    
    
    144
    

    
    
    
    

    
    
    
    

    
    
    
    

    
    
    144Net loss

    
    
    
    

    
    
    
    


    
    
    
    

    
    
    
    

    
    
    (7,006
    )

    
    
    
    

    
    
    (7,006
    )Other comprehensive income

    
    
    
    

    
    
    
    


    
    
    
    

    
    
    65
    

    
    
    
    

    
    
    
    

    
    
    65Balance, September 30, 2007 (unaudited)

    
    
    1,614
    

    
    $
    129
    


    
    $
    1,234,903
    

    
    $
    32
    

    
    $
    (1,233,821
    )

    
    $
    (805
    )

    
    $
    438
   4




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VERTICALNET, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(in thousands)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net loss to common shareholders
    
    $
    (1,599
    )
    
    $
    (3,384
    )
    
    $
    (7,006
    )
    
    $
    (22,003
    )Foreign currency translation adjustment
    
    
    20
    
    
    
    73
    
    
    
    65
    
    
    
    276Comprehensive loss
    
    $
    (1,579
    )
    
    $
    (3,311
    )
    
    $
    (6,941
    )
    
    $
    (21,727
    )
   5




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VERTICALNET, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (1) Summary of Significant Accounting Policies
 Description of the Company
   Basis of Presentation
  Note 2).
 Reverse Stock Splits
  2007 Reverse Split
     6




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2006 Reverse Split
    Use of Estimates
  Cash and Cash Equivalents
  Restricted Cash
  Intangible Assets and Other Long-Lived Assets
 
    7




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Deferred Revenue
  Financial Instruments
  Concentration of Credit Risk
  Revenue Recognition
 Software and software related revenues
       8




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Services revenues
    2007
    
    
    2006Accounts
    
    
    
    
    
    
    
    
    
    
    AccountsReceivable
    
    
    
    
    
    
    % of Total
    
    
    Receivable
    
    
    
    
    
    
    % of TotalCustomer
    
    Balance (a)
    
    
    Revenues
    
    
    Revenues
    
    
    Balance (a)
    
    
    Revenues
    
    
    RevenuesA
    
    $
    59
    
    
    $
    457
    
    
    
    4.60
    %
    
    $
    154
    
    
    $
    1,460
    
    
    
    11.9
    %B
    
    
    44
    
    
    
    564
    
    
    
    5.7
    
    
    
    85
    
    
    
    2,049
    
    
    
    16.7All others, net of allowance (b)
    
    
    3,373
    
    
    
    8,850
    
    
    
    89.7
    
    
    
    4,618
    
    
    
    8,765
    
    
    
    71.4Total
    
    $
    3,476
    
    
    $
    9,871
    
    
    
    100.0
    %
    
    $
    4,857
    
    
    $
    12,274
    
    
    
    100.0
    %
 
 (a)
    
    Represents both billed and unbilled amounts.(b)
    
    Total includes unbilled amounts as of September 30, 2007 and 2006 of $343,000 and $817,000, respectively.  9




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##### Table of Contents



2007
    
    
    2006% of Total
    
    
    
    
    
    
    % of TotalCustomer
    
    Revenues
    
    
    Revenues
    
    
    Revenues
    
    
    RevenuesA
    
    $
    112
    
    
    
    3.7
    %
    
    $
    240
    
    
    
    5.8
    %B
    
    
    135
    
    
    
    4.4
    
    
    
    1,013
    
    
    
    24.3All others
    
    
    2,791
    
    
    
    91.9
    
    
    
    2,920
    
    
    
    69.9Total
    
    $
    3,038
    
    
    
    100.0
    %
    
    $
    4,173
    
    
    
    100.0
    %
 Stock-Based Compensation
     Foreign Currency Translation
  Contingencies
  Accounting for Derivatives
  Computation of Historical Income (Loss) Per Common Share
   10




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Adoption of Recent Accounting Pronouncements
      (2) Liquidity
   11




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.
    12




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(3) Detail of Certain Balance Sheet Accounts
  September 30,
    
    
    December 31,2007
    
    
    2006Accounts Receivable, trade
    
    $
    3,230
    
    
    $
    2,889Unbilled accounts receivable
    
    
    343
    
    
    
    1,077Retainage
    
    
    
    
    
    
    83,573
    
    
    
    3,974Less: allowance for doubtful accounts
    
    
    (97
    )
    
    
    (97
    )$
    3,476
    
    
    $
    3,877
   September 30,
    
    
    December 31,2007
    
    
    2006Software
    
    $
    1,720
    
    
    $
    1,720Computer equipment
    
    
    2,046
    
    
    
