ISTA Pharmaceuticals to close $40 million note sale; Xponential wraps convertible offering

By Sheri Kasprzak

New York, June 22 - ISTA Pharmaceuticals, Inc. led PIPE action on Thursday with news that it will wrap up a $40 million offering of senior subordinated convertible notes on Friday.

The 8% notes mature in five years and are convertible into common stock at $7.75 per share, a 22.2% premium to the company's $6.34 closing stock price on June 21.

One buysider was not impressed.

"I know the company and am not a fan of their programs," said the buysider. "I think they did the deal out of desperation. That's my 2 cents."

"Obviously some big players believe in this stock," said an equity trader of the offering.

Slated to purchase the notes on Friday are HBK Master Fund LP; Deerfield Partners, LP; Deerfield International Ltd.; Sprout Capital IX, LP; Sprout Entrepreneurs Fund, LP; Sprout IX Plan Investors, LP; Visium Balanced Fund, LP; Visium Balanced Offshore Fund, Ltd.; Visium Long Bias Offshore Fund, Ltd.; Atlas Master Fund, Ltd.; LBI Group, Inc.; and Highbridge International LLC.

Banc of America Securities LLC is the placement agent.

By 1:30 p.m. ET, the stock had fallen 2.68%, and by the end the day, ISTA had sustained a loss of 14 cents, or 2.21%, to close at $6.20 (Nasdaq: ISTA).

ISTA intends to use the proceeds from the offering for the commercialization of ISTA's lead product containing prednisolone acetate and tobramycin. The launch of the product is expected to coincide with the company's filing of a New Drug Application with the Food and Drug Administration and the FDA's acceptance and approval of the application.

According to ISTA's latest earnings statement, the company incurred a net loss of $10.62 million for the quarter ended Mach 31, compared with a net loss of $8.21 million for the same quarter of 2005.

Located in Irvine, Calif., ISTA is a specialty pharmaceutical company focused on treatments for eye conditions like dry eye, vitreous hemorrhage, diabetic retinopathy, glaucoma and ocular pain.

Xponential completes $20 million offering

Elsewhere in PIPEs Thursday, Xponential Inc. completed its long-standing $20 million private placement of limited recourse secured subordinated convertible notes. The offering has been ongoing since March 2005, and the notes were issued in several tranches.

The 8% notes are due Dec. 31, 2014 and are convertible into common shares at $10.00 each, a 400% premium to the company's $2.00 closing stock price on June 21.

Massie Capital, Ltd. was the placement agent.

"We are pleased that the private placement is completed," said Dwayne Moyers, the company's chief executive officer, in a statement. "The company is actively pursuing acquisition and investment opportunities with the proceeds of the offering."

Xponential's stock remained unchanged at $2.00 on Thursday (OTCBB: XPOI).

Xponential, based in Norcross, Ga., makes small, short-term loans secured by personal property.

Maverick raises $10 million

Moving to the energy sector, Maverick Oil and Gas, Inc. wrapped a $10 million private placement of 9.75% secured convertible debentures.

A group of institutional investors purchased the debentures, which are due June 21, 2007 and are convertible into common shares at $0.9376 each.

The investors received warrants for 18.6 million shares, exercisable at $0.9376 each for five years.

Proceeds from the offering will fund exploration on the company's Fayetteville shale project and for the Barnett shale project.

"The company intends to use the proceeds from the private placement primarily to continue its ongoing drilling and development efforts in the Fayetteville shale project in Arkansas and the Barnett shale project in Texas," said V. Ray Harlow, the company's CEO, in a news release. "We are pleased that existing stakeholders elected to make this investment in the company."

Connected to the offering, the strike price of existing warrants priced at $1.50 and $2.00 each will be reduced to $0.9376 each due to anti-dilution provisions triggered by the deal. Those warrants will be exercisable for 9.3 million shares.

Maverick's stock lost a penny on Thursday to end the session at $0.98 (OTCBB: MVOG).

Fort Lauderdale, Fla.-based Maverick is an oil and natural gas exploration company.

Glencairn leads Canadians

In Canada, Glencairn Gold Corp. arranged a C$18 million private placement of 30 million subscription receipts.

The receipts are priced at C$0.60 each, a 4% discount to the company's C$0.63 closing stock price on Wednesday.

The receipts are exchangeable for units of one share and one half-share warrant once Glencairn completes its acquisition of the La Libertad gold mine in Nicaragua. The whole warrants from the units are exercisable at C$0.80 for two years.

Yamana Gold Inc. has agreed to buy C$2.5 million of the receipts.

The placement is being conducted through a syndicate of underwriters led by Orion Securities Inc.

Proceeds will be used for general corporate purposes, including expenses connected to the mine acquisition. The rest will be used for exploration expenses on the company's existing properties.

The stock closed down a penny at C$0.62 (Toronto: GGG).

Toronto-based Glencairn is a gold exploration company.

In other mineral offerings, GobiMin Inc. priced a C$7,004,000 private placement.

The offering, which is being placed through a syndicate of agents led by Desjardins Securities Inc., includes 4.12 million shares at C$1.70 each.

The deal is scheduled to close July 5.

Proceeds will be used for exploration and for the acquisition of additional properties. The rest will be used for working capital.

On Thursday, the company's stock closed unchanged at C$2.00 (TSX Venture: GMN).

Based in Montreal, GobiMin is a mineral exploration company.

Gran Tierra stock gains 3%

A day after wrapping a $65,004,076 private placement, Gran Tierra Energy, Inc.'s stock gained more than 3%.

The stock gained 9 cents to end at $3.05 (OTCBB: GTRE).

On Wednesday, when the deal settled, the stock dropped 7.5%, or 24 cents, to close at $2.96.

Under the terms of the placement, Gran Tierra sold units at $1.50 each, a discount of more than 53% to the company's $3.20 closing stock price on June 20.

The units are comprised of one share and one half-share warrant. The full warrants are exercisable at $1.75 each through June 20, 2011.

Sanders Morris Harris and Deutsche Bank were the placement agents for the deal, the proceeds of which will be used to settle Gran Tierra' acquisition of Argosy Energy International and of the El Vinalar Block in Argentina from Golden Oil Corp.

Gran Tierra is a Calgary, Alta.-based oil and natural gas exploration company.

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