Clean Power Technologies seals $10 million equity line; Odyssey Marine pockets $6.6 million from PIPE

By Sheri Kasprzak

New York, Jan. 24 - Clean Power Technologies Inc. led PIPE action Wednesday with the completion of a $10 million equity line. Elsewhere, Odyssey Marine Exploration, Inc.'s stock benefited from a $6.6 million offering of convertible preferred stock.

In the equity line, Dutchess agreed to buy shares of Clean Power at 96% of the lowest closing bid price for the five trading days after notice of a draw.

After the deal was announced late Wednesday, the stock closed unchanged at $0.76 (OTCBB: CPWE) with only 500 shares traded compared with the average 2,437.

Calgary, Alta.-based Clean Power develops hybrid fuel technologies used in car engines.

Meanwhile, in the broader market, a sellsider based in New York said he feels tech offerings may be popular coming up.

"Tech stocks are getting a boost right now and that usually means more [offerings]," he said.

The stocks are boosted, in part, he said by gains made Wednesday by Yahoo!, Inc. and recent PIPE issuer Sun Microsystems, Inc.

"When big-name companies' stock climb, it tends to move smaller companies' stock as well," he noted.

That could mean some would-be issuers may be gearing up to price offerings in the coming weeks, he noted.

Stocks made some gains Wednesday with the Dow Jones Industrial Average advancing 87.97 to close at 12,621.77 and the Nasdaq composite index climbing 34.87 to end at 2,466.28. The Standard & Poor's 500 composite index edged up 12.14 to settle at 1,440.13.

Odyssey's deal

Elsewhere in PIPEs Wednesday, Odyssey Marine Exploration, Inc. concluded a $6.6 million private placement of series D convertible preferred stock, an offering that sent its stock up 14.34%.

The stock gained 39 cents Wednesday after the deal was announced in the afternoon to end the session at $3.11 (Amex: OMR).

The volume of Odyssey Marine shares traded Wednesday also climbed with 191,600 shares traded compared with the average 67,617.

The company sold 2.2 million shares of the preferreds at $3.00 each to funds managed by GLG Partners LP and Fortress Investment Group LLC.

Each preferred is convertible into one common share.

In connection with the placement, investors agreed to surrender some existing warrants for new warrants. The new warrants allow for the purchase of 440,000 shares of series D preferred stock exercisable at $4.00 each through Jan. 24, 2009 and 2.2 million shares of the preferreds exercisable at $3.50 each through May 15, 2007. The new warrants were exchange for the surrender of warrants exercisable at $3.50 each through March 9, 2007.

Tampa-based Odyssey Marine provides deep-sea shipwreck exploration services.

Sun's stock gains 8.66%

Looking to the tech sector, Sun Microsystems, Inc.'s stock advanced by 8.66% Wednesday, a day after the company agreed to place $700 million in senior convertible notes with KKR Private Equtiy Investors, LP.

The stock gained 49 cents to close at $6.15 and climbed another 3 cents in after-hours trading (Nasdaq: SUNW).

Volume of Sun shares traded Wednesday took off with 168,677,457 shares traded. The average number of Sun shares traded is 58,954,400.

KKR agreed to buy $350 million in notes due 2012 and $350 million in notes due 2014.

The 2012 notes bear interest at 0.625% semi-annually and the 2014 notes at 0.75% semi-annually. Both notes are convertible at $7.21 each, a 27.4% premium to the company's $5.66 closing stock price on Tuesday.

KKR also received warrants for both sets of notes. The warrants issued with the 2012 notes are exercisable at a $9.20 each, or a 60% premium to the company's Jan. 22 closing stock price of $5.75 and the warrants issued with the 2014 notes are exercisable at a $10.0625 each, a 75% premium to the Jan. 22 closing stock price. The exact number of warrants offered in the deal could not be determined Wednesday.

The placement is scheduled to close Friday.

Sun plans to use some of the proceeds to fund convertible note hedge transactions it entered into concurrently with the private placement.

"We are excited to have the support of one of the world's premier private equity firms," said Jonathan Schwartz, Sun's chief executive officer, in a statement. "KKR has a stellar track record of creating value for its shareholders and bringing insight and opportunity to the companies in which it invests. This investment is an important validation of our strategy and competitive assets, and reflects endorsements from key customers, along with improving financial performance and market share gains."

"Sun Microsystems is a leader and innovator in the global technology marketplace," said George Roberts, founding member of KKR, in a statement. "Jonathan Schwartz and his team have demonstrated remarkable vision and strong discipline in executing its turnaround strategy. This leadership, coupled with the world-class products and services for which Sun has always been known, underscores the company's ability to sustain its recent momentum and the gains it has made in the marketplace. We are pleased to have the opportunity to pursue this investment through KKR Private Equity Investors in order to help Sun to best capitalize on its substantial growth potential."

Sun Microsystems, based in Santa Clara, Calif., develops network computing technologies.

Osisko plans C$70 million placement

Moving to Canadian offerings, Osisko Exploration Ltd. priced a C$70.15 million offering of stock.

The deal includes up to 6.1 million shares at C$11.50 each. The price per share is a 7.2% discount to the company's C$12.40 closing stock price Tuesday.

The placement is being made through a syndicate of underwriters led by Westwind Partners Inc. The syndicate has a greenshoe for up to 900,000 additional shares.

Proceeds will be used for exploration on the company's Malartic gold project.

Osisko's stock lost 10 cents, or 0.81%, to close at C$12.30 (TSX Venture: OSK).

Osisko, located in Montreal, is a gold exploration company.

Railpower's stock drops

In Canadian secondary market news, Railpower Technologies Corp.'s stock slipped on Wednesday, a day after the company increased to C$30 million a C$25 million private placement.

The stock dropped 3 cents to end at C$1.35 (Toronto: P).

On Tuesday, when the increase was announced, the stock gained 24 cents, more than 21%, to close at C$1.38.

Volume, however, remained elevated on Wednesday with 2,431,753 shares traded compared to the average 1,216,030. On Tuesday, 6,881,583 shares were traded compared with the average 1,126,140 shares.

In the offering, Railpower intends to sell units of one share and one half-share warrant at C$1.00 each.

Proceeds will be used for general corporate purposes.

Montreal-based Railpower develops hybrid energy technology systems used in railroads.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.