PhillyInc

Since then, the B2B software market has become more difficult for Verticalnet, founded in 1995 by Michael Hagan of NutriSystem Inc. (NASDAQ: NTRI). Large businesses are driving harder bargains with technology companies, demanding free or reduced-rates on services in exchange for signing contracts. Software giants such as Oracle Corp. (NASDAQ: ORCL) have grown stronger through acquisitions. Verticalnet's stock, which once topped $9,500 at the height of the dotcom bubble in 2000, has plunged more than 50 percent this year alone and closed yesterday at 49 cents per share. It now facing possible delisting from the Nasdaq. Lentz's own performance-based pay of $380,000 was to be cut by about 8 percent, to $350,000 this year.

But all is not lost. The company reported to the SEC today that it has grasped a lifeline from "certain investors." They are not identified other than stating they were purchasers of private Class B preferred shares. But there was at least one condition: Cut back Lentz even deeper. So the board led by Gregory G. Schott and Lentz have now whacked Lentz's salary down to $300,000, a reduction of 21 percent. His two-year contract no longer has an option for one-year renewals and it expires in 2009.

An unceremonious decline for the 44-year-old Stanford M.B.A. graduate and Chestnut Hill resident. In an interview with The Inquirer ($ required) in the more optimistic days of 2005, Lentz had the sober tone of a dotcom survivor. His marketing director David Kaplan likened Verticalnet to the hard luck fictional boxer Rocky, saying "We're not to the top of the Art Museum steps yet, but we're no longer drowning in the Schuylkill." Maybe time to don those swimming trunks, again.

- Jonathan Berr

The company’s president and general counsel, John Tobin, told us that it was a mistake, not a scam. “We’re not proud to have to have any accounting error.” As to the nefarious motives alleged in the lawsuit, he said: “That’s not correct.”

The suit was filed in April 2006 on behalf of holders of Astea’s common stock between May 11, 2005 and March 31, 2006, when the company announced the restatement. Officers sold shares in November 2005.

Tobin said the best news for Astea is that the suit was thrown out before the discovery stage, where it can cost hundreds of thousands to defend pre-trial. “That’s when your costs of litigation start skyrocketing. They just want the leverage and that’s why it’s great to have it dismissed at this point.”

Among the lawyers representing plaintiffs were Robert Roseman and David Felderman of Spector Roseman and Kodroff P.C. in Philadelphia. Defending Astea before U.S. District Judge William Yohn was Pepper Hamilton LLP. in Philadelphia.

- Jane M. Von Bergen

Neoware Inc. (NASDAQ: NWRE) Chief Executive Klaus Besier, whose company agreed in July to a $214 million buyout from Hewlett-Packard Corp. (NASDAQ: HPQ), has landed a good deal for himself once the merger closes.

Besier, who was hired to turn around the King of Prussia, Pa. tech company in October 2006, will become Vice President, Thin Client Business Unit at H-P. He'll receive a base salary of $250,000 per year and will be eligible to participate in HP's "Pay for Results" bonus program, according to a filing with the Securities & Exchange Commission. He's also entitled to a payout of $992,250 because his stock options will immediately vest and to other bonuses if certain conditions aren't met.

In addition to Besier, Hewlett also is interested in hiring other top managers including Chief Operating Officer Eric Rubino, Executive Vice President Peter Bolton and Executive Vice President James Kirby.

"Since the signing of the merger agreement, representatives of HP have had periodic ongoing discussions with Messrs. Rubino, Kirby and Bolton regarding the possibility of their employment with HP following the merger. HP expects that formal offers of post-merger employment will be made to such persons in the near future," the filing said.

Neoware shareholders are scheduled to vote on the merger on September 27.

- Jonathan Berr

Did you see the previous item about Klaus Besier's new job? The current chief executive of Neoware Inc. (NASDAQ:NWRE) in King of Prussia will become Vice President, Thin Client Business Unit at Hewlett-Packard (NASDAQ:HPQ) once H-P's acquisition of Neoware closes, perhaps later this year.

You gotta love his job title! Thin Client.

