Memory Pharmaceuticals wraps $10 million loan; TWL raises $4 million from convertibles

By Sheri Kasprzak

New York, March 20 - Memory Pharmaceuticals, Inc. pocketed $10 million from a loan with warrants to head up private placement activity on Tuesday.

In the broader market, volume remained relatively light even as the stock market continued to creep its way back upward.

"I'm not seeing anything that should be keeping [issuers] out of the market right now," said one sellsider when asked if the low volume in the PIPE market is a trend that will continue. "There was a drop earlier because of stocks [falling] but right now they're making a comeback; so, maybe it's just a one off. I don't think this is a trend though."

The Dow Jones Industrial Average, which as been taking a beating for the past couple of weeks, gained 61.93 to close at 12,288.10 and the Nasdaq composite index advanced by 13.80 to settle at 2,408.21. The Standard & Poor's 500 composite index put on 8.88 to close at 1,410.94.

In the Memory offering, the company sold a $10 million loan to Hercules Technology Growth Capital, Inc.

The deal includes warrants for 598,086 shares, exercisable at $2.09 each for five years. The strike price of the warrants is a 5.4% discount to the company's $2.21 closing stock price on Monday.

On Tuesday, the stock gave up 14 cents, or 6.33%, to settle at $2.07, gaining almost a penny in after-hours trading activity (Nasdaq: MEMY).

The loan bears interest at Prime rate plus 320 basis points and is due in 30 equal monthly installments beginning the last business day of June 2008.

Memory last visited the PIPE market for funds in October when the company sold $31.302 million in shares to Great Point Partners and MPM Capital at $1.11 each. The share price was a 2.6% discount to the company's $1.14 closing stock price on Oct. 4.

In September 2005, the company sold $30.59 million in shares at $1.90 each.

Memory, based in Montvale, N.J., develops treatments for central nervous system disorders.

Cleveland BioLabs stock edges up

In other biotech news, Cleveland BioLabs, Inc.'s stock made its way up slightly on Tuesday after the company sold $30,020,984 in series B convertible preferred stock.

The stock gained 8 cents to end at $8.90 and climbed another 15 cents in after-hours trading (Nasdaq: CBLI).

On Monday, when the deal closed, the stock slid 13.48%, or $1.37, to settle at $8.82.

The 5% preferreds are convertible into common shares at $7.00 each, a 31.3% discount to the company's closing stock price on Monday of $10.19.

The offering was conducted to fund a U.S. Department of Defense application submission of Cleveland BioLabs' Protectan CBLB502 as a drug candidate to treat radiation poisoning.

The Defense Department denied a similar application made by Hollis-Eden Pharmaceuticals earlier this month.

Reedland Capital Partners and Basic Investors, Inc. were the placement agents.

Based in Cleveland, Cleveland BioLabs develops treatments for cancer.

Elsewhere in the sector, Chelsea Therapeutics International Ltd. saw it stock jump by 6% Tuesday after selling $12.5 million in stock.

The stock gained 30 cents to end at $5.30 (Nasdaq: CHTP). The company's stock settled up 5.93%, or 28 cents, at $5.00 on Monday when the deal was announced.

The offering includes shares priced at $4.72 each and warrants exercisable at $5.66 each for five years.

The deal is set to close March 22.

Leerink Swann & Co. is the bookrunner.

Proceeds will be used for the continued development of CH-1504, the company's lead anti-folate compound for rheumatoid arthritis.

Located in Charlotte, N.C., Chelsea is a biopharmaceutical company focused on developing anti-folate compounds used to treat a variety of diseases, including immunological disorders and inflammatory ailments.

TWL raises $4 million

Elsewhere in PIPEs news Tuesday, TWL Corp. landed $4 million from an offering of senior secured convertible debentures with Laurus Master Fund, Ltd.

The 15% debentures are due March 31, 2011 and are convertible into common shares at $0.03 each. The investors received warrants for 53,333,333 shares, exercisable at $0.03 each for six months.

The company's stock remained unmoved at $0.04 Tuesday (OTCBB: TWLP).

TWL, based in Carrollton, Texas, develops learning and certification training services for corporations.

JSX stock climbs on PIPE

Moving to the energy sector, JSX Energy Inc. saw its stock climb by more than 18% on Tuesday after announcing plans to wrap up a $3 million private placement in April.

The stock gained 27 cents, or 18.62%, to close at $1.72 (Pink Sheets: JSXG). The volume of shares traded Tuesday tapered off with 8,700 shares traded compared with the average 182,965 shares.

A Vancouver, B.C.-based market source familiar with natural resources said he wasn't familiar with JSX but noted that the stock seemed to be responding well to the offering.

"For a Pink Sheets stock, that's pretty impressive," he said.

The company intends to sell 2,068,965 units at $1.45 each to a European investment group. The unit price is on par with the company's closing stock price on Monday.

The units include one share and one warrant. Each warrant is exercisable at $2.50 for three years.

The company expects the offering to settle by April 16.

Proceeds will be used for the acceleration of the company's business plan to pursue oil exploration and production opportunities in Thailand.

Based in Bangkok, JSX is an oil and natural gas exploration and production company.

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