Zix concludes $11.8 million PIPE; Global Gold raises $13 million in unit offering

By Sheri Kasprzak

New York, April 5 - Zix Corp. secured agreements for an $11,816,700 private placement of units Wednesday from a large group of both institutional and accredited investors, sending the company's stock up as technology stocks advanced in general.

Zix expects to sell 9.93 million units at $1.19 each. The units are comprised of one share and one warrant for 0.6 of a share. The whole warrants are exercisable at $1.54 each for 66 months.

The price per unit is an 8.4% discount to the company's $1.30 closing stock price on Tuesday. The warrant strike price is an 18.5% premium to the same closing stock price.

The stock gained 3.85%, or 5 cents, to end at $1.35 Wednesday, gaining another penny in after-hours trading (Nasdaq: ZIXI). On Tuesday, the company's stock lost 6 cents to end at $1.30.

The investors in the deal include RAQ, LLC; Conor O'Driscoll; Diamond Opportunity Fund, LLC; Enable Growth Partners LP; Enable Opportunity Partners LP; Pierce Diversified Strategy Master Fund LLC; SRB Greenway Capital, LP; SRB Greenway Capital (QP), LP; and SRB Greenway Offshore Operating Fund, LP.

Other investors were H&Q Life Sciences Investors; Iroquois Master Fund Ltd.; Alice Ann Corp.; Robert. G. Allison; William H. Baxter Revocable Trust; Gary A. Bergren; Piper Jaffray as Custodian FBO Bradley A Erickson IRA; Piper Jaffray as Custodian FBO Robert H. Clayburgh IRA; Piper Jaffray as Custodian FBO Daniel L. Lastavich IRA; Piper Jaffray as Custodian James B. Wallace SPN/PRO; Richard C. Perkins; Richard A. Hoel; Shawn P. Weinand; Castlerigg Master Investments Ltd.; SF Capital Partners Ltd.; Valesco Healthcare Partners II LP; Valesco Healthcare Partners I LP; Valesco Healthcare Overseas Fund, Ltd.; and Con Egan.

Proceeds will be used for working capital and general corporate purposes.

"We believe this investment, combined with continued growth in our cash-generating e-mail encryption business and anticipated expansion of our base of active e-prescribing users, will provide the company with sufficient operating capital to achieve cash flow breakeven," said Rick Spurr, the company's chief executive officer, in a statement.

"As part of the capital raise, our goal was to add strong, respected institutional investors to our shareholder base. We accomplished this objective with a significant percentage of the placement going to H&Q Life Sciences Investors, a recognized leader in health care investments, which led the financing round with an approximate $3 million investment, and other respected institutional investors."

Looking to the company's latest earnings report, Zix reported a net loss of $43.60 million for the year ended Dec. 31, 2005, compared with a net loss of $42.04 million for year-end 2004.

Dallas-based Zix produces electronic communications services that deliver secured information to corporations.

Global Gold's $13 million offering

Despite a dip in gold prices Wednesday, Global Gold Corp. settled a $13 million PIPE, selling 10.4 million units of one share and one third-share warrant.

Global Gold sold the units to a group of investors led by Firebird Global Master Fund, Ltd. and East Capital, and including Farallon Capital Management, Persistency Capital, QVT Financial, Prince Street Capital and Aton International Ltd.

The whole warrants are exercisable at $1.25 each.

Aton Securities, Inc. was the placement agent.

Proceeds will be used for exploration projects in Armenia and Chile, for acquisition plans and for working capital.

The settlement of the deal was announced Wednesday afternoon, and by the end of the day, the stock had gained 7.14%, or 10 cents, to close at $1.50 (OTCBB: GBGD).

Based in Greenwich, Conn., Global Gold is a gold exploration company.

Gold prices were off a touch on Wednesday, losing 90 cents to close at $585 per ounce.

"We're still amazingly close to $600 [per ounce]," said one market source familiar with the resources sector. "There's still enough interest to keep things going for a while."

China Security settles $8 million PIPE

Elsewhere in private placements Wednesday, China Security and Surveillance, Inc. concluded an $8 million private placement, selling 2,666,667 shares at $3.00 apiece to a group of investors led by Pinnacle China Fund, LP.

The deal comes as China Security begins making its transition to a U.S.-based company. The transition is expected to be complete before the end of the year.

The investors in the placement received warrants for 416,667 shares, exercisable at $3.00 each.

Brean Murray, Carret & Co. was the placement agent.

Proceeds will be used for future acquisitions, working capital and general corporate purposes.

"We appreciate the commitment of our new institutional investors and look forward to a continued, productive relationship," said Tu Guo Shen, the company's CEO, in a news release. "As the 2005 audit comes to a close, we estimate the company will report a record revenue of approximately $33 million to $35 million, representing a 106% increase from the $16 million reported in 2004.

"The capital generated by this transaction will help us accelerate our organic growth initiatives and will allow us to pursue targeted acquisitions to enhance our position as a leading product developer and marketer in the burgeoning security and surveillance industry in China."

At the end of the day, China Security's stock had jumped 52.78%, or $1.90, to end at $5.50 (OTCBB: CSSTF).

Located in Shenzhen, China, China Security provides security and surveillance products and services.

Energy issuers may back off

Even though energy issuers have been prevalent in the PIPE market for the past two weeks, volatile oil prices may keep some issuers away, at least for the short term, said one sellside source Wednesday.

"At this point, oil needs to stabilize," he said. "We're up one day, down the other, and there's no stability. So far, energy stocks are OK, but too much volatility is going to impact them negatively and I think [issuers] are just going to wait for a while to see if oil settles a bit. I know that would be my advice."

On Wednesday, oil prices gained 84 cents to settle a $67.07 per barrel. Oil prices fell on Tuesday after climbing on Monday.

Energy offerings were light on Wednesday. Samson Oil & Gas Ltd., an Australian oil explorer, announced that it is in talks to conduct a PIPE with U.S.-based institutional investors, but the pricing terms haven't been set.

On Wednesday, Samson's stock lost A$0.005 to end at A$0.41 (Australia: SSN).

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