ROO leads lighter U.S. PIPE volume with $5.75 million offering; iMedia raises $4.92 million

By Sheri Kasprzak and Ronda Fears

New York, Aug. 23 - ROO Group Inc. was the headliner for a comparatively slower day for private placements Tuesday, settling a $5.75 million deal.

The details of the ROO offering could not be determined Tuesday, but $3.4 million of the proceeds will be used to repay convertible debt.

Burnham Hill Partners was the placement agent.

New York-based ROO is a streaming video content provider for web sites.

According to the company's latest earnings statement, ROO is suffering from a capital deficiency.

"As of June 30, 2005, we had a working capital deficiency of approximately $1.86 million," said the earnings statement. "Our cash balance as of June 30, 2005 of $120,816 is, in management's opinion, not sufficient to ensure our continued operation and the payment of debts until our business is profitable and generating sufficient cash flow to meet our liquidity requirements, of which there can be no assurance. We do not expect additions to property and equipment to be material in the near future."

In other news, ROO said it is preparing for a 1-for-50 reverse stock split.

On Tuesday, the company's stock closed up $0.01, or 37.04%, to end at $0.037.

In the broader market, sell-siders said volume took a slip as stocks dropped on slightly higher oil prices.

"It's off a bit," said one market source. "These days, we're going to see one of two things. Either volume will go down when conditions get like this or issuers are going to come up with some sneaky structures to get around the stock market."

Oil gained $0.06 to close at $65.71 per barrel while the Dow fell 50.31 to close at 10,519.58; the Nasdaq composite index gave up 4.16 to end at 2,137.25, and the S&P 500 edged down to 1,217.59.

iMedia's $4.92 million deal

iMedia International, Inc. wrapped up a $4.92 million private placement of units Tuesday.

The company sold 4,920 units at $1,000 each.

The units are comprised of one series B convertible preferred share and warrants for up to 3,000 common shares.

Each preferred is initially convertible into 2,500 common shares and pay annual dividends at 6%.

Each warrant is exercisable at $0.60 each for five years.

Atlas Capital was the placement agent.

Atlas placed another offering for iMedia in May. On May 24, the company sold $3.04 million in series A convertible preferred stock.

Those preferreds also paid dividends at 6% annually and were convertible into common shares at $0.40 each.

The proceeds from the latest offering will be used for working capital and general corporate purposes.

"Completing this round of funding is a major milestone for us," said David MacEachern, the company's chief executive officer, in a statement. "We now have the growth capital to begin penetrating several new vertical markets and allow us to expedite the integration of our newspaper syndication program with Universal Press Syndicate.

"We have struggled with under-capitalization for quite some time. This financing will now allow us to aggressively pursue our business plan and increase our sales and marketing staff, which can only have positive benefits for the company."

According to its latest earnings report, iMedia suffered net losses of $2,756,029 for the quarter ended June 30, compared to losses of $1,241,595 for the corresponding quarter in 2004. For the six months ended June 30, the company lost $6,969,365 compared to $2,113,707 for the six months ending June 30, 2004.

iMedia, based in Santa Monica, Calif., produces CD-ROMs and DVDs for marketing campaigns. The company's stock remained unchanged at $0.52 Tuesday.

Kangaroo pockets C$5 million

Kangaroo Media Inc. led PIPE news in Canada with the closing of its C$5 million private placement.

The company sold 10,638,299 shares at C$0.47 each to three institutional investors.

The investors also received a total of 10,638,299 warrants, exercisable for an additional share at C$0.66 each for five years.

The proceeds will be used for working capital.

Montreal-based Kangaroo produces handheld devices for spectators at live events.

Kangaroo's stock closed unchanged at C$0.68 Tuesday.

Andean American leads gold offerings

Vancouver, B.C.-based Andean American Mining Corp. led a small group of gold offerings Tuesday with its C$4.05 million private placement.

The deal is comprised of up to 4.5 million units at C$0.90 each.

The units consist of one share and one half-share warrant. The whole warrants are exercisable at C$1.20 for the first six months and C$1.50 for the remaining six months.

The proceeds will be used to retire outstanding convertible debentures, finance drilling on the company's Sinchao property, make potential acquisitions and provide working capital.

Andean's stock closed up C$0.01 at C$1.04 Tuesday.

Another Vancouver-based gold company, Tournigan Gold Corp., announced its plans to raise C$2 million in a PIPE deal.

That offering includes 5 million units at C$0.40 each.

Sprott Asset Management Inc. will buy the units and for each will receive one share and one half-share warrant.

The whole warrants provide for an extra share at C$0.55 each for two years.

The proceeds will be used for development on the company's newly acquired uranium assets in Slovakia.

On Tuesday, Tournigan's stock gained C$0.03, or 7.7%, to end at C$0.42.

Mineral exploration company Forest Gate Resources Inc., which has gold properties, also announced an offering Tuesday.

The Montreal-based company plans to sell up to 2,631,579 flow-through shares at C$0.38 each for proceeds of C$1 million.

Northern Securities Inc. is the placement agent.

The proceeds will be used for development on the company's diamond exploration projects.

Forest Gate's stock slipped half a cent to close at C$0.335 Tuesday.

Callisto's stock jumps 9%

Following word that it closed a $1,813,900 private placement, Callisto Pharmaceuticals, Inc.'s stock climbed more than 9%, gaining $0.09 to end at $1.06 Tuesday.

The company announced that it sold 1.87 million shares at $0.97 each to some of its current shareholders.

The New York-based pharmaceutical company said it intends to put the proceeds for research and development.

"This landmark event is another validation of the Callisto strategic vision and particularly for our potential to impact the worldwide marketplace with innovative anticancer drugs," said Gary Jacob, the company's chief executive officer, in a statement.

"The proceeds from this private placement will provide Callisto with the needed funds to accelerate the development of our two leading anticancer drug candidates, Atiprimod and Annamycin. These drugs could help to treat some of the most devastating forms of cancer in patients whose condition has relapsed."

The company completed a similar offering with some of its existing shareholders on March 9, selling 1,985,791 shares at $1.52 each for proceeds of $2,993,402.

According to its latest earnings report, Callisto sustained a net loss of $5,204,808 for the six months ended June 30, up from a net loss of $3,737,710 for the same period in 2004.

Callisto develops treatments for cancer and related diseases.

Oscient may pursue financing

In other biotech news, Oscient Pharmaceuticals Inc. may be next in line for some sort of financing transaction, according to market chatter Tuesday following Isis Pharmaceuticals Inc.'s $51 million PIPE offering.

The Isis deal was viewed as good news for the existing Isis convertible bonds, one market source said. Isis shares closed Tuesday off $0.08, or 1.58%, at $4.97 but were seen in after-hours trading up $0.05, or 1%.

Oscient shares closed Tuesday off $0.13, or 5.7%, at $2.15 and also were seen higher in after-hours trade by $0.07, or 3.26%.

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