VCampus Completes $1.85 Million Private Placement
VCampus Corporation a leading provider of end-to-end, web-based e-Learning solutions, today announced that it has completed a $1.85 million private equity placement through the combination
of preferred stock and convertible debt. The company also announced that it
has signed contracts with nine new customers in Q-4 2001 and has taken cost-saving
measures that have reduced its cost structure, entering the new year in strong
position to reach EBITDA break-even by Q2-2002.
³This private placement was the culmination of a year in which VCampus
proved it was up to the challenge of securing its place as the leading e-learning
ASP during a time of economic uncertainty,² said Daniel Neal, President
and CEO of VCampus. ³We are extremely proud of the year¹s accomplishments,
from adding over 30 new customers, to renewing contracts with the vast majority
of our existing customers, adding new service offerings, improving our service
reliability and customer care operations, launching new platform capabilities,
and most recently, raising new capital to fuel continued growth of the business.
We are particularly grateful for the support of our customers.²
VCampus¹s new customers for Q4-2001 included major corporations such as
Blue Cross and Blue Shield of Michigan and United Airlines, one federal agency
and two major professional associations, as well as an expansion of its relationship
with University of the Incarnate Word.
Increasing operational efficiency to reduce the company¹s cost structure
was another achievement for Q4-2001. ³Our number-one goal is to bring VCampus
to cash flow breakeven as soon as possible. To that end, we¹ve cut $170,000
per monthover $2 million per yearin ongoing costs of running the
business since the third quarter of 2001. We¹ve made the tough decisions
and now have a company that¹s as close as ever to generating self-sustaining
cash flow. We have also succeeded in reducing costs without sacrificing service
quality or our ability to grow revenues,² said Neal.
The private placement consisted of issuance of a new series of preferred stock
in the amount of $925,000, convertible to common stock at a conversion price
of 35 cents per share. The preferred stock also carried 660,709 warrants to
purchase common stock at 40 cents. The remaining $925,000 was issued in the
form of convertible debt, convertible into common stock at a conversion price
of 35 cents per share. The convertible debt also carried 1,321,428 warrants
to purchase common stock at 40 cents per share. The number of shares of common
stock issuable upon both the exercise of the warrants and the conversion of
the debt are subject to shareholder approval.
This financing was conducted in lieu of the $5-10 million financing that was
previously considered and disclosed in a press release dated November 13. As
such, the provisions of the previously considered financing, including conversion
of the company’s existing preferred shares to common shares, are no longer relevant.
"As the investment market continued to change, we realized that it was
more beneficial to our shareholders to accept less capital infusion at this
time. Our projections show that this investment will carry the company to cash-flow
breakeven, which is an incredibly important milestone for VCampus," said
Deborah Colella, Acting CFO of VCampus.
The securities sold in this financing have not been registered under the Securities
Act of 1933, as amended, and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
VCampus® Corporation (Nasdaq: VCMP) is a leading provider of end-to-end
e-Learning solutions. The company develops, manages and hosts turnkey, web-based
learning solutions for corporations, government agencies and higher education
institutions. VCampus enables these organizations to offer complete global distance
learning solutions to their customers, employees, distributors, suppliers and
students. VCampus¹ e-Learning solutions are designed to help clients deliver
higher education programs to adult students; improve the performance of their
distribution channels and suppliers; measure and develop their employees¹
knowledge, skills and abilities; and increase their customers¹ satisfaction
and loyalty. VCampus distributes a courseware library of more than 4,000 web-based
courses and has delivered more than 2 million courses to over 500,000 adult
learners. VCampus Corporation is headquartered in Reston, VA. For more information,
call 800-915-9298, or visit the VCampus website at www.vcampus.com . VCampus is a registered trademark of VCampus Corporation.
(703) 893-7800 ext. 264
This press release contains forward-looking statements within
the meaning of the federal Private Securities Litigation Reform Act of 1995.
Statements contained herein that are not statements of historical fact are forward-looking.
Without limiting the foregoing, references to future growth or expansion are
forward-looking, and words such as "anticipates," "believes,"
"could," "estimate," "expect," "intend,"
"may," "might," "should," "will," and
"would" and other forms of these words or similar words are intended
to identify forward-looking information. You should read statements that contain
these words carefully because they discuss our future expectations, contain
projections of our future results of operations or of our financial position
or state other forward-looking information. There might be events in the future
that we are not able to predict accurately or control, and any forward-looking
statements are subject to risks and uncertainties that could cause our actual
results to differ materially. These risks and uncertainties include: (1) our
history of losses and our need to raise additional capital; (2) the ability
to recruit and retain qualified technical and other personnel in a highly competitive
market; (3) market acceptance of our new and future products; (4) growing competition;
and (5) our ability to maintain and manage our growth. For additional information
regarding risk factors that could affect our future results, please refer to
the discussions of "Risk Factors" in our Form 10-K for the year ended
December 31, 2000, filed with the SEC on April 2, 2001, and our Form S-3 Registration
Statement filed on May 2, 2001, and other SEC filings.