    2,000Office equipment and furniture
    
    
    264
    
    
    
    264Leasehold improvements
    
    
    251
    
    
    
    8904,281
    
    
    
    4,874Less: accumulated depreciation and amortization
    
    
    (3,933
    )
    
    
    (3,954
    )$
    348
    
    
    $
    920
     September 30,
    
    
    December 31,2007
    
    
    2006Accounts payable
    
    $
    3,706
    
    
    $
    2,908Accrued taxes
    
    
    683
    
    
    
    788Compensation and related costs
    
    
    213
    
    
    
    577Professional fees
    
    
    324
    
    
    
    318Financial printing
    
    
    159
    
    
    
    175Convertible and discount note interest
    
    
    159
    
    
    
    176Commission due to sales chain partners
    
    
    172
    
    
    
    358Derivative liabilities
    
    
    76
    
    
    
    229Other
    
    
    209
    
    
    
    169$
    5,701
    
    
    $
    5,698
  13




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(4) Goodwill and Other Intangibles
      GrossCarrying
    
    
    Accumulated
    
    
    Net BookAmount
    
    
    Amortization
    
    
    ValueSeptember 30, 2007:Acquired technology
    
    $
    3,739
    
    
    
    3,739
    
    
    $
    Customer contracts and relationships
    
    
    7,024
    
    
    
    5,769
    
    
    
    1,255Non-compete agreements
    
    
    252
    
    
    
    199
    
    
    
    53Trademarks
    
    
    12
    
    
    
    12
    
    
    
    $
    11,027
    
    
    $
    9,719
    
    
    $
    1,308December 31, 2006:Acquired technology
    
    $
    3,733
    
    
    $
    3,431
    
    
    $
    302Customer contracts and relationships
    
    
    6,958
    
    
    
    5,162
    
    
    
    1,796Non-compete agreements
    
    
    251
    
    
    
    165
    
    
    
    86Trademarks
    
    
    11
    
    
    
    11
    
    
    
    $
    10,953
    
    
    $
    8,769
    
    
    $
    2,184
    14




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(5) Long-term Debt, Convertible Notes, and Other Non-Current Liabilities
  September 30,
    
    
    December 31,2007
    
    
    2006Capital leases
    
    $
    60
    
    
    $
    111Senior secured convertible promissory notes
    
    
    
    
    
    
    1,894Senior subordinated discount notes
    
    
    5,132
    
    
    
    5,069Other long-term liabilites
    
    
    456
    
    
    
    3665,648
    
    
    
    7,440Less: current portion of long-term debt, convertible notes, and other
non-current liabilities
    
    
    (5,623
    )
    
    
    (2,170
    )Long-term debt, convertible notes, and other non-current liabilities
    
    $
    25
    
    
    $
    5,270
 Senior Secured Convertible Promissory Notes
       15




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Senior Subordinated Discount Note
      16




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(6) Series B Preferred Stock
   17




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18




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(7) Commitments and Contingencies
  Lease ObligationsOperating
    
    
    Capital
    
    
    Total2007 (a)
    
    $
    106
    
    
    $
    25
    
    
    $
    1312008
    
    
    276
    
    
    
    38
    
    
    
    3142009
    
    
    83
    
    
    
    1
    
    
    
    842010
    
    
    76
    
    
    
    
    
    
    
    76541
    
    
    
    64
    
    
    
    605Less interest
    
    
    
    
    
    
    (4
    )
    
    
    (4
    )Total
    
    $
    541
    
    
    $
    60
    
    
    $
    601
 (a)
    
    Reflects amounts payable over the last three months of 2007.          19




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(8) Litigation
       20




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(9) Capital Stock
   Stock Option Fair Value Information
   Stock-based Compensation Expense
  Three Months EndedSeptember 30,
    
    
    Nine Months EndedSeptember 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Cost of revenues
    
    $
    3
    
    
    $
    24
    
    
    $
    13
    
    
    $
    238Research and development
    
    
    1
    
    
    
    46
    
    
    
    31
    
    
    
    184Sales and marketing
    
    
    12
    
    
    
    105
    
    
    
    59
    
    
    
    347General and administrative
    
    
    4
    
    
    
    175
    
    
    
    41
    
    
    
    645$
    20
    
    
    $
    350
    
    
    $
    144
    
    
    $
    1,414
   21




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##### Table of Contents



(10) Restructuring
   (11) Segment Information
    Three months endedSeptember 30,
    
    
    Nine months endedSeptember 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:United States
    
    $
    2,236
    
    
    $
    3,411
    
    
    $
    7,648
    
    
    $
    10,295International
    
    
    802
    
    
    
    762
    
    
    
    2,223
    
    
    
