Time America raises $2 million from PIPE; better stocks may mean more PIPEs, sellsider says

By Sheri Kasprzak

New York, Jan. 9 - Time America, Inc. led a quiet day for private placements, announcing the completion of a $2 million note offering.

Meanwhile, as stocks continued to improve, one sellside source said PIPEs may get a shot in the arm as well.

The Dow Jones Industrial Average moved above 11,000 on Monday for the first time in four years, a move the sellsider said may make private placements at least somewhat more appealing to companies looking for a quick cash infusion.

"Certainly it doesn't hurt," he said. "If the broad [stock] market is doing well, it trickles down to particular sectors. Having said that, the sectors is where it gets tricky. This [a better stock market] may improve PIPEs, but a lot depends upon where specific sectors are."

The source noted that tech stocks in particular seem to be doing well now and noted that that sector is big for private placements.

"Make your own conclusions," he added.

Back to the broader stock market, the Dow Jones Industrial Average gained 52.59 to end at 11,011.90; the Nasdaq composite index closed up 13.07 at 2,318.69; and the Standard & Poor's 500 composite index ended the day up 4.70 at 1,290.15.

Moving back to the Time America offering, the company sold a $2 million secured convertible note to Laurus Master Fund, Ltd. The note is due in three years, bears interest at Prime rate plus 200 basis points with a 7.25% floor and is convertible into common shares at $0.65 each.

Time America had 14,651,981 outstanding common shares as of Nov. 8.

Laurus has also purchased a $1.5 million secured non-convertible revolving note from Time America. The two-year note bears interest at Prime rate plus 200 basis points with a 7.25% floor.

Laurus received warrants for 140,000 shares, exercisable at $0.65 each for seven years.

In June 2005, the company completed a similar offering with Laurus. Laurus funded $1.5 million convertible loan due June 23, 2008. The loan is convertible into common shares at $0.65 each.

Looking to its earnings, Time America reported a net loss of $712,275 for the quarter ended Sept. 30, 2005, compared with a net loss of $192,331 for the same quarter of 2004.

Based in Scottsdale, Ariz., Time America develops time- and labor-management hardware and software.

On Monday, the company's stock lost 2 cents to close at $0.58.

TIR closes C$30 million PIPE

Looking to Canada, TIR Systems Ltd. capped off its C$30 million convertible debenture offering, raising another C$2.8 million in principal.

The company's stock slipped 6 cents after the closing was announced Monday morning to end at C$1.59.

The 7% debentures are due in 2011 and are convertible into common shares at C$1.30 each.

This marks the fourth and final tranche of the deal. On Oct. 28, TIR closed a C$14.2 million tranche of the deal, on Nov. 21 a C$9 million tranche and on Dec. 29 a C$4 million tranche.

For every C$1,000 in principal of the debentures, the investors received warrants for 200 shares. The warrants are exercisable for three years at C$1.50 each.

Proceeds will be used for commercialization and general corporate purposes.

"With the successful completion of our financing, the company now has the funding in place to capitalize on our leadership position in the development of Solid State Lighting solutions and delivery of commercial products to our OEM partners, based on our groundbreaking LEXELTM technology," said Leonard Hordyk, the company's chief executive officer, in a statement.

"The investment by Zumtobel [AG] and [Lighting Services Inc.], combined with the development agreements we have recently signed with both these companies as well as with the Genlyte Group, one of the largest lighting fixture manufacturers in North America, provides significant momentum for the successful execution of our strategy to lead the inevitable conversion of the US$91 billion lighting market from century-old analogue light sources to superior digital SSL technology."

Vancouver, B.C.-based TIR develops lighting systems using sound-based and other technologies.

In the broader Canadian PIPE market Monday, one sellside source noted that oil prices were down and this may be impacting PIPE issuance.

"It's all about commodities and a lot of that goes with oil prices," he said.

Sahara stock jumps 41.5%

After announcing the increase of a previously announced convertible debenture offering to C$1,035,000 from C$900,000, Sahara Energy Ltd.'s stock took off, gaining more than 41.5%.

The stock gained 22 cents on Monday to finish at C$0.75.

Under the terms of the debenture offering, the company plans to issue 1,035 debentures at C$1,000 each. The debentures mature on Dec. 31, 2008 and are convertible into units of one share and one warrant at C$0.45 each. The warrants are exercisable at C$0.55 each for two years.

The coupon of the debentures could not be determined Monday.

The deal was first announced Jan. 4 as a C$900,000 offering under the same terms.

Sahara's stock began trading on the Toronto Stock Exchange's Venture Exchange on Dec. 16.

Based in Calgary, Alta., Sahara is an oil and natural gas exploration company.

International PBX's C$1.8 million deal

Elsewhere in light Canadian private placement action, International PBX Ventures Ltd. priced a non-brokered C$1.8 million unit offering.

The company plans to sell up to 4 million units at C$0.45 apiece. The units include one share and one warrant. The warrants allow for the purchase of another share at C$0.60 each for 15 months.

Proceeds will be used for drilling and exploration as well as for working capital.

Based in Vancouver, B.C., International PBX is a mineral exploration company.

The company's stock fell 2 cents, or 4.08%, Monday to close at C$0.47.

Maverick Oil stock gains 5.17%

After concluding a $20 million convertible debenture deal late last week, Maverick Oil and Gas Inc.'s stock edged up on Monday.

The company's stock gained $0.045 Monday to settle at $0.915.

On Friday, when the settlement of the debenture offering was first announced, Maverick's stock gained 10.31%, or 8 cents, to end at $0.87.

The debentures are convertible into common shares at $0.94 each.

"It looks pretty solid to me," said one market source familiar with natural resources stocks on Monday after being asked about the 5.17% increase in Maverick's stock. It's "at a bit of a premium. [The] stock seems to be responding."

In fact, the stock responded despite a dip in oil prices on Monday.

Oil prices dropped 71 cents Monday to close at $63.50 per barrel.

Based in Fort Lauderdale, Fla., Maverick Oil and Gas is an oil and natural gas exploration, exploitation, development and production company.

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