X0202 4 2008-05-16 0 0000877931 Vertical Communications, Inc. VRCC 0001044321 MARXE AUSTIN W & GREENHOUSE DAVID M C/O SPECIAL SITUATIONS FUNDS 527 MADISON AVENUE, SUITE 2600 NEW YORK NY 10022 0 0 1 0 Preferred Stock 0.05 2008-05-16 4 P 0 709 A 2008-05-16 Common Stock 14170405 709 I By Limited Parternships None This is a joint filing by Austin W. Marxe (Marxe) & David M. Greenhouse (Greenhouse). They share voting & investment control over all securities owned by Special Situations Fund III QP, L.P. (SSFQP), Special Situations Cayman Fund, L.P. (Cay), Special Situations Private Equity Fund, LP (PE), Special Situations Technology Fund, L.P. (Tech) & Special Situations Technology II, L.P. (Tech II). SSFQP held a $367,842.03 Note, which was converted into 372 PS convertible into 7,448,801 CS, Cay held a $125,880.62 Note, which was converted into 127 PS convertible into 2,549,083 CS, PE held a $124,212.70 Note, which was converted into 127 PS convertible into 2,549,083 CS, Tech held a $13,110.31 Note, which was converted into 13 PS convertible into 265,484 CS, and Tech II held a $68,727.42 Note, which was converted into 70 PS convertible into 1,391,730 CS. The interest of Marxe & Greenhouse in the shares owned by SSFQP, Cay, PE, Tech, & Tech II is limited to the extent of his pecuniary interest. The Special Situations Funds entered into and agreement on April 16, 2008 to purchase Subordinated Convertible Promissory Notes ("Note"). On May 16, 2008 the principal amount (and estimated accrued and unpaid interest as of May 16, 2008) of such Notes, were automatically converted into Series F Preferred Stock. The Preferred Stock is convertible into Common Stock at a rate equal to five cents per share. Austin W. Marxe 2008-05-30 David M. Greenhouse 2008-05-30