Castle Brands prepares to seal $20.89 million private placement; LCC wraps $17 million stock offering

By Sheri Kasprzak

New York, April 19 - Heading up a rather active day for private placements was a $20.895 million offering of shares from Castle Brands Inc.

Meanwhile, tech offerings crept back onto the scene with a few deals announced in that sector including a $17.085 million deal from LCC International, Inc. and an $8.2 million offering from QPC Lasers, Inc.

Even so, these offerings seem to be the exceptions to the rule.

"Tech stocks are off; so, I'll have to say it's probably not a trend," said one West Coast-based sellside market source. "I'm sure the individual issuer is probably more important in this instance than what the broader sector is doing."

Moving back to the Castle offering, the company plans to sell to a group of institutional investors 3.5 million shares at $5.97 on May 4. The price per share is on par with the company's closing stock price on Wednesday.

The offering also includes warrants for 1.4 million shares, exercisable for five years at $6.57 each.

Piper Jaffray & Co. is the placement agent.

The company's stock fell 3 cents Thursday to end at $5.94 (Amex: ROX).

"We are pleased with the success of this offering," said chief executive officer Mark Andrews in a news release. "This transaction will substantially improve the financial position of the company and at the same time significantly enhanced our shareholder base."

New York-based Castle Brands markets brands of vodka, rum, whiskey and liqueurs.

LCC's $17 million deal

In the LCC offering, the company sold 5.1 million class A shares at $3.35 each.

Punk, Ziegel & Co. and B. Riley & Co. were the placement agents.

Proceeds will be used for investing in the company's growth strategy, which includes investing in higher-growth elements of its core business, focusing on higher margin revenues, developing tools-based services and potential acquisitions.

The company's stock gained 3 cents to close at $4.03 on Thursday but gave up 2 cents in after-hours trading (Nasdaq: LCCI).

"The wireless industry is on the threshold of tremendous change, and it is important we position LCC to maximize our share of this rising tide," said LCC CEO Dean Douglas in a statement.

"Wireless service providers are driving new data, voice and mobile content adoption based on emerging technologies ... This placement will enable LCC to capitalize on the increasing demands of our customers as we continue to expand our diverse services offering and increase the value we provide our customers around the world."

Located in McLean, Va., LCC is a wireless voice and data networking services provider.

QPC raises $8.2 million

Elsewhere in the tech sector, QPC Lasers, Inc. pocketed $8.2 million from a private placement of convertible debentures.

Of the debentures, $1.6 million included debt obligations exchanged for debentures.

The two-year debentures bear interest at 10% annually and are convertible into common shares at $1.05 each. The investors received warrants for 11.7 million shares, exercisable at $1.05 each for five years.

Proceeds will be used for expanded marketing, operations and general corporate purposes.

The stock remained unchanged at $1.30 Thursday (OTCBB: QPCI).

"Having met or exceeded all of our key milestones in 2006, this financing positions QPC to continue to move aggressively forward on its business plan," said chief operating officer George Lintz in a statement.

"With recently announced new customers, new contracts, increasing orders and ongoing introduction of new laser technologies, QPC strongly believes its future holds great promise."

Sylmar, Calif.-based QPC develops high-brightness, high-power semiconductor lasers used for defense, homeland security, industrial and medical markets.

Avax stock jumps

In biotech news, Avax Technologies, Inc. saw its stock jump by almost 23% after the company announced the closing of a $10,007,500 private placement.

The stock gained 5.4 cents, or 22.89%, to settle at $0.289 Thursday (OTCBB: AVXT).

In the placement, the company sold 80.06 million units of one share and one warrant at $0.125 each. The warrants are exercisable at $0.15 each through April 13, 2012.

Proceeds will be used for working capital.

Philadelphia-based Avax is a biotech company focused on vaccine therapies and cancer treatments.

Cel-Sci, CytRx stock down

In other biotech news, Cel-Sci Corp.'s stock fell more than 3.5% on Thursday after the company closed a $15 million private placement.

The stock lost 3.58%, or 3 cents, to end at $0.781 Thursday (Amex: CVM). On Wednesday, the stock gained 6 cents to end at $0.81.

In the placement, the company sold shares at $0.75 each.

Proceeds will be used for phase 3 clinical trials for the company's product for head and neck cancer.

Vienna, Va.-based Cel-Sci develops treatments for cancer and infectious diseases.

Another biotech company also saw its stock fall after announcing a private placement on Wednesday.

CytRx Corp.'s stock fell 2 cents to close at $4.49 (Nasdaq: CYTR). On Wednesday, the stock gained 29 cents, or 6.04%, to settle at $4.51.

In the CytRx placement, the company sold shares at $4.30 each to 14 institutional investors. The share price is a 10.4% discount to the company's $4.80 closing stock price on Tuesday.

Of the proceeds, $15 million will go to subsidiary RXi Pharmaceuticals Corp. The rest will be used for research and development, maintenance fees, working capital and general corporate purposes.

Lehman Brothers Inc. was the lead agent.

Based in Los Angeles, CytRx develops human therapeutics.

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