Data Return Corp. –

ARLINGTON, Texas – Data Return Corp., an Internet hosting provider, went public October 28, offering 6.25 million shares at $13 apiece, above its $10 to $12 filing range.

Bear, Stearns & Co. Inc., CIBC World Markets, Wit Capital Corp. and Thomas Weisel Partners L.L.C. underwrote the offering, which left 34.4 million shares oustanding.

Level 3 Communications Inc., DCR Technology Fund I Ltd. and OHG Technology Ltd. were venture backers. There were no selling shareholders.

Data Return provides advanced Internet hosting services based on technologies developed by Microsoft Corp. The company’s advanced hosting services include the hardware, software and network technologies necessary to support complex Web sites and Web-based applications.

The company expects the $74.6 million in proceeds from the offering to be used for capital expenditures, including the purchase of servers and other hardware, and to repay debt, as for working capital and for general corporate purposes.

Data Return has never been profitable, losing $322,000 in the three months ended June 30, 1998 and $635,000 in the three months ended June 30, 1999.

No venture backers joined the company’s board of directors.

Data Return – Selected Financial

(in thousands, except per share data)

Sepetember 22, 1997 (inception) Year Ended Three Months Ended June 30,

to March 31, 1998 March 31, 1999 1998 1999

Total revenue 336 1,889 281 1,228

Total loss -191 -1,284 -322 -635

Total loss per share -0.01 -0.07 -0.02 -0.03