American Oriental prices $60 million unit deal; PIPE volume takes off ahead of holiday

By Sheri Kasprzak

New York, Nov. 23 - American Oriental Bioengineering Inc. led private placement news on Wednesday just ahead of the long Thanksgiving holiday weekend while a slate of deals crowded the market as oil prices dropped and stocks made gains.

"In general, things are picking up because it's the last day to get anything done before the holiday," pointed out one market source. "[Issuers] want to get this stuff done before the end of the year, so a lot is pricing now so that it can close before the beginning of the year."

Another market source said the combination of a short week, lower oil prices on Wednesday and advances made by all of the major stock indexes came together to push volume upward.

"It's not just one thing or another," he added. "It's several factors at once."

Oil prices slipped $0.13 to close at $58.71 per barrel while the Dow Jones Industrial Average gained 44.66 to end at 10,916.09. The Nasdaq composite index settled up 6.42 at 2,259.98, and the Standard & Poor's 500 composite index closed up 4.38 at 1,265.61.

In the American Oriental offering, the company intends to sell up to 12.5 million units at $4.80 each.

The units include one share and one warrant for 0.3 of a share. The details of the warrants were unavailable Wednesday.

After the offering was announced Wednesday afternoon, the company's stock plummeted 95 cents, or 15.91%, to end at $5.02.

However, the Hong Kong-based company only has 9.7 million shares available for issue. The offering will require shareholder approval to increase the number of authorized shares.

Proceeds will be used for acquisitions and general corporate purposes.

Looking to its earnings, for the quarter ended Sept. 30, the company reported net income of $3,709,764 compared with net income of $2,241,045 for the same quarter of 2004.

American Oriental makes and distributes pharmaceutical and nutraceutical products.

Windrose prices direct offering

Moving to direct placements, Indianapolis-based Windrose Medical Properties Trust priced a previously announced $42.3 million stock deal.

The company plans to issue 3 million shares at $14.10 each to institutional investors under its shelf registration.

Cohen & Steers Capital Advisors, LLC and Robert W. Baird & Co. Inc. are the placement agents for the deal.

Proceeds from the deal will be used for the acquisition of 22 properties. If those acquisitions are not completed, the company will use some of the proceeds to repay up to $50 million in mortgage debt secured by three of its current properties. The rest will be used for general corporate purposes.

Windrose is a real estate investment trust focused on acquiring health care facilities.

The company's stock gained 28 cents to end at $14.80 Wednesday.

Peregrine's direct deal

In another direct placement Wednesday, biopharmaceutical company Peregrine Pharmaceuticals Inc. priced a $6.72 million offering.

The deal is comprised of 8 million shares at $0.84 each to one institutional investor.

The shares will be sold under the company's shelf registration.

Proceeds will be used to accelerate development of some of the company's products.

"This is an exciting time for Peregrine as we pursue Tarvacin clinical trials for cancer and hepatitis C, explore its utility in a variety of other viral indications, including influenza, HIV and CMV and collaborate with an academic consortium to further assess the safety and efficacy of Cotara to treat malignant brain cancer," said Stephen King, the company's chief executive officer, in a statement. "This infusion of capital will enable us to accelerate and expand these efforts, which we view as critical to realizing the potential of these important new therapies."

Based in Tustin, Calif., Peregrine is a pharmaceutical company focused on treatments for cancer.

The company's stock lost a penny on Wednesday to close at $0.93 but gained a penny in after-hours trading.

Home Solutions plans $26.67 million deal

Home Solutions of America, Inc. announced its plans to hit the private placement market with a $26,675,000 offering.

The deal includes 4.85 million units at $5.50 each.

The units are comprised of one share and one warrant for 0.2 of a share. The whole warrants allow for the purchase of another share at $5.50 each for five years.

Sanders Morris Harris Inc. was the placement agent.

The offering was announced Wednesday morning, and the company's stock lost 86 cents, or 13.03%, to finish at $5.74.

Proceeds will be used to repay $11 million in debt from the acquisition of assets from Florida Environmental Remediation Services, Inc. The rest will be used to pay off $7 million in mezzanine debt and to provide working capital.

"I am delighted to have the first phase of our financing completed," said Richard Bennett, the company's chief executive officer, in a statement. "We can now pursue strategic alliances with multi-national telecommunications infrastructure companies and implement our sales and marketing initiatives that were constrained due to a lack of capital. I am also extremely pleased that Michael Criden and Glenn Singer have joined [the] board of directors. Both gentlemen bring a vast source of business experience in addition to creating a truly independent board for the first time in the company's history."

Based in Dallas, Home Solutions provides recovery, restoration and rebuilding services.

Royal Laser leads Canadians

In Canada, Royal Laser Corp. led private placement news there with a C$6.5 million convertible debenture offering.

The 8% debentures mature in three years and are convertible into common shares at C$1.05 each.

The deal is slated to close Nov. 29.

Canaccord Capital Corp. is the placement agent.

Proceeds will be used for the company's acquisition of Smokey Manufacturing Inc. and Thunder Tool and Manufacturing Ltd. The rest will be used for general corporate purposes.

Based in Toronto, Royal Laser makes laser-based technologies used in metalworking and woodworking.

The stock lost C$0.01 on Wednesday to end at C$0.67.

Goldsource Mines' C$3.6 million offering

Goldsource Mines Inc. led one of two gold and diamond offerings in the news on Wednesday.

The deal includes 6 million units of one share and one half-share warrant. The whole warrants are exercisable at C$0.75 each for two years.

The non-brokered offering has an over-allotment option for up to 2 million additional units.

Proceeds will be used for exploration and development of the company's Saskatchewan diamond projects and for working capital.

After the deal was announced Wednesday afternoon, the company's stock gained C$0.20, or 28.57%, to end at C$0.90.

Based in Vancouver, B.C., Goldsource is a diamond exploration company.

Reno, Nev.-based Bullion River Gold Corp. wrapped a $3.5 million private placement of 7 million units at $0.50 apiece Wednesday.

The units include one share and one warrant. The warrants are exercisable at $0.75 each for two years.

Proceeds will be used for production on the company's French Gulch property.

"Our goal with this financing was to raise sufficient funds to execute the test mining on our French Gulch property, and with satisfactory results from the test mining, to take it right into production," said Peter Kuhn, the company's president, in a statement. "We have continued to develop and keep relationships strong with our investor partners which enabled us to complete this financing so that we can quickly move forward production."

The company's stock gained 2 cents to end at C$0.54.

i2 Technologies stock down 2.6%

i2 Technologies, Inc.'s stock slipped slightly on Wednesday after announcing the pending settlement of a $75 million convertible note offering.

The company's stock lost 36 cents, or 2.62%, to end at $13.36 on Wednesday after gaining 2.01%, or 27 cents, on Tuesday.

The notes the company is gearing up to sell are convertible into common shares at $15.4675 each.

Based in Dallas, i2 develops technologies used in the supply chain sector.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.