EcoSystem to take in $76.62 million; Inovio plans sale; Legend looks to improve balance sheet

By Stephanie N. Rotondo

Portland, Ore., July 30 - In the private placement market Thursday, several large deals came to market, though the clear dominant sector was medical-related issuers. In addition, many deals included the sale of preferred shares.

Among the day's biggest placements, EcoSystem Corp. said it inked a deal with five investment funds to purchase more than $76 million of preferred shares and warrants. The company plans to use the funds to acquire distressed ethanol assets in the hopes of realizing its annual output goal.

And Inovio Biomedical Corp. announced a $30 million registered direct offering of preferred shares. Warrants are also included and proceeds will be used for general purposes.

Meanwhile, Legend Power Systems Inc. is aiming to raise C$7.5 million via an equity unit sale. The funds will help the company move forward on its U.S. and Canadian marketing plans.

Elsewhere, Sparta Commercial Services Inc. wants to raise $5 million by issuing preferreds. The deal was made with a single investor.

Cortex Pharmaceuticals Inc. also said it would issue preferreds - of the convertible variety - in its effort to raise $4.03 million.

In completed deals, NeoGenomics Inc. closed on a $4.77 million equity sale to Abbott Laboratories. The financing is in addition to the recently announced strategic supply agreement with Abbott.

EcoSystem to take in $76.62 million

EcoSystem executed a $76.62 million private placement of preferred shares and warrants, the company said in a regulatory filing.

The New York-based company sold 766,190 series E preferred shares, along with approximately 24.7 million three-year warrants.

EcoSystem said the financing agreement was inked with five investment funds: Copperbottom Investments, Ltd., Absentia Holdings, Ltd., On Time Investments, Ltd., Agri-Technologies, Ltd. and Britannia Securities International, Ltd. The company expects to secure the funds by Aug. 5.

"EcoSystem will use the investment proceeds to acquire distressed ethanol production facilities, to acquire other strategically-compatible assets and to develop and integrate EcoSystem's Cellulosic Corn technologies into EcoSystem's planned ethanol production facilities," the company said in a press release.

The financing will aid in EcoSystem's goal of achieving "an annualized renewable fuel production rate of 500 million gallons per year within three years, and to demonstrate market leadership by using its technologies to refine more fuel out of corn for less cost on reduced energy consumption and carbon emitted," the release continued.

EcoSystem's stock (OTCBB: ESYM) gained 40.0059, or 368.75%, to $0.0075. Market capitalization is $2.12 million.

EcoSystem is a developer of industrial-scale applications of bioreactor technology, which are aimed at resolving ecological challenges and producing carbon-neutral products.

Inovio conducting direct offering

Inovio Biomedical announced a $30 million registered direct offering of common shares and warrants, according to a press release.

Under the terms of the transaction, Inovio will sell units for approximately 11.11 million shares and warrants for an additional 2.77 million shares. The warrants are equal to 0.25 shares.

Each unit will sell at $2.70 per unit. The warrants are exercisable at $3.50 per share for six months.

Proceeds will be used for general corporate purposes. Settlement is expected by Aug. 3.

Inovio's equity (Amex: INO) dropped $1.71, or 53.77%, to $1.47. Market capitalization is $64.8 million.

Inovio Biomedical is a San Diego-based designer and developer of new generation vaccines focused on cancers and infectious diseases.

Legend looks to improve balance sheet

Legend Power Systems will conduct a C$7.5 million private placement of units, the company announced.

The company will issue 15 million units containing one common share and one half-share warrant at C$0.50 each. Each whole warrant bears a strike price of C$0.60 and is exercisable for 18 months.

"Net proceeds from the offering will be used by Legend Power to execute its sales and marketing plan, both in Canada and in the United States, to repay certain notes payable, which will significantly improve Legend Power's balance sheet, and for general corporate purposes," the company said in a news release.

Additionally, the company said it would issue an update on its previously announced non-brokered private placement "shortly."

Legend's shares (TSX Venture: LPS) ended unchanged at C$0.50. Market capitalization is C$13.5 million.

Legend Power Systems is a Burnaby, B.C.-based electrical energy conservation company.

Sparta to raise $5 million

New York-based Sparta Commercial Services orchestrated on a $5 million sale of series B preferred stock, according to a regulatory filing.

The preferreds will be sold to Optimus Capital Partners LLC, under the terms of the deal inked on July 29. Optimus will acquire the shares at undisclosed intervals until July 28, 2010.

In addition to the shares, Optimus will receive five-year warrants exercisable at a price equal to Sparta's closing price the day before delivery.

Sparta's stock (OTCBB: SRCO) improved by $0.013, or 16.25%, to $0.093. Market capitalization is $14.8 million.

Sparta Commercial Services is an independent provider of financial services.

Cortex plans preferred converts sale

Cortex Pharmaceuticals plans to raise $4.03 million via a private placement of series F convertible preferred equity.

Just over 4,000 shares will be sold, as well as warrants for 6.06 million common shares. The preferred are convertible into common stock at $0.3324 per share, while the warrants are exercisable at $0.2699 for three years.

"Cortex plans to use the net proceeds from the financing to meet the company's working capital needs and for general corporate purposes," the company stated in a press release. "Cortex is currently enrolling patients in a pilot phase 2 clinical trial of CX1739 for the potential treatment of sleep apnea. Additionally, it has multiple discussions under way related to strategic relationships with other companies and it believes that this funding will support its continued business activities in these areas."

Settlement is expected by Aug. 3.

Cortex's shares (Amex: COR) fell 2 cents, or 7.37%, to $0.25. Market capitalization is $13.4 million.

Cortex Pharmaceuticals is an Irvine, Calif.-based company specializing in novel drug therapies for neurological and psychiatric conditions.

NeoGenomics settles deal with Abbott

NeoGenomics wrapped a $4.77 million private placement of equity, the Fort Myers, Fla.-based company said in an filing with the Securities and Exchange Commission.

The company sold 3.5 million common shares to Abbott Laboratories at $1.362 per share, according to a press release issued July 24.

In the same press release, NeoGenomics said it also entered into a strategic supply agreement with Abbot. Under the agreement, Abbot will provide materials to NeoGenomics in order for the company to develop its fluorescence in situ hybridization test for the diagnosis of melanoma.

"We are delighted to have entered into this strategic agreement with Abbott," said Douglas VanOort, chairman and chief executive officer of NeoGenomics, in the release. "Melanoma is the most serious form of skin cancer, and its incidence continues to rise significantly. We are very pleased to have this opportunity to research, develop and offer a new genetic test to help clients better diagnose and treat patients who may suffer from melanoma."

NeoGenomics' equity (OTCBB: NGNM) dropped 4 cents, or 2.07%, to $1.89. Market capitalization is $62.8 million.

NeoGenomics is a cancer genetics diagnostics testing company.

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