Vistula secures $16.5 million from stock sale; BigString raises $2 million from convertibles

By Sheri Kasprzak

New York, May 22 - Even as technology stocks took a hit Monday, Vistula Communications Services, Inc. led PIPE activity, announcing the pending completion of a $16.5 million private placement.

A group of institutional investors intend to purchase 16.5 million shares in the coming days. Vistula had 34,164,898 outstanding common shares as of Thursday.

Vistula will issue warrants for 13.2 million shares, exercisable at $1.00 each for five years.

The investors in the offering include Jana Piranha Master Fund, Ltd.; Loeb Partners Corp.; Berggruen Holdings North America Ltd.; Narragansett Offshore, Ltd.; JMG Capital Partners, LP; JMG Triton Offshore Fund, Ltd.; Ore Hill Hub Fund, Ltd.; SF Capital Partners Ltd.; Tribecca Global Convertible Investments Ltd.; Narragansett I, LP; Plainfield Special Situations Master Fund Ltd.; Mauretania Partners, LP; Sandler Capital Structure Opportunities Master Fund, Ltd.; Little Wing LP; Dialectic Antithesis Partners LP; Dialectic Capital Partners LP; SDS Capital Group SPC, Ltd.; Tradewinds Fund Ltd.; Aslan Capital Master Fund, LP; Bear, Stearns & Co. Inc.; Evan Collins; J. Douglas Harvey; and Wensley Barker, III.

CRT Capital Group LLC was the placement agent for the offering.

Proceeds will be used to buy the intellectual property rights to the V-Cube IP PBX solution, which is Vistula's core voice-over-internet protocol technology offering.

"You know, as [voice-over-internet protocol] companies go, they're just not that great," said one market source familiar with the tech sector. "They seem to be struggling to make money and it doesn't look like there's much of a light at the end of the tunnel for them. This [private placement] may be a boost for them, but I'd be cautious."

In fact, the company's first-quarter earnings report was released on Monday. For the quarter the company sustained a net loss of $4.19 million, compared with a net loss of $1.41 million for the same quarter of 2005. Revenues, however, were improved on the year with $319,419 in net revenue reported for the quarter ended March 31. The company reported net revenue of $122,198 for the first quarter of 2005.

Vistula's stock remained unchanged Monday at $1.24 (OTCBB: VSTL).

New York-based Vistula provides voice-over-internet protocol services to communications companies.

BigString's $2 million PIPE

In other tech news, BigString Corp. wrapped up a $2 million private placement with affiliates of Tudor Investment Corp.

The investors bought 400,000 preferreds and received warrants for 1 million shares.

The series A preferreds are convertible into common shares at $0.50 each and pay annual dividends at $0.15 per share per year.

The warrants are exercisable at $1.25 each for 10 years.

The investors in the deal include Witches Rock Portfolio Ltd., The Tudor BVI Global Portfolio Ltd. and Tudor Proprietary Trading LLC.

BigString's chief executive officer Darin Myman did not return requests for comment on the offering by press time Monday.

Proceeds from the offering will be used for operations and for the advancement of the company's technologies.

In other news at BigString, the company has acquired the web sites of FindItAll.com, an event search engine, and AmericanMoBlog.com, a photo-sharing site.

With news of the site acquisitions, the release of the latest earnings report and the placement, BigString's stock climbed 10.96%, or 8 cents, to settle at $0.81 (OTCBB: BSGC).

According to the earnings report from Monday, BigString reported a net loss of $553,987 for the first quarter of 2006, compared with a net loss of $326,469 for the quarter ended March 31, 2005.

The company reported net sales of $3,172 for the quarter, compared with $1,546 for the corresponding 2005 quarter.

Based in Red Bank, N.J., BigString operates BigString.com, which provides user-controlled e-mail services.

Myriad stock up on equity line

After announcing a $20 million equity line, Myriad Entertainment & Resorts, Inc. saw its stock advance by 13.33%, or 4 cents, Monday to end the session at $0.34 (OTCBB: MYRA).

Under the terms of the line, which was funded by Dutchess Private Equities Fund, LP, Myriad may sell shares at 93% of the lowest closing bid price for the five trading days before a draw over a three-year period.

Looking at Myriad's latest earnings statement, released May 11, the company reported a net loss of $258,367 for the quarter ended March 31, compared with a net loss of $223,588 for the same quarter of 2005.

Based in Edmonton, Alta., Myriad Entertainment is a holding company that acquires and operates golf facilities and country clubs.

Nutrition 21 stock loses 5.86%

Nutrition 21, Inc.'s stock dropped by 5.86% to end the session at $2.09 (Nasdaq: NXXI) after wrapping up two placements totaling $10 million. In after-hours activity, the stock lost another 2 cents.

On Friday, when the deal was settled, the stock gained 8.29%, or 17 cents, to end at $2.22.

In the two placements, the company issued shares at $1.80 each to a group of investors that included Fort Mason Capital LLC and BETA.

Nutrition 21, based in Purchase, N.Y., develops nutritional supplements.

Interpharm stock dips

After announcing a $10 million PIPE on Friday, Interpharm Holdings, Inc. stock slipped slightly on Monday.

The stock lost 1.54%, or 2 cents, to end at $1.28 (Amex: IPA).

The deal, comprised of 10,000 shares of 8.25% convertible preferred stock, is being funded by Tullis-Dickerson Capital Focus III, LP. The preferreds are convertible any time after March 31, 2007 into a total of 6.5 million common shares.

On Friday, when the deal was announced, the stock fell 1.52%, or 2 cents, to close at $1.30.

Based in Hauppauge, N.Y., Interpharm produces generic prescription and over-the-counter drugs.

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