Immunomedics raises $37.7 million from notes offering; oil, stocks push volume

By Sheri Kasprzak

Atlanta, May 2 - Immunomedics, Inc. led private placement news Monday with word that it had wrapped an upsized $37,675,000 offering of senior convertible notes.

In the broader private placement market, sell-siders said better stocks and higher oil prices helped volume in the United States and Canada, respectively.

Immunomedics' three-year notes bear interest at 5% annually and are convertible into common shares at $2.62 each. The deal was increased from the $36 million originally announced on April 27.

One market source who had seen the deal said he felt the conversion price was at a solid premium.

"It's at a premium, which is always great for the company if they can sell at that price and they did," the market source said.

The conversion price was 10% above the $2.38 closing level on the day before the deal was announced.

The investors also received warrants for 76.39 common shares for every $1,000 in principal of notes purchased. The warrants are exercisable at $2.98 each for three years.

The investors will also have an option to buy up to 20% in additional principal of the notes and warrants for 120 days after closing.

After the closing was announced Monday morning, the company's stock gained $0.04 to close at $2.20.

"This funding comes at an important stage of our development," said Immunomedics' vice president of finance and chief financial officer Gerard Gorman, in a statement. "The funds will allow us to maximize our options as we prepare for pivotal trials of our lead product candidate, epratuzumab, in lupus patients. We can now dedicate substantial efforts toward the lupus trials independently, while at the same time we discuss support with potential global licensing partners."

Lazard Freres & Co. LLC was the lead placement agent and C.E. Unterberg, Towbin was the co-placement agent.

Morris Plains, N.J.-based Immunomedics is a biopharmaceutical company focused on the development of monoclonal, antibody-based treatments for cancer, autoimmune and other diseases.

Activity helped by higher stocks

Elsewhere in the private placement market, sell-siders said volume got a boost from improved stocks and oil prices. Mineral-related stocks also got a boost, which helped push some deals, sources said.

"Stocks were up somewhat," said one U.S.-based sell-side source. "I think that's helping a bit. Some issuers are probably out there today with deals because of Friday's stocks too. So those numbers are important [to volume]."

The Dow Jones Industrial Average gained 59.19 to close at 10,251.70; the Nasdaq composite index ended up 7 to close at 1,928.65 and the S&P 500 closed up 5.31 at 1,162.16.

Oil prices also helped volume in Canada a bit, sources there said.

"Oil companies make up the majority of our issuers, so when oil's up, you'll see better volume most of the time," said one Canadian sell-sider. "We did have some energy companies in the market today, I'd say mostly smaller deals that I wouldn't normally follow too closely. It has been sparse though."

Oil gained $1.20 to close at $50.92 per barrel Monday.

iSecuretrac raises $11 million

iSecuretrac Corp. said the details on its wrapped $11 million private placement of preferred stock are forthcoming.

The company sold the preferreds to Sponsor Investments, LLC.

The deal is conditional upon approval of changes to the company's certificate of incorporation by its shareholders, a move the company said it expects to achieve in early June.

The deal is expected to close June 15.

A spokesman for the company said the details of the offering will be released once the company's shareholders' meeting is conducted.

"We are excited about having an investment partner that will be with us for the long term and brings valuable business relationships and experience to our management team," said Tom Wharton, the company's chief executive officer, in a statement. "Completion of this transaction will have a positive impact on our growth and should give shareholders confidence in our future."

The company's chief financial officer David Vana said the offering is the final step of the company's financial restructuring.

"This infusion of equity, along with significant elimination of debt and preferred stock we have negotiated, will noticeably strengthen our balance sheet and provide the necessary funding to satisfy the company's working capital, research and development and inventory requirements for the foreseeable future," Vana said in a statement.

Based in Omaha, Neb., iSecuretrac monitors individuals for clients using global positioning systems and wireless technologies.

On Monday, the company's stock closed down $0.01 at $0.21.

Diamondex arranges C$6.79 million deal

Diamondex Resources Ltd. said it plans to head to the private placement market with a C$6,795,000 offering Monday.

The company plans to sell 7.55 million units at C$0.90 each to Barrick Gold Corp.

The units include of one share and one warrant. The warrants provide for an additional share at C$1.25 each for two years.

"We are excited with this investment in Diamondex," said Alex Davidson, Barrick's executive vice president, in a statement. "Diamondex has a strong management and technical team and we believe the portfolio of properties that they hold are very prospective. We look forward to reviewing and evaluating our respective properties for gold and diamond opportunities."

In a second tranche, Barrick and Tell Investments LLP will buy an additional 3,561,111 units and 1.7 million units, respectively, under the same terms.

Based in Vancouver, B.C., Diamondex is a diamond exploration company. It plans to use the proceeds for its diamond exploration programs and acquisitions.

The company's stock closed up C$0.10 at C$0.90 on Monday.

Who's Your Daddy raises $3.75 million

Who's Your Daddy Inc. wrapped the first tranche of a $6.25 million private placement for $3.75 million, the company said Monday.

The company sold 3.75 million shares at $1 each.

A second and final tranche for $2.5 million will close in 90 days.

Geneva Equities is the placement agent in the offering.

The private placement is being conducted as part of Who's Your Daddy's acquisition of Snocone Systems, Inc. Under the terms of the acquisition, Snocone will issue 4.5 million common shares to Who's Your Daddy.

"Our goal over the next year will be the marketing and distribution of the Who's Your Daddy product line as well as creating mass brand awareness and retail market penetration on a nationwide basis," said the company's chief executive officer, Edon Moyal, in a statement. "The recent round of financing will allow us to achieve this goal on a larger scale over a shorter period of time than initially anticipated."

Based in San Diego, Who's Your Daddy markets and develops energy drinks. The proceeds will be used for production, manufacturing and distribution of the company's energy drinks.

Airbee's stock climbs

Airbee Wireless, Inc.'s stock made a comeback Monday after dropping on Friday.

The company announced late last week that it had received a $20 million equity line from Cornell Capital Partners, LP.

The company's stock gained $0.10, or 12.99%, at $0.87 on Monday.

On Friday, the company's stock slid $0.35, or 31.25%, to close at $0.77. The company's stock dropped $0.06 to close at $1.12 when the equity line was first announced on Thursday.

Under the terms of the agreement, the company may sell shares at 97% of the lowest volume weighted average price of the company's stock for five days before notice of a draw.

Based in Rockville, Md., Airbee produces connectivity software for wireless voice, data and video communications.

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