Private placement volume remains sluggish; B2Digital gets $12.5 million equity line

By Sheri Kasprzak

Atlanta, Jan. 27 - Private placement action in both the United States and Canada all but ground to a halt Thursday as stocks slid and oil had a lackluster day.

Even so, some market sources in the United States remained optimistic about issuance, looking ahead.

"With things coming in, yes it is dead, but lots of things in the hopper I am told," said one sell-side source.

"Yeah, nothing really going on today," said another market source. "But I do agree that there are some things that may be of interest coming up soon."

Things weren't much better in Canada Thursday.

"Nothing I can point to," said one Canadian source when asked why volume dipped Thursday. "Oil and gas [are] a touch weaker."

By the end of the day, however, oil did manage to climb a mere $0.06 to close at $48.84 per barrel.

The Dow Jones Industrial Average closed down 61.78 at 10,436.81; the Nasdaq composite index lost 7.41 to end at 2,038.68 and the S&P 500 gave up 2.65 to close at 1,171.42.

Leading private placement news in the United States, B2Digital Inc. received a $12.5 million equity line from Dutchess Private Equities Fund II LP, the company said Thursday.

Under the terms of the agreement, B2Digital may draw upon the line over a 36-month period.

The shares B2Digital will sell to Dutchess are priced at 94% of the lowest closing bid price for five trading days after notice.

There is a $1 million ceiling for each put in the agreement. The number of shares the company may sell for each put is equal to either 200% of the average daily volume for 10 days before the put notice multiplied by the average three daily closing bid prices immediately before the put date or $25,000.

"We are excited to enter into another equity line agreement with Dutchess Private Equities Fund," said B2Digital's president Robert Russell in a statement.

"The funds will expedite our business development and the costs of these funds are relatively inexpensive. Based on the commitment, the cost of capital to the company will be far lower than the costs for other funding options that are available. This funding provides us with the flexibility and control needed to develop our company in an orderly and cost-effective manner."

Based in Beverly Hills, Calif., B2Digital provides video-on-demand and pay-per-view services to the hospitality industry. The company plans to use the proceeds from the equity line to expedite its business development plan.

On Thursday, the company's stock closed unchanged at $0.0096.

GlobeTel closes $1.8 million deal

GlobeTel Communications Corp. raised $1.8 million in a private placement Thursday, but details on the offering could not be obtained at press time.

The company sold shares to a group of institutional investors.

"The financial community continues to recognize and support GTEL in all its areas of development and business growth by their increasing investment in the company," said the company's chief executive officer Timothy Huff in a statement.

"This placement, which had significant demand from institutional investors, will allow us to more aggressively go after the share of the markets we are in. We continue to take the necessary steps to deliver growth and value for our shareholders and achieve exciting new milestones and success for GTEL in 2005 and beyond."

Based in Pembroke Pines, Fla., GlobeTel is a telecommunications company.

GlobeTel's stock closed up $0.008 at $0.176 on Thursday.

Canadian offerings

Heading up Canadian deals Thursday, Sterling Resources Ltd. said it has upsized its previously announced C$10 million offering to C$18 million.

The offering now consists of 20 million shares at C$0.90 each.

Canaccord Capital Corp. and Maison Placements Canada Inc. are the placement agents in the deal.

"It's pretty much in line," said one Canadian market source. "Sterling just put out its earnings for 2004 and the company is strong as far as earnings. That contributes a lot to the pricing."

The market source pointed out that beyond balance sheet strength, the oil sector in general is very strong now.

Sterling, based in Calgary, Alta., is an oil and gas exploration company. The proceeds from the private placement will be used to fund the company's exploration activities, including its recently acquired offshore U.K. petroleum licenses. The remainder will be used for working capital.

The company's stock closed up C$0.04 at C$1.02.

Lanesborough REIT raises C$5.87 million

Lanesborough Real Estate Investment Trust said the greenshoe on its previously announced private placement closed Thursday for an additional C$5,857,500, bringing the total to C$25 million.

The greenshoe included 1,171,500 trust units at C$5 each.

Westwind Partners Inc. was the placement agent in the offering.

Winnipeg-based Lanesborough is a real estate investment trust. It plans to use the proceeds from the offering for the purchase of five multifamily apartment complexes and other properties. The remainder will be used for general corporate purposes.

On Thursday, Lanesborough's stock closed down C$0.11 at C$5.70.

Manicouagan arranges deal

Manicouagan Minerals Inc. will head to the private placement market with an offering for up to C$4.2 million.

The company plans to sell up to 16.25 million units at C$0.20 each and up to 6.8 million flow-through units at C$0.25 each.

The units include one share and one half-share warrant.

The whole warrants provide for an additional share at C$0.25 each through Dec. 23, 2006.

Toronto-based Manicouagan is a nickel and copper exploration company.

The company's stock closed up C$0.04 at C$0.26 Thursday.

Dianor raises C$1.7 million

Dianor Resources Inc. brought in C$1,677,361.20 from a private placement.

The company issued 7,292,874 units at C$0.23 each. The units are comprised of one share and one warrant.

The warrants allow for an additional share at C$0.35 each for one year.

Investors in Canada, the United States and Europe subscribed to the units.

Dianor is a diamond exploration company based in Val D'Or, Quebec. The proceeds from the private placement will be used for working capital and general corporate purposes.

Dianor's stock closed up C$0.02 at C$0.32 Thursday.

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