Stockgroup cements new relationship; Broadpoint eyes opportunities; Amarin, Oxus raise for development

By Kenneth Lim

Boston, May 14 - Stockgroup Information Systems Inc. said it raised $3 million from options specialist PEAK6 Capital Management LLC to strengthen both its balance sheet and its relationship with a key investor.

Meanwhile, Broadpoint Securities Group Inc. sold $25 million of mandatory redeemable preferred shares as it prepares to seek investment opportunities.

Amarin Corp. plc announced a $60 million placement of American Depositary Shares that will help to accelerate its developmental projects, while Oxus Gold Inc. raised $18.5 million from a convertible loan note issue to bump up its production levels.

Stockgroup raises $3 million

Stockgroup said it closed a $3 million sale of convertible preferred shares in a non-brokered private placement to PEAK6 Capital Management.

The company sold 3,000 preferreds at $1,000 apiece. Each preferred has an annual dividend of 7%, payable in cash or stock at the company's option, and has an initial conversion price of $0.4545 per common share.

Stockgroup common stock (OTCBB: SWEB) closed at $0.38 on Wednesday, lower by 6.17%, or $0.03.

The preferreds cannot be converted for 180 days, and the company may redeem them at any time after 90 days by paying 110% of their value.

Stockgroup, a financial media company based in New York, said proceeds will be used for general corporate purposes and working capital.

The deal was first announced on May 5. Stockgroup issued the preferreds to PEAK6, a Chicago-based options trading shop, as part of a strategic agreement in which Stockgroup will provide market data, research and news to PEAK6's new online options web site.

Stockgroup does not have any specific plans for the proceeds, but the deal was important because the company has just emerged from a major revamp of its Stockhouse.com online financial portal, Stockgroup director of capital markets Steve Gear told Prospect News.

"It is significant for two reasons," Gear said. "One is it adds financial strength on our balance sheet. Second of all, the conversion price was a premium to market ... which was a sign of confidence in us from a very successful organization that is a strategic investor for us."

"We are just finishing a large build-out of our infrastructure over the last year," he added. "We absorbed a large acquisition and the web site, Stockhouse.com, was relaunched, and that was the largest project in the company's history. We just wanted to add some additional balance sheet strength in what is now a rocky market."

The deal should also help to strengthen the relationship between Stockgroup and PEAK6, Gear said.

"It cements our relationship with an investor and partner," he said. "PEAK6 is a private company but it has a very large footprint in the options market. What they're doing is they have this new web site called Optionsnews.com, which is a new web site geared towards options and derivatives, and they're in the early stages of building it. ... We should have some interesting synergies together down the road."

Gear said he was satisfied with the structure of the deal and the pricing. The dividend of 7% is lower than what some other companies have had to pay, while the option of paying the dividend in stock or cash gives the company flexibility, he said.

"We wanted to do something at a premium to the market, and we had an investor with us who was very interested," he said. "We got a 7% rate, we got a lock-up, and we got a premium to the market, so given where the market is right now, it's pretty good."

Stockgroup currently has no plans to raise more capital, Gear said.

Reaction from other shareholders has been positive, he noted.

"The reaction from our shareholder base has been positive," he said. "I think it gives them more comfort that our balance sheet is stronger."

Broadpoint eyes opportunities

Broadpoint Securities Group said it is raising $25 million from a fund managed by MAST Capital Management LLC to pursue expansion opportunities.

Broadpoint said it is selling the series A mandatory redeemable preferred shares to MAST, which currently controls about 10% of Broadpoint's common stock.

The transaction is expected to close on June 30.

Broadpoint common stock (Nasdaq: BPSG) closed at $2.46 on Wednesday, lower by 1.99%, or $0.05.

Broadpoint is a New York-based investment bank. On Wednesday, the company reported a net loss of $9.2 million for the quarter ended March 31.