    1,979Total revenues
    
    $
    3,038
    
    
    $
    4,173
    
    
    $
    9,871
    
    
    $
    12,274
 September 30,
    
    
    December 31,2007
    
    
    2006Long-lived Assets:United States
    
    $
    461
    
    
    $
    1,300International
    
    
    14
    
    
    
    36$
    475
    
    
    $
    1,336
  (12) Interest and Other Expense (Income), Net
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest expense, net
    
    $
    433
    
    
    $
    1,199
    
    
    $
    1,301
    
    
    $
    2,707Perpetual licensing transaction
    
    
    (23
    )
    
    
    
    
    
    
    (800
    )
    
    
    Change in fair value of derivative liabilities
    
    
    6
    
    
    
    (64
    )
    
    
    (153
    )
    
    
    (1,265
    )Change in fair value of warrant liabilities
    
    
    (994
    )
    
    
    
    
    
    
    596
    
    
    
    Loss on asset disposal
    
    
    316
    
    
    
    
    
    
    
    316
    
    
    
    Transaction loss (gain)
    
    
    1
    
    
    
    9
    
    
    
    8
    
    
    
    47Other expenses (income), net
    
    
    (36
    )
    
    
    1
    
    
    
    (34
    )
    
    
    $
    (297
    )
    
    $
    1,145
    
    
    $
    1,234
    
    
    $
    1,489
  22




---



##### Table of Contents



Interest Expense, net
    Perpetual Licensing Transaction
   Change in Fair Value of Derivative Liabilities
   Change in Fair Value of Warrant Liabilities
   23




---



##### Table of Contents



Loss on Asset Disposal
  (13) Subsequent Event
 Merger Agreement
     Series C Preferred Stock Purchase Agreement
     24




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 The information in this report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Any statements contained in this report that are
not statements of historical fact may be deemed forward-looking statements. Words such as may,
might, will, would, should, could, project, estimate, pro forma, predict,
potential, strategy, anticipate, plan to, believe, continue, intend, expect, and
words of similar expression (including the negative of any of the foregoing) are intended to
identify forward-looking statements. Additionally, forward-looking statements in this report
include statements relating to the design, development, and implementation of our products; the
strategies underlying our business objectives; the benefits to our customers, and their trading
partners, of our products; our liquidity and capital resources; and the impact of our acquisitions
and investments on our business, financial condition, and operating results.
 Our forward-looking statements are not meant to predict future events or circumstances and may not
be realized because they are based upon current expectations that involve risks and uncertainties.
Actual results and the timing of certain events may differ materially from those currently expected
as a result of these risks and uncertainties. Factors that may cause or contribute to a difference
between the expected or desired results and actual results include, but are not limited to, the
availability of and terms of equity and debt financing to fund our business; our reliance on the
development of our enterprise software business; our ability to continue to remain listed on the
Nasdaq Capital Market; competition in our target markets; 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 the risks discussed in Part II , Item 1A of
this report entitled Risk Factors. Given these uncertainties, investors are cautioned not to
place undue reliance on our forward-looking statements. We disclaim any obligation to update these
factors or to announce publicly the results of any revisions to any of the forward-looking
statements contained in this report to reflect future events or developments.
 Company Overview
     Critical Accounting Policies and Estimates
    25




---



##### Table of Contents



RESULTS OF CONTINUING OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2007 AND 2006
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Software and software related
    
    
    55.0
    %
    
    
    56.1
    %
    
    
    49.5
    %
    
    
    47.0
    %Services
    
    
    45.0
    %
    
    
    43.9
    %
    
    
    50.5
    %
    
    
    53.0
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of revenues:Cost of software and software related
    
    
    11.4
    %
    
    
    12.7
    %
    
    
    10.7
    %
    
    
    13.9
    %Cost of services
    
    
    29.8
    %
    
    
    25.1
    %
    
    
    32.2
    %
    
    
    33.7
    %Amortization of acquired technology and customer contracts
    
    
    3.9
    %
    
    
    6.5
    %
    
    
    6.3
    %
    
    
    6.3
    %Total cost of revenues
    
    
    45.0
    %
    
    
    44.3
    %
    
    
    49.1
    %
    
    
    53.8
    %Gross profit
    
    
    55.0
    %
    
    
    55.7
    %
    
    
    50.9
    %
    
    
    46.2
    %Operating expenses:Research and development
    
    
    27.1
    %
    
    
    28.8
    %
    
    
    28.5
    %
    
    
    33.2
    %Sales and marketing
    
    
    38.6
    %
    
    
    39.1
    %
    
    
    38.5
    %
    
    
    44.5
    %General and administrative
    
    
    42.0
    %
    
    
    37.1
    %
    
    
    36.9
    %
    
    
    39.8
    %Litigation and settlement costs
    
    
    
