ANTs Software scurries off with $9 million from stock deal; Amacore obtains $10 million equity line

By Sheri Kasprzak

New York, May 2 - PIPE activity was yet again led by a technology company as tech stocks climbed Tuesday.

ANTs Software Inc. settled a $9,042,502 placement of its stock, selling 6,028,335 shares at $1.50 each, a 46.8% discount to the company's $2.82 closing stock price on Monday.

As of March 1, ANTs had 45,239,120 common shares outstanding.

One sellsider not affiliated with the deal said the substantial discount may have been the only way ANTs could do the offering.

"It's the only way they could get that deal done," he said. "Dogs have to beg."

Ken Ruotolo, ANTs' chief financial officer, in an interview Tuesday, said the discount is comparable to discounts the company has sold its stock at in the past.

"We're comfortable with it," Ruotolo said. "It's attractive to the investors and we feel it's fair given where we are as a company considering the risks associated with the investment."

The company, Ruotolo said, is launching new products and growing its sales and marketing force.

The latest round of financing, Ruotolo said, was conducted because the company is entering into a new phase of product and sales expansion and research and development.

The remainder of the proceeds will be used for working capital.

On Tuesday, the stock gained 2 cents to close at $2.84 (OTCBB: ANTS), after losing 2 cents early in the session.

For the quarter ended Dec. 31, the highest closing stock price for the company's stock was $2.90 and the lowest was $1.80. The highest closing stock price for the same quarter of 2004 was $2.02 and the lowest was $1.04.

"This financing allows us to support important operating activities, including expanding our database consolidation sales program, which can provide customers a true path to significant cost savings, expanding alliances with key partners and continuing to develop the ANTs data server to meet the needs of enterprise customers across a broad range of industries," said Boyd Pearce, the company's chief executive, in a news release Tuesday. "We appreciate the long-term commitment and vision shown by ANTs investors and shareholders as we work to realize the potential of our technology, product and people."

ANTs familiar to market

This is not the first time ANTs has headed to the PIPE market for funding.

In fact, according to Ruotolo, the company has been conducting private placements to fund its operations since the mid-1990s.

"The benefits [of a PIPE] are that the people who are investors take a long-term view in launching our products into market and are willing to provide management with the support," Ruotolo said. "They come back for additional rounds to fund our research and development and marketing efforts. We can determine fairly quickly and reasonably the kind of deal structure. So it's a win-win for both the company and the investor."

ANTs has been able to attract new investors in every round of financing, Ruotolo said. Even so, Ruotolo estimates about 60% of the investors in each financing round are existing investors.

On Jan. 18, 2005, the company settled a $2,123,000 offering of 2,123,000 units. The units were priced at a 61.2% discount to the company's Jan. 14 closing stock price of $2.60. The units were comprised of one share and one warrant, each of which was exercisable at $2.00.

After that offering closed, ANTs' stock dropped 5 cents to close at $2.55.

Moving to the company's latest earnings statement, ANTs reported a net loss of $8.70 million for the year ended Dec. 31, compared with a net loss of $5.06 million for the same period of 2004.

Based in Burlingame, Calif., Ants develops relational database management software.

In the broader tech market, one sellside market source said tech stocks are slowly making a comeback after a slump last week.

"We should be seeing some activity [in PIPEs] because tech [stocks] seems to be doing a bit better," said the market source early Tuesday afternoon.

Amacore's $10 million equity line

Elsewhere in the PIPE market Tuesday was a $10 million equity line The Amacore Group, Inc. received from Dutchess Private Equities Fund, LP.

When the deal was announced Tuesday afternoon, the stock advanced by a penny, or 42.86%, to end at $0.02 (OTCBB: ACGIE).

The three-year equity line allows Dutchess to purchase shares of Amacore at 93% of the lowest closing bid price for the five trading days after notice of a draw.

As of Nov. 16, 2005, the company had 49,192,284 common shares outstanding.

Looking to the company's earnings, Amacore reported a net income of $3.86 million for the quarter ended Sept. 30, 2005, compared with a net loss of $4.38 million for the same quarter of 2004.

In July 2004, Amacore bought LBI Inc. for $130,000 in cash or 100,000 class A shares.

Tampa, Fla.-based Amacore provides vision care benefits.

a21 stock loses a penny

In secondary market action, a21, Inc.'s stock dipped a day after the company announced the completion of a $15.5 million convertible notes offering.

The stock fell a penny, or 1.4%, to settle at $0.71 Tuesday (OTCBB: ATWO).

After the deal was announced Monday, a21's stock jumped 12.5%, or 8 cents, to settle at $0.72.

A group of institutional investors led by StarVest Partners, LP; QueeQueg Partners, LP; and Morgan Stanley bought the notes, which are convertible at $0.65 each.

Jacksonville, Fla.-based a21 is an online digital content marketplace used by creative professionals. The company provides images through three web sites.

Nstein stock advances by 4.8%

Moving to Canada, Nstein Technologies Inc. saw its stock climb by 4.76% on Tuesday after the company priced a C$9,996,000 private placement.

The stock gained half a cent to settle at C$0.11 (TSX Venture: EIN).

On Monday, when the placement was announced, the stock settled up a penny and a half to close at C$0.105.

In the placement, J.L. Albright Venture Partners and Solidarity Fund QFL agreed to buy 117.6 million shares at C$0.085 each, a 5% discount to the company's C$0.09 closing stock price on April 28.

Montreal-based Nstein develops software used to analyze unstructured data in a variety of languages.

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