Private placement volume high ahead of holiday; details released on C$110 million Gammon Lake deal

By Sheri Kasprzak

Atlanta, Nov. 24 - The highway to grandma's house wasn't the only thing crowded Wednesday ahead of the Thanksgiving holiday.

Issuers jammed the private placement market with bigger deals than in recent weeks, fueled, according to some sell-side sources, by Thursday's holiday and available cash from investors.

"It really is Thanksgiving," said one sell-sider. "Companies are trying to get stuff done before the holiday."

Canadian volume got a boost from improved oil prices Wednesday. Oil jumped $0.50 to close at $49.44 per barrel.

"Oil keeps improving and so a lot of Canadian energy companies are getting into the market," said one Canadian source.

In particular, Birchcliff Energy Ltd. upsized its previously announced private placement and Gentry Resources Ltd. said it would be entering the market.

Elsewhere in Canada, Gammon Lake Resources Inc. released details on the C$110 million private placement announced Nov. 23.

The fully subscribed deal consists of 15.715 million special warrants at C$7 each. The special warrants are exchangeable for one common share upon receipt for a final prospectus qualifying the distribution of the shares and the filing of a registration statement.

The deal is expected to close Dec. 14.

"This marks yet another important milestone for Gammon Lake and its shareholders," said the company's Fred George in a statement. "We are extremely proud of the significant achievements the company has made in the advancement of the Ocampo project."

BMO Nesbitt Burns Inc. was the lead placement agent in the deal.

Based in Dartmouth, Nova Scotia, Gammon Lake is a mineral exploration company with properties in Mexico. The company plans to use the proceeds from the private placement for working capital and the development of phase one of its Ocampo gold and silver project.

On Wednesday, Gammon Lake's stock closed up C$0.16 at C$7.03.

MDU wraps $16.25 million deal

Heading up private placement news in the United States, MDU Communications International Inc. wrapped a $16.25 million offering. It had previously said it was planning a $15 million deal without giving details.

The company sold 6,063,400 units at $2.68 each. The units are comprised of one share and three-tenths of one warrant.

The whole warrants allow for an additional share at $3.40 each.

CRT Capital Group LLC was placement agent in the deal.

MDU is a Totowa, N.J.-based digital satellite provider for multi-dwelling units. The company plans to use the proceeds from the financing for general corporate purposes, including supporting growth.

The company's stock closed down $0.01 at $2.89.

LanOptics gets $14.4 million

LanOptics Ltd. raised $14,364,000 in a private placement of shares Wednesday, the company said.

Institutional investors bought 1,368,000 shares at $10.50 each and warrants for 478,800 shares.

The warrants allow for an additional share at $15.50 each for five years.

"After this transaction, LanOptics' consolidated cash balance will exceed $26 million, all of which is dedicated to secure EZchip's future success," said LanOptics' board member Eli Fruchter in a statement. "This new funding will serve to enhance EZChip's leadership in the network processor market and demonstrate our commitment to this emerging market."

Based in Yokneam, Israel, LanOptics produces semiconductors for high-speed network processors. The company plans to use the proceeds from the financing to support its EZchip technology and for general corporate purposes.

On Wednesday, the company's stock plummeted $0.93 to close at $12.83.

Superconductor raises $10.9 million

Superconductor Technologies Inc. has raised $10.9 million through the direct placement of about 15.6 million shares.

The shares were sold at $0.70 each under a shelf registration to institutional investors.

Needham & Co. is the placement agent in the offering, which is expected to close Nov. 29.

Superconductor, which is based in Santa Barbara, Calif., produces low-noise amplifiers and filters to improve radio frequency signal quality.

Superconductor's stock closed down $0.1003 Wednesday at $0.8098.

Verticalnet closes offering

Verticalnet Inc. closed a $6.1 million private placement offering, the company said Wednesday.

Institutional investors purchased 5,519,989 shares at $1.10 each and also received 2.2 million shares at $1.35 each.

"Verticalnet has grown tremendously over the last year, both organically and through acquisitions," said Verticalnet's president and chief executive officer Nathanael V. Lentz in a statement. "Our revenue today is over three times our revenue of a year ago and our customer base has expanded by approximately 600%. Larger companies need more working capital, for financial flexibility, for investment and especially for ensuring customer and prospective customer confidence."

Based in Malvern, Pa., Verticalnet is a supply management company. It plans to use the proceeds from the deal for working capital.

The company's stock closed down $0.01 at $1.26 Wednesday.

Canadian offerings

Elsewhere in Canadian private placements Wednesday, Birchcliff Energy Ltd. said it increased the size of its previously announced private placement to C$57 million.

The company will sell an additional 3 million subscription receipts, which are convertible into common shares, bringing to 19 million the number of shares, including subscription receipts sold in the offering. The securities are being offered at C$3 each.

A syndicate of underwriters in the deal was led by GMP Securities Ltd. was involved in the deal.

The offering is part of a merger with Scout Capital Corp.

Birchcliff is a Calgary, Alta.-based private oil and gas company. Scout is a Calgary-based merchant and investment bank. Scout's stock closed at C$0.30 Nov. 4, its last trade.

Ascalade's C$10 million deal

Ascalade Communications Inc. completed a private placement for C$10,866,000.

The company sold 10,866 units at C$1,000 each. The units are comprised of C$1,000 in 12% convertible subordinated debentures maturing Nov. 19, 2006 and 100 common-share warrants.

The debentures are convertible at the lesser of a 15% discount to any future initial public offering or reverse take-over price per share or C$0.85. Subsequent to an IPO or RTO, the debentures are redeemable for common shares at a 15% discount to market.

The three-year warrants allow for an additional share at a 15% premium to any IPO or RTO price per share. If an IPO or RTO is not conducted, the warrants are exercisable at C$1.15.

A syndicate of underwriters led by GMP Securities Ltd. was involved in the financing.

Vancouver, B.C.-based Ascalade is a wireless communications manufacturing company. The company plans to use the proceeds to fund production-line and manufacturing facility upgrades and for working capital.

Gentry raises C$8.55 million

Gentry Resources Ltd. will raise C$8.55 million in a private placement through the sale of 3 million shares at C$2.85 each.

The offering is being sold through a syndicate of underwriters led by GMP Securities Ltd.

The deal is expected to close Dec. 15.

Based in Calgary, Alta., Gentry is an oil and natural gas exploration company. The company will use the proceeds from the financing to fund its acquisition of oil and natural gas interests in the Princess area of southern Alberta from a major Canadian oil and gas company. The proceeds may also be used to temporarily reduce the company's indebtedness.

Gentry's stock closed down C$0.03 at C$3.

Resverlogix closes downsized deal

Resverlogix Corp. closed a private placement for C$7.9 million, downsized from the originally announced C$9 million offering.

The company sold 2,639,633 shares at C$3 per share.

First Associates Investments Inc. was lead placement agent in the deal.

"This latest financing represents a total of more than C$12 million raised by Resverlogix over the past 12 months," said Resverlogix's president and chief executive officer Don McCaffrey in a statement. "This is a significant achievement and represents the ability for the company to continue to develop our lead technologies in the important medical markets of cardiovascular disease, cancer and fibrotic disorders."

Resverlogix, based in Calgary, Alta., is a biotechnology company focused on the development of biopharmaceuticals.

The company's stock closed down C$0.05 at C$3.35.

© 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.