    
    
    
    0.1
    %
    
    
    
    
    
    
    8.4
    %Restructuring charges (reversals)
    
    
    
    
    
    
    (0.5
    %)
    
    
    
    
    
    
    1.6
    %Impairment charge for goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80.5
    %Amortization of other intangible assets
    
    
    2.8
    %
    
    
    4.8
    %
    
    
    2.9
    %
    
    
    5.4
    %Total operating expenses
    
    
    110.5
    %
    
    
    109.4
    %
    
    
    106.9
    %
    
    
    213.4
    %Operating loss
    
    
    (55.5
    %)
    
    
    (53.7
    %)
    
    
    (56.0
    %)
    
    
    (167.1
    %)Interest and other expense (income), net
    
    
    (9.8
    %)
    
    
    27.4
    %
    
    
    12.5
    %
    
    
    12.1
    %Net loss
    
    
    (45.7
    %)
    
    
    (81.1
    %)
    
    
    (68.5
    %)
    
    
    (179.3
    %)
 EMPLOYEE HEADCOUNT BY CLASSIFICATION
 September 30,2007
    
    
    2006Dedicated
    
    
    
    
    
    
    
    
    
    
    DedicatedOffshore
    
    
    
    
    
    
    
    
    
    
    OffshoreEmployees
    
    
    Consultants
    
    
    Total
    
    
    Employees
    
    
    Consultants
    
    
    TotalCost of revenues
    
    
    26
    
    
    
    7
    
    
    
    33
    
    
    
    35
    
    
    
    4
    
    
    
    39Research and development
    
    
    18
    
    
    
    11
    
    
    
    29
    
    
    
    24
    
    
    
    23
    
    
    
    47Sales and marketing
    
    
    21
    
    
    
    
    
    
    
    21
    
    
    
    25
    
    
    
    
    
    
    
    25General and administrative
    
    
    13
    
    
    
    
    
    
    
    13
    
    
    
    18
    
    
    
    
    
    
    
    18Total
    
    
    78
    
    
    
    18
    
    
    
    96
    
    
    
    102
    
    
    
    27
    
    
    
    129
  26




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##### Table of Contents



Revenues
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months Ended(in thousands)
    
    September 30,
    
    
    Difference
    
    
    September 30,
    
    
    Difference2007
    
    
    2006
    
    
    $
    
    
    %
    
    
    2007
    
    
    2006
    
    
    $
    
    
    %Software and software related
    
    $
    1,671
    
    
    $
    2,343
    
    
    $
    (672
    )
    
    
    (28.7
    %)
    
    $
    4,890
    
    
    $
    5,774
    
    
    $
    (884
    )
    
    
    (15.3
    %)Services
    
    
    1,367
    
    
    
    1,830
    
    
    
    (463
    )
    
    
    (25.3
    %)
    
    
    4,981
    
    
    
    6,500
    
    
    
    (1,519
    )
    
    
    (23.4
    %)Total revenues
    
    $
    3,038
    
    
    $
    4,173
    
    
    $
    (1,135
    )
    
    
    (27.2
    %)
    
    $
    9,871
    
    
    $
    12,274
    
    
    $
    (2,403
    )
    
    
    (19.6
    %)
 Revenue Concentration
  2007
    
    
    2006Accounts
    
    
    
    
    
    
    
    
    
    
    AccountsReceivable
    
    
    
    
    
    
    % of Total
    
    
    Receivable
    
    
    
    
    
    
    % of TotalCustomer
    
    Balance (a)
    
    
    Revenues
    
    
    Revenues
    
    
    Balance (a)
    
    
    Revenues
    
    
    RevenuesA
    
    $
    59
    
    
    $
    457
    
    
    
    4.60
    %
    
    $
    154
    
    
    $
    1,460
    
    
    
    11.9
    %B
    
    
    44
    
    
    
    564
    
    
    
    5.7
    
    
    
    85
    
    
    
    2,049
    
    
    
    16.7All others, net of allowance (b)
    
    
    3,373
    
    
    
    8,850
    
    
    
    89.7
    
    
    
    4,618
    
    
    
    8,765
    
    
    
    71.4Total
    
    $
    3,476
    
    
    $
    9,871
    
    
    
    100.0
    %
    
    $
    4,857
    
    
    $
    12,274
    
    
    
    100.0
    %
 
 (a)
    
    Represents both billed and unbilled amounts.(b)
    
    Total includes unbilled amounts as of September 30, 2007 and 2006 of $343,000 and $817,000, respectively.  2007
    
