Terax Energy plans $10 million private placement; energy companies respond to oil prices

By Sheri Kasprzak

Atlanta, June 2 - As oil companies moved slowly back into the private placement market, Dallas-based oil exploration company Terax Energy, Inc. led PIPE news Thursday.

The company announced its plans to raise up to $10 million in a private placement of units.

The deal includes up to 1 million units at $10 each. The units are comprised of eight post-split shares and warrants for four shares.

The warrants provide for an additional share at $1.75 each for 18 months.

The offering pushed the company's stock up $4.65 to close at $4.65 on Thursday. The company's stock had been at $0.00 since a stock split from December 2004.

"Absolutely, oil [prices] helped," said one market source who saw the deal. "This will be phenomenal for them and they're already seeing some results from it."

Elsewhere in the oil sector, Canadian oil exploration company Reece Energy Exploration Corp. announced its plans to raise C$4.25 million.

Because of Wednesday's jump in oil prices, two sell-siders - one in Canada and one in the United States - agreed that energy companies may have been responding by introducing new deals to the PIPE market. On Wednesday, oil prices gained $2.63 to close at $54.60 per barrel.

On Thursday, however, oil prices retreated, losing $0.97 to close at $53.63 per barrel.

In the broader private placement market, according to sell-siders, remained strong Thursday as stocks made slight gains.

The Dow Jones Industrial Average edged up 3.62 to close at 10,553.49; the Nasdaq composite gained 9.94 to close at 2,097.80 and the S&P 500 ended up 2.07 to close at 1,204.29.

"It wasn't a bad day," said one sell-sider. "I'd say [volume is] probably a little weaker than earlier this week, but still solid."

PSi closes $7 million deal

Moving to the tech sector, PSi Technologies Holdings, Inc. wrapped a $7 million offering of an exchangeable senior subordinated note with a Merrill Lynch Global Emerging Market Partners affiliate.

The four-year note bears interest at 10% annually and is exchangeable into common shares at $1 each.

"The issuance of the note is a key initiative to strengthen the company's balance sheet and to support the development and installation of sufficient capacities to meet projected demands for the company's power QFN package," said the company's chairman and chief executive officer Arthur Young in a statement.

After the deal was announced late Thursday, the company's stock closed up $0.25, or 17.73%, at $1.66, but lost $0.18, or 10.84% in after-hours trading.

Based in San Francisco, PSi provides assembly and test services for the semiconductor industry. The proceeds will be used to partially fund expenses related to the company's Power QFN Package and to repay debts to suppliers.

Frontier Pacific's C$7.13 million offering

Over in the natural resources sector, Frontier Pacific Mining Corp. has arranged a private placement with three investors for up to C$7,124,871.

The company plans to sell up to 28,399,484 units at various prices to two institutional investors and one individual investor.

The units include one share and one warrant. The warrants provide for an additional share at C$0.40 each for two years.

In the first tranche of the deal, one institutional investor will buy 7.5 million units at C$0.17 each in a first tranche and 12.5 million units at C$0.30 each in a second tranche for a total of C$5,025,000. After the first tranche closes the second institutional investor and the individual investor will buy 3,455,484 units at C$0.25 each and 4,944,000 units at C$0.25 each for a total of C$2,099,871.

One market source who was not familiar with the company but does have knowledge of the natural resources sector said mineral stocks, except for gold, have been faring well lately.

"From what I've seen, this company does have some gold prospects, so it's really hard to say," the source said of the pricing of the deal. "But they've essentially sealed the deal because they're negotiating directly with the investors."

After the offering was announced early Thursday afternoon, the company's stock closed unchanged at C$0.165.

Based in Vancouver, B.C., Frontier is a mineral exploration company. The proceeds will be used to fund the operations of the company's Greek subsidiary Thracean Gold Mining SA. The proceeds will be also be used for the development of the company's Perama Hill project in Greece and for exploration activities on its interest in the Macusani Uranium project in southern Peru. The remainder will be used for working capital.

LightPath raises $1.05 million

Orlando, Fla.-based LightPath Technologies, Inc. closed a $1.05 million private placement Thursday, the company said.

Two private investors bought 350,000 of the company's shares at $3 each and also received warrants for 140,000 shares, exercisable at $4.30 each.

"We are very pleased that the investors recognize the progress we have made in growing our revenues, diversifying our customer base and expanding our product offerings," said the company's president and chief executive officer Ken Brizel in a statement.

"The additional capital, obtained at an above-market price on the closing date, will be employed to accelerate the introduction of new products and continue enhancing our operational capabilities. With the additional opportunities the capital provides, we are optimistic that our future results will confirm the confidence in our prospects that this investment demonstrates."

LightPath produces optical networking items for the telecommunications industry. The proceeds will be used for new product development, equipment and working capital.

At the end of the day Thursday, LightPath's stock had gained $0.15 to close at $2.71.

Advanced Magnetics' stock rises

After closing a direct placement for $13.8 million on Wednesday and raising another $3.3 million from the deal on Thursday, Advanced Magnetics' stock continued to make gains.

The company's stock closed up $1 on Thursday at $10.

After the company wrapped the $13.8 million deal Wednesday, the company's stock gained $0.05 to close at $9.

A company that provides nanoparticles used in the pharmaceutical industry led news Wednesday.

The company sold units of five shares and one warrant at $47.50 each.

Cambridge, Mass.-based Advanced Magnetics develops superparamagnetic iron oxide nanoparticles used by the pharmaceutical industry.

QGX's stock closes down

A day after announcing its plans to raise C$6.08 million in a private placement, QGX Ltd.'s stock slid Thursday.

The company's stock lost C$0.05, or 2.27%, to close at C$2.15.

"I had a feeling that would happen," said one market source who had been following the deal. "The discount is a little much. It just makes sense that their stock would slide accordingly."

The source had noted on Wednesday that QGX has some gold interests and gold prices have been sliding since Monday when France rejected the European Union's constitution.

The company plans to sell shares at C$1.60 each, or a 21% discount to its closing stock price of C$2.02 on May 31.

After the deal was announced late Tuesday, the company's stock gained C$0.18, or 8.91%, to close at C$2.20.

Based in Waterdown, Ont., QGX is a mineral exploration company.

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