- The Washington Times - Thursday, November 23, 2000

EGlobe Inc., a District of Columbia-based provider of telecommunications and information services, was dropped from the Nasdaq national stock market yesterday.

The company is appealing Nasdaq's decision.

"We are dealing with them to ask them to reconsider their decision, which we felt was premature," said Allen Mandel, senior vice president of corporate relations.

EGlobe will remain delisted during the appeals process, which is expected to take several months. Nasdaq spokesman Wayne Lee would not say specifically why the company was delisted, but he noted that EGlobe was trading below the required price.

EGlobe's stock price has been slipping for the past few months, dropping below $1 from $14 six months ago. The stock closed yesterday at $1 in over-the-counter trading. Stocks in more than 28,000 small and new companies are traded over the counter, a term that originated when stocks actually were bought over the counter. They are low-priced and infrequently quoted.

Nasdaq is home to many technology, banking and rapidly growing companies. It has strict requirements including maintaining a certain stock price and is considered more prestigious than over-the-counter trading.

"The company can certainly appeal, and an independent panel will hear the company's case, and we just have to wait and see what the decision is after the hearing," Mr. Lee said.

EGlobe offers Internet, voice, fax and calling-card services. Working with phone companies around the world, it also provides related validation, billing and payment systems.

The company was founded more than 10 years ago and used to be called Executive TeleCard. It was a pioneer in international direct calling.

After a year of mounting losses, EGlobe is restructuring. It announced Monday that it will spin off one of its business segments, Vogo Networks, which offers telephone service with Internet access.

"Currently we are in negotiations with a series of major investment groups," Mr. Mandel said. "That would allow us to release some debt … as well as put some cash into the company."

EGlobe also hopes to retain a minority stake in the new company and be able to continue offering its technology to customers.

"We had attempted to do a strategic financing of the entire company, but based upon discussions with investor groups, they really wanted one segment, not both that we are in," Mr. Mandel said.

The decision to spin off Vogo comes just days after EGlobe reached a deal with Visual Bridge Inc., a supplier of audio and video content with video messaging technology and services. The five-year deal made EGlobe the supplier of voice access to all Visual Bridge Internet services. The value of the deal was not disclosed.

Financially strapped, the D.C. company has been seeking to keep cash in house. In October, it was able to consolidate its debt with EXTL Investors, LLC, reducing cash debt payments by some $1.5 million per quarter.

In an attempt to boost its stock earlier this month, the company had a reserve stock split, turning every 4.7 of its shares into one. But the shares continued to slip, prompting Nasdaq to drop EGlobe.

Shortly before that, two members of the company's board of directors who had joined the company when it merged with TransGlobal in March resigned.

EGlobe hired investment banking firm Jefferies & Co. Inc. to counsel it on financials, including merger and acquisition possibilities.

The bad news this fall comes after EGlobe announced three deals this summer: It partnered with a company in India, won a contract to provide messaging and telephone services to customers of MyAlert.com and started working in Europe.

Revenues fell 25 percent to $24 million from $32 million. Net loss grew 34 percent to $19 million (97 cents per diluted share) from $14 million ($1.61) a year ago. Diluted shares reflect the value of options, warrants and other securities convertible into common stock.

For fiscal 1999, net sales rose 40 percent to $42 million from $30.03 million in 1998. Net loss rose 284 percent to $51.47 million ($14.48) from $13.40 million ($4.04) the previous year.

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