Frontera Resources wraps $46.5 million note sale; Encorium secures $5 million

By Sheri Kasprzak

New York, May 9 - Even as oil prices took a dip on Wednesday, Frontera Resources Corp., an oil and natural gas exploration company, led PIPE news with a $46.5 million offering of unsecured convertible notes.

Frontera's 10% notes are due May 2012 and are convertible at $1.67 each, a 7.5% premium to the company's 78p closing stock price on Friday.

Meanwhile, oil prices slid by $1.25 to close the session at $61.01 per barrel.

Frontera may sell another $20 million in the notes within 30 days of closing.

Raymond James and Associates was the placement agent.

The company will place $10 million of the proceeds in an escrow account from which half will be released when the stock price exceeds the conversion price for at least 20 consecutive trading days. The rest of the escrowed funds will be released when the share price exceeds twice the conversion price for at least 20 consecutive trading days.

Proceeds will be used for development and exploration on the company's projects in Block 12 in the former Soviet state of Georgia.

The stock got off to an early jump, gaining 8.9%, or 6.50p, by 6:13 a.m. ET. The stock went on to gain 2.50p to close at 75.50p, a gain of 3.42% (London: FRR).

Houston-based Frontera is an oil and natural gas exploration company.

Encorium's $5 million deal

Moving to the biotech sector, Encorium Group, Inc. secured agreements from two institutional investors for a $5 million private placement.

News of the deal sent the company's stock down by more than 5%. The stock lost 18 cents to close at $3.40 (Nasdaq: ENCO).

The offering includes 1,748,252 units at $2.86 each.

The units consist of one share and one half-share warrant. Each whole warrant allows for the purchase of another share at $4.12 for five years, starting six months after closing.

Savvian Advisors LLC was the placement agent.

The deal is set to close soon.

Proceeds will be used for working capital and general corporate purposes.

"We are very pleased to consummate this transaction for additional capital and are pleased by the confidence these new investors have placed in the future of Encorium," said Kenneth Borow, the company's chief executive officer, in a statement.

"We believe this financing will help to accelerate our business plan and put the company in a strong position to support the next phase of its growth. We expect to supplement our future growth with internal expansion into additional geographic regions around the globe as well as through strategic acquisitions."

Located in Wayne, Pa., Encorium develops and manages clinical trials and patient registries for pharmaceutical and biotechnology companies.

PolyMedix plans deal

Elsewhere in the biotech sector, PolyMedix, Inc. said it is negotiating a $35 million direct placement of its stock.

The terms of the offering have not been determined, but the offering is expected to include both shares and warrants.

Needham & Co., LLC is the lead agent.

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

Proceeds will be used for commercialization of the company's current and future product candidates, for research and development and for working capital.

The company's stock remained unmoved at $1.80 Wednesday (OTCBB: PYMX).

Philadelphia-based PolyMedix develops small-molecule compounds used to treat infectious diseases.

ImmunoCellular raises $2.3 million

ImmunoCellular Therapeutics, Ltd., another biotech company, closed a $2,262,252 private placement.

The company sold 1,508,168 shares at $1.50 each. The share price is a 30% discount to the company's $2.15 closing stock price on Tuesday.

The stock closed unchanged at $2.15 on Wednesday (OTCBB: IMUC).

The investors also received warrants for 1,508,168 shares, exercisable at $2.50 each for two years.

ImmunoCellular, based in Los Angeles, develops cellular treatments for brain cancer and neurodegenerative disorders.

Innuity closes deal

In the tech sector, Innuity, Inc. completed a $2 million offering of senior secured notes with warrants Wednesday.

Imperium Master Fund, Ltd. bought the notes, which are due May 3, 2008 and bear interest at 15% annually.

The notes included warrants for 1.128 million shares, exercisable at a penny each for three years.

"We believe this new funding agreement is more beneficial to our shareholders and has allowed Innuity to obtain the necessary capital to both significantly improve the balance sheet, while also providing resources for working capital as we strive to move towards cash flow positive operations over the next several quarters," said John Wall, the company's CEO, in a news release.

"The Imperium funding transaction will allow us to recall the 7.4 million shares that we issued in anticipation of the Mercatus funding, thereby reducing the overall dilution of this financing round."

Proceeds will be used to recall 7.4 million shares issued to Antares Trading Mercatech Fund, SA. The shares were issued through a restricted equity purchase agreement with Mercatus & Partners, Ltd.

The stock lost 13.04%, or 3 cents, to settle at $0.20 Wednesday (OTCBB: INNU).

Located in Redmond, Wash., Innuity designs, acquires and integrates software applications for small businesses.

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