Tech offerings dominate PIPE issuance; Alchemy raises $12 million from stock offering

By Sheri Kasprzak

New York, Oct. 10 - A surge in activity among technology companies in the PIPE market may be coming from improved tech stocks overall, said one sellside market source.

"[Tech] is moving along nicely," he said in an interview Tuesday afternoon. "It's the right time to price, and [tech] issuers looking for [a] boost in capital are jumping in."

Even though tech stocks in general may be improving, Alchemy Enterprises, Ltd. settled a $12,075,000 offering at a 75.8% discount to its closing stock price on Monday.

Offerings on Tuesday, in fact, were led by the Alchemy Enterprises offering. Alchemy issued 34.5 million shares at $0.35 each. The company's stock closed at $1.45 on Monday.

The company had 78,499,986 outstanding common shares as of June 30.

Despite that substantial discount, the stock advanced by 2 cents, or 1.38%, to close at $1.47 (OTCBB: ACHM).

Brookstreet Securities Corp. was the placement agent for the offering.

Proceeds for research

"Our investors are excited about the prospects for Alchemy's technology platform," said Neil Dabney, director of mergers and acquisitions for Brookstreet, in a statement. "This placement will continue to fund Alchemy's research and development partnership with NASA's Jet Propulsion Lab and keep the company on track for deploying its first prototype electric power cell unit in a hybrid bus during the first quarter of 2007."

"It is certainly a real vote of confidence to have the member brokers and clients of such a quality firm as Brookstreet believing in Alchemy's potential," said Jonathon Read, the company's chief executive officer, in a news release.

Proceeds will be used for the company's research and development partnership with NASA's Jet Propulsion Lab. The company will also use the proceeds to deploy its electric power cell unit in a hybrid bus.

Moving to the company's latest earnings statement, Alchemy reported a net loss of $8.61 million for the quarter ended June 30, compared with a net loss of $4,675 for the corresponding 2005 quarter.

In June, the company engaged Brookstreet to conduct the offering to raise up to $10.5 million, and the offering may have been conducted to keep the company in business.

"There are no assurances that the company will be successful [with the private placement] and without sufficient financing it would be unlikely for the company to continue as a going concern," said the latest earnings statement.

Based in Scottsdale, Ariz., Alchemy develops electric power cell technologies.

Wi-Tron's $5.5 million deal

Elsewhere in the tech sector, Wi-Tron, Inc. priced a non-brokered private placement for up to $5.5 million. The deal sent the company's stock up 7.89% after it was announced in the morning.

The non-brokered offering includes up to 11 million units of one share, one warrant and one piggyback warrant.

The warrants are exercisable at $1.00 each. The piggyback warrants, which expire Nov. 15, 2006, are only exercisable if the regular warrants are exercised. The strike price for the piggyback warrants is also $1.00.

The stock climbed by 3 cents to close at $0.41 (OTCBB: WTRO). Volume took off with 45,300 shares traded compared to the average 20,178 shares.

Proceeds will be used for reorganization, working capital and the payment of accrued compensation.

Wi-Tron, based in Raritan, N.J., produces power-amplification technologies used in wireless telecommunications products.

Another tech company, PhotoWorks, Inc., said it plans to sell 8,860,714 units at $0.35 each for proceeds of $3,101,250. The unit price is a 25.5% discount to the company's $0.47 closing stock price on Monday.

The units in the deal include one share and one quarter-share warrant. Each whole warrant is exercisable at $0.50.

Craig Hallum Capital Group LLC was the placement agent.

Proceeds will be used for growth and development.

PhotoWorks' stock gave up 7.27%, or 4 cents, to close at $0.51 (OTCBB: PHTW).

Seattle-based PhotoWorks is an internet-based digital photography publishing company.

IR concludes offering

Looking to the biotech sector, IR Biosciences Holdings, Inc. finished a $2,276,500 private placement.

The company sold 91.06 units at $25,000 each.

Each unit includes 156,250 common shares and a warrant for 78,125 shares. The warrants are exercisable at $0.50 each for five years.

The stock closed unchanged at $0.21 Tuesday (OTCBB: IRBO).

IR Biosciences, based in Scottsdale, Ariz., is a biotechnology company focused on treatments for radiation exposure.

Blue Parrot plans deal

In Canadian offerings, Blue Parrot Energy Inc. negotiated a C$6 million offering despite another drop in oil prices Tuesday.

Oil gave up $1.44 to close at $58.58 per barrel.

In the placement, the company plans to sell 20 million flow-through shares at C$0.30 apiece.

Research Capital Corp. is the placement agent.

The company's stock gave up 12%, or 3 cents, to settle at C$0.22 (TSX Venture: BPA).

Proceeds will be used for continued exploration and development.

Calgary, Alta.-based Blue Parrot is an oil and natural gas exploration company.

Cash Systems stock drops

After closing its previously announced $20 million PIPE Tuesday, Cash Systems, Inc.'s stock dropped yet again.

The stock fell by 25 cents, or 3.82%, to end the session at $6.30 (Nasdaq: CKNN). The stock fell by 4 cents, or 0.61%, to close at $6.55 on Monday when the deal was first announced.

Volume of the shares traded remained muted with 10,939 shares traded compared to the average 47,832 shares. On Monday, 5,362 shares were traded compared to the average 47,831 shares.

As previously announced, Cash sold 6.5% senior secured convertible notes, convertible at $8.00 each. The conversion price represents at 22% premium to the company's $6.55 closing stock price on Monday.

Deutsche Bank Securities Inc. was the placement agent for the offering.

Proceeds will be used to repay bank debt. The remainder will be used for working capital.

Based in Burnsville, Minn., Cash Systems provides automated teller machines.

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