Vertical Announces Plans to Voluntarily Deregister its Common Stock

CAMBRIDGE, Mass., July 29, 2008 – Vertical Communications, Inc. (OTCBB: VRCC.OB), a leading provider of next-generation, IP-based phone systems and voice applications, announced today that that it intends to voluntarily deregister its common stock on or about July 29, 2008. Vertical intends to suspend its reporting obligations under the Securities Exchange Act of 1934 by filing a Form 15 with the Securities and Exchange Commission (“SEC”). It is eligible to voluntarily deregister because it has fewer than 300 shareholders of record.

Upon the filing of the Form 15, Vertical’s reporting obligation will be to file its June 30, 2008 Form 10-K as in the normal course of business and all other future obligations to file certain reports with the SEC, including Forms 10-K, 10-Q and 8-K, will be suspended.  Vertical expects that the deregistration of its common stock will become effective 90 days after the date of filing the Form 15 with the SEC. Vertical anticipates that its common stock will no longer be quoted on the Over-the-Counter Bulletin Board, and expects that, following deregistration with the SEC, its common stock will be quoted on the Pink Sheets®, an electronic quotation service for over-the-counter securities. The Pink Sheets is a provider of pricing and financial information for the over-the-counter securities markets. It is a centralized quotation service that collects and publishes market maker quotes in real time primarily through its website, www.pinksheets.com.   Vertical can give no assurances that any broker will make a market in Vertical’s common stock.

“The Special Committee of Vertical’s Board of Directors decided to take this action because it believes that the burdens associated with operating as a registered public company currently outweigh any advantage to the Company and it stockholders. Among the factors that the Special Committee considered were the costs of preparing and filing periodic reports with the SEC; the elimination of the substantial legal, audit and other costs associated with being a reporting company including the substantial increase in costs associated with the requirements of the Sarbanes-Oxley Act of 2002 and the related SEC procedures; the limited nature and extent of current trade in Vertical’s common stock; and the lack of analyst coverage and minimal liquidity for Vertical’s common stock,” stated Vertical’s Chief Executive Officer, Bill Tauscher. “Many small public companies are choosing to deregister because of these same concerns. We believe that freeing up these resources will create value for our shareholders by allowing us to better execute our business plan, and improve our long term financial strength.”

Vertical will continue to issue press releases and make news announcements of important events and post them on its website, which may be found at www.vertical.com.

About Vertical Communications, Inc.

Vertical Communications, Inc. is one of the largest telephony vendors in North America and a global leader in next-generation IP-based voice and data and digital communications systems for business, with a current installed base of over 200,000 customers. Vertical combines voice and data technologies with business process understanding to deliver integrated IP-PBX and application solutions that enhance customer service and business productivity. Vertical’s customers are leading companies of all sizes, from small to large and distributed, and include CVS/pharmacy, Staples and Apria Healthcare. Vertical delivers its solutions through a worldwide network of over 1800 business partners. With headquarters in Cambridge MA, Vertical has sales, engineering and operations facilities in Charlottesville VA, Phoenix AZ, Santa Clara CA, Sarasota FL, Munich Germany and Hyderabad India. For more information about Vertical, please call 877-VERTICAL or visit our Website at www.vertical.com.

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CONTACT:
Ken Clinebell
Vertical Communications, Inc.
941.554.5000 ext 1513

"Safe Harbor" Statement

This communication contains forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, particularly those statements regarding deregistration of the Company’s common stock and those preceded by, followed by, or that otherwise include the words, “believes,” “expects,” “anticipates,” “intends,” “estimates,” or similar expressions. Forward-looking statements relating to expectations about future results or events are based upon information available as of today’s date, and there is no assumed obligation to update any of these statements. The forward-looking statements are not guarantees of future performance, and actual results may vary materially from the results and expectations discussed. These forward-looking statements are made subject to significant risks and uncertainties that could cause actual results to differ materially from those stated including, without limitation, the risk that Vertical will not realize anticipated benefits and/or cost savings from the deregistration of our common stock, the risk that deregistration of our common stock will not beneficially affect our operations, financial condition or shareholder value, and the risk that our deregistration process will not be completed in the timeframe mentioned above. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Vertical Communications, Inc. undertakes no obligation to publicly release any revisions to these forward looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
 
Trademark Information
Vertical Communications and the Vertical Communications logo and combinations thereof are trademarks of Vertical Communications, Inc.  Artisoft, TeleVantage, InstantOffice and Vertical Networks are registered trademarks of Artisoft, Inc. All other brand and product names are used for identification only and are the property of their respective holders.