Primus seals $20.58 million direct placement; Ener1 raises $15 million

By Sheri Kasprzak

New York, June 29 - PIPE volume got a boost on Friday from the upcoming holiday week.

"A ton of people are going to be away on vacation, so of course a lot of stuff is getting done today," said one sellsider of the sudden burst in volume. "I'd expect to see volume take off the week after next because of the very same reason. People are away; things either get done the week before or the week after."

Another sellsider agreed.

"There has been a big push to get [offerings] out before next week," he said. "Next week will likely be very, very quiet."

Heading up the large number of deals announced Friday was a $20,587,500 registered direct placement from Primus Telecommunications Group, Inc.

The company issued 22.5 million shares at $0.915 each to institutional investors under its shelf registration.

When the offering was announced Friday afternoon, the stock gained 6 cents, or 6.38%, to end the session at $1.00 (OTCBB: PRTL).

CRT Capital Group LLC was the agent for the deal.

Based in McLean, Va., Primus is a telecommunications company focused on voice-over-internet protocol and wireless data services.

Ener1 secures $15 million

In other PIPE news, Ener1, Inc. received a commitment for a $15 million placement from its controlling shareholder, Ener1 Group.

Ener1 Group agreed to buy 50 million shares at $0.30 each, a 42% premium to the company's $0.21 closing stock price on Wednesday.

The investor also will receive warrants for up to 60% of the shares issued in the offering, exercisable at $0.30 each for five years.

Ener1's stock climbed by 9.52%, or 2 cents, to close at $0.23 (OTCBB: ENEI) on Friday.

Volume was slightly elevated with 82,900 shares traded compared with the average 63,678 shares.

Connected to the deal, the strike price on all of Ener1 Group's existing Ener1, Inc. warrants will be reduced to $0.30 from $0.50.

Closing of the offering is contingent upon Ener1's achievement of certain milestones related to its lithium ion battery and fuel cell development over the next 180 days.

Proceeds will be used for the commercial development of the company's lithium ion batteries for hybrid electric vehicles and for the launch of the company's fuel cell-powered surveillance camera.

"This tremendous commitment from Ener1 Group will allow Ener1 to gain ground in the development of the lithium ion battery for [hybrid electric vehicles]," said Ener1 vice chairman Charles Gassenheimer in a statement.

"It will also provide the funding to launch the surveillance camera product, which we expect to be very successful. This large financing commitment will allow us to focus on improving shareholder value through development of our business. In addition, we are working with our investment bankers to raise capital to fund our operations through the end of 2008 and also provide sufficient capital to restructure our long-term debt. This financing structure gives us the financial flexibility to complete this additional financing when the market conditions are most beneficial to our shareholders."

Fort Lauderdale, Fla.-based Ener1 develops lithium ion batteries and other alternative energy sources.

China Agritech's $15 million deal

Elsewhere, China Agritech, Inc. announced the pending completion of a $15,001,200 offering of stock.

In that deal, the company plans to sell 5.556 million shares at $2.70 apiece to a group of accredited investors.

The offering is set to close during the July 2 week.

The placement was announced Friday morning, and by the end of the session, China Agritech's stock gave up 9.32%, or 33 cents, to settle at $3.21 (OTCBB: CAGC).

The majority of the proceeds will be used for the addition of organic granular fertilizer to the company's product lines and for the construction of a granular fertilizer line in each of the company's factories in Hebei, Anhui, Chongging and Xinjiang. The remaining proceeds will be used for working capital.

Connected to the offering, 1,124,564 shares owned by the company's chief executive officer, Yu Chang, were placed in escrow as part of a make-good obligation.

Under the make-good provision, if the company's after-tax income for fiscal year 2007 exceeds $8.35 million, the escrowed shares will be returned to Chang.

"Sustainable agriculture is a top priority for the People's Republic of China," Chang said in a news release.

"The Chinese government is encouraging farmers to use more 'green' or 100% organic cultivating methods which now account for about a fifth of China's agriculture. With this additional capital, we intend to take advantage of this trend by expanding our production capabilities, marketing efforts and recently established distribution network to include organic granular fertilizer."

Beijing-based China Agritech manufactures liquid fertilizer.

Antares secures $15.04 million

Moving to the biotech sector, Antares Pharma Inc. announced the pending completion of a $15.04 million offering of 9.4 million shares at $1.60 each.

The shares will be sold to a group of institutional investors through lead agent Oppenheimer & Co. Inc. The investors also will receive warrants for 3.3 million shares, each exercisable at $2.00.

The stock gave up 9.71%, or 17 cents, to close at $1.58 (Amex: AIS).

Proceeds will be used for the phase 3 clinical study of the company's Anturol product and for the advancement of new products in the pipeline. The rest will be used for working capital and general corporate purposes.

Located in Ewing, N.J., Antares develops drug delivery systems, including a transdermal patch.

The Antares offering is just one of several biotech deals in the PIPE market in the past two weeks.

EpiCept Corp. is another biotech name with an offering in the pipeline.

The company said Friday it plans to close a $9.945 million offering of stock. The deal includes 5.1 million shares at $1.95 each.

News of the placement sent the stock plummeting 11.89%, or 29 cents, to settle at $2.15 (Nasdaq: EPCT).

The investors also will receive warrants for 2.56 million shares, exercisable at $2.93 each for five years.

Proceeds will be used for working capital.

EpiCept, based in Tarrytown, N.Y., develops treatments for pain related to cancer as well as treatments for cancer.

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