Princeton Review to seal $60 million offering of convertible preferred stock

By Sheri Kasprzak

New York, July 24 - The Princeton Review, Inc. topped PIPE headlines on Tuesday with news of a $60 million offering of convertible preferred stock.

Bain Capital Ventures and Prides Capital agreed to buy the 6% preferreds, which are convertible into common stock at $6.00 per share. The conversion price represents a 23% premium to the company's $4.85 closing stock price on Monday.

In connection with the offering, Princeton Review will retire its B-1 convertible preferred stock.

In other news at the company, Michael J. Perik, formerly the chief executive officer of The Learning Co., was named chief executive officer at The Princeton Review. Former CEO John S. Katzman will remain as executive chairman.

"Over the past 25 years, we have created an unrivaled brand in learning and helped millions of students in the United States and around the world pursue higher education," said Katzman in a statement released Tuesday morning.

"Today's changes take us to another level. Bain and Prides bring great track records, and their investment materially strengthens and simplifies our balance sheet; this allows us to capitalize on a number of important opportunities in the industry as we place a renewed emphasis on expanding the geographic and product footprint of our core franchise."

The stock climbed by 8.25%, or 40 cents, to end the day at $5.25 and gained another 3.86 cents in after-hours trading.

Volume more than doubled with 152,429 shares traded compared with the average 76,049 shares.

New York-based Princeton Review is a test preparation services company.

Dow sinks by 226

In the broader market, stocks tanked on Tuesday, but a market insider said he didn't feel the drop would impact PIPEs too much.

"There's really not that much to impact," he said when asked about the damage the drop in stocks could have on the PIPE market. "It's sluggish as it is so I don't really see how it's going to make that much of a difference."

The Dow Jones Industrial Average gave up 226.47 on Tuesday to close at 13,716.95, and the Nasdaq composite index fell by 50.72 to close at 2,639.86. The Standard & Poor's 500 composite index slipped by 30.53 to settle at 1,511.04.

Southridge stock dives

A day after announcing the completion of a $19.6 million unit offering, Southridge Technology Group, Inc.'s stock fell by 14.45%.

The company's stock lost 25 cents on Tuesday to close at $1.45 (OTCBB: SOUT). On Monday, the stock gained 13.5 cents to close at $1.695.

The company sold units of one share and one half-share warrant at $0.60 each, a 61% discount to the company's $1.56 closing stock price on Friday.

The offering was conducted as part of the company's merger with RxElite Holdings, Inc.

The whole warrants in the offering are exercisable at $0.85 each for two years.

Proceeds will be used for costs related to the launch of the company's generic Sevoflurane, for product pipeline development and for working capital.

Based in Meridian, Idaho, Southridge develops and manufactures generic prescription drugs.

Gold offerings continue in Canada

Meanwhile, in the Canadian PIPE market, gold offerings continued to abound with Gold Hawk Resources Inc. pricing a C$10 million deal on Tuesday.

The company plans to sell 16,666,700 shares at C$0.60 each.

Agent Octagon Capital Corp. has a greenshoe for up to 2.5 million additional shares.

The deal is set to close Aug. 16.

Proceeds will be used for development at the company's Coricancha Mine, as well as for exploration and development at the company's other properties and for working capital.

The stock lost 3 cents on Tuesday to close at C$0.59 (TSX Venture: CGK).

Based in Vancouver, B.C., Gold Hawk is a gold explorer.

Explorator Resources, Inc., a copper-gold exploration company, priced a C$9.75 million offering of 13 million units at C$0.75 each on Tuesday.

The units consist of one share and one half-share warrant. Each whole warrant is exercisable at C$1.00 apiece for 18 months.

The offering is being placed through a syndicate that includes Blackmont Capital Inc. and Canaccord Capital Corp. The deal is set to close Aug. 9.

The company's stock lost 3 cents on Tuesday to settle at C$0.80 (TSX Venture: EXO).

The company is located in Toronto.

Zoloto stock dips

In secondary market activity, Zoloto Resources Ltd.'s stock fell slightly on Tuesday, a day after the company priced a C$10 million stock offering.

The stock gave up 1.73%, or 3 cents, to close at C$1.70 (TSX Venture: ZR). The stock gave up 5 cents on Monday after the deal priced to end at C$1.73.

In the placement, the company intends to sell shares at C$1.50 each.

Placement agent Kingsdale Capital Markets Inc. has a greenshoe for up to 3,333,333 additional shares in the deal, which is set to close on Friday.

The company intends to use the proceeds for exploration on its Russian properties in Chukotka and Irkutsk, as well as for future auctions of gold projects as the company plans its expansion in the area. The remainder will be used for general corporate purposes.

Zoloto is a Vancouver, B.C.-based gold exploration company.

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