Private placements fall flat as oil pushes stocks down; Offshore Systems plans C$19.5 million deal

By Sheri Kasprzak

Atlanta, March 9 - As oil prices continued to make gains Wednesday, private placement volume was pushed down by a dip in the stock market.

Oil prices rose $0.18 Wednesday to close at $54.77 per barrel.

Meanwhile, the Dow Jones Industrial Average slipped 107 to close at 10,805.62; the Nasdaq composite index lost 12.26 to close at 2,061.29 and the S&P 500 gave up 12.42 to end at 1,207.01.

"Well, it wasn't a good day," said one sell-sider of volume Wednesday. "Stocks are down, oil's up. Those are not the best conditions for private placements. I think it is safe to say that issuers are waiting until conditions improve."

Even in Canada, where sell-siders have said strong oil prices and a solid resources market have been driving the private placement market, volume fell flat Wednesday.

"I can't really say," said one Canadian sell-sider when asked what was driving down activity there.

One Canadian company did lead private placement news Wednesday.

Offshore Systems International Ltd., a company that provides charts and software to the navigation industry, announced its plans to raise C$19.5 million in a private placement.

The deal includes up to 19,500 units at C$1,000 each. The units are comprised of 20 class B series 2 preferred shares and 588 warrants.

The preferreds pay annual dividends at 7% and are convertible into 58.82 common shares at C$0.85 each.

The warrants allow for an additional share at C$0.85 each for five years.

The company may redeem the preferreds any time after three years at C$60 per share plus unpaid dividends.

Based in Vancouver, B.C., Offshore Systems supplies electronic chart systems and software for navigation. It plans to use the proceeds for acquisitions in the United States, working capital and to redeem 57,711 class B series 1 preferred shares held by two institutional investors at a price of about C$2.9 million.

Offshore Systems' stock closed down C$0.03 at C$0.85 Wednesday.

Boston Life Sciences wraps $5 million offering

Boston Life Sciences, Inc. completed a private placement for $5 million in a deal one market source said was priced as a substantial premium.

The company sold 2 million shares at $2.50 each.

"Its stock has certainly responded well to the closing," said one market source familiar with the offering. "It's a pretty big premium to market."

According to the source, the deal had been priced at about a 30% premium.

On Wednesday, the company's stock gained $0.38 to close at $2.11 and gained an additional $0.10 in after-hours trading.

Based in Boston, Boston Life Sciences is a research and clinical development company focused on therapeutic products for the central nervous system.

Health Discovery raises $2.5 million

Health Discovery Corp. wrapped a private placement for $2.5 million but the company did not return phone calls requesting additional details on the offering.

The deal was first announced as a $2 million deal, but was increased to accommodate interest from institutional investors.

"We are extremely pleased to have secured the necessary financing to move from the research and discovery phase to the validation and commercialization phase of our newly discovered biomarkers," said Stephen Barnhill, the company's chief executive officer, in a statement. "This round of financing is a key ingredient to the successful implementation of the company's business plan and we are proud and honored to have the support ant confidence of both individual and institutional investors in this funding round."

Based in Savannah, Ga., Health Discovery provides pharmaceutical and diagnostic companies with biomarkers to create more accurate diagnostic tests. The proceeds will be used to begin the clinical validation phase of biomarkers for prostate cancer, to complete the company's image analysis product for detecting tumor cells in the blood, to begin the company's clinical validation for biomarkers for acute myelocytic leukemia and to begin a program for detecting patients at risk for toxicity related drug events.

On Wednesday, Health Discovery's stock closed down $0.02 at $0.22.

Optimal Geomatics closes C$1.9 million deal

Optimal Geomatics Inc. raised C$1,928,625 in an upsized private placement, the company said.

The company issued 7,714,500 shares at C$0.25 each.

"The close of this most recent private placement is an extremely positive indicator for the company," said Colum Calwell, the company's president and chief executive officer, in a statement. "There were 27 participants, the majority of whom were new investors and long-term shareholders. This new injection of working capital will enable the company to move forward in its corporate objectives."

The offering was first announced March 1 as a C$1.8 million deal comprised of 7.2 million shares sold at the same price.

Based in Vancouver, B.C., Optimal Geomatics provides geomatics services to power line and pipeline utility companies. The proceeds from the deal will be used for general working capital, including marketing and sale in North America and the expansion of its operations in Vancouver.

On Wednesday, the company's stock closed unchanged at C$0.35.

Niogold arranges C$1 million deal

Niogold Mining Corp. announced its plans Wednesday to raise up to C$1 million in a private placement.

The offering includes up to 4 million units at C$0.25 each.

The units are comprised of one share and one warrant. The warrants provide for an additional share at C$0.30 each for one year.

"I think it's a good pricing for them," said one Canadian market source. "It's discounted quite a bit, but the warrants are what really make it appealing. I think they'll do okay with it."

The source said resource companies like Niogold have had strong stock performances lately.

Based in Val-d'Or, Quebec, Niogold is a gold, base metals, diamond, niobium and rare earth metals exploration company.

On Wednesday, the company's stock closed down C$0.02 at C$0.31.

Implant Sciences's stock falls

A day after announcing the completion of a $7,808,635 private placement, Implant Sciences Corp.'s stock tumbled.

The company's shares lost $1.42 on Wednesday to close at $7.21.

On Tuesday, when the deal closed, the company's stock lost $0.37 to end at $8.63.

The company issued shares at $7.225 each, a 15% discount to the company's closing price March 3.

Based in Wakefield, Mass., Implant Sciences develops ion technology for the homeland security, semiconductor and medical industries.

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