Vertical Computer Systems Signs $10 Million Equity Line With Cornell Capital Partners, L.P.

LOS ANGELES, CA, August 29, 2001 – - Vertical Computer Systems, Inc. (OTC BB: VCSY) today announced the private placement of a $10 million equity financing with Cornell Capital Partners, L.P., a New York-based institutional investment fund that provides financing to companies in emerging growth markets. The financing takes the form of an equity line of credit under which Vertical may draw up to $10,000,000 over the next three years.

The maximum amount of each draw will be governed by a formula based on the trading volume and price of Vertical shares over a period preceding the draw. The number of shares issued to the investor at each draw will be determined by the volume-weighted share price of trading in Vertical shares preceding the draw. Both the amount of each draw and the related shares issued will reflect a 9% discount to market price. A draw will not be permitted if the current market price of Vertical shares is below a trailing average of the volume-weighted share price. Draws will also be subject to other conditions, including being subject to an effective SEC registration statement which will permit the investor to freely trade the common stock issued under the financing.

Vertical President Richard Wade commented, “We are pleased by Cornell’s enthusiastic support of our company. The financing strengthens Vertical as it will provide us with the resources to continue to expand our gateway portals and our data management technologies globally. This equity line provides us the necessary flexibility to control the timing and amount of access to working capital, under terms which allow us to effectively manage the potential dilutive effects that are characteristic of many forms of equity finance.”

“Vertical is an outstanding investment opportunity for us,” said Joe Donohue, Senior Partner at Cornell Capital. “In our view, the data management sector shows enormous potential, and Vertical is well positioned as a technology leader within this sector. We are eager to assist Vertical in meeting its immediate financing needs and we look forward to a long-term relationship with the Company.”

About Vertical Computer Systems, Inc.

Vertical Computer Systems, Inc. (OTC.BB: VCSY) is a technology holding company that acquires and operates best-of-the-breed data management technologies that (i) complement each other and (ii) provide cross-product distribution channels. The power of VCSY's business model is multiplied by its proprietary global distribution system, its Home Country Gateway (HCGs).

Utilizing its growing global network of online HCGs, the company offers B2B, B2G and B2C solutions through its wide range of accessible resources that specifically cater to the needs and desires of targeted communities around the world. VCSY has also acquired -- a complete online travel information center at

At present, VCSY has five HCGs in operation:,,,,, and is working to establish other HCG partnerships, including

The company is continuously developing Emily Ô Solutions, (, proprietary XML-based technology providing unique software for e-commerce, information technologies, Web-based data management and process control.

VCSY also offers a free, easy and personalized e-mail service for all Web users ( For more information, visit the company’s Web site at

This release contains, in addition to historical information, forward-looking statements. These statements are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Factors that may cause such a difference include, but are not limited to, competition from other portals, the Company’s ability to integrate and market the Emily™ software, the market reception to VCSY’S new products, the potential benefits to customers, the conversion of sales leads into customers and the ramp-up of ASP users and other factors over which VCSY may have little or no control such as those described in the Company’s filings with the SEC.