NitroMed will pocket $62.53 million from direct stock deal; NexMed wraps $8.32 million PIPE

By Sheri Kasprzak

New York, Jan. 25 - NitroMed, Inc.'s stock settled off a touch after the company announced the pending settlement of a $62,525,000 direct placement of stock.

The direct offering sent the company's stock down 2 cents to close Wednesday at $11.50 (Nasdaq: NTMD).

A group of institutional investors has agreed to buy 6.1 million shares in the deal at $10.25 each. The shares will be issued under the company's shelf registration through agents J.P. Morgan Securities Inc. and Thomas Weisel Partners, LLC.

As of Nov. 1, NitroMed had 30,480,097 outstanding common shares.

Sondra Newman, an investor relations representative for NitroMed, did not immediately return requests for additional comment on the offering by press time Wednesday.

Proceeds will be used for the commercial launch of the company's first marketed product, BiDil. The rest will be used for working capital.

Looking to its earnings, NitroMed sustained a net loss of $32,072,000 for the quarter ended Sept. 30, 2005, compared with a net loss of $10,801,000 for the corresponding quarter of 2004.

"We may seek additional funding through collaborative arrangements and public or private financings," said the company's latest earnings statement. "Additional funding may not be available to us on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders.

"For example, if we raise additional funds by issuing equity securities or convertible debt securities, further dilution to our existing stockholders may result. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail one or more of our research or development programs. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish our rights to some of our technologies, product candidates or products which we would otherwise pursue on our own."

Based in Lexington, Mass., NitroMed develops orally administered treatments for heart failure.

Elsewhere in the biotech sector, NexMed, Inc. settled an $8,319,000 private placement.

In that deal, the company sold 9,347,191 shares at $0.89 each to institutional and accredited investors led by Southpoint Capital Advisors LP and Loeb Partners Corp. The investors also received warrants for 3,738,876 shares, exercisable at $1.11 each for four years. The strike price of the warrants represents a 23% premium to the company's closing stock price of $0.90 on Jan. 24.

The offering pulled the company's stock up 11.11%, or 10 cents, to close at $1.00 (Nasdaq: NEXM). The stock gained another 2 cents in after-hours trading.

Proceeds will be used for development of the company's NexACTR technology and for general corporate purposes.

"We are very pleased with the successful closing of this placement in a very difficult financing climate," said Richard Berman, the company's chief executive officer, in a statement. "This is a strong indication of the investors' confidence in the NexMed story.

"Our attention is now focused on finding licensing partners for all of our products in development, including Alprox-TD and Femprox. We remain aggressive in seeking growth opportunities that would improve our shareholder value."

The company's chief financial officer, Mark Westgate, said the placement will provide the company with cash reserves as it attempts to restructure its debt.

"We have made notable progress in streamlining the operations and reducing our monthly overhead," said Westgate in a statement. "We will continue with our restructure plan and anticipate that we will bring our monthly burn to about $500,000 by midyear. As such, we do not anticipate additional financing needs for a considerable period of time."

Based in Robbinsville, N.J., NexMed is a drug development company focused on treatments for nail fungus, sexual disorders and other ailments.

Tidelands closes $6.57 million debenture

Tidelands Oil & Gas Corp. received $5,396,098 in proceeds from the private placement of $6,569,750 in discounted convertible debentures.

The zero-coupon debentures were priced at 82, mature on Jan. 20, 2008 and are convertible into common shares at $0.87 each.

The debentures were purchased by a group of seven investors led Palisades Master Fund, LP.

The investors received series A warrants for 2,491,974 shares, exercisable at $0.935 each through Jan. 20, 2009 and series B warrants for 7,551,432 shares, exercisable at $1.275 each through Feb. 19, 2007.

HPC Capital Management LLC was the placement agent.

Proceeds will be used for working capital.

"We are appreciative of HPC's confidence in our business plan and project opportunities in the near and longer term," said Michael Ward, Tidelands' president and CEO, in a statement. "The monies provided through this financing will bridge our initiatives with the financial capability to assist in the completion of our objectives. As always, we remain focused and committed to the execution of our business plan and look forward to delivering additional fundamental milestones shortly."