    
    2006% of Total
    
    
    
    
    
    
    % of TotalCustomer
    
    Revenues
    
    
    Revenues
    
    
    Revenues
    
    
    RevenuesA
    
    $
    112
    
    
    
    3.7
    %
    
    $
    240
    
    
    
    5.8
    %B
    
    
    135
    
    
    
    4.4
    
    
    
    1,013
    
    
    
    24.3All others
    
    
    2,791
    
    
    
    91.9
    
    
    
    2,920
    
    
    
    69.9Total
    
    $
    3,038
    
    
    
    100.0
    %
    
    $
    4,173
    
    
    
    100.0
    %
     27




---



##### Table of Contents



Cost of Revenues
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months Ended(in thousands)
    
    September 30,
    
    
    Difference
    
    
    September 30,
    
    
    Difference2007
    
    
    2006
    
    
    $
    
    
    %
    
    
    2007
    
    
    2006
    
    
    $
    
    
    %Cost of software and software related
    
    
    345
    
    
    
    529
    
    
    
    (184
    )
    
    
    (34.8
    %)
    
    
    1,053
    
    
    
    1,702
    
    
    
    (649
    )
    
    
    (38.1
    %)Cost of services
    
    
    904
    
    
    
    1,047
    
    
    
    (143
    )
    
    
    (13.7
    %)
    
    
    3,178
    
    
    
    4,131
    
    
    
    (953
    )
    
    
    (23.1
    %)Amortization of acquired technology and customer contracts
    
    
    117
    
    
    
    272
    
    
    
    (155
    )
    
    
    (57.0
    %)
    
    
    617
    
    
    
    768
    
    
    
    (151
    )
    
    
    (19.7
    %)Total cost of revenues
    
    
    1,366
    
    
    
    1,848
    
    
    
    (482
    )
    
    
    (26.1
    %)
    
    
    4,848
    
    
    
    6,601
    
    
    
    (1,753
    )
    
    
    (26.6
    %)
  Cost of Software and Software Related
    Cost of Services
    28




---



##### Table of Contents



Amortization of Acquired Technology and Customer Contracts
  Operating Expenses
 Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Nine Months Ended(in thousands)
    
    September 30,
    
    
    Difference
    
    
    September 30,
    
    
    Difference2007
    
    
    2006
    
    
    $
    
    
    %
    
    
    2007
    
    
    2006
    
    
    $
    
    
    %Research and development
    
    
    824
    
    
    
    1,201
    
    
    
    (377
    )
    
    
    (31.4
    %)
    
    
    2,811
    
    
    
    4,074
    
    
    
    (1,263
    )
    
    
    (31.0
    %)Sales and marketing
    
    
    1,172
    
    
    
    1,630
    
    
    
    (458
    )
    
    
    (28.1
    %)
    
    
    3,804
    
    
    
    5,464
    
    
    
    (1,660
    )
    
    
    (30.4
    %)General and administrative
    
    
    1,276
    
    
    
    1,547
    
    
    
    (271
    )
    
    
    (17.5
    %)
    
    
    3,645
    
    
    
    4,885
    
    
    
    (1,240
    )
    
    
    (25.4
    %)Litigation and settlement costs
    
    
    
    
    
    
    6
    
    
    
    (6
    )
    
    
    (100.0
    %)
    
    
    
    
    
    
    1,032
    
    
    
    (1,032
    )
    
    
    (100.0
    %)Restructuring charges (reversals)
    
    
    
    
    
    
    (21
    )
    
    
    21
    
    
    
    (100.0
    %)
    
    
    
    
    
    
    195
    
    
    
    (195
    )
    
    
    (100.0
    %)Impairment charges for goodwill and intangible assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    9,877
    
    
    
    (9,877
    )
    
    
    (100.0
    %)Amortization of other intangible assets
    
    
    86
    
    
    
    201
    
    
    
    (115
    )
    
    
    (57.2
    %)
    
    
    288
    
    
    
    660
    
    
    
    (372
    )
    
    
    (56.4
    %)Total operating expenses
    
    
    3,358
    
    
    
    4,564
    
    
    
    (1,206
    )
    
    
    (26.4
    %)
    
    
    10,548
    
    
    
    26,187
    
    
    
    (15,639
    )
    
    
    (59.7
    %)
   Research and Development
      29




---



##### Table of Contents



Sales and Marketing
    General and Administrative
    Litigation and Settlement Costs
   Restructuring Charges
    30




---



##### Table of Contents



Impairment Charge for Goodwill
   Amortization of Other Intangible Assets
  Interest and Other Expense (Income), Net
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest expense, net
    
