Private placement action slow as issuers prepare deals; Ortec raises $5 million

By Sheri Kasprzak

Atlanta, Jan. 6 - Private placement volume remained low Thursday and some sell-side sources believe it may just take time for issuers to put together new deals.

"For the most part, everything from last year has closed," said one source. "There aren't a lot of new deals out there. I think I've seen a few very small ones."

"There's nothing I can point to that's keeping volume down today," said another source. "We're just waiting for issuers to determine what their needs are."

Sources said issuance could get a boost from an improving stock market. After three days of the stock market doldrums, most of the indexes recovered Thursday.

The Dow Jones Industrial Average climbed 25.05 to close at 10,622.88; the S&P 500 ended the day up 4.15 at 1,187.89 while the Nasdaq composite slipped 1.24 to close at 2,090.

Canadian sources said this week that better oil prices could mean more energy companies in the market. On Thursday, oil climbed $2.17 to end the day at $45.56 per barrel.

Heading up private placement action in the United States was a $5 million deal from Ortec International Inc.

The company said it sold $5 million in shares, but the company's chief executive officer Ron Lipstein remained tight-lipped about the details of the deal.

Lipstein said the announcement of the closing was merely a preview to a form 8-K from the Securities and Exchange Commission, which is scheduled to be filed in a few days.

"This is a way to do it a lot quicker," Lipstein said of the company's decision to conduct a private placement.

The company is currently awaiting approval from the Food and Drug Administration for one of its products and Lipstein said the private placement was an easy way for the company to raise money during this period.

"As we await what we expect to be a positive response from the Food and Drug Administration, this financing provides the immediate capital necessary to continue our preparation for the commercial launch of OrCel with our marketing partner," Lipstein said in a statement.

Burnham Hill Partners was the placement in the offering.

Ortec, based in New York, is a tissue-engineering company focused on products and technologies that repair and regenerate human tissue. On Thursday, the company's stock closed up $0.09 at $1.04.

First Reliance's $4.6 million deal

First Reliance Bancshares Inc. wrapped up a private placement of shares for $4,619,607, the company said Thursday.

The company sold 401,705 shares at $11.50 each.

"I don't know much about the deal," said one market source. "I've only just seen it. It's at a discount, but not a very big one, so I think it's an okay deal for the company. I really don't know anything about this particular company though."

First Reliance is a holding company for First Reliance Bank in Florence, S.C.

The company's stock closed unchanged at $12.90 Thursday.

Blue Ridge closes deal

Blue Ridge Energy Inc. said Thursday it closed a private placement for $2.5 million.

The company sold 12.5 million units at $0.20 each. The units are comprised of one share, one warrant and one piggyback warrant.

The warrants allow for one share at $0.50 each and the piggyback warrants allow for an additional share at $1 each, exercisable only if the initial warrant is fully exercised.

Based in Houston, Blue Ridge is an oil and gas exploration and development company. It plans to use the proceeds from the offering for working capital and general corporate purposes, including the generation of prospects and purchase of leases.

On Thursday, the company's stock closed unchanged at $0.60.

SunCoast wraps offering

SunCoast Bancorp Inc. closed a $1.35 million private placement of convertible preferreds, the company said Thursday.

SunCoast issued 108,000 shares of 6% preferreds at $12.50 each.

The preferreds are convertible into common shares the earlier of Dec. 31, 2006 at $10.50 per share.

Based in Sarasota, Fla., SunCoast is a holding company for SunCoast Bank, which has two branches in Sarasota. The proceeds from the offering will be used for general corporate purposes and working capital.

SunCoast's stock closed up $1.05 at $13.05 Thursday.

Pacific Safety closes second tranche

Pacific Safety Products Inc. finished a C$4,812,500 second tranche of a private placement.

The company sold 1.750 million units at C$2.75 each. The units are comprised of one share and one half-share warrant.

The whole warrants allow for an additional share at C$3.75 each through Jan. 9, 2006.

"It's priced in line," said one market source. "This company is doing well. It's in the process of completing a joint venture, it's poised for growth, so I think the private placement was a good move for them."

Acumen Capital Finance Partners Ltd. was the underwriter in the offering.

Based in Kelowna, B.C., Pacific Safety Products manufactures body armor, tactical clothing and emergency medical kits for military and law enforcement agencies, private security companies and medical service organizations. The company plans to use the proceeds in the deal for working capital and general corporate purposes.

Pacific Safety's stock closed up C$0.05 at C$2.70.

Metalex raises C$3.6 million

Metalex Ventures Ltd. closed a C$3,586,859 private placement.

The company sold 3,985,399 flow-through shares at C$0.90 each.

Dominick and Dominick Inc. was the placement agent in the offering.

Based in Kelowna, B.C., Metalex is a diamond mining and exploration company.

The company's stock closed unchanged at C$0.90 Thursday.

Consolidated Global closes C$1.8 million deal

Consolidated Global Minerals Ltd. finished a C$1.8 million private placement, downsized from its previously announced offering.

The company sold 4.5 million units at C$0.40 each.

The units are comprised of one share and one warrant. Each warrant allows for an additional share at C$0.60 for two years.

Based in Vancouver, B.C., Consolidated Global is a mineral exploration company focused on lead-zinc, coal, diamond, copper and gold properties. The company plans to use the proceeds from the financing for general purposes and for its exploration programs.

The company's stock closed unchanged at C$0.425 on Thursday.

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