WorldGate stock edges up on $11 million PIPE; West Hawk prices C$15 million deal as oil prices fall

By Sheri Kasprzak

New York, Aug. 14 - WorldGate Communications Inc. headed up private placement activity to kick off the week as stocks rebounded and then came off their highs.

"Better stocks seem to be helping somewhat," said one sellside market source Monday afternoon. "The way things are going with oil, nothing is a given. I envision things [volume] picking up in the next month or so. I think that's a pretty good gauge of where things are going now."

In the WorldGate offering Monday, the company sold 6% convertible debentures to Cornell Capital Partners, LP.

The company's stock bumped up by 2 cents on Monday to end the session at $1.27 (Nasdaq: WGAT).

The volume of WorldGate shares traded Monday slipped with 181,979 shares traded compared to the average 246,415 shares.

The debentures are due in three years and are convertible into common shares at the lesser of $1.75 each or 90% of the volume weighted average price of the company's stock for a set time period before conversion.

The investor received five-year warrants for 2,595,000 shares. Of the warrants, 1,145,000 are exercisable at $1.85 each, 1.1 million at $2.35 each and 350,000 at $2.60 each.

"We believe that this transaction significantly strengthens WorldGate's financial position and allows us to continue to invest in our Ojo video phone," said Hal Krisbergh, WorldGate's chief executive officer, in a statement.

"Cornell's investment, which is the largest investment by a single investor in the company's history, will increase our ability to continue our technological leadership in video telephony and continue to market Ojo to customers around the world. Our recent successes in several key parts of the world will be enhanced by the support this investment will provide."

"We are excited for this opportunity to work with the management of WorldGate and their Ojo personal video phone," said Michael D'Ecclesiis of Cornell in a news release. "We look forward to a longstanding relationship with the company."

WorldGate, based in Trevose, Pa., designs personal video phones.

West Hawk's C$15 million deal

In the oil sector Monday, West Hawk Development Corp. arranged a C$15 million PIPE even as oil prices declined.

Oil lost $1.10 on the day to close at $73.25 per barrel after making substantial gains last week.

"Oil and gold are really pushing down the market here," said one Canadian market source. "Probably not the best time to get something out there, if you ask me."

Even so, the West Hawk deal includes up to 20 million special warrants at C$0.75 each, a 14% discount to the company's C$0.88 closing stock price on Friday.

The special warrants are exchangeable for units of one share and one half-share warrant once a prospectus covering the underlying shares is filed.

The whole warrants are exercisable at C$1.00 each for two years.

A syndicate of agents led by Salman Partners Inc. has a greenshoe for up to 6,666,700 special warrants.

The deal is scheduled to close Sept. 7.

On Monday, the company's stock lost 8 cents, or 9.09%, to end the day at C$0.80 (TSX Venture: WHD).

Proceeds will be used for drilling on the company's Figure Four property in the Piceance basin of Colorado. The rest will be used for working capital.

Based in Vancouver, B.C., West Hawk is an oil and natural gas exploration company.

In other energy news, Eastshore Energy Ltd. settled, with a partially exercised greenshoe, a private placement for C$10,583,750.

The company issued 8,467,000 class A shares at C$1.25 each, including the over-allotment option for 467,000 shares exercised by agent Jennings Capital Inc.

The deal priced July 19 as a C$10 million offering of 8 million shares. The agent had been granted a greenshoe for up to 2 million additional shares.

Proceeds will be used for ongoing exploration and development.

On Monday, the company's stock slipped by 11 cents, or 7.91%, to end at C$1.28 (TSX Venture: EST).

Calgary, Alta.-based Eastshore is an oil and natural gas exploration, development and production company.

Duquesne stock edges up

Elsewhere in the energy sector, Duquesne Light Holdings, Inc. saw its stock nudge up by 0.15% on Monday after the company wrapped a $141,379,712 private placement Friday.

The stock gained 3 cents to close at $19.48 (NYSE: DQE). The stock had closed down a penny on Friday when the placement settled to end at $19.45.

In the placement, Duquense sold shares at $16.00 each, a 17.8% discount to the company's closing stock price of $19.46 on Thursday, to Duet Investment Holdings Ltd. and Industry Fund Management (Nominee) Ltd.

Pittsburgh-based Duquesne transmits and distributes electric energy.

Cytori stock dives

In the biotech sector, Cytori Therapeutics, Inc.'s stock dove by 11.9% on Monday after the company closed a private placement late last week.

The company's stock lost 67 cents to end at $4.96 (Nasdaq: CYTX). The stock gave up 6 cents, or 1.05%, to close at $5.63 Friday and slipped 6 cents on Thursday to close at $5.69 after a $16,779,966 private placement.

In the placement, the company received agreements to issue shares at $5.75 each to a group of institutional investors led by Olympus Corp.

Piper Jaffray & Co. was the placement agent for the offering, set to close within 30 days.

San Diego-based Cytori develops cell-based therapeutics using adult stem cell and regenerative cells derived from adipose tissue to treat cardiovascular disease, gastrointestinal disorders and other ailments.

© 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.