SOURCE: FTS Group, Inc.

December 07, 2006 17:57 ET

FTS Group to Restate Financial Statements Beginning With Its Form 10-KSB for the Year Ended December 31, 2005 and All Subsequent Quarterly Filings Due to Non Cash Reclassification of Warrants

TAMPA, FL -- (MARKET WIRE) -- December 7, 2006 -- FTS Group, Inc. (OTCBB: FLIP), an acquisition and development Company, today announced that after a review of its prior financial statements management has concluded that it must restate its prior financial statements beginning with its 2005 Form 10-KSB and all subsequent quarterly filings through the third quarter of this year due to a reclassification of warrants issued in December of 2005.

FTS Chairman and CEO Scott Gallagher stated, "The issue that has generated the reclassification of non cash warrants and the necessary restatement is related to the financing closed in December of 2005. At the time we did not have enough authorized shares to issue shares underlying all of the warrants if hypothetically, the warrants had been exercised prior to our request to increase our authorized shares being approved. Even though no investors requested any warrant exercises or communicated any intent to exercise, the SEC has taken the position that we still need to reclassify the treatment of the warrants. Therefore we will be restating our 2005 Form 10-KSB for the period ended December 31, 2005, our Form 10-QSB for the period ended March 31, 2006, our Form 10-QSB for the period ended June 30, 2006 and finally our Form 10-QSB for the period ended September 30, 2006. On October 20, 2006, we gained shareholder approval to increase our authorized shares. Thus, at the end of 2006, the warrants will be reclassified again to the previous classification. None of these changes will have any impact on our sales or earnings in the previous statements. We appreciate your patience as we attempt to comply with these ever changing rules and classifications."

Investors are directed to review "Note 1" to all of the restated financials for detailed information on the reclassification of the warrants and how they affect the restated financials. In addition the Company would like to remind investors that amended filings such as an 8K/A or 10K/A are "amended" filings. They contain language from the filing at the time the filing was made. They do not imply that unamended language is "current"; for instance if a contract was pending when an 8K was filed and signed months later the 8K/A or "amended" filing will still have language relating to the contract status at the time of the filing. Please carefully review any amended SEC filings which are available for review at www.SEC.gov.

About FTS Group, Inc.

FTS Group, Inc. is a publicly traded holding company operating in the wireless industry through its wholly owned subsidiaries FTS Wireless, Inc. and See World Satellites, Inc. The Company operates through retail locations in Florida and Pennsylvania and globally over the Internet through its web sites www.FTSGroup.com, www.CellChannel.com, www.SeeWorld.biz and www.FTSWireless.com. For additional information about FTS Group, Inc. or any of its wholly owned subsidiaries please review the Company's quarterly, annual and other filings with the Securities and Exchange Commission at http://www.SEC.gov or contact the Company at the e-mail or phone number below.

Forward-Looking Statements

Included in this release are certain "forward-looking" statements, involving risks and uncertainties, which are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's financial performance. Such statements are based on management's current expectations and are subject to certain factors, risks and uncertainties that may cause actual results, events and performance to differ materially from those referred to or implied by such statements. In addition, actual future results may differ materially from those anticipated, depending on a variety of factors, sales and earnings growth, ability to attract and retain key personnel, and general economic conditions affecting consumer spending, including uncertainties relating to global political conditions, such as terrorism. Information with respect to important factors that should be considered is contained in the Company's Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Readers are cautioned not to place reliance on these forward-looking statements, which speak only as of the date hereof.

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