FTS Wireless eyes $5 million PIPE; Nstein prices C$5 million stock deal

By Sheri Kasprzak

New York, Oct. 13 - FTS Group, Inc. led PIPE news Thursday with its plans to raise $5 million on behalf of subsidiary FTS Wireless, which it plans to spin off.

Even though the pricing details of the offering could not be determined by Thursday evening, FTS said it has set aside 5 million shares for the deal.

FTS Group had 56,982,202 outstanding common shares as of June 30.

Tampa-based FTS announced, along with the private placement, its plans to spin off FTS Wireless into a separate, publicly traded company.

"Earlier this week, we announced the signing of a binding letter of intent to purchase a highly profitable, privately held wireless company in a stock and cash deal valued at $5.5 million," said the company's chief executive officer Scott Gallagher in a letter to shareholders released Thursday.

Of the proceeds, $4 million will be used to close the acquisition and $1 million will be used for acquisition-related expenses and working capital.

Looking to its latest earnings report, FTS Group posted a net loss of $191,055 for the quarter ended June 30, compared to a net loss of $216,000 for the same quarter of 2004.

FTS Group is a holding company for retail wireless locations. On Thursday, its stock gained 5.26% to close at $0.04.

Elsewhere in PIPE news Thursday, Montreal's Nstein Technologies Inc., which completed a private placement of notes Wednesday, priced another offering on Thursday.

In this most recent deal, the company intends to sell 35,714,285 shares at C$0.14 each.

Investors will also receive warrants for up to 14.3 million shares. The five-year warrants are exercisable at C$0.18 each.

After the deal was announced early Thursday, Nstein's stock took a significant fall. The company's stock lost 20.6%, or C$0.035, to close at C$0.135.

The company's stock, which had been halted since Sept. 29, resumed trading on Thursday. Trade of Nstein's shares was halted at the company's request, "pending an announcement," according to the original press release concerning the halt.

The stock offering comes just a day after Nstein wrapped a C$5.1 million convertible note offering for proceeds of $4.1 million.

The zero-coupon notes were priced at 80, mature in two years and are convertible into common shares at C$0.14 each.

"This investment provides us additional capital resources to execute our business plan which is focused on accelerated growth and corporate development in the global unstructured data analysis market," Robert Barakett, Nstein's chief financial officer, said of the note offering in a statement.

Nstein develops software to analyze unstructured data in almost every language.

Oil prices drop, but stocks still off

Even though oil prices fell for the first time this week, sell-siders in the PIPE market said it wasn't enough to pull up stocks.

"It was really all over the board today," one market source said of the three major stock indexes. "Up, down, mixed. Way too erratic to get anything substantial done, I suppose."

But will lower oil prices help with PIPE issuance later this week or into next week?

"It's too early to tell," said another sell-sider. "Oil has its whims and it's hard to tell one day to the next what might pop up to send it soaring or falling. But if it trends downward again, I think things will pick up."

Oil prices lost $1.04 Thursday to end at $63.08 per barrel.

Stocks, on the other hand, closed the day out mixed but little changed with the Dow Jones Industrial Average giving up 0.32 to end at 10,216.59; the Nasdaq composite index gaining 9.75 to finish at 2,047.22; and the Standard & Poor's 500 composite index dipping 0.84 to settle at 1,176.84.

United Bolero's C$1.55 million deal

Looking to other Canadian offerings Thursday, Vancouver, B.C.-based United Bolero Development Corp. priced a unit offering for up to C$1.55 million.

The company intends to sell up to 7 million common units at C$0.20 each and up to 750,000 flow-through units at C$0.20 each.

The non flow-through units are comprised of one share and one warrant. The warrants allow for the purchase of another share at C$0.25 each for two years.

The flow-through units consist of one flow-through share and one half-share warrant. The whole warrants are exercisable at C$0.25 each for one year.

Proceeds will be used for exploration at the Bald Butte project and the Chong molybdenum property.

The offering was announced late Wednesday and United Bolero's stock gained 19.15%, or C$0.045 to close at C$0.28 Thursday.

United Bolero is a mineral exploration company.

Vical's stock edges down

A day after its stock plummeted 20% on the pricing of a $22.56 million direct placement, biopharmaceutical company Vical Inc.'s stock slid a bit more on Thursday.

The company's stock was down $0.02 to close at $4.82 Thursday after dropping $1.21 on Wednesday to finish at $4.84.

On Wednesday, the San Diego-based company announced that it plans to sell shares at $4.80 each on Oct. 17 to a group of institutional investors.

The shares will be sold under Vical's shelf registration.

Vical is focused on DNA delivery technologies used to prevent and treat diseases like cancer.

Commtouch's stock rebounds slightly

Commtouch Software Ltd. saw a minor increase in its stock on Thursday, regaining precisely what it lost the in the previous session.

The company's stock gained a penny, or 1.7%, making up the drop its stock sustained on Wednesday.

On Tuesday, when the private placement closed, the company's stock gained 13.19%, or $0.07, to end at $0.60.

The company sold shares at $0.50 each.

Based in Netanya, Israel, Commtouch produces anti-virus software.

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