IRVINE, Calif., Aug. 31, 1999 (PRIMEZONE) -- 2TheMart.com, Inc. (Nasdaq:TMRT) today announced a cash infusion of up to $2 million by founder, chairman and chief executive officer, Steven W. Rebeil. The infusion will take the form of a collateralized loan, the company said.
Mr. Rebeil said, "This loan clearly shows my confidence in the 2TheMart.com team, concept and potential. These funds will be used for interim working capital as we move to complete our $10 million private placement. Additionally, I am pleased to announce that we are on schedule to complete the launch of 2TheMart.com's web site in the fourth quarter. The site design has been completed and approved and is now undergoing its final development phase."
The initial use of the proceeds, according to Mr. Rebeil, will be to conclude the current portion of a progress payment approximating $3 million due IBM, bringing the total amount paid to IBM of approximately $5.7 million. Mr. Rebeil said "I am appalled by recent specious press reports relating to our relationship with IBM. The fact of the matter is that we have been working with 'Big Blue' since January of this year. The fact of the matter is that IBM initiated work on our web site and we signed our first definitive agreement with IBM in February. And the fact of the matter is that our May agreement with IBM was the result of months of contract reformulation and requirements definitions that resulted in a clarity of scope of work and cost estimates that were finalized in an additional definitive agreement with IBM in May of this year. While our contract states October 8 for site completion, that is an estimate for contract purposes. We will launch in the fourth quarter of 1999.
"IBM has worked with the 2TheMart.com team for nearly a year. We could not have asked for a better partner, and we are very close now to the fruition of thousands of manhours of work - a conclusion that will result in the launch of what we believe will be the one of the most exciting e-commerce ventures in the industry."
Mr. Rebeil noted that "We were premature earlier this year in suggesting that our site would be launched in the second quarter. If we have any regret, it is that we let our enthusiasm get the best of us. It is remarkable that press reports continue to point to our news release six months after the fact and when we are just a couple of months away from our launch. It is equally remarkable that the most recent press reports have been written without any effort to contact 2TheMart.com.
"Moreover, it is true, as reported by the media, that we received a modified report from our auditors. I would be hard pressed to find a startup Internet company that has not had such a report. Our accounting firm, Grant Thornton, is one of the finest in the world. We certainly are in concurrence with its findings and look forward to a long and strong relationship with the firm.
"With the recent filing of our Form 10 with the Securities and Exchange Commission, the completion of our web site design and the proximity to closing of our private placement, 2TheMart.com is looking forward to an exciting launch of its web site and an exciting entry into the millennium."
2TheMart.com is an Internet e-commerce company founded in January 1999.
Certain information and statements included in this release constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied in such forward looking statements.