Canadian private placement volume surges, U.S. volume lags; Lorus closes tranche

By Sheri Kasprzak

Atlanta, Jan. 18 - Canadian private placement volume got a push Tuesday from strong oil prices and a solid resources market.

Meanwhile, U.S. volume continued to lag as the markets reopened following the Martin Luther King Jr. holiday.

"There's really nothing I can see that would affect volume today," said one market source. "The stock market looks better than it has in a while, so I really can't say if anything is affecting volume."

The Dow Jones Industrial Average ended the day up 70.79 at 10,628.79, the Nasdaq composite index closed up 18.13 at 2,106.04 and the S&P 500 finished 11.46 higher at 1,195.98.

In Canada, however, issuance improved on a strong oil market fueled by colder temperatures and a stronger resources market.

"Oil is definitely helping issuance here," said one Canadian sell-sider. "But also resources, like gold, are strong too. We've seen a few gold companies out in the market."

Canadian oil companies like Mission Oil & Gas Inc. and International PetroReal Oil Corp. had deals in the market Tuesday and precious metals, minerals and resources companies like Apogee Minerals Ltd., GGL Diamond Corp. and Medoro Resources Ltd. all announced deals as well.

Oil prices held firm Tuesday, closing unchanged at $48.38 per barrel after enjoying significant gains last week.

Heading up action the United States, Lorus Therapeutics closed a $5 million tranche of its $15 million private placement of convertible secured debentures.

The tranche, the second of its kind, is part of a three-tranche deal with The Erin Mills Investment Corp. Erin Mills has agreed to buy three secured debentures at $5 million each. The final tranche is expected to close April 15.

The debentures mature Oct. 6, 2009, and bear interest at Prime plus 100 basis points.

The debentures are convertible into common shares at $1 each, a price that represents a 56% premium to the company's closing price Jan. 13.

Based in Toronto, Lorus is a biopharmaceutical company focused on the research and development of cancer therapies. The proceeds from the offering will be used to finance research, development and ongoing operations.

On Tuesday, Lorus's stock closed up $0.01 at $0.53.

Knockout closes $5.5 million deal

Knockout Holdings Inc. finished a downsized private placement for $5.5 million.

The company, which had originally planned to raise $6 million in the deal, sold 117,296 units at $46.89 each.

The units are comprised of one series B preferred share and a warrant for 16 common shares.

The warrants allow for an additional share at $2.25 each for five years.

The preferreds pay an annual dividend of 10% and are convertible into about 160 common shares at a conversion price equal to the stated value divided by $0.2931.

Duncan Capital LLC was the placement agent in the deal.

"The successful completion of these two offerings of preferred shares and warrants has provided the capital required for us to formally launch our line of George Foreman's Knock-Out household cleaners and disinfectants," said the company chief executive officer and chairman in a statement.

The company also closed a private placement of preferreds for $2.5 million in December.

Knockout Holdings, based in Northlake, Ill., develops and markets the George Foreman's Knock-Out line of nontoxic cleaners and disinfectants.

Knockout's stock closed unchanged at $1.30 on Tuesday.

Xenonics raises $4.1 million

Xenonics Holdings Inc. closed a private placement for $4,104,000.

The offering included 820,800 shares sold at $5 each to institutional and accredited investors.

The majority of the shares were sold by Xenonics, but some were sold by the company's shareholders.

Based in Carlsbad, Calif., Xenonics develops and produces lighting products for military, law enforcement, public safety and the commercial and private sectors.

The company's stock closed up $0.10 at $6.20 on Tuesday.

Ants wraps deal

Ants Software Inc. finished a private placement offering for $2,123,000.

The company issued 2,123,000 units at $1 each to accredited investors. The units consist of one share and one warrant.

The warrants allow for an additional share at $2 each through Nov. 12, 2007.

"Although I'm not that familiar with the company, I'd have to say it's probably not the sector itself," said one market source. "Software stocks have been doing well and are expected to continue to be strong. So I can't really say why this company had such a huge discount on the pricing of this deal."

Ants's stock closed down $0.05 at $2.55 on Tuesday.

Based in Burlingame, Calif., Ants develops relational database management software. It plans to use the proceeds from the private placement for sales, marketing and general corporate purposes.

Vertex concludes offering

Vertex Interactive Inc. closed a private placement of secured convertible notes for $1.85 million.

The company sold the two-year notes to four institutional investors.

The notes bear interest at 10% and are convertible into common stock at the lower of $0.09 or 40% of the average of the three lowest intraday trading prices for 20 days before conversion.

The investors also received warrants for 1.85 million shares, exercisable at $0.09 each for five years.

Vertex is a South Plainfield, N.J.-based software company focused on supply chain and warehouse management programs.

Vertex's stock closed up $0.008 at $0.12 on Tuesday.

Sagemark closes final tranche

The Sagemark Companies Ltd. finished the third and final tranche of a $7.5 million private placement for $1,678,500.

The company issued 839,250 shares to investors at $2 each.

Warrants for 419,625 shares at $4 each for five years were also issued in the deal.

Joseph Stevens & Co. Ltd. was the placement agent in the deal.

"This funding provides the company with the opportunity to enhance shareholder value through the aggressive expansion of the company's positron emission tomography imaging center portfolio," said the company's president and chief executive officer Ted Shapiro in a statement.

"PET saves time. PET saves money. But, more importantly, PET saves lives. This funding will allow us to provide life-saving technology while simultaneously rewarding shareholder loyalty," said Stephen Schulman, president and chief executive officer of the company's subsidiary Premier PET Imaging International Inc., in a statement.

Based in New York, Sagemark acquires, organizes and operates outpatient diagnostic imaging centers. The company plans to use the proceeds from the offering to add to its portfolio of positron emission tomography imaging centers.

On Tuesday, the company's stock closed unchanged at $4.70.

Canadian offerings

Leading private placement news north of the border, First Capital Realty Inc. announced its plans to hit the private placement market with a C$51,975,000 offering.

The company will sell 2.7 million shares at C$19.25 each, the majority of which will be purchased by two institutional investors.

The offering is being underwritten by Desjardins Securities Inc. and TD Securities Inc.

First Capital is a Toronto-based real estate company focused on developing supermarket-anchored shopping centers in Canadian metropolitan areas. The company plans to use the proceeds from the offering to pay down certain revolving credit facilities and to fund future acquisition and development activities. The remainder of the funds will be used for general corporate purposes.

On Tuesday, First Capital's stock closed up C$0.15 at C$19.15.

Mission Oil to raise C$26.4 million

Mission Oil & Gas Inc. plans to raise C$26.4 million in a private placement.

The company plans to sell 4 million shares at C$6.60 each.

The offering is being conducted through an underwriting syndicate is led by Orion Securities Inc.

Mission, based in Calgary, Alta., is an oil and gas exploration, development and production company. It plans to use the proceeds from the offering for capital expenditures and potential strategic acquisition opportunities.

Mission Oil's stock closed down C$0.10 at C$7.20 on Tuesday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.