CSI raises C$15 million in private placement; higher oil sparks talk of more volume

By Sheri Kasprzak

Atlanta, April 19 - CSI Wireless Inc. led private placement news in a day sell-siders called slower than usual.

The company completed its previously announced private placement, including the full exercise of a greenshoe, for C$15 million.

The company sold 4 million shares at C$3.75 each.

An underwriting syndicate led by GMP Securities Inc. exercised a greenshoe for 800,000.

The deal was first announced March 28 as a C$12 million offering of 3.2 million shares at the same price.

"Investor demand for this financing was high, enabling us to increase the amount raised from C$12 million to C$15 million," said Stephen Verhoeff, the company's president and chief executive officer, in a statement. "This capital allowed us to quickly complete the acquisition of the Outback [GPS] business and establish the dominant position within the precision agriculture market."

Based in Toronto, CSI Wireless manufactures global positioning system products, wireless network equipment and telematics systems. It plans to use the proceeds to redeem a note issued as partial consideration for recent acquisitions made by CSI and subsidiary Satloc LLC. The remainder will be used for general corporate purposes.

On Tuesday, the company's stock closed up $0.10 at $3.03. The company's stock has not traded on the Toronto Stock Exchange since May 21, 2004.

Elsewhere in the private placement market, sell-siders looked to higher oil prices and said they felt volume may improve over the course of the coming weeks.

"The last few days have been virtually dead," said one sell-side source in the United States. "I think the boost we saw in oil may help some. Today was actually a pretty good day for stocks, but it was still relatively slow for PIPEs. Higher oil may mean more companies getting back out there."

In Canada, another sell-sider said oil companies are the lifeblood of the PIPE market there and higher oil prices may mean more issuance among energy companies north of the border.

"Absolutely it means a lot to us here because they [energy companies] make up such a huge portion of the deals we do," said the Canadian source.

Oil prices made gains for the second day in a row after taking a tumble over the course of last week. Oil rose $1.92 to close at $52.94 per barrel.

Canadian Royalties raises C$5.54 million

Canadian Royalties Inc. closed three private placements to raise C$5.54 million.

In the first offering, a brokered deal conducted through First Associates Investments Inc., the company sold 2.3 million units at C$1.80 each.

The units include one share and one half-share warrant. The full warrants allow for an additional share at C$2 each for two years and at C$2.40 each for the remaining two years.

In one of two non-brokered deals offered under the same terms as the brokered deal, the company sold 500,000 units at C$1.80 each to Sidex LP.

In its last offering, Canadian Royalties sold 277,778 units at C$1.80 each to The Solidarity Fund QFL.

"It looks good for them," said one market source who had seen the deal. "The warrants look really great."

Even so, the company's stock didn't budge Tuesday, closing at C$1.70.

Canadian Royalties, based in Montreal, is a nickel exploration company. The proceeds will be used for exploration on its Raglan South Trend Nickel project. The remainder will be used for general corporate purposes.

AXM raises $3.13 million

AXM Pharma, Inc. wrapped a private placement of secured convertible promissory notes for $3,125,000.

The notes bear interest at 9% annually and are convertible into common shares at $2.10 each. The maturity of the notes could not be obtained by press time Tuesday.

For each $500,000 of notes purchased under the offering, the investor will receive a series A warrant for 300,000 shares, exercisable at $2.90 each and a series B warrant for 300,000 shares, exercisable at $3.50 each. The investors also received a series C warrant for the number of shares issuable upon conversion of the investor's note, exercisable at the conversion price.

H.C. Wainwright & Co., Inc. and Chardan Capital Markets were the placement agents.

"We are pleased to complete this round of financing and the two new distribution agreements recently announced," said the company's vice chairman, Douglas MacLellan, in a statement. "With the current financing in place and potential for another $15.12 million in funding from this round [from warrants] we can continue fulfilling our fast-growing purchase orders that have come in since our factory opened March 1. We look forward to our best year on record in 2005."

Based in Las Vegas, AXM produces, markets and distributes pharmaceuticals in China. The proceeds will be used to accelerate the growth and distribution of the company's pharmaceutical products and to fill current purchase orders.

The company's stock closed down $0.04 at $2.50 Tuesday.

Kalimantan plans C$1 million deal

Kalimantan Gold Corp. announced its plans to head to the private placement market with a C$1 million offering.

The company plans to sell up to 5 million units at C$0.20 each.

The units include one share and one half-share warrant. The full warrants provide for an additional share at C$0.25 each for one year.

"Gold was way up today, so expect to see a few more of these types of deals in the coming days," said one market source familiar with the sector. "The warrants are at a slight premium, so I think that's good. Overall, not bad. But this is one of the few gold companies we've seen. Gold has been suffering lately and this seems like a solid boost that will bring back more gold issuers."

Based in Vancouver, B.C., Kalimantan is a gold, diamond and base metals exploration company. The proceeds will be used to complete the company's diamond drilling campaign at the Baroi Far East Zone.

Kalimantan's stock closed unchanged at C$0.24 on Tuesday.

Motient's stock closes up

Motient Corp.'s stock ended the day up Tuesday, a day after it announced the closing of a $408.5 million private placement.

The company's stock closed up $0.50, or 2.2%, at $23.25.

After the closing was first announced Monday, the company's stock lost $2.25 to close at $22.75.

The company sold preferred shares at $1,000 each.

The preferreds are convertible into common shares at $33.33 each.

"It just took a while for the deal to actually affect their stock," said one market source following the deal, explaining why its stock went up after dropping upon word of the closing.

"I don't think their closing price Monday had anything to do with the private placement. It looks like a great deal for them, they had strong investor response and I think it will serve them well, especially when trying to get funds in the future."

Motient, based in Lincolnshire, Ill., provides wireless data technologies to corporations. The proceeds will be used to acquire newly issued common stock of TerreStar Networks Inc., a subsidiary of Mobile Satellite Ventures. The remainder will be used for general corporate purposes.

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