Lipid Sciences wraps $6.29 million PIPE; American Technology stock slips on $9.49 million stock sale

By Sheri Kasprzak

New York, Aug. 8 - Heading a more active day for private placements was a $6,292,164 private placement from Lipid Sciences, Inc.

The offering, announced late in the day Tuesday, included 4,993,781 shares at $1.26 each to a group of institutional and accredited investors. The price per share is equal to the volume weighted average price of the company's stock for the 10 trading days before Tuesday.

The company had 27,372,767 shares outstanding as of April 28.

The investors received warrants for 0.3 of a share for every share purchased in the offering. The warrants are exercisable at $1.51 each through Feb. 9, 2012. The warrants are not exercisable until Feb. 9, 2007.

Proceeds will be used for the completion of the company's human clinical trial for HDL Selective Delipidation, the company's technology aimed at reversing atherosclerosis, a disease caused when the blood vessels build up with cholesterol.

On Tuesday, the stock fell 4.1%, or 5 cents, to end at $1.17 (Nasdaq: LIPD).

The company recently reported a net loss of $3 million for the quarter ended March 31, compared with a net loss of $2.39 million for the corresponding quarter of 2005.

Located in Pleasanton, Calif., Lipid Sciences is a biotechnology company focused on treatments for medical problems caused by lipid or fat deposits in the blood.

In the broader PIPE market, stocks sank after climbing early in the session. Meanwhile, oil prices settled back down after spiking on word that BP plc closed down an Alaskan pipeline.

"Just like I said," quipped one market source who predicted oil prices would rebound after initial word of the pipeline shutdown. "People get overly excited about news items. I had a feeling this would happen. That's not to say we're in the clear or that [oil] prices aren't going to go up. A lot of people are saying we'll see $80 [per barrel before the end of this summer. We'll have to wait and see."

Oil prices dropped by 67 cents Tuesday to close at $76.31 per barrel.

Looking to stocks, the Dow Jones Industrial Average closed down 45.79 to end at 11,173.59; the Nasdaq composite index lost 11.65 to close at 2,060.85; and the Standard & Poor's 500 composite index dropped 4.29 to settle at 1,271.48.

American Tech's $9.49 million deal

In the technology sector, American Technology Corp. sold 4,870,512 shares in a private placement to raise $9,497,498.

The offering closed Monday, but on Tuesday, the stock had fallen by 7 cents to end at $2.23 (Nasdaq: ATCO).

The price per share was $1.95 or an 18% discount to the company's $2.30 closing stock price on Monday.

The investors, which include Special Situations Fund III QP, LP; Special Situations Fund III LP; Special Private Equity Fund, LP; Special Situations Technology Fund, LP; Special Situations Technology Fund II, LP; Iroquois Master Fund, LLC; and ICF, LLC, received warrants for 1,948,205 shares, exercisable through Aug. 6, 2010 at $2.67 each. The warrants become exercisable on Feb. 7, 2007.

Olympus Securities, LLC was the placement agent.

Proceeds will be used for working capital.

San Diego-based American Technology produces directed-sound technologies.

Phoenix plans C$40 million deal

Looking to Canadian PIPE offerings, Phoenix Capital Income Trust priced a C$40 million private placement.

The placement, which is being offered through agent Research Capital Corp., includes up to 8 million trust units.

Toronto-based Phoenix is a real estate company that acquires real estate interests from individuals or joint ventures in Canada.

In other Canadian offerings, Sherwood Copper Corp. negotiated a private placement for up to C$15,015,000.

The deal includes up to 4.62 million special warrants at C$3.25 each.

The special warrants are exchangeable on a one-for-one basis for common stock once a prospectus covering the underlying shares is filed.

A syndicate of underwriters led by Dundee Securities Corp. and Sprott Securities Inc. has a greenshoe for up to 3.08 million additional special warrants.

Proceeds will be used for construction of the company's high-grade Minto copper-gold project in the Yukon Territory. The remainder will be used for general corporate purposes.

"This financing ensures that we can maintain the rapid pace of development at our high-grade Minto copper-gold project," said Stephen Quinn, the company's chief executive officer, in a statement. "Debt arrangements are proceeding to completion, with closing of the project debt facility with Macquarie Bank Ltd. anticipated within a month.

"This equity funding, combined with recent warrant exercises, ensures we are positioned to meet our financial obligations until the debt facility is in place. In the meantime, development of the Minto project is proceeding rapidly and we are on target to meet or beat our production start date of mid-2007."

In other news, Sherwood said 520,175 warrants with an exercise price of C$1.77 each were exercised for proceeds of C$920,709 and another 962,500 warrants at C$2.00 will be exercised for another C$1,925,000 in proceeds.

Sherwood, based in Vancouver, B.C., is a gold and copper exploration company.

U.S. Shipping stock dips

A day after announcing the imminent closing of a $76,914,000 private placement of trust units, U.S. Shipping Partners LP saw its stock edge down on Tuesday. The company had also announced its second-quarter earnings on Monday.

The stock gave up 4 cents, or 0.2%, to close at $19.51 (NYSE: USS).

In the placement, U.S. Shipping agreed to sell common units at $18.34 each and class B units at $17.12 each.

Proceeds from the deal will be used for construction expenses related to the company's joint venture with National Steel and Shipbuilding Co. to build nine double-hulled tankers.

Also on Monday, U.S. Shipping announced its second-quarter earnings. The company reported revenues of $37.8 million for the quarter ended June 30, compared with revenues of $33.8 million for the same quarter of 2005.

U.S. Shipping, which has headquarters in Edison, N.J., provides long-haul marine transportation services for the refined petroleum products sector.

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