Knobias Clip Report (11-08-2007)

Submitted By Knobias ClipReport

INPC: Files Chapter 11; Agrees to Sell to Versa Capital

Thursday’s session saw a bit of a reversal from what has been common place in the markets over the past few days. The Dow which was down over 200 points on the day saw bulls take hold and stave off another triple digit loss, closing down only 33 points.

Financials led the reversal while technology names were mainly down following Cisco’s earnings reports that painted a bleak picture.

Bernanke testified in Washington and commented that the subprime mess could be in the $150 billion ballpark. The comment early in the day sparked the selloff but reversed when many theorized that he didn’t see the problem coming in the first place giving rise to the theory that he probably doesn’t know the extent and that his estimate could be inaccurate.

In the small cap space, another technology related name saw its shares’ 10 month long continue after filing for bankruptcy.

InPhonic, Inc. (INPC) is a leading online seller of wireless services and products. The Company sells these services and devices, and provides world-class customer service through websites that it creates and manages for online businesses, national retailers, member-based organizations and associations under their own brands.

The Company also operates Wirefly, a leading one-stop comparison mobile phones and wireless plans shopping site that has been awarded "Best of the Web" by Forbes magazine and "Best in Overall Customer Experience" by Keynote Performance Systems. They also deliver a full range of MVNO and mobility solutions to enterprise clients through its Mobile Virtual Network Enablement (MVNE) platform.

On Thursday, InPhonic announced that it had entered into an agreement to sell substantially all of its assets to an affiliate of Versa Capital Management, a Philadelphia based private equity firm.

In order to implement the sale, InPhonic filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.

It was noted that Versa would also be providing a Debtor-in-Possession ("DIP") financing facility to provide working capital and financial resources necessary to fund the transition in operations to new ownership pending court approval of the sale to Versa. InPhonic will continue to conduct normal business operations at all of its facilities consistent with its obligations as a Chapter 11 debtor-in-possession.

The filing of bankruptcy was triggered by an Oct 1. missed interest payment on the Company’s secured loans which triggered the default notices.

Top unsecured creditors were noted as being Microsoft at $8 million, Yahoo at almost $4 million, and Google at $3.5 million.

Following the announcement, shares plunged some 84% to 6c a share. The Company’s equity began the year at $11 a share and hit highs of $14.50 in February before sliding to current levels.



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