    $
    433
    
    
    $
    1,199
    
    
    $
    1,301
    
    
    $
    2,707Perpetual licensing transaction
    
    
    (23
    )
    
    
    
    
    
    
    (800
    )
    
    
    Change in fair value of derivative liabilities
    
    
    6
    
    
    
    (64
    )
    
    
    (153
    )
    
    
    (1,265
    )Change in fair value of warrant liabilities
    
    
    (994
    )
    
    
    
    
    
    
    596
    
    
    
    Loss on asset disposal
    
    
    316
    
    
    
    
    
    
    
    316
    
    
    
    Transaction loss (gain)
    
    
    1
    
    
    
    9
    
    
    
    8
    
    
    
    47Other expenses (income), net
    
    
    (36
    )
    
    
    1
    
    
    
    (34
    )
    
    
    $
    (297
    )
    
    $
    1,145
    
    
    $
    1,234
    
    
    $
    1,489
 Interest Expense, net
     31




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##### Table of Contents



Perpetual Licensing Transaction
   Change in Fair Value of Derivative Liabilities
   Change in Fair Value of Warrant Liabilities
  Loss on Asset Disposal
   32




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
  (in thousands)
    
    September 30,
    
    
    December 31,2007
    
    
    2006Cash and cash equivalents
    
    $
    642
    
    
    $
    2,809Accounts receivable, net
    
    $
    3,476
    
    
    $
    3,877Working capital (deficit)
    
    $
    (9,449
    )
    
    $
    (4,160
    )Current ratio
    
    
    0.36
    
    
    
    0.64Deferred revenues
    
    $
    4,880
    
    
    $
    4,613Total debt and other non-current liabilities, including
current portion and derivative liabilities
    
    $
    5,724
    
    
    $
    7,669Nine Months Ended September 30,2007
    
    
    2006Cash flow activities:Net cash used in operating activities
    
    $
    (2,780
    )
    
    $
    (3,798
    )Net cash provided by investing activities
    
    
    116
    
    
    
    32Net cash provided by financing activities
    
    
    520
    
    
    
    3,343
  Operating activities
  Investing activities
  Financing activities
     33




---



##### Table of Contents



.
     34




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##### Table of Contents



Contractual Commitments
  Expected Cash Payment by Period  (in thousands)
 2007(a)
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    Thereafter
    
    
    TotalSenior subordinated discount notes (b)
    
    $
    325
    
    
    $
    5,629
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,954Operating leases
    
    
    106
    
    
    
    276
    
    
    
    83
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    540Capital leases (c)
    
    
    25
    
    
    
    38
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64Liability settlement (d)
    
    
    50
    
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Tenant improvement loan (e)
    
    
    3
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10Insurance financing (f)
    
    
    176
    
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    212Employment agreements (g)
    
    
    256
    
    
    
    456
    
    
    
    257
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    969Other obligations (h)
    
    
    14
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26Total
    
    $
    955
    
    
    $
    6,604
    
    
    $
    341
    
    
    $
    75
    
    
    $
    
    
    
    $
    
    
    
    $
    7,975
 (a)
    
    Reflects amounts payable over the last three months of 2007.(b)
    
    Senior subordinated discount note include future interest obligations.(c)
    
    Capital lease balances include future interest obligations.(d)
    
    Liability settlement balances include future interest obligations.(e)
    
    Tenant improvement loan balances include future interest obligations.(f)
    
    Relates to insurance policy financing in 2007.(g)
    
    Represents minimum salaries due to certain executives based on existing employment agreements. In
addition, these agreements provide for additional payments upon employee separation of
approximately $904,000.(h)
    
    Relates to third-party hosting facilities and minimum off-shore development resources commitments.
 Off-Balance Sheet Arrangements
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Foreign Currency Risk
  Interest Rate Risk
  Derivatives
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Item 4. Controls and Procedures
 (a) Evaluation of disclosure controls and procedures.
 (b) Changes in internal controls.
 
 Part II. Other Information
  
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  We will require additional capital to fund our operations and obligations.
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.
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Our indebtedness and debt service obligations may adversely affect our cash flows.
  