On Wednesday, the company's stock fell 3 cents, or 3.03%, to end at $0.96 (OTCBB: TIDE).

Based in San Antonio, Tidelands provides transportation, distribution and storage services for the oil and natural gas sector.

DynEco raises $2 million

Moving to the technology sector, DynEco Corp. settled a $2 million private placement of a convertible secured promissory note.

The 8% note was purchased by MMA Capital, LLC.

The note matures on Jan. 13, 2007 and is convertible into common shares at $1.00 each.

MMA received warrants for 2 million shares, exercisable for three years at $1.00 each.

A total of $1.84 million of the proceeds will be used for working capital, the repayment of outstanding convertible debentures and notes and the initiation of the company's acquisition strategy.

"This $2 million funding represents an important step in implementing Dynamic [Leisure Group, Inc.]'s [DynEco's subsidiary] business plan and acquisition strategy," said Daniel Brandano, the company's CEO, in a statement. "The majority of existing travel operators and cruise lines suffer from outdated reservation systems, lack of brand recognition and insufficient marketing and sales. Leveraging our proprietary travel pricing and packaging software, Dynamic owns the source code to a technology platform that has attracted several potential key acquisitions under a unified brand.

"With our platform, we can create a synergistic environment that maximizes inventory usage, strengthens marketing and sales efforts, improves efficiencies and reduce operations costs across the organization. We are currently evaluating companies for acquisition and look to move forward with our strategies to enhance shareholder value."

The stock gained 7.14% on Wednesday, or $0.005, to end at $0.075 (OTCBB: DYCO).

Based in Tampa, Fla., DynEco develops technology and content used by the travel and leisure industry.

UEX leads Canadian offerings

As gold prices climbed for the first time this week, UEX Corp. led PIPE activity in Canada, pricing a C$42 million stock deal.

The offering includes 6 million non flow-through shares at C$5.00 each and 2 million flow-through shares at C$6.00 apiece. The deal is being placed through a syndicate of underwriters led by Dundee Securities Corp.

UEX expects the deal to wrap up on Feb. 15.

Proceeds will be used for exploration and development of uranium projects in the Athabasca basin of northern Saskatchewan. The rest will be used for general corporate purposes.

UEX's stock advanced 30 cents on Wednesday to close at C$5.33 (Toronto: UEX).

Based in Vancouver, B.C., UEX is a uranium exploration company.

Oil prices slid $1.21 to close the day at $65.85 per barrel.

Gold prices, however, climbed $5.20 on Wednesday to end at $563.10 per ounce. The boost may be behind a major pickup in volume north of the border, one sellsider said.

"Gold is pretty strong," he said. "That's going to carry a lot of the major minerals. Oil's down though, so we may see fewer energy deals. Stocks in general are down, but I suspect as long as gold and some of the other metals do OK, volume will be all right."

Tournigan Gold Corp. priced and then upsized a C$40,000,150 private placement of special warrants. The special warrants are exchangeable on a one-for-one basis for common shares four months after the offering closes.

The deal includes 27,586,310 special warrants at C$1.45 each and is scheduled to close on Feb. 15.

The offering was first announced Wednesday morning as a C$35 million offering of 24,137,932 special warrants at the same price.

A syndicate of underwriters led by Sprott Securities Inc. has an over-allotment option for up to 3,620,690 special warrants.

Proceeds will be used for capital expenditures at the company's Kremnica gold deposit and for a coping study at the Jahodna uranium project.

The company's stock gained 5 cents to settle at C$1.70 Wednesday (TSX Venture: TVC).

Based in Vancouver, B.C., Tournigan is a gold exploration company.

SR Telecom stock loses 8%

A day after pricing a C$50 million stock deal, SR Telecom Inc.'s stock tumbled more than 8%.

The stock lost 8.11%, or C$0.015, Wednesday to close at C$0.17 (Toronto: SRX).

On Tuesday, when the stock offering priced, the company's stock fell 15.91%.

The company intends to issue shares at C$0.15, a 21.1% discount to the average market price of the company's stock over five trading days.

SR Telecom, based in Montreal, designs broadband fixed wireless access technologies used by telephone and internet service providers.

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