Monday March 15, 9:01 am Eastern Time

Company Press Release

SOURCE: ARC Systems

ARC Systems Receives $2 Million in Venture Funding

AUSTIN, Texas, March 15 /PRNewswire/ -- ARC Systems, the developer of the Internet-based LT2k(TM) automated underwriting system, today announced that it has secured $2 million in private equity financing from Verticality Investment Group, LLC (VIG). Based in Jersey City, New Jersey, Verticality is a venture capital firm that invests in private technology companies.

``ARC Systems will use a portion of the funding to expand our facility which will enable us to offer 24x7 service and technical support to our customers,'' said Ed Jones, CEO of ARC Systems. ``The funding will also help accelerate our marketing efforts and support continued technology developments.''

ARC Systems' flagship product, LT2k, was designed to automate the underwriting of the most complicated non-conforming first mortgages via the Internet. Such companies as mortgage.com, formerly First Mortgage Network, have now utilized ARC Systems' services to include conforming and nonconforming mortgages on their premiere Web sites.

Verticality's extensive research revealed that ARC Systems' technology filled a void in the market. Furthermore, mortgage companies believed the ability to automate the underwriting of subprime mortgages over the Internet was not possible. ``From a business model standpoint, VIG was impressed with the fact that ARC Systems doesn't market directly to the end user, but rather partners with the actual lending institutions who face the day-to-day headaches present in the mortgage industry,'' said Hadar Pedhazur, principal of VIG. ``From our experience, this business-to-business style marketing is very effective and one we like to support and promote.''

Although the LT2k system is targeted at financial institutions in the mortgage industry, the system's underwriting matrix flexibility allows for expansion into any industry that performs the basic functions of application, credit, documentation, or underwriting any loan that requires a credit check. Future partnerships will allow ARC Systems to expand their services into auto loans, debt consolidation loans and credit card applications.

Via the Internet, the LT2k system takes less than 30 seconds from submission of an application to render a decision and return the underwriting decision and credit reports to the lender. The technology has the capacity to pull up to 10,000 credit reports and make 5,000 underwriting decisions per hour.

About Verticality

Based in Jersey City, VIG is a venture capital management company that focuses on investments in private technology companies, generally those involved in software development concentrating on finance, the Internet, programming tools, development environments, distributed object systems and programming languages. VIG's partners have achieved notable successes in both large corporate and entrepreneurial venues. For more information, call Hadar Pedhazur at 201-656-9311 or visit www.verticality.com.

About ARC Systems

Austin-based ARC Systems is a custom software developer of Internet based solutions for relational database applications. Through Internet technology, ARC Systems provides products that create economic and human resource efficiencies, changing the paradigm of underlying business practices. ARC Systems' flagship product, LT2k, is the world's first Internet based automated underwriting system for subprime mortgages. LT2k's underwriting matrix flexibility allows for expansion into any industry that performs the basic functions of application, credit, documentation, or underwriting any loan that requires a credit check including auto loans, debt consolidations, and credit card applications. For more information on ARC Systems, call 512-444-9732 or visit www.arcsystems.com for a free demonstration.

SOURCE: ARC Systems