Marshall Edwards sells $18.35 million in stock; Edgewater Foods seals $5.4 million PIPE

By Sheri Kasprzak

New York, July 12 - Australian pharmaceutical company Marshall Edwards, Inc. led another light day of private placements, wrapping an $18,355,003 private placement of stock and receiving a $15 million equity line.

The company sold 4,950,001 shares at $2.90 each to accredited investors, a 19% discount to the company's $3.58 closing stock price on Tuesday. The company also issued another 1,379,310 shares to Cornell at the same price.

Marshall Edwards had 56,938,000 outstanding common shares as of April 30.

The accredited investors came away from the deal with warrants for 1,732,499 shares, exercisable at $4.35 each. Cornell received warrants for 482,759 shares, exercisable under the same terms.

Janney Montgomery Scott, LLC was the placement agent.

Cornell is also funding a $15 million equity line. Cornell may buy shares of Marshall Edwards at 97% of the lowest volume weighted average price for the five trading days after notice of a draw over two years.

In the equity line agreement, Cornell received warrants for 600,000 shares, exercisable under the same terms as the warrants issued with the stock.

"I wouldn't dismiss them right off," said one buyside market source. "They've got some clinical trials going on for a lot of their stuff and it's just too early to tell what they can do."

Of the stock sale itself, the buysider seemed a bit disappointed with the pricing level.

"I think they sold a little too cheap," he said.

The settlement was announced Wednesday morning, and by the end of the day, Marshall Edwards' stock fell 7 cents, or 1.96%, to close at $3.51 (Nasdaq: MSHL).

Located in North Ryde, New South Wales, Australia, Marshall Edwards is a pharmaceutical company focused on developing treatments for cancer. The company is developing a drug called Phenoxodiol to treat prostate cancer.

In the broader market Wednesday, stocks took a beating with the Dow Jones Industrial Average falling 121.59 to end at 11,013.18 and the Nasdaq composite index losing 38.62 to close at 2,090.24. The Standard & Poor's 500 composite index gave up 13.92 to finish at 1,258.60.

Meanwhile, oil prices climbed by 79 cents to close the session at $74.95 per barrel.

One sellside market source in Vancouver, B.C., said Wednesday that rising oil prices may continue to fuel more energy PIPE offerings.

"We're already seeing a lot," he said. "It has its on and off days, but I'm looking pretty much at two or three a day most days."

Among the energy offerings priced so far this week were a C$15 million deal from Jura Energy Corp. and a C$94.1 million offering from Pacific Energy Resources Ltd. priced on Monday.

Peerless plans C$8.19 million deal

And speaking oil deals, Peerless Energy Inc. priced a C$8.19 million offering of class A flow-through shares.

The deal includes up to 1.95 million shares at C$4.20 each.

The placement is being placed through a syndicate of underwriters led by FirstEnergy Capital Corp.

The offering is scheduled to close Aug. 2.

Proceeds will be used for drilling on the company's light oil prospects in Viewfield, Sask., and Red Earth, Alta.

Wednesday, the stock closed unchanged at C$3.30 (TSX Venture: PRY).

Peerless, based in Calgary, Alta., is an oil and natural gas exploration company with properties in Alberta, Saskatchewan and British Columbia.

In the alternative fuels market, Nova Oil, Inc., which settled a $16.12 million PIPE earlier this week, completed a second closing of the deal for $2,635,000.

The company sold another 1.7 million units at $1.55 each. The units consist of one share and one half-share warrant. The whole warrants are exercisable at $2.60 each for five years.

In the first closing on July 6, Nova sold 10.4 million units. The warrants in that closing had a strike price of $2.54.

Proceeds from the deal will be used for working capital and general corporate purposes as the company continues to build and operate two to four biodiesel refineries.

The company's stock closed up 9 cents, or 4.6%, to end at $2.05 (OTCBB: NVAO).

Houston-based Nova is an alternative energy company focused on developing synthesized and renewable fuel products.

Edgewater Foods' $5.4 million PIPE

In other private placement offerings, Edgewater Foods International, Inc. settled the last tranche of a $5.4 million private placement on Wednesday.

Edgewater issued a total of 7.2 million shares of its series A convertible preferred stock at $0.75 each and in the final tranche, issued 1.72 million preferreds.

The preferreds are convertible into common shares at $0.75 each.

The investors received series A, B, C and D warrants equal to half of the number of preferreds purchased - or 3.6 million shares. The series A warrants are exercisable at $1.15 each, the B warrants at $1.35 each, the C warrants at $1.85 each and the D warrants at $2.25 each. All of the warrants expire in five years.

The company's stock remained unmoved at $1.40 (OTCBB: EDWT).

The proceeds from the offering will be used to expand the company's scallop operations and increase the capacity of the company's farming site.

Based in Gaithersburg, Md., Edgewater is an aquaculture and marine hatchery operator.

Jura stock climbs 7.7%

Moving back to the energy sector, Jura Energy's stock climbed 7.7% a day after the company priced a private placement of units for up to C$15 million.

The stock gained 10 cents to end at C$1.40 (Toronto: JEC). On Tuesday, when the offering priced, the stock dipped by 5 cents to end at C$1.30.

In the placement, Jura intends to sell units of one share and one warrant at C$1.00 apiece.

The placement is being conducted through a syndicate of agents led by Westwind Partners Inc.

The deal is scheduled to close July 25.

Calgary, Alta.-based Jura is an oil and natural gas exploration company.

Another energy company, Surge Global Energy, Inc., saw its stock edged down by a penny Wednesday.

The stock closed at $1.75 (OTCBB: SRGG). The stock fell by 5.88%, or 11 cents, to close at $1.76 on Tuesday, the day subsidiary Signet Energy, Inc. settled a PIPE for C$18,736,950.

Signet sold shares at C$1.15 each to individual investors in the United States and Canada.

Following the offering, Surge no longer controls more than half of Signet's voting stock.

San Diego-based Surge Global is an oil and natural gas exploration company.

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