uBid, Inc. Completes Stock-for-Stock Merger to Become a Public Company and $45 Million Private Placement of Common Stock and Warrants
CHICAGO, IL, December 29 2005 -- uBid, Inc., one of the leading online auction companies in the U.S., announced today that it has merged with a subsidiary of Cape Coastal Trading Corporation (OTC BB: CCSR), whose only business following the merger will be the execution of uBid’s business plan under the uBid name. Cape Coastal Trading Corporation plans to change its corporate name to uBid, Inc. as soon as corporate law requirements can be satisfied, currently anticipated within 30 days following the merger. uBid will retain its senior management team led by CEO Robert H. Tomlinson, Jr., Timothy E. Takesue, Executive VP and all uBid, Inc employees. The merger resulted in uBid becoming a publicly traded company, and uBid’s management and Board of Directors have assumed operational control of the surviving entity.
Concurrent with the merger, the combined company completed a $45 million private placement involving the issuance of 10,000,000 shares of Cape Coastal Trading Corporation common stock to a group of institutional and accredited investors at $4.50 per share. The Company also issued to the investors warrants to purchase an additional 2,500,000 shares of Cape Coastal Trading Corporation common stock exercisable at $5.85 per share. The net proceeds from the financing of approximately $40 million will be used for the retirement of all debt and for general working capital purposes. SG Cowen & Co. was the lead placement agent and ThinkEquity Partners was a co-agent. Calico Capital Group, LLC acted as financial advisor for this transaction.
“This is a watershed moment in our company’s history,” said CEO Robert H. Tomlinson, Jr. “It caps a successful rebuilding effort over the past 30 months and now affords us the resources we need to drive significant growth and expansion towards becoming a major force in the e-commerce world.”
uBid operates an online marketplace located at www.ubid.com offering new, close-out, overstock and refurbished merchandise to both consumers and businesses through a trusted auction style and fixed price format. The company provides consumers the opportunity to bid on or buy a wide variety of popular, brand name products at significant discounts. uBid’s unique platform enables only certified suppliers and manufacturers a more efficient and economical channel for maximizing revenue of their surplus merchandise. Furthermore, uBid offers consumers a trusted buying environment, eliminating potential fraud by certifying all its merchants and processing 100% of all transactions between buyers and sellers.
Founded in 1997, uBid’s predecessor completed an initial public offering in December 1998 and was subsequently acquired by CMGI, Inc. (Nasdaq: CMGI) in April 2000. In April 2003, uBid became a majority-owned subsidiary of the Petters Group Worldwide, LLC. Both CMGI and Petters Group Worldwide will remain as shareholders in the surviving public entity.
SEC Filings and Forward-Looking Statements
Additional information regarding uBid’s private placement, the merger with Cape Coastal Trading Corporation, the disposition of Cape Coastal Trading Corporation’s prior operating business, uBid`s business and uBid`s officers and directors will be contained in a Report on Form 8-K to be filed with the Securities and Exchange Commission by Cape Coastal Trading Corporation.
Certain statements made in this release are forward-looking statements, including the statement that the merger and the private placement “affords us the resources we need to drive significant growth and expansion towards becoming a major force in the e commerce world.“ Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business of uBid,Inc. and the industries and markets in which uBid,Inc. operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. Factors which may affect uBid, Inc.’s business, financial condition and operating results include the effects of changes in the economy, consumer spending, the financial markets and the industries in which uBid,Inc. and its partners operate, changes affecting the Internet and e-commerce, the ability of uBid,Inc. to develop and maintain relationships with strategic partners and suppliers and the timing of its establishment or extension of its relationships with strategic partners, the ability of uBid, Inc. to timely and successfully develop, maintain and protect its technology and product and service offerings and execute operationally, the ability of uBid, Inc. to attract and retain qualified personnel, the ability of uBid,Inc. to successfully integrate its acquisitions of other businesses, if any, and the performance of acquired businesses. uBid, Inc. and Cape Coastal Trading Corporation expressly disclaim any intent or obligation to update these forward-looking statements, except as otherwise specifically stated by uBid, Inc. or Cape Coastal Trading Corporation.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of uBid’s securities.
Anthony Priore
Chief Marketing Officer
Tel: 773-272- 4446
Fax: 773-272-4055
tpriore@ubid.com
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