If that's not brilliant marketing ploy, we don't know what is. Wonder if there's a weight limit. Oh yeah, baby, you're thin, please buy my laptop. Probably harder to bring revenue into the Tubby Client Business Unit. That's the real challenge. If Besier were really good, they'd put him in charge of the Tubby unit -- let him turn that one around.

OK, now that we've had a lot of fun with the term "Thin Client," one of our tech-heads (my boss, paid the big bucks to be smart) provided a definition. It's a computer that is functional only when connected to a particular server. Therefore it's "thin" as in meager, as opposed to "thin" as in svelte. However, it is also svelte because it has fewer inner gizzards. The computer is the "client" of the server.

Do you have any wonderful business terms you love? Send them in -- see if you can beat "thin client!" Include two definitions -- whatever wacko, yet printable, and somewhat plausible one that is inspirational to you, and the real one. Please distinguish between the two. Sometimes the absurd is more real than reality, as we all know.

- Jane M. Von Bergen

How far is Lower Bucks County from Outer Space?

Not that far, perhaps. Environmental Tectonics Corp. (AMEX:ETC) in Southampton has signed a contract with Virgin Galactic, a company owned by Virgin Group's Richard Branson to provide training for Virgin Galactic's suborbital space travelers -- the first set of space tourists. At first, Environmental Tectonics will train Virgin Galactic's Founders, the name given to the first 100 travelers to sign on with Virgin Galactic. But the contract extends beyond those travelers, the company said. Training runs September through November at Environmental Tectonics' NASTAR Center in Southampton.

Environmental Tectonics creates software that provides flight simulation so pilots can learn to respond in an emergency. But so far, they haven't managed to create the software that will teach chairman William F. Mitchell and the rest of management how to respond to three years of losses and declining revenues. Nonetheless, at least for today, shares are up and trading is brisk -- maybe that's because of today's announcement, or because of Tuesday's news that the company's largest investor, former cable-television executive H.F. "Gerry" Lenfest sunk another $3.3 million in the company, by buying 3,300 shares of preferred stock.

- Jane M. Von Bergen

Innovation Philadelphia, the Philadelphia city office created by John Street to juice the local entrepreneurial economy and which probably has had more than its share of ups and downs, said today it has unveiled a new Web site. Take a look at www.innovationphiladelphia.org and give it a review. Wonder why George Burrell couldn't wait to leave before it unveiling this?

Sometimes it's the deals you don't do that provoke food for thought. Since late July, Wayne-based Ascend Acquisition Corp. (OTC.BB:ASAQ), has had plans to acquire an Austin, Texas company called ePak International Ltd.

An amended registration statement recounts the litany of businesses that Ascend considered before choosing ePak: an industrial pipe maker, a snack food retailer, a home-building materials supplier, a document storage firm, medical-service billing company, several oil-field services businesses, a temp agency, a foam fabricator, a provider of voting machines, an infrastructure repair company, a media firm focused on the Hispanic radio market, a propane fuel supplier, an urban for-profit day care school, and a freight forwarding business. (No names, of course.)

As for ePak, it can be seen as a high-tech China play, given its huge semiconductor-related products factory in Shenzhen. Ascend, a special-purpose acquisition company, has been advised by Arthur Spector, a Philadelphia-area M&A and finance executive.

The National Venture Capital Association says that 235 venture firms raised $34.7 billion in 2007, the most since 2001. And the fourth quarter proved to be the most lucrative for them when 63 firms - including two from the Philadelphia area - raised $11 billion.
Locally, LLR Partners raised $600 million for its third venture fund. LLR is the private-equity firm in Center City focused on later-stage company. It was started by Ira M. Lubert and several other financial wizards. Today, Lubert presides over a family of funds with more than $3.3 billion in committed capital.
Also, seed- and early-stage investor NextStage Capital L.P. raised $20 million in the fourth quarter to bring the amount under management for its first fund to $25 million. The firm is based in Audubon, Pa., and was started by Terry Williams, Robert Adams and Dan McKinney. Williams was the founder of a recruitment and talent management firm that he later sold to Comsys IT Partners. Adams and McKinney are both former Safeguard Scientifics Inc. executives. - Mike Armstrong