NCT leads deal sizes with $50 million amended equity credit agreement

By Sheri Kasprzak

Atlanta, Oct. 6 - NCT Group, Inc. led private placement action Wednesday with an amended $50 million private equity agreement.

The company's amended and restated private equity agreement allows it to sell up to $50 million in stock to a Cayman Islands-based limited liability company.

In the new agreement, NCT can sell up to $50 million of common stock to Crammer Road LLC in exchange for cash. The agreement requires NCT to sell Crammer Road at least $5 million in NCT common stock at a 9% discount from market price.

To complete the amended deal, NCT must receive stockholder approval.

NCT, based in Westport, Conn., develops noise-reduction and sound-enhancement technology. The company's stock closed unchanged Wednesday at $0.21.

Dynamic Health's $6 million deal

Dynamic Health Products Inc. completed a $6 million private placement Wednesday.

The secured convertible notes include warrants to Laurus Master Fund to purchase 1.375 million shares of Dynamic's common stock.

Interest on the note is at Prime plus 200 basis points, subject to a floor of 6%. The interest rate decreases by 100 basis points for every 25% increase in Dynamic's common stock price above the fixed conversion price after registration covering the shares of common stock underlying the convertible notes and warrants. The interest rate cannot drop below 0%.

After Dec. 1, Dynamic will pay $187,500 a month of the outstanding principal, along with accrued interest, in cash or registered stock.

Dynamic is based in Largo, Fla., and produces non-prescription dietary supplements, over-the-counter drugs and beauty supplies. The company's stock closed down $0.04 at $1.30.

Langer's $5.5 million sale

Langer Inc. sold $5.5 million 7% senior subordinated notes to 10 accredited investors. The deal includes warrants to purchase 110,000 shares of common stock.

The notes are pre-payable at any time without penalty.

The company said it plans to use the net proceeds from the deal for its acquisition of Silipos, a Delaware-based skin-care company, and for general working capital.

Langer's stock closed unchanged Wednesday at $7.

Digital Recorders brings $5 million

Digital Recorders Inc. jumped into the private placement market with a $5 million deal.

The Dallas-based a digital communications company sold 1,207,729 shares of common stock to an investor for $4.14 per share and granted warrants for 241,546 shares of common stock at an exercise price of $6 per share, exercisable for five years.

David Turney, Digital's chairman, chief executive officer and president, refused to comment Wednesday on the specifics of the deal, but said the company plans to use the proceeds for general working capital.

The transaction is scheduled to close no later than Oct. 8.

The company specializes in transit, transportation and law enforcement digital communications and audio enhancement systems.

Digital Recorders' stock closed down $0.22 at $5.07 Wednesday.

Creative Vistas deal

Creative Vistas, Inc. entered into a $4.5 million deal with Laurus Master Fund Wednesday.

The notes convert at $3 per share and pays interest at Prime plus 200 basis points with a minimum rate of 6%. The minimum monthly payment on the note is $100,000 plus monthly interest.

The secured convertible term note includes options to purchase up to 499,999 shares of common stock at a price of $0.02 per share and a seven-year warrant to purchase up to 750,000 shares of common stock at $3.45 per share.

Creative Vista's assets and its subsidiaries, Acquireco and AC Technical, will secure the loan. Creative is based in Phoenix.

First Reliance sells $3.43 million stock

First Reliance BancShares Inc. entered into a $3.43 million private placement Wednesday.

The agreement, which includes 79 investors, is for 298,295 shares of common stock at $11.50 per share.

There were no brokerage or underwriting commissions paid in the private placement.

First Reliance BancShares is a Florence, S.C.-based holding company that owns First Reliance Bank. The company's stock closed unchanged Wednesday at $12.

Isonics private placement

Isonics Corp. entered the private placement market Wednesday with a $3.3 million deal.

The issue includes 33,000 shares of series E convertible preferred stock and 614,000 common stock warrants to a single, offshore investor. Isonics paid a due diligence fee of $231,000 and a reimbursement of $20,000 in expenses to Asset Managers International of Dublin, Ireland, according to the terms of the deal.

There was no placement agent in the deal.

The preferred stock is convertible into common stock at a price equal to 35% of market price on the conversion date, but no higher than $1.24 per share, with a floor price of $1 per share.

Each common stock warrant is exercisable for one share of common stock through Oct. 4, 2007. Half of the common stock warrants have an exercise price of $1.24 per share, while the other half have an exercise price of $1.35 per share.

Isonics' stock closed unchanged at a $1.52 Wednesday.

Cubic Energy closes $2.58 million convertible

Cubic Energy Inc. closed a $2.575 million private placement Wednesday.

The company issued the senior secured convertible notes to a group of institutional and high net-worth investors. The notes pay an annual interest of 7% and can convert into common stock at a price of $0.50 per share.

Investors also received five-year stock purchase warrants for an additional 2.575 million shares of common stock at $1 per share.

