American Telecom pockets $12.5 million from convertible preferreds; Verso raises $2 million

By Sheri Kasprzak

New York, Jan. 31 - Heading up private placement activity Wednesday was a $12.5 million offering of series A convertible preferred stock from American Telecom Services, Inc.

Meanwhile, issuance volume remained relatively light in the U.S. market even as stocks rose. Rising oil prices kept some issuers away again.

After seesawing during the session, oil finally settled up $1.17 to end at $58.14 per barrel.

The Dow Jones Industrial Average put on 98.38 to close at 12,621.69 and the Nasdaq composite index gained 15.298 to end at 2,463.93. The Standard & Poor's 500 composite index settled the day up 9.42 at 1,438.24.

"Oil had been very unpredictable lately and even though stocks are performing well, no one wants to jump in with both feet until [oil] settles down," said one market source when asked about the impact oil is having on the PIPE market. "I think there is a market for [offerings]."

In the American Telecom deal, the company sold 5,000 shares of 8% preferreds at $25,000 apiece.

News of the deal released Wednesday morning sent the stock up early, gaining 6.25% by 9:55 a.m. ET. At the end of the day, the stock had gained 6.25%, or 26 cents, to settle at $4.26 (Amex: TES).

The preferreds are convertible into common stock at $4.25 per share.

Credit Suisse Securities (USA) LLC, SIAR Capital and Benchmark Advisors were the lead investors and received warrants for 1,176,471 shares, exercisable for five years at $4.25 each.

"As ATS continues to expand its retail presence, products and recurring service line, this capital, coupled with our recently announced credit facility, will strengthen our financial position," said Bruce Hahn, the company's chief executive officer, in a statement.

"We believe this offering is a significant endorsement from high-quality institutional investors who have expressed confidence in our business model, management team and large market opportunity. This capital infusion will give us the ability to continue executing our plans for rapid growth."

Based in City of Industry, Calif., American Telecom is a communications services company.

Verso closes $2 million deal

In another offering in the communications sector, Verso Technologies, Inc. concluded a $2 million stock offering with Enable Growth Partners, LP; Enable Opportunity Partners, LP; and Pierce Diversified Strategy Master Fund, LLC.

The investors bought 2 million shares and received warrants for 1 million additional shares, exercisable at $1.25 each for five years.

The company may sell up to $3 million in additional shares in the offering.

Verso's stock gained 4 cents, or 3.42%, Wednesday to close at $1.21, gaining another 5 cents in after-hours activity (Nasdaq: VRSO). Volume remained low Wednesday with 88,144 shares traded compared with the average 159,618 shares.

Back in February 2006, Verso raised $7.02 million from a non-brokered offering of 5.4 million units at $1.30 each. The units included one share and one warrant with each warrant exercisable at $1.56 each for five years.

Atlanta-based Verso is a communications company for carriers and service providers.

Drinks raises $8 million

In other PIPE news, Drinks Americas Holdings, Inc. wrapped an $8 million stock deal that sent the company's stock up 8.31% Wednesday.

The stock gained 25 cents after the company announced the completion of the offering Wednesday afternoon to close at $3.26 (OTCBB: DKAM).

The volume of Drinks Americas shares traded Wednesday also climbed with 492,596 shares traded compared with the average 278,260 shares.

In the placement, the company sold 4,444,444 shares at $1.80 each to five investors. The investors also received warrants for 3,777,778 shares exercisable at $3.00 each.

Midtown Partners & Co., LLC was the placement agent.

Located in Wilton, Conn., Drinks Americas distributes alcoholic and non-alcoholic beverages.

Everton plans private placement

Looking north of the border, Everton Resources Inc. negotiated a C$10 million private placement of units Wednesday.

News of the offering comes as gold prices jumped above $650 per ounce. Gold prices gained $7.70 Wednesday to close at $657.90 per ounce.

The offering includes up to 8 million units of one share and one half-share warrant. Each whole warrant is exercisable at C$1.65 each for 18 months.

The deal is being placed through a syndicate of agents led by Orion Securities Inc.

Proceeds will be used for exploration on the company's Quebec and Dominican Republic properties.

The company's stock lost a penny Wednesday to close at C$1.26 (TSX Venture: EVR).

Everton is a gold exploration company based in Ottawa.

Continental Minerals stock drops

In other resources news, Continental Minerals Corp.'s stock dipped Wednesday after the company priced a C$19.965 million unit deal on Tuesday.

The company's stock fell by 3 cents, or 1.8%, to close at C$1.65 (TSX Venture: KMK). On Tuesday, Continental's stock gave up 8 cents, or 4.55%, to settle at C$1.68.

In the placement, Continental intends to sell units of one share and one warrant at C$1.65 each. The unit price is a 6.25% discount to the company's C$1.76 closing stock price on Monday.

Proceeds will be used to complete the Xietongmen feasibility study, the Environmental Impact Assessment and the 10,000-meter exploration drill program to define the size of the Newtongmen discovery. The rest will be used for working capital.

Vancouver, B.C.-based Continental is a mineral exploration company.

Xtreme stock closes up

A day after pricing a C$54.6 million stock deal, Xtreme Coil Drilling Corp.'s stock edged higher Wednesday, gaining 4.55%.

The stock closed up 50 cents to end at C$11.50 (Toronto: XDC). On Tuesday, when the deal was priced, the stock gained 2.8%, or 30 cents, to settle at C$11.00.

In the offering, Xtreme intends to sell shares at C$10.50 each, a 1.9% discount to the company's C$10.70 closing stock price on Monday.

Peters & Co. Ltd. is the underwriter for the offering, which is set to close Feb. 15.

Proceeds will be used for an increase in the company's 2007 capital expenditure program and for working capital.

Calgary, Alta.-based Xtreme Coil develops and builds drilling rigs.

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