United Fuel wraps $8.75 million PIPE as part of merger; SyntheMed raises $6 million in stock deal

By Sheri Kasprzak

New York, April 4 - United Fuel & Energy Corp. headed up PIPE activity Tuesday as oil prices dipped.

Several energy companies made private placement headlines Tuesday even as energy stocks sank in the afternoon.

"You have to realize that energy stocks looked really good yesterday and even early in the session, but as oil fell, so did energy stocks," said one market source familiar with the natural resources sector. "You have to get these things done when you can get them done at a reasonable level."

Oil prices closed down 84 cents to end at $65.90 per barrel Tuesday after gaining 11 cents on Monday to end at $66.74 per barrel.

In the United Fuel offering, the company issued 1,333,333 common shares at $1.50 each and 6,750 shares of series A convertible preferred stock at $1,000 each as part of its acquisition of Queen Oil and Gas.

The $6.2 million acquisition of Queen was completed on April 1.

The 8% preferreds are convertible into common shares at $1.50 each.

The price per share and conversion price are an 11.7% discount to the company's $1.70 closing stock price on Tuesday.

Sanders Morris Harris was the placement agent.

Proceeds will be used to fund part of the acquisition.

"We are very pleased to have completed these financings and appreciate the support of these new investors as we close the Queen acquisitions," said Chuck McArthur, the company's chief executive officer, in a news release. "We are looking forward to integrating Queen's operations into ours and utilizing Queen's existing customers. We believe we are well-positioned to leverage the reputation for quality service that Queen has been building for over 30 years and will enjoy the benefits of this business combination in southeast New Mexico."

The company's stock remained unchanged at $1.70 (OTCBB: UFEN). On Monday, the stock gained 6 cents to end at $1.70.

Based in Midland, Texas, United Fuel distributes gasoline, diesel, propane and lubricant products.

Looking to the biotech sector, SyntheMed, Inc. wrapped a $6 million stock offering to fund commercialization of its Repel-CV adhesion barrier product.

U.S.- and Europe-based institutional investors bought 15 million shares at $0.40 each.

The deal was announced Tuesday morning, and SyntheMed's stock slipped a penny to end at $0.74 (OTCBB: SYMD).

Clubb Capital, Ltd. was the placement agent.

"We are very pleased by the positive response of the investment community to this transaction," said Robert Hickey, SyntheMed's CEO, in a statement. "The proceeds of this financing will allow us to move aggressively toward the commercialization of Repel-CV Adhesion Barrier and the advancement of our other product development projects."

Located in Oceanport, N.J., SyntheMed develops adhesive products used in cardiac surgery, as well as other medical products.

Ortec closes $6.17 million deal

Elsewhere in the biotech sector, Ortec International, Inc. secured $6,166,000 from the sale of 6,166 shares of series E convertible preferred stock.

The 6% preferreds are convertible into 5,000 common shares each at $0.20. The investors will receive warrants for 5,000 shares for every $1,000 in investment. The warrants are exercisable at $0.50 each.

Proceeds from the deal will be used to pay a portion of Ortec's acquisition of Hapto Biotech, Inc. The proceeds will be held in escrow until the company's receives formal approval for the merger. The merger of Hapto, a private company that develops two fibrin-derived platform technologies used to regenerate human tissue, is expected to conclude on April 11.

Rodman & Renshaw, LLC was the bookrunner with Riverbank Capital Securities, Inc. as co-agent.

Ortec's stock advanced by a penny on Tuesday to settle at $0.33 (OTCBB: ORTN).

New York-based Ortec is a tissue-engineering company focused on products to repair and regenerate human tissue.

Pluristem, a similar biotech company, wrapped a $3 million convertible debentures sale on Tuesday, selling 7% senior secured debentures with warrants.

The debentures are due April 3, 2008 and are convertible into common shares at the lower of 75% of the volume weighted average price of the company's stock for the 20 trading days before conversion or the price per share of any subsequent equity or convertible financing the company embarks upon.

The investors will receive warrants for 47,393,364 shares, exercisable at $0.075 each.

Proceeds from the non-brokered deal will be used for the development of the company's suite of stem cell therapy products. The remainder will be used for working capital.

"The private placement will enable us to support the implementation of the strategy change we announced recently," said Yossi Keret, the company's chief financial officer, in a statement. "The market for cell-based products is enormous and we hope to become a significant player in this exciting potential market."

Pluristem's stock slipped 7.5%, or $0.006, to end at $0.074 (OTCBB: PLRS).

In other news, Doron Shorrer, the company's chairman, has resigned. Zami Aberman, the company's chief executive officer, was appointed chairman.

Pluristem, based in Haifa, Israel, is a biotechnology company focused on developing stem cell therapies used to treat severe blood disorders.

Welichem prices C$4.5 million PIPE

In Canadian biotech news, Welichem Biotech Inc. negotiated a C$4.5 million placement of units.

The non-brokered deal includes up to 60 million units of one share and one half-share warrant with each whole warrant exercisable at C$2.00.

The unit price is a 25% discount to the company's C$0.25 closing stock price on Tuesday and the warrant strike price is a 190% premium to the same closing stock price.

The offering may be upsized by 5 million units up to 48 hours before closing.

Welichem's stock remained unchanged Tuesday (TSX Venture: WBI).

Welichem, based in Burnaby, B.C., is a biotechnology company focused on therapeutic drugs for autoimmune diseases and cancer.

Choice Resources' C$8 million deal

Moving back to the resources sector, Choice Resources Corp. priced an C$8 million deal on Tuesday.

The offering, which will be placed through agent Research Capital Corp., includes up to 4,210,526 units of one share and one half-share warrant at C$0.95 each and up to 3,636,364 flow-through shares at C$1.10 each.

The whole warrants are exercisable at C$1.35 each.

Research has a greenshoe for up to 25% of the units and up to 25% of the flow-through shares.

The stock fell 2 cents to end at C$0.90 (TSX Venture: CZE).

Choice has 58,606,222 outstanding common shares.

The deal is expected to close April 25.

Proceeds will be used for exploration and development on the company's oil and natural gas properties.

Calgary, Alta.-based Choice is an oil and natural gas exploration company.

Another oil company, Bulldog Resources Inc., settled a C$6,080,400 private placement Tuesday, selling 3,378,000 shares at C$1.80 apiece.

Insiders of the company bought C$837,000 of the offering.

The shares were placed through a syndicate of agents led by Tristone Capital Inc.

Tuesday, the stock rose 4 cents, or 1.91%, to settle at C$2.13 (Toronto: BD).

Calgary, Alta.-based Bulldog is an oil and natural gas exploration company.

StemCells stock slips

StemCells, Inc.'s stock fell for the second straight session after announcing a $35,837,500 direct placement of stock.

The stock dropped 1.6%, or 5 cents, to close at $3.07, losing another penny in after-hours trading (Nasdaq: STEM).

On Monday, the stock dropped 12.85%, or 46 cents, to end the day at $3.12.

In the direct offering, a group of institutional investors agreed to buy shares at $3.05 each, a 12.8% discount to the company's $3.58 closing stock price on Friday.

The shares will be sold under StemCells' shelf registration.

USB Investment Bank is the placement agent.

Proceeds will be used for capital expenses, strategic purposes, product development, working capital and general corporate purposes.

Located in Palo Alto, Calif., StemCells is a biotechnology company focused on developing stem cell treatments for nervous system diseases.

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