"In the two quarters since the launch of Broadpoint we have made significant progress toward building a premier investment bank serving midsize companies and their investors," Broadpoint chairman and chief executive Lee Fensterstock said in a statement. "The turmoil in the capital markets in the first quarter offered opportunities for our fixed income businesses to produce excellent results. We are also pleased to have MAST's commitment to fund a $25 million mandatory redeemable preferred stock issue that will enable the company to take advantage of significant opportunities to build our business that the current competitive environment is affording us."

In a conference call with analysts, Fensterstock said the new capital will be an important tool for the company to pursue opportunities.

"It's our intention to use this capital to expand our existing businesses but also to be opportunistic given the many opportunities we're seeing," he said. "I should add that in terms of the utilization of this capital, it's going to be completely consistent with the strategy ... that we've laid out, that of serving corporations and the people who invest in them, so we don't see any change in our mission as a result of having raised these additional funds, but rather the tools to help us execute it."

The company expects to close the financing by the end of the second quarter.

Amarin raises $60 million

Amarin said it is selling up to $60 million of American Depositary Shares in two equal tranches through a private placement.

The first tranche will consist of 12,173,914 new ordinary shares sold for $28 million and potentially 869,565 new ordinary shares sold to insiders for $2 million, all at $2.30 per share.

The second tranche would consist of ADSs at a price equal to the lower of $2.60 and 113% of the average of the volume-weighted average prices of Amarin's ADSs for each of the 30 trading days immediately prior to the date of the second tranche's closing.

Amarin's ADSs closed at $2.59 on Wednesday, down by 1.52%, or $0.04.

Amarin, a London-based developer of central nervous system disorder treatments, said it will use the proceeds to advance its product pipeline, to retire $2.75 million of convertible debentures and for general purposes. The company will be free of debt after the convertibles are retired.

The new investors in the deal are Sofinnova Ventures, OrbiMed Advisors LLC, Thomas, McNerney & Partners, Panorama Capital, Longitude Capital and Fountain Healthcare Partners, who will take a combined $56 million,

Certain directors of Amarin have also indicated an interest in investing up to an additional $4 million in the placement, also over two equal tranches, bringing the potential total of the placement up to $60 million, Amarin said in a statement.

"This financing strengthens our balance sheet considerably, and allows us to accelerate our key clinical development programs," Amarin chairman and chief executive Thomas Lynch said in the statement. "We are now well positioned to take advantage of the significant opportunities available to the company."

Amarin president and chief operating officer Alan Cooke added in the statement, "We are delighted with the participation by well recognized biotech investors and by the continued support of our directors, which we believe reflects the attractive investment proposition Amarin represents."

Oxus raises $18.5 million

Oxus Gold said it completed an $18.5 million private placement of 8% unsecured convertible loan notes.

The notes were sold in units of $250,000 each.

They are convertible into new ordinary shares at 37p per share. Oxus common stock (LSE: OXS) closed at 28p on Wednesday, higher by 23.08%, or 5.25p.

Oxus has also mandated the Royal Bank of Scotland arrange a project finance facility of approximately $150 million, with the first drawdown expected by November.

The notes may be converted on the earlier of a written request from the holder or the first drawdown on the new project finance facility to construct the underground sulfides project at Amantaytau Goldfields. The notes also may be redeemed on the earlier of first drawdown on the project finance facility or two years. If all of the notes are converted, the maximum number of new shares that would be issued is 26,315,789.

London-based Oxus is gold exploration company.

"I am very pleased that we were able to conclude this issue in the context of the current market," Oxus chief executive Richard Wilkins said in a statement. "This placement of loan notes, although less than we had originally proposed to raise, is still sufficient to enable AGF [Amantaytau Goldfields] to proceed with the development of the underground sulfides project, ahead of drawdown on the RBS facility, and in order for AGF to meet its first underground production target of Q3 2009. It will also enable AGF to construct the heap leach operation at Asaukak, and to progress its exploration program.

"I believe that the company has now entered a new phase of its development, one that will see our attributable gold production increase significantly, and with it our profitability. We will also have financed a major capital expenditure program with minimum dilution to our shareholders."

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