On Track wraps $22.21 million unit offering; Global Energy raises $12.5 million from note offering

By Sheri Kasprzak

New York, Nov. 1 - On Track Innovations Ltd. led private placement news Tuesday with the completion of a $22,210,515 offering of units.

The company sold 1,828,026 units at $12.15 apiece to institutional investors in the United States, England and Switzerland.

Of the units sold, 1,544,568 are comprised of one share and one warrant for 0.6 of a share and 283,458 are comprised of one share and one half-share warrant. The whole warrants are exercisable at $14.58 each for five years.

After the closing was announced Tuesday morning, the company's stock gained 4.52%, or $0.59, to close at $13.65.

RBC Capital Markets Inc. was the bookrunner for the offering with Andrew Garrett, Inc. as co-agent.

On Track plans to use the proceeds to support large-scale implementation of projects in the identity and payments markets.

Neither Galit Mendelson, a spokeswoman for On Track, nor Ohad Bashan, the company's chief executive officer, immediately returned requests for comment on the offering by press time Tuesday.

As to On Track's earnings, the company reported a net loss of $4.7 million for the six months ended June 30 compared to a net loss of $5.9 million for the corresponding period of 2004, representing a decrease of 21%.

The company reported revenues for the first six months of 2005 increased by 45% to $14.3 million from $9.9 million in 2004.

Based in Fort Lee, N.J., On Track makes microprocessor-based smart cards used for payment systems, homeland security, electronic passports and other services.

Global Energy raises $12.5 million

Moving to the energy sector, Global Energy Development plc, a London-based oil explorer, settled a $12.5 million convertible note deal Tuesday.

The variable-coupon notes bear interest at 5% for the first three years, 6% from October 2008 through October 2010 and 7% afterward.

The notes are due on Oct. 30, 2012 and are convertible into common shares at 305.8p each, a 10% premium to the company's closing mid-market price on Oct. 28.

"The company has significantly enlarged its acreage position and prospects over the past year and expects to supplement the current 5.1 million acres even further over the coming months," said Stephen Voss, the company's managing director, in a statement released Tuesday. "The company even now holds a number of exploratory projects that the management considers to have high potential and as such are accelerating the drilling programs associated with them.

"The purpose of issuing the notes is to provide the company with additional immediate funds that can supplement the current cash flow from production and be specifically dedicated toward rig contracting and building up inventory, as well as general corporate use, thereby allowing greater visibility over drilling schedules."

On Tuesday, Global Energy's stock gained 2p to close at 279p.

Exabyte stock gains 55.3%

The completion of a $9.5 million convertible note offering sent Exabyte Corp.'s stock up on Tuesday.

The company's stock gained 55.26%, or $1.05, to close at $2.95 on Tuesday following word that it had settled a $9.5 million private placement of 10% secured convertible notes.

The notes, which were sold to Meritage Entrepreneurs Fund, LP; Meritage Private Equity Fund, LP and Meritage Private Equity Parallel Fund, LP, mature on Sept. 30, 2010 and are initially convertible into common shares at $2.80 each.

The investors also received warrants for 4.75 million shares, exercisable at $2.80 each for five years.

The company completed a 10-for-1 reverse stock split on Oct. 31.

Proceeds from the note offering will be used for working capital.

"We are pleased to have completed the convertible note offering with the participation of existing Exabyte shareholders," said Carroll Wallace, the company's chief financial officer, in a statement. "This financing will allow the company to continue to execute its business strategy of expanding market share of our VXA product line and our growing LTO automation products."

Based in Boulder, Colo., Exabyte develops tape backup, restoration and archival technologies.

Sonoran concludes $8.5 million PIPE

Elsewhere in the energy sector, Phoenix-based Sonoran Energy, Inc. wrapped an $8.5 million private placement, though the details of that offering could not be determined Tuesday night.

Sonoran announced its plans to raise between $7 million and $10 million on Oct. 5.

MTM Corporate Finance was the lead investor for the offering.

Proceeds will be used for development of the company's operations in the United States and to support its projects in the Middle East.

"We are extremely pleased with the confidence the investment community has shown in Sonoran Energy's strategic direction and our plans to grow as an independent oil and gas company," said Peter Rosenthal, the company's chief executive officer, in a statement. "The proceeds of the private placement will serve as a catalyst as we develop our domestic oil and gas opportunities, and start work on the [production sharing agreement] in Jordan."

According to Rikky Hasan, managing director of MTM, a large number of the investors participating in the offering were from the Middle East.

"We are very pleased with the response to this private placement as investors largely comprise individuals from the Middle East who could provide both insight and influence to assist Sonoran in its expansion plans for the region," Hasan said in a statement.

Sonoran is an oil and natural gas exploration company. Its stock lost a penny on Tuesday to end at $0.80.

Orko prices C$4 million unit deal

In Canada, Orko Gold Corp. announced its intention to hit the PIPE market with a C$4 million unit offering.

The Vancouver, B.C.-based gold exploration company plans to sell 10 million units of one share and one half-share warrant.

The whole two-year warrants are exercisable at C$0.50 each for the first year and C$0.60 each for the second year.

Proceeds will be used for phase III drilling on the company's Mexican mineral properties and for working capital.

Even though gold prices have been performing well, one market source said Monday's fall in oil prices and a stronger U.S. dollar have knocked gold down slightly.

"It's [gold] been performing incredibly well this year but off a bit now," he said. "We're not seeing a lot [of gold issuers in the PIPE market]."

Orko's stock slipped C$0.005 to end at C$0.425 Tuesday.

Patient Infosystems stock edges up

Patient Infosystems Inc.'s stock moved up slightly a day after concluding a $5.16 million stock offering.

The company's stock gained $0.05, or 1.2%, to end the day at $4.25.

On Monday, when the company completed a private placement of stock at $3.44 each, its stock gained $0.25, or 6.33%, to settle at $4.20.

Based in Rochester, N.Y., Patient Infosystems is an ancillary benefits management company.

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