Oil, election boost private placement market; Transax gets $5 million in equity

By Sheri Kasprzak

Atlanta, Nov. 3 - Sell-side sources said stabilized oil prices and the U.S. presidential election benefited the broad private placement market Wednesday.

"Good oil helps," said one Canadian sell-sider. "The presidential election in the U.S. has helped the market certainly. Look at what has happened in the overall markets."

Oil prices stabilized at around $50 a barrel Wednesday, rebounding from some volatility earlier in the week.

In the United States, the Dow Jones Industrial Average gained 62.17 points to 10,116.56, the Nasdaq composite rose 21.96 points at 2,001.83 and the S&P 500 index ended up 9.07 at 1,139.58. In Canada, the S&P/Toronto Stock Exchange composite index was up 21.53 points at 8,879.76 even as the Canadian dollar slipped.

Heading up private placement action in the United States was a $5 million standby equity distribution agreement closed by Transax International Ltd.

The company received the two-year agreement from Cornell Capital Partners LP. Under the terms of the agreement, Transax may sell up to $5 million in common shares to Cornell.

Cornell will pay a 3% discount to the lowest closing bid price of Transax's common stock on the over-the-counter bulletin board for five days.

Cornell will also get a one-time commitment fee in the form of $200,000 of convertible compensation debentures. The debentures have a three-year term with an annual interest of 5%. The debentures are convertible into shares at 100% of the lowest closing bid price for three trading days before the conversion date.

Transax is an Irvine, Calif.-based network provider for healthcare companies. The proceeds from the agreement will be used for expansion. On Wednesday, its stock closed unchanged at $0.095.

American Water Star raises $5 million

American Water Star Inc. said it received $5 million from Laurus Master Fund Ltd. in a fixed-price secured convertible term note.

The three-year note is payable in cash or convertible into shares at $0.57 per share. The note bears interest at Prime plus 300 basis points and may be adjusted downward under circumstances related to the trading value of the company's stock.

American Water Star also issued Laurus a five-year warrant to buy 2,542,860 shares at $0.66.

Based in Las Vegas, American Water Star is a beverage bottling company. It plans to use the proceeds from the financing for general working capital. The company's stock closed up $0.03 at $0.49 Wednesday.

CIC's $4 million equity financing

Communication Intelligence Corp. closed an equity financing for $4 million, the company said Wednesday.

The deal was done with a combination of debt and equity financing.

CIC issued $4.195 million in convertible promissory notes at a rate of 7% per year. The notes are convertible at $0.462 per share. If the principal owing on the notes is converted, CIC will issue 9,080,087 shares of common stock. If the notes are note converted, all principal and accrued interest will be due Oct. 28, 2007.

In the equity portion of the deal, warrants were issued for 3,632,035 shares at $0.508 per share. The warrants expire Oct. 28, 2009.

CIC may call the warrants if its stock trades above $1 for 20 consecutive trading days 20 days after the registration statement for the resale of shares issued upon conversion of the notes and exercise of the warrants.

H.C. Wainwright & Co. Inc. acted as placement agent in the deal.

CIC, based in Redwood Shores, Calif., is a software company focused on biometric signature verification and input software. The company plans to use the proceeds from the financing for working capital. Its stock closed down $0.11 at $0.50 Wednesday.

Power3's convertibles debentures

Power3 Medical Products Inc. got $3 million in convertible debentures from several investors.

Crestview Capital Master LLC, Crescent International Ltd., Cityplatz Ltd., GSSF Master Fund LP, Omicron Master Trust, Otape Investments LLC, Gryphon Master Fund LP, Platinum Partners Value Arbitrage Fund LP, Richard Molinsky, Sage Capital Investments Ltd., Mohawk Funding, Bach Farms LLC and DKR SoundShore Oasis Holding Fund Ltd. all invested in the three-year debentures.

The investors were required to buy the first $1 million in debentures at the initial closing on Oct. 28. The remaining $2 million must be purchased at the second closing, which is expected to occur at least by the fifth trading day after the registration statement is effective.

The debentures issued in the initial closing are due in full Oct. 28, 2007 and will not bear interest. The debentures issuable at the second closing will be payable in three years and will also not bear interest.

The conversion price for the initial $1 million in debentures is $0.90, subject to either 75% of the average daily volume weighted average price the common stock for five trading days or the daily volume weighted average price of the common stock on such date being less than $0.90.

The $2 million in debentures is convertible at the lesser of $0.90 or the 75% average of the daily volume weighted average price of common stock for five trading days before the registration statement is effective.

Power3, based in The Woodlands, Texas, is a proteomics company specializing in cancer and neurological disease detection. On Wednesday, the company's stock closed up $0.01 at $1.41.

SulphCo wraps $2.6 million in deals

SulphCo Inc. has finished second closings on two private placements it started in June, the company said, bringing in $2.6 million.

Investors who bought $1.34 million in units at $0.90 and about $1.27 million at $1.25 per unit in June had the right to buy an additional $1.34 million of $0.90 unit and $1.27 million of $1.25 units at a second closing before Oct. 31.

By Nov. 2, all of those rights had been exercised.

The entire private placement, including the first closing, brought in $5.22 million for SulphCo.

The $0.90 units consisted of one share, a warrant and an investment right for two additional shares. The warrants, good for 30 months, allow for the purchase 0.35 shares at $1.125.

A warrant is also available for up to 0.35 shares at $1.125 per share for each additional share acquired under the investment right.

The $1.25 units consist of one share, a 30-month warrant for 0.35 shares at $1.5625 per share and an investment right entitling the investor to buy one additional share at $1.25.

A warrant is also included with the investment right for 0.70 shares at $1.5625 for each additional share acquired under the investment right.

"The funds from the second closings will permit us to complete development activities presently underway and give us greater flexibility to push our technology into the marketplace more rapidly," said Rudolf Gunnerman, Power3's chairman and chief executive officer, in a statement.

SulphCo is a Sparks, Nev.-based desulfurization technology company. The company plans to use the proceeds from the financing for working capital and general corporate purposes. The company's stock closed up $0.02 at $1.79 Wednesday.

Canadian deals

Exceed Energy Inc. said Wednesday it will raise C$4 million in a private placement.

The offering is being done on a bought-deal basis and includes 5,172,413 flow-through class A common shares at C$0.58 per share and 2,222,222 class A shares at C$0.45.

Underwriter GMP Securities Ltd. also has the option to buy an additional 2,222,222 class A shares at C$0.45, exercisable any time after closing.

The deal is expected to close Nov. 17. The shares issued in the deal are subject to a four-month hold.

Before this issue, Exceed had 12,110,238 class A shares and 852,125 class B shares outstanding.

Exceed, based in Calgary, Alta., is an oil and gas exploration, development and exploitation company. It plans to use the proceeds from the financing for ongoing exploration and development and for general corporate purposes.

On Wednesday, Exceed's stock closed down $0.05 at $0.50.

Triloch to raise C$3 million

Triloch Resources Inc. said Wednesday it will raise C$3 million in a private placement.

GMP Securities Ltd. will act as underwriter in the bought-deal private placement, which consists of one million class A flow-through common shares at C$3 per share.

Upon completion of the deal, Triloch will have 18,399,452 class A common shares and 807,752 class B common shares issued and outstanding. Triloch expects the deal to close Nov. 18.

On Wednesday, the company's stock closed down $0.09 at $6.11.

Triloch, based in Calgary, Alta., is an oil and natural gas exploration company. It plans to use the proceeds from the deal for further exploration.

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