GigaBeam eyes turnaround with deal; FLO sells more convertibles; Ceramic, Dussault place stock

By Kenneth Lim

Boston, May 2 - GigaBeam Corp. raised an additional $1.28 million in a private convertible placement, and management said the money will help the company achieve a turnaround.

Meanwhile, FLO Corp. said it will sell another $5.5 million of convertibles to raise funds for an acquisition.

Ceramic Fuel Cells Ltd. announced a £7 million stock placement, while Dussault Apparel Inc. said it raised $1.28 million from a private stock sale.

GigaBeam aims for turnaround

GigaBeam said it raised an additional $1.28 million from a private placement of $3.02 million in convertible debentures.

About $1.1 million of the deal was previously advanced to the company.

Investors also received warrants for 17.2 million shares, exercisable at $0.35.

GigaBeam common stock (OTCBB: GGBME) closed at $0.40 on Friday, up by 5.26%, or $0.02.

GigaBeam, a Durham, N.C.-based maker of point-to-point wireless communications products, said it will use the proceeds to build sales, to accelerate production and for general operational matters as it works toward becoming cash flow positive.

The convertible placement was a "big deal" for the company, GigaBeam president and chief executive Jay Lawrence told Prospect News.

"We're doing a turnaround, and this is going to help us I think make the bend," he said.

GigaBeam is currently loss-making, and Lawrence is trying to turn the company's fortunes around in terms of profit and cash flow.

"What I've been doing is really try to size the business down to where we can make money," he said. "We've been cash tightening since I took over. Putting additional fuel in our tank at this point is just outstanding."

GigaBeam is also trying to broaden is product offering to target customers outside the high-end space.

"We're kind of the Ferrari in the fixed wireless space," Lawrence said. "We've introduced a Cadillac, now we're bringing out the Camry. ... It means we have to walk away from fewer deals."

The company is at the brink of being cash flow positive, and the hope is that the latest financing will give GigaBeam the extra nudge, he added.

"If you look at the last numbers we just put out to shareholders, we're right on the line [on cash flow] ... I don't think we're far off," he said. "I'm hoping we can have some good fortune. If we just hang in there and do a little more, we're really close."

An issue of convertible debentures was the best deal the company could get on the market, he said.

"We looked at a number of deals," Lawrence said. "We're kind of in a tough market for raising money. ... We need to find a path of least resistance in the investing community. This was the deal that had the best traction in the investment community."

"It's a tough market, so I'm really happy with the fact that we could get this done as quickly as we did," he said. "The current syndicate of institutional folks really believe in us."

FLO sells more notes

FLO said it is selling an extra $5.5 million of secured 12% convertible notes due April 3, 2010 as part of a previously announced placement.

The company had sold $1.6 million previously, bringing the total financing to $7.1 million.

The notes are convertible into FLO common stock at an initial conversion price of $0.80 per share, lower than the previous notes, which had a conversion price of a dollar. Conversion will be automatic if the company's shares close at $3.00 or higher for 20 consecutive trading days.

FLO common stock (OTCBB: FLRP) gained $0.10, or 13.33%, to close at $0.85 on Friday.

FLO said it will also issue warrants for 125,000 common shares, exercisable at $0.75, and short-term warrants for 100,000 shares, exercisable at $0.60, for every $100,000 invested.

Chantilly, Va.-based FLO, which provides a registered traveler service for air travelers, said it will use the proceeds to fund its expansion and to complete an acquisition of the rtGO technology from Unisys Corp.

"The completion of this financing provides FLO with the resources necessary to aggressively pursue its enrollment campaigns," FLO chief executive Glenn Argenbright said in a statement. "We are focused on providing the best possible offering in this industry and this financing allows us to bring more value to our customers and partners."

Ceramic to sell stock

Ceramic Fuel Cells said it is selling 35 million shares at 20p each to raise a total of £7 million.

The company's common stock (AIM: CFU) closed at 22.5p on Friday, lower by 8.16%, or 2p.

Victoria, Australia-based Ceramic Fuel Cells, a developer of fuel cell technology for stationary power generation, said it will use the proceeds for working capital.

Dussault raises $1.28 million

Dussault Apparel said it raised $1.28 million from a private placement of stock-and-warrant units.

The deal involved 1.28 million units, each comprising one common share and one warrant, at a dollar per unit. Each warrant is exercisable at $1.25 for two years.

Dussault is a Los Angeles-based clothing company.

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