Cell Therapeutics secures $37.2 million from PIPE; American Oil to raise $28.5 million in stock sale

By Sheri Kasprzak

New York, April 12 - Direct placements by Cell Therapeutics Inc. and American Oil & Gas Inc. led PIPE activity on Thursday.

The largest of the direct placements came from Cell Therapeutics, which plans to sell $37.2 million in series B convertible preferred stock on April 16.

A group of institutional investors has agreed to purchase 37,200 shares of the 3% preferreds at $1,000 apiece. The preferreds are convertible into common shares at $1.6825 each, or $6.73 each following a one-for-four reverse stock split that will be effective April 15.

The shares are being sold under the company's shelf registration.

News of the deal sent the company's stock down early, giving up 22 cents, or 12.04%, by 10:15 a.m. ET. The stock went on to lose 35 cents, or 19.13%, to end at $1.48 (Nasdaq: CTIC).

The number of Cell Therapeutics shares traded Thursday was extremely high with 18,302,356 shares traded compared with the average 1,243,450 shares.

The investors will receive warrants for half of the investment amount divided by $1.6825, or $6.73 post-split. The warrants are exercisable at $1.62 each, or $6.48 each post-split.

Rodman & Renshaw, LLC was the placement agent.

Seattle-based Cell Therapeutics develops treatments for cancer.

American Oil's $28.5 million deal

The other big direct placement Thursday was from American Oil & Gas, which priced a $28,506,602 direct placement.

The deal includes up to 6,001,390 shares at $4.75 each, an 11.5% discount to the company's $5.37 closing stock price on Wednesday.

The shares are being sold under the company's shelf registration.

A.G. Edwards & Sons Inc. and C.K. Cooper & Co. are the placement agents.

The company's stock got off to a rocky start Thursday morning, slipping 10.43%, or 56 cents, by 11 a.m. ET. American Oil's stock ended the day down 10.8%, or 58 cents, to close at $4.79 (Amex: AEZ).

Denver-based American Oil is an oil and natural gas exploration, acquisition and development company.

Cell Genesys stock slips

In other biotech news, Cell Genesys Inc.'s stock dipped on Thursday, a day after the company announced the imminent closing of a $60 million registered direct placement of stock.

The stock lost 5 cents to settle at $5.28 but gained 2 cents in after-hours trading activity (Nasdaq: CEGE). On Wednesday when the deal was announced, the stock fell 75 cents, or 12.34%, to close at $5.33.

Volume picked back up with 8,535,583 shares traded compared with the average 4,212,350 shares. On Wednesday, 15,367,977 shares were traded.

In the placement, Cell Genesys plans to sell shares at $5.55 each, an 8.7% discount to the company's $6.08 closing stock price from Tuesday.

The shares will be sold under the company's shelf registration.

Credit Suisse Securities (USA) LLC is the bookrunner for the deal, set to close April 16.

Proceeds will be used for the ongoing phase 3 trials of the company's GVAX product for prostate cancer. The rest will be used for the development of other product candidates and for general corporate purposes.

Cell Genesys, based in South San Francisco, develops treatments for cancer.

Wherify raises $4.59 million

Elsewhere in PIPE news Thursday, Wherify Wireless, Inc. closed a $4,585,600 private placement of series A convertible preferred stock, sold following the exercise of an option by holders of $1.2 million in 10% senior convertible promissory notes issued in February.

The holders bought 5,732 shares of the preferreds at $800 each. The preferreds are convertible into common shares at $0.125 each.

The notes, issued Feb. 22, are due Feb. 15, 2008 and included an option for up to $7.5 million in series A convertible preferreds.

The company's stock ended the day up 22.22%, or 4 cents, to close at $0.22 (OTCBB: WFYW). By 2 p.m. ET, the stock had climbed 2 cents, or 11.11%. Volume was also up with 238,486 shares traded compared with the average 98,980 shares.

Based in San Mateo, Calif., Wherify develops personal global positioning service tracking devices.

Erdene Gold raises C$10 million

Moving to Canadian offerings, Erdene Gold Inc. settled a C$10 million private placement of shares at C$1.00 each.

The share price is a 16.67% discount to the company's C$1.20 closing stock price on Wednesday.

National Bank Financial Inc. and Wellington West Capital Markets Inc. were the underwriters for the deal.

Proceeds will be used to advance the company's Zuun Mod molybdenum project as well as for general exploration costs and general corporate purposes.

The company's stock gained 7 cents, or 5.83%, to close at C$1.27 on Thursday (Toronto: ERD).

Halifax, N.S.-based Erdene is a gold and precious metals exploration company.

Patrick stock drops

A day after closing an $11.025 million private placement to fund its planned $75 million acquisition of Adorn, LLC, Patrick Industries, Inc.'s stock fell by 6.75%.

The stock gave up 86 cents to close at $11.89 (Nasdaq: PATK). On Wednesday, the stock gained 10.62%, or $1.22, to close at $12.75.

The company sold shares at $11.25 each to Tontine Capital Partners, LP and Tontine Capital Overseas Master Fund, LP.

The investors also agreed to provide an interim debt financing of up to $16.5 million but not less than $13.975 million in senior subordinated notes.

Proceeds from the agreement will be used to fund its acquisition of Adorn, an Indiana-based manufacturer of interior components for recreational vehicles and manufactured housing.

With headquarters in Elkhart, Ind., Patrick Industries manufactures building supplies used in the manufactured housing sector.

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