PRB Gas wraps $22 million deal; VitalStream seals $14 million stock offering

By Sheri Kasprzak

New York, Feb. 6 - PRB Gas Transportation, Inc. led PIPE news to kick off the week, settling a $22 million private placement of senior secured convertible notes.

The 30-month notes bear interest at 10% annually and are initially convertible into 3,142,857 shares at $7.00 each.

"We've got the people, prospects and now the financing in place to execute our very ambitious capital program for 2006," said Robert Wright, the company's chief executive officer, in a statement. "With these funds plus our current cash position and our bank lines that are being negotiated, we are able to proceed with our $30 million capital plan that includes a $21 million exploration and production program and $9 million from gas gathering projects."

The offering was announced Monday afternoon, and the company's stock ended the day up 2 cents to close at $5.80 (Amex: PRB).

Denver-based PRB is an oil and natural gas development and production company.

Elsewhere, VitalStream Holdings, Inc. settled a $14 million stock offering.

The company issued 10,769,230 shares at $1.30 apiece to a group of new and existing investors, including Winslow Management Co., Crosslink Capital and Columbia Acorn Fund. Winslow and Crosslink are new investors to VitalStream.

As of Sept. 30 VitalStream had 65,394,528 outstanding common shares. Following the placement, the company has 83,854,939 outstanding shares.

The price per share is a 17% discount to the company's closing stock price of $1.57 on Feb. 3.

"We feel it was done at a reasonable discount," said Alex Witten, a managing director of The Blueshirt Group, VitalStream's investor relations firm, in an interview Monday. "There was no warrant coverage; we didn't use a placement agent. We thought it was done under very favorable terms."

Witten said the company was able to attract a solid group of investors without the use of a placement agent because it is in a fast-growing sector.

"Our investors see potential for the company in a very, very fast-growing market," he said.

The company also announced Monday that it plans to conduct a reverse stock split within a range of 1-for-2 to 1-for-5.5 before on Dec. 31. The reverse stock split and the placement will position the company in its goal to list its stock on Nasdaq.

"As we formalized our 2006 plan, VitalStream's board recognized that in order to accelerate our ability to capture our share of the significant operating and acquisition opportunities in the streaming media applications market, we needed to strengthen our balance sheet, expose the company to a wider investor base and deepen our strategic relationships," said Jack Waterman, the company's CEO, in a statement released Monday morning.

"We now have taken significant steps toward achieving all of these objectives. We are particularly pleased by the strong show of support from two new investors, Winslow Management Co. of Boston, who was the lead in this financing round, and Crosslink Capital.

"In addition, demand from several existing investors, including Columbia Acorn Fund, was so strong that we were able to complete the transaction without a placement agent. Simultaneously, we believe that enacting a reverse split as the final step toward our ultimate objective of moving to the Nasdaq National Market will make the company more attractive to a broader financial base over time."

Separately, VitalStream is gearing up for its fourth-quarter earnings conference call on Feb. 13.

For the quarter ended Sept. 30, VitalStream reported a net loss of $999,090, compared with a net loss of $223,475 for the quarter ended Sept. 30, 2004.

The company's stock remained unchanged Monday at $1.57 (OTCBB: VSTH).

VitalStream completed another private placement in June 2004, selling 17.9 million shares for proceeds of $11 million.

Based in Irvine, Calif., VitalStream provides video and audio streaming products via the internet.

Advaxis wraps $3 million debenture deal

Looking to the biopharmaceutical sector, Advaxis, Inc. completed a $3 million convertible debenture offering with Cornell Capital Partners, LP.

Cornell bought 6% secured convertible debentures due 2009.

The debentures are convertible into common shares at the lesser of $0.287 each or at 95% of the lowest volume weighted average price of the company's stock for the 30 trading days before conversion.

The investor received warrants for 4.2 million shares, exercisable at $0.287 each and warrants for 300,000 shares, exercisable at $0.344 each.

As of July 31, 2005 the company had 37,656,887 outstanding common shares.

"This financing will strengthen the company's balance sheet and accelerate its clinical development," said Roni Appel, the company's CEO, in a statement. "As Lovaxin C, our first Listeria cancer immunotherapy, enters phase 1/2 testing in cervical cancer patients, this infusion of capital will help to ensure that our trial proceeds in accordance with our business plan and will facilitate the acceleration of additional indications including breast, prostate and ovarian cancers."

Proceeds will be used to advance the clinical development of the company's Lovaxin C product for cancer.

The company's stock closed unmoved at $0.24 Monday (OTCBB: ADXS).

Looking to the company's latest earnings report, Advaxis reported a net loss of $388,604 for the quarter ended July 31, 2005, compared with a net loss of $163,962 for the same period ended July 31, 2004.