    
    requiring the dedication of a substantial portion of our expected cash flow from
operations to service the indebtedness, thereby reducing the amount of expected
cash flow available for other purposes, including capital expenditures;
    
    increasing our vulnerability to general adverse economic and industry conditions;
    
    limiting our ability to obtain additional financing;
    
    limiting our flexibility to plan for, or react to, changes in our business and
the industry in which we compete; and
    
    placing us at a possible competitive disadvantage to competitors with less debt
obligations and competitors that have better access to capital resources.
 Our discount note provides that upon the occurrence of various events of default and change of
control transactions, the holder would be entitled to require us to prepay the discount note, which
could leave us with little or no working capital for operations or capital expenditures.
   We generate a significant portion of our revenues and accounts receivable from certain customers.
   We may be unable to maintain our listing on The Nasdaq Capital Market, which could cause our stock
price to fall and decrease the liquidity of our common stock.
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If our stock is delisted from The Nasdaq Capital Market or our share price declines significantly,
then our stock may be deemed to be penny stock.
  If our stock is delisted from The Nasdaq Capital Market, we may be unable to license our products
and sell our services to prospective or existing customers.
  Issuance of shares of common stock upon conversion of our Preferred Stock and exercise of warrants
will dilute the ownership interests of existing shareholders and could adversely affect the market
price of our common stock.
  Failure to complete the Merger could negatively affect the market price of our Common Stock.
 
    
    the market price of our common stock may decline to the extent that the current market
price of its shares reflects a market assumption that the Merger will be completed;
    
    costs relating to the Merger, such as legal, accounting and financial advisory fees,
and, in specified circumstances, termination fees, must be paid even if the Merger is not
completed;
    
    the funds available to us may be insufficient to make full repayment on the Discount
note, which will come due on April 1, 2008; and
    
    the diversion of managements attention from the day-to-day business of the Company, the
potential disruption to our employees and our relationships with customers, landlords,
suppliers and distributors during the period before the completion of the Merger may make
it difficult for the Company to regain its financial and market positions if the Merger
does not occur.
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Unless the Merger Agreement is terminated, we will not be able to enter into a merger or business
combination with another party at a favorable price because of restrictions in the Merger
Agreement.
  Uncertainties associated with the Merger may cause the Company to lose key personnel.
  Our discount note is secured by substantially all of our assets.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (a)
    
    Not applicable.(b)
    
    Not applicable.(c)
    
    Not applicable.
 
 Item 3. Defaults Upon Senior Securities
 (a)
    
    None.(b)
    
    None.
 
 Item 4. Submission of Matters to a Vote of Security Holders
 (a)
    
    We held our 2007 Annual Meeting of Shareholders on August 15, 2007.(b)
    
    Pursuant to Instruction 3 to Part II, Item 4 of Form 10-Q, no response is required.(c)
    
    The matters voted upon at the annual meeting, and the results of the
vote on such matters, is set forth below. The total number of shares
voted are shown prior to the effect of the reverse stock split.
 (1)
    
    Election of Directors. The results of the vote tabulated at the
meeting for the following two director nominees were as follows:
 Number of SharesVoted in Favor
    
    
    WithheldMichael J. Hagan
    
    
    7,206,157
    
    
    
    717,399Gregory G. Schott
    
    
    7,636,934
    
    
    
    286,622
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(2)
    
    Approval of an increase in number of shares of our common stock
authorized for issuance under our 2006 Omnibus Equity Compensation
Plan, The results of the vote tabulated at the meeting for the
proposal were as follows (including broker non-votes):
 FOR
    
    AGAINST
    
    ABSTAIN
    
    BROKER NON-VOTE2,819,309
    
    741,226
    
    69,883
    
    4,293,138
 (3)
    
    Approval of an amendment to our Amended and Restated Articles of
Incorporation to effect a reverse stock split of our outstanding
common stock at an exchange ratio of not less than 1-for-5 and not
more than 1-for-10 and authorize our Board of Directors to implement
the reverse stock split within this range at any time prior to the
2008 annual meeting of shareholders by filing an amendment to our
Amended and Restated Articles of Incorporation, The results of the
vote tabulated at the meeting for the proposal were as follows:
 FOR
    
    AGAINST
    
    ABSTAIN7,489,577
    
    343,354
    
    90,624
 (4)
    
    Approval of an amendment to our Amended and Restated Articles of
Incorporation to increase the number of authorized shares of our
common stock to 120,000,000 shares. The results of the vote tabulated
at the meeting for the proposal were as follows:
 FOR
    
    AGAINST
    
    ABSTAIN7,081,611
    
    734,151
    
    107,794
 (5)
    
    Approval of an amendment to our Amended and Restated Articles of
Incorporation to increase the number of authorized shares of our
preferred stock to 35,000,000 shares. The results of the vote
tabulated at the meeting for the proposal were as follows (including
broker non-votes):
 FOR
    
    AGAINST
    
    ABSTAIN
    
    BROKER NON-VOTE2,824,981
    
    690,316
    
    115,121
    
    4,293,138
 (6)
    
    Approval to issue shares of our common stock upon conversion of our
Series B Preferred Stock in an aggregate amount exceeding 19.99% of
our outstanding shares of common stock. The results of the vote
tabulated at the meeting for the proposal were as follows (including
broker non-votes):
 FOR
    
    AGAINST
    
    ABSTAIN
    
    BROKER NON-VOTE3,299,659
    
    212,224
    
    118,535
    
    4,293,138
 (d)
    
    Not applicable.
 