Proceeds from the deal will be used to develop a recently acquired oil well in Louisiana.

Cubic, an energy company, is based in Dallas and its stock closed up $0.04 at $0.50.

Brazauro plans C$2.55 million deal

Brazauro Resources Corp. said Wednesday it plans to raise C$2.55 million in a private placement.

The company will offer 3 million shares of common stock at C$0.85 per share.

A finder's fee of 8% in cash and 8% in B warrant may be issued in connection with the placement, the company said. Each B warrant will entitle the holder to buy an additional share of Brazauro at C$1.05 per share for one year from the issue date.

The funds will be used for drilling and gold exploration in the Tapajos region of Brazil.

Brazauro is a Houston-based gold exploration company. The company's stock closed down C$0.10 to C$0.95.

Simtrol finishes $2.35 million placement

Norcross, Ga.-based Simtrol Inc. finished a $2.35 million private placement.

In the deal, the company sold 912,500 shares of common stock to 30 investors for gross proceeds of about $1.825 million. The company also issued warrants for 912,500 additional shares of common stock at an exercise price of $2 per share, for net proceeds of about $1.56 million.

Along with the private placement, $525,000 of the company's convertible debt issued in February, including all accrued and unpaid interest, was converted into 271,409 shares of common stock. The conversion price was $2 per share and the company issued to investors warrants to purchase 542,818 in additional shares at an exercise price of $2 per share.

Simtrol designs, develops and markets Windows-based software. The company's stock closed up $0.02 at $1.15 Wednesday.

Allegheny deal positive for debt relief

A $151.5 million private placement closed by Allegheny Energy may help the power company repay debts.

The company sold 10 million shares of common stock at $15.15 per share Tuesday to four institutional investors. The deal came at a 5.3% discount to its closing price. The shares represent about 8% dilution to existing shares and about 10% of existing shareholders' equity on the balance sheet at the end of June, sources said.

"Although it's a relatively small amount, it is positive for them," said one equity analyst. "It is good that they have access to the equity market and will provide some cash to pay down debt. We have seen several high-yield names sell equity recently, and it's a good trend."

The funds from the private placement will be used to repay $1.5 billion in debt by the end of 2005.

The relief comes at a hard time for the energy company.

In late September, Allegheny Energy sold a Manhattan, Ill. power plant to a private investment firm for $173 million in an effort to repay debts. Even so, the company said at the time it expected to incur $440 million in third-quarter charges related to the possible sale of two other facilities.

On the bright side, company said it has reduced debt by about $700 million since Dec. 1, 2003, and has also entered into contracts to sell its West Virginia gas operations and its interest in the Ohio Valley Electric Corp.

"This stock issuance is another significant step in our program to strengthen the financial condition of Allegheny Energy," Paul Evanson, the company's chairman and chief executive officer, said in a statement Tuesday. "With market conditions favorable, we decided this was an appropriate time to issue equity. This private placement offered the company an opportunity to raise capital in a cost-effective manner within a short period of time."

Allegheny Energy's stock closed up $0.87 Wednesday at $16.87.

Canadian deals

In Canadian private placement action Wednesday, Deep Resources entered into a C$5 million deal.

The private placement is comprised of C$1.5 million in flow-through common shares and C$3.5 million of common shares on a best-efforts agency basis, the company said.

The flow-through shares are priced at C$1.10 per share and the common shares are priced at C$0.85 per share.

National Bank Financial will act as lead agent on the private placement.

Deep Resources, a Calgary, Alta.-based oil and natural gas independent, said it plans to use the profits from the deal for oil and gas development and exploration expenses.

The company chose to do the private placement in order to fund 22 drilling operations in a short amount of time, Warren Coles, Deep Resources' chief financial officer, said in an interview Wednesday.

The private placement was fully subscribed by Wednesday morning, leading Coles to believe the deal may have been priced too low.

"We've done three previous private placements," Coles said. "All but one of them was done with flow-through shares. We're very comfortable with them."

The financing is scheduled to close Oct. 27.

Deep Resources' stock closed up C$0.05 Wednesday at C$1.

In other Canadian deals, energy company Result Energy Inc. plans to raise C$2.5 million in a private placement deal, the company announced Wednesday.

In the non-brokered private placement up to 4,166,167 shares will be issued at C$0.60 per unit. Each unit will be comprised of one common share of Result issued on a flow-through basis and one half of one non-transferable common share purchase warrant.

Each whole warrant allows for the purchase of one common share issued on a flow-through basis at an exercise price of C$0.75 between Jan. 1, 2005 and Dec. 15, 2005.

Upon closing, Result will have up to 27,796,074 common shares issued and outstanding.

The Calgary, Alta.-based company said it plans to use the proceeds from the private placement for exploration and general corporate purposes.

News of the private placement came on the same day the company announced it was planning a nine-well down-spacing drilling program on a recently acquired gas project in Saskatchewan.

Result's stock closed unchanged Wednesday at C$0.50.

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