Princeton, N.J.-based Advaxis is a biopharmaceutical company focused on developing Listeria-based cancer vaccines and other cancer therapies.

Lower stocks impact PIPE volume

Even though the major stock indexes closed mostly up, a slump in stock prices during the majority of the day may have pushed PIPE volume down, according to one market source.

"It looks to me like [stocks] are either down or not moving much at all," he said. "That doesn't do much to encourage activity on the whole, so I'm not seeing a lot."

The Dow Jones Industrial Average edged up 4.65 to close at 10,798.27; the Nasdaq composite index gave up 3.78 to end at 2,258,80; and the Standard & Poor's 500 composite index gained 0.99 to settle at 1,265.02.

Xtreme Coil leads Canadian offerings

Moving to Canada, Xtreme Coil Drilling Corp. negotiated a C$40.6 million PIPE.

The offering is being conducted as part of Xtreme Coil Drilling's amalgamation with Norquay Capital Ltd.

Xtreme intends to issue up to 5.8 million shares at C$7.00 each.

Peters & Co. Ltd. is the placement agent.

The company anticipates the deal will close on March 2.

Proceeds will be used to pay for a portion of expenses related to the amalgamation.

In the amalgamation, shareholders of Norquay will receive one share of the amalgamated company for each 30 shares of Norquay held. Each Xtreme shareholder will receive one share of the amalgamated company for every share of Xtreme held.

After the amalgamation, the company will operate under the Xtreme Coil Drilling Corp. name as a coil drilling technology company.

Norquay presently has no operations.

Xtreme Coil is based in Calgary, Alta.

Gold Hawk's C$14 million PIPE

In natural resources offerings in Canada Monday, Gold Hawk Resources Inc. priced a C$14 million offering of subscription receipts. The receipts are exchangeable on a one-for-one basis for units of one share and one half-share warrant upon the completion of its acquisition of the Tamboraque mine.

The offering was priced as gold prices advanced. Gold prices moved up $3.10 on Monday to close at $570.20 per ounce.

In the placement, Gold Hawk intends to sell up to 56 million and at least 48 million subscription receipts at C$0.25 each. The whole warrants are exercisable at C$0.35 each for two years.

The deal was announced Monday afternoon, sending the company's stock down 15.15%, or 5 cents, to close at C$0.28 (TSX Venture: CGK).

The placement agent for the offering is Jennings Capital Inc. The agent has a greenshoe for up to 9 million additional receipts exercisable for up to two days before closing.

If the mine acquisition is not completed by March 31, the proceeds from the deal will be returned to the subscribers.

Proceeds will be used to fund the acquisition. The remainder will be used for working capital.

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

Dejour heads up energy offerings

Several energy companies priced private placements Monday with the lot of them led by a C$6.4 million offering from Dejour Enterprises Ltd.

Oil prices retreated $0.26 to end the day at $65.11 per barrel.

The offering includes up to 4 million flow-through shares at $1.60 each.

The deal is slated to close on Feb. 28.

Pacific International Securities Inc. is the placement agent.

The company intends to use the proceeds for exploration on the company's Canadian uranium properties.

Dejour's stock closed unchanged at C$1.56 Monday (TSX Venture: DJE).

Vancouver, B.C.-based Dejour is an oil, natural gas and uranium exploration and development company.

Elsewhere in the energy sector, Dalmac Energy Inc. priced a C$5 million unit offering.

Dalmac plans to sell 4 million units of one share and one half-share warrant.

Each full warrant allows for the purchase of another share at C$1.50 each for two years.

A syndicate of placement agents led by Research Capital Corp. has a greenshoe for up to 800,000 units.

The deal is expected to close Feb. 28.

Proceeds will be used for asset acquisitions and working capital.

The company's stock slipped 9 cents, or 6.47%, to end at C$1.30 (TSX Venture: DAL).

Based in Edmonton, Alta., Dalmac is an oil and natural gas exploration company.

GOME stock falls

GOME Electrical Appliances Holding Ltd.'s stock slipped Monday after completing a $125 million convertible bond offering Friday.

GOME's stock closed down HK$0.35, or 4.76%, to end at HK$7.00 Monday (HKSE: GOME).

On Friday, when the private placement closed, the company's stock jumped 21.5%.

The stock remained unchanged on Pink Sheets at US$0.78 Monday (Pink Sheets: GMELF).

On Friday, the company issued convertible bonds to Warburg Pincus Private Equity IX, LP. The bonds are convertible into a total of 151,496,788 common shares at US$0.8251 each.

Based in Hong Kong, GOME is an electrical appliance retailer in the People's Republic of China.

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