 Item 5. Other Information
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Item 6. Exhibits
 ExhibitNumber
    
    Description2.1
    
    Agreement of Merger, dated as of October 25, 2007, by and between Verticalnet, Inc.,
BravoSolution, S.p.A. and BravoSolution U.S.A., Inc. (1)10.1
    
    Voting Agreement, dated as of October 25, 2007, by and between Verticalnet, Inc.,
BravoSolution U.S.A., Inc. and the parties thereto (2)10.2
    
    Stock Purchase Agreement, dated as of October 25, 2007, by and between Verticalnet,
Inc. and BravoSolution U.S.A., Inc. (3)10.3
    
    Cancellation Agreement, dated August 6, 2007, among Verticalnet, Inc. and 261 Fifth
Avenue TIC Owner LLC and Normandy 261 5th Ave, LLC (4)10.4
    
    Second Amendment dated July 24, 2007 between Verticalnet, Inc. and Nathanael Lentz (5)31.1
    
    Chief Executive Officers Rule 13a-14(a)/15d-14(a) Certification.*31.2
    
    Chief Accounting Officers Rule 13a-14(a)/15d-14(a) Certification.*32.1
    
    Chief Executive Officers Certification Pursuant to 18 U.S.C. Section 1350.32.2
    
    Chief Accounting Officers Certification Pursuant to 18 U.S.C. Section 1350.
 *
    
    Filed herewith.
    
    Furnished herewith.(1)
    
    Filed as Exhibit 2.1 to the registrants current report on Form 8-K filed October 31, 2007.(2)
    
    Filed as Exhibit 99.1 to the registrants current report on Form 8-K filed October 31, 2007.(3)
    
    Filed as Exhibit 99.2 to the registrants current report on Form 8-K filed October 31, 2007.(4)
    
    Filed as Exhibit 99.1 to the registrants current report on Form 8-K filed August 13, 2007.(5)
    
    Filed as Exhibit 10.1 to the registrants current report on Form 8-K filed July 27, 2007.
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SIGNATURES
  VERTICALNET, INC.By:
    
    /s/ NATHANAEL V. LENTZName:
    
    Nathanael V. LentzPresident and Chief Executive OfficerDate: November 19, 2007By:
    
    /s/ JONATHAN T. COHENName:
    
    Jonathan T. CohenVice President andChief Accounting Officer(principal financial and accounting
officer)Date: November 19, 2007
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EXHIBIT INDEX
 ExhibitNumber
    
    Description2.1
    
    Agreement of Merger, dated as of October 25, 2007, by and between Verticalnet, Inc.,
BravoSolution, S.p.A. and BravoSolution U.S.A., Inc. (1)10.1
    
    Voting Agreement, dated as of October 25, 2007, by and between Verticalnet, Inc.,
BravoSolution U.S.A., Inc. and the parties thereto (2)10.2
    
    Stock Purchase Agreement, dated as of October 25, 2007, by and between Verticalnet,
Inc. and BravoSolution U.S.A., Inc. (3)10.3
    
    Cancellation Agreement, dated August 6, 2007, among Verticalnet, Inc. and 261 Fifth
Avenue TIC Owner LLC and Normandy 261 5th Ave, LLC (4)10.4
    
    Second Amendment dated July 24, 2007 between Verticalnet, Inc. and Nathanael Lentz (5)31.1
    
    Chief Executive Officers Rule 13a-14(a)/15d-14(a) Certification.*31.2
    
    Chief Accounting Officers Rule 13a-14(a)/15d-14(a) Certification.*32.1
    
    Chief Executive Officers Certification Pursuant to 18 U.S.C. Section 1350.32.2
    
    Chief Accounting Officers Certification Pursuant to 18 U.S.C. Section 1350.
 *
    
    Filed herewith.
    
    Furnished herewith.(1)
    
    Filed as Exhibit 2.1 to the registrants current report on Form 8-K filed October 31, 2007.(2)
    
    Filed as Exhibit 99.1 to the registrants current report on Form 8-K filed October 31, 2007.(3)
    
    Filed as Exhibit 99.2 to the registrants current report on Form 8-K filed October 31, 2007.(4)
    
    Filed as Exhibit 99.1 to the registrants current report on Form 8-K filed August 13, 2007.(5)
    
    Filed as Exhibit 10.1 to the registrants current report on Form 8-K filed July 27, 2007.
  45