Rexahn heralds deal; Rick's settles convertibles sale; Golden Band seeks funds for mill repair

By Stephanie N. Rotondo

Portland, Ore., June 28 - Rexahn Pharmaceuticals Inc. announced on Monday its plan to raise $10 million via a registered direct offering.

The company will sell units in the financing effort. Proceeds will be used, in part, to fund clinical trials.

Among completed deals, Rick's Cabaret International Inc. said it had pocketed $9.2 million from a private placement of convertible debentures. The funds will be used to supplement the company's "war chest" for acquisitions.

Golden Band Resources Inc. said on Friday it would conduct a private placement of units for proceeds up to C$7 million. On Monday, a company spokesperson told Prospect News the transaction was being done in connection with a future debt financing. The company will use the proceeds to refurbish an old mill, allowing it to keep its promise of being in production by the last quarter of 2010.

Rexahn heralds direct offering

Rexahn Pharmaceuticals has arranged a $10 million registered direct offering of units, according to a press release.

The units will be sold at $1.50 each and will contain one common share and one warrant equal to 0.3 common shares.

Whole warrants are exercisable at $1.90 for four years. The strike price represents a 10.46% premium over the June 25 closing price of $1.72.

All told, Rexahn expects to issue 6.7 million common shares and warrants good for another 2 million shares.

Proceeds will be used to develop the company lead clinical programs, including the funding of Rexahn's phase 2 clinical study program of Serdaxin, Zoraxel and Archexin, as well as for general corporate purposes. Settlement is expected July 1.

The company did not respond to requests for comment on Monday.

Rexahn's stock (Amex: RNN) fell 15 cents, or 8.72%, to $1.57. Market capitalization is $118.02 million.

Rexahn Pharmaceuticals is a Rockville, Md.-based biopharmaceutical company.

Rick's settles debenture sale

Rick's Cabaret International, a Houston-based operator of adult nightclubs, said it raised $9.2 million in a private placement of convertible debentures.

The three-year 10% debentures are convertible into common stock at $10.25 per share. The conversion price represents a 17.41% premium over the $8.73 closing price on June 25.

The company can redeem the debentures after six months if the stock's closing price hits $13.47 or above for 20 consecutive trading days.

Additionally, investors received three-year warrants. The warrants are exercisable at $10.25.

"The new funds mean we have more than $18 million in our war chest to acquire clubs that will be accretive to our earnings," said Eric Langan, president and chief executive officer, in a press release. "We are currently having ongoing negotiations over several properties and we are constantly looking for clubs that fit our model and have the potential to become strong contributors to our growth story."

Rick's equity (Nasdaq: RICK) dropped 18 cents, or 2.09%, to $8.55. Market capitalization is 87.29 million.

Golden Band seeks funds

Golden Band Resources' chief operating officer, Gary Haywood, told Prospect News that its recently announced private placement of units was being done in connection with a debt financing.

On Friday, the Saskatoon, Saskatchewan-based gold exploration company publicized a non-brokered private placement for proceeds up to C$7 million. The company is selling flow-through and non-flow-through units.

The flow-through units of one common share and one half-share warrant will be sold at C$0.40 per unit. Each whole flow-through unit warrant will be exercisable at C$0.50 until Dec. 31, 2010 and at C$0.55 thereafter until June 30, 2011.

The company also will sell units of one common share and one half-share warrant at C$0.35 per unit. Each of these warrants will be exercisable at C$0.45 until Dec. 31, 2010 and at C$0.50 thereafter until June 30, 2011.

Funding for mill refurbishment

According to Haywood, Sprott Asset Management - an existing investor - had approached the company wanting to do a debt financing. However, neither the investor nor the company wanted to do a large debt deal.

"We wanted to make sure that, in terms of the company's health, we didn't have a lot of debt hanging over our heads," he said.

As such, the company and investor came up with the idea to conduct the private placement. Golden Band must raise at least C$5 million and, once completed, Sprott will invest C$7 million via debt issuance.

Haywood said the company "needs about C$18 million" to put one of its projects into production. The C$7 million raise din the pipe market back in February has helped the company to do "active work," but there is still more to do.

The funds from the transaction will be used to refurbish a mill Golden Band purchased circa 1987, 1988, Haywood said. The mill has been inactive for the past 11 years and therefore "it needs some work. The bulk of the funds will be used for getting the mill up and running."

The proceeds will also be used for ongoing exploration and working capital. Golden Band expects production to begin in October.

Settlement is expected by July 15.

Golden Band's shares (TSX Venture: GBN) slipped half a cent, or 1.67%, to C$0.295. Market capitalization is C$60.6 million.

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