Verso Announces Private Placement

Verso Technologies, Inc., a global provider of next generation network solutions, today announced that it has entered into securities purchase agreements with certain institutional buyers pursuant to which it will sell in a private placement securities at an aggregate purchase price of $2,000,000 consisting of 2,000,000 shares of common stock and 5-year warrants to purchase 1,000,000 shares of common stock at an exercise price of $1.25 per share

The company expects the net proceeds from this sale will be approximately $1,850,000 after expenses. The company has now sold and agreed to sell a total of $4,000,000 in this private placement consisting of 4,000,000 shares of common stock and 2,000,000 5-year warrants to purchase common stock at an exercise price of $1.25 per share. The company expects the net proceeds from these transactions to total $3,600,000 after expenses.

The company expects to use the proceeds from the offering for general corporate purposes, including satisfying the company's obligation to Zhone Technologies, Inc. in connection with the company's previously announced acquisition of the iMarc product line from a subsidiary of Zhone.

The securities offered and sold in the private placement 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 the registration requirements of the Securities Act. The company may offer securities on substantially the same terms described herein to other qualified institutional buyers and institutional accredited investors. As part of the terms of the private placement, the company is obligated to file a registration statement to register for resale under the Securities Act the shares of common stock issued or issuable in connection with the private placement.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor, shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state - Verso Technologies.