deltathree.com Inc. –

NEW YORK – Deltathree.com Inc., an Internet telephony company, went public November 23, offering 6 million shares at $15 apiece. The company’s stock priced at the top of its $13 to $15 filing range.

Lehman Brothers Holdings Inc., Merrill Lynch & Co., U.S. Bancorp Piper Jaffray, Lazard Freres & Co. L.L.C. and Fidelity Capital Markets underwrote the initial public offering, which left 27.5 million shares outstanding.

There were no selling shareholders. RSL Communications Ltd. and CNET Investments Inc. were venture backers.

The company is a global provider of Internet protocol telephony services, which include the transmission of voice and data traffic for communications carriers and the provision of enhanced Web-based services for individual and corporate consumers. The company manages an Internet protocol-based network that has nearly 45 centers in 27 countries. Customers place calls from personal computers or standard phones at costs lower than those of traditional carriers and can send, retrieve and forward voice mail, e-mail and faxes.

The company expects the $82.2 million in proceeds expected from the IPO to be used for marketing and promotion, capital expenditures and for general corporate purposes.

Deltathree.com has never generated a profit, losing $2.4 million in 1997 and $7.1 million in 1998.

Itzhak Fisher, president and chief executive officer at RSL, joined the company’s board of directors in July 1997, along with Nir Tarlovsky, a director at RSL. Jacob Schuster, a director, vice president and assistant secretary at RSL, joined the company’s board of directors in May 1999, along with Donald Shassian, chief operating officer at RSL. Avery Fisher, a vice president at RSL, joined the company’s board of directors in September 1999. Robert Grusky, president at RSL Investments, a part of RSL Communications, joined the company’s board of directors upon the closing of the IPO.

deltathree.com – Selected Financial

(in thousands, except per share data)

June 1996 (inception) Year Ended Nine Months Ended

to December 31, 1996 December 31 September 30

1997 1998 1998 1999

Total revenue 1 1,246 5,638 3,669 6,432

Net loss -178 -2,368 -7,121 -4,588 -17,458

Net loss per share -0.03 -0.19 -0.37 -0.24 -0.89