Private placement volume improves slightly; Depomed plans $22.7 million offering

By Sheri Kasprzak

Atlanta, Jan. 7 - Even as both stock prices dropped and oil prices slipped, private placement volume picked up as issuers got their act together, sources said.

"Well, it's very simple," said one market source. "Volume is better today because issuers finally have something to put out there. It's taken a few days, but things have picked up."

Despite lower stocks in both the United States and Canada, and a drop in oil prices, both U.S. and Canadian issuers announced the debut of a new crop of private placement offerings for 2005.

The Dow Jones Industrial Average dropped 18.92 to close at 10,603.96 on Friday, the Nasdaq composite was down 1.39 to end at 2,088.61 and the S&P 500 closed 1.70 lower at 1,186.19.

Leading action in the United States was a $22,662,000 direct offering from Depomed Inc.

According to a source familiar with the deal, which priced Thursday, the company plans to sell 5,036,000 shares at $4.50 each.

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

"It's a 16% discount to market and, looking at its closing price today, the market did not like this deal," said one market source.

On Thursday, when the offering priced, the company's stock was at $5.33.

At market close Friday, Depomed's stock had plummeted $0.61 to end at $4.72.

"The pharmaceutical industry is actually seeing a boost and this company seems to be doing pretty well, so it's hard to point to why exactly this deal is under-priced," the source said.

Thomas Weisel Partners LLC is the placement agent in the deal.

Based in Menlo Park, Calif., Depomed is a pharmaceutical company focused on oral drug delivery technologies.

Alteon gets $10 million

Alteon Inc. is in the process of wrapping up a $10 million private placement.

The company received agreements for about 9.5 million shares at $1.05 each from new and existing institutional investors.

"Biopharm stocks are doing pretty well these days and this seems to reflect that," said one market source. "It's priced reasonably in line with the market. I think both the company's strength and the strength of the biopharmaceutical industry are probably responsible for the pricing [of this deal]."

The placement agent in the offering was Rodman & Renshaw LLC.

Based in Parsippany, N.J., Alteon is a biopharmaceutical company focused on drugs that reverse or slow diseases of aging and complications of diabetes. The company plans to use the proceeds from the deal to fund the ongoing clinical development of phase 2 clinical development programs and for general corporate purposes.

On Friday, the company's stock closed down $0.18 at $1.10.

Zone 4 Play's $6 million deal

Zone 4 Play Inc. plans to hit the private placement market with a $6 million offering.

The deal includes up to 4 million shares at $1.50 each.

In addition, about 2.5 million shares were sold earlier this week to for proceeds of about $3.7 million.

Punk, Ziegel & Co. LP is the placement agent in the deal.

Based in Wilmington, Del., Zone 4 Play develops gaming software for digital television, mobile phones and web platforms.

The company's stock closed unchanged at $1.35 on Friday.

Workstream closes deal

Workstream Inc. added $990,000 to a previously announced $14 million private placement.

The company sold 330,000 shares at $3 each to raise a total of $15 million.

Warrants for 165,000 shares at $3.50 each were also issued in the offering.

Worksteam, based in New York and Ottawa, Ont., provides recruitment and employee services to companies. It plans to use the proceeds from the deal to strengthen its balance sheet and provide additional working capital for its growth strategy, including product development, international expansion and targeted strategic acquisitions.

Workstream's stock closed up $0.03 at $2.95 on Friday.

Canadian offerings

Mint Technology Corp. led private placement news north of the border with its plans to raise C$15 million.

So far, the offering has not been priced, according to the company's managing director Dean Thrasher.

"We expect it to price in the next couple of weeks," Thrasher said in an interview.

Thrasher said the company decided to conduct a private placement in lieu of taking on debt facilities.

"We were not looking to add any debt facility at this time," Thrasher said. "In terms of a public offering, we have a lot of good relationships on the Street here in Canada. We just felt that this was a much better way to go."

The company has retained GMP Securities Ltd. as the placement agent for the deal.

Based in Toronto, Mint provides electronic payment transactions. The company plans to use the proceeds from the offering for the expansion of sales and marketing, contract implementation and general working capital.

On Friday, the company's stock closed down C$0.01 at C$0.60.

Photon Control wraps deal

Photon Control Inc. closed up a C$2.2 million private placement Friday when it finished a C$840,850 final tranche.

In the final tranche, the company sold 2,402,430 units at C$0.35 each.

The units are comprised of one share and one half-share warrant. The whole warrants allow for an additional share at C$0.45 each for one year.

Woodstone Capital Inc. was the placement agent in the offering.

Based in Burnaby, B.C., Photon Control develops light-based products used for measurement and control. The proceeds from the financing will be used for the company's operational and development plans for 2004 and 2005.

Photon Control's stock closed up C$0.005 at C$0.37 on Friday.

Consolidated Global hits market again

Only one day after wrapping a C$1.8 million private placement, Consolidated Global Minerals Ltd. is back in the market again.

This time the company hopes to raise C$2 million through the sale of 5 million units at C$0.40 each.

The units are comprised of one share and one warrant.

The warrants allow for an additional share at C$0.60 each for two years.

Based in Vancouver, B.C., Consolidated Global is a mineral exploration company focused on lead-zinc, coal, diamond, copper and gold properties. The company plans to use the proceeds from its latest private placement for general corporate purposes and to finance its exploration programs.

On Friday, the company's stock closed unchanged at C$0.425.

Vector finishes C$1.3 million offering

Vector Wind Energy Inc. closed a C$1,332,700 offering.

Vector issued 3,246,750 flow-through shares at C$0.40 each and 85,000 common-share units at C$0.40 each.

The units were comprised of one share and one half-share warrant. The whole warrants allow for an additional share at C$0.50 each for two years.

Based in Ottawa, Vector develops wind energy projects. The company plans to use the proceeds from the offering for exploration and development and for general corporate purposes.

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