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February 1, 2002

Edgar Toughs It Out

By Colleen Marie O'Connor

From the start, EDGAR Online (Nasdaq:

EDGR) was no ordinary publicly-traded dotcom company. It did not have a triple digit gain in its 1999 IPO, unlike some dotcom IPOs at the height of the market boom.

Now things are looking up for EDGAR Online, one of the few surviving publicly-traded dotcoms.

The first online tracker of Securities and Exchange Commission documents, the company recently announced the completion of a $5 million PIPE investment.

Special Situations Funds, Discovery Capital Partners and one existing shareholder were named as institutional investors in the PIPE deal, which was facilitated by New York-based Atlas Capital Services.

Terms of Deal

Deal terms included the sale of two million shares at $2.50 a share, and a small amount of warrants, which are detailed in a company filing, according to a spokesman for EDGAR Online.

"These funds represent exactly the type of experienced investors EDGAR Online is proud to have as shareholders," said Edgar Online CEO Susan Strausberg.

Proceeds of the transaction will be used to help fund the company's continued growth into the corporate marketplace, including product and sales force development. Sales to the corporate marketplace now account for about 80 percent of the company's revenue.

Edgar was "not hesitant at all" to participate in a PIPE investment, added a company spokesman. "It's a very positive deal for us, and we don't see any negatives."

Popular Investment

The PIPE investment was a first for EDGAR. It comes at a popular time for these once obscure transactions.

According to DirectPlacement Inc., last year 998 PIPE deals raked in $13.5 billion in proceeds, the second busiest year ever for PIPE transactions.

EDGAR raised $34.2 million in an IPO lead managed by C.E. Unterberg Towbin back in May 1999. Offering 3.6 million shares at $9.50 apiece, investors initially hemmed and hawed over the IPO. The stock opened down at $8.75, but was later redeemed and closed its first day of trading at $9.56 a share.

Since then, the company's stock price chart has looked like the roller coaster ride of the overall market, as shares dipped to the $1.00 range in October 2001.

Investors, however, seem to have responded more favorably to news of the PIPE. EDGAR's stock was trading in the $3 range at press time.

Colleen Marie O'Connor is an associate editor at The IPO Reporter, published by Venture Economics, a Thomson Financial Company.