NeoRx secures $65.03 million from stock deal; Jeantex stock off 7% after getting $10 million equity line

By Sheri Kasprzak

New York, Feb. 1 - NeoRx, Inc. led PIPE activity Wednesday with a $65.03 million stock offering announced late in the day. NeoRx also received a $3.5 million bridge loan.

A group of institutional investors, including MTM Capital, Bay City Capital, Deerfield Management Co., Abingworth and T. Rowe Price, will buy 92.9 million shares at $0.70 each.

Those investors will also receive warrants for 25.4 million shares, exercisable at $0.77 each for five years.

The investors will also finance a $3.5 million convertible bridge loan. The loan matures May 31, 2006, bears interest at 8% annually and is convertible into 5 million shares at $0.70 each.

For the loan, the investors received warrants for 2.5 million shares, exercisable at $0.77 each for five years.

"This significant financing, led by one of the most knowledgeable and experienced group of investors in the industry, would allow us to continue to support and expand clinical development of picoplatin and pursue our ongoing goal of building a diverse oncology pipeline of products that provide new treatments for cancer patients," said Jerry McMahon, the company's chief executive officer, in a statement. "The proposed financing will be critical step forward in our efforts to reposition the company as a specialty pharmaceutical company focused on oncology."

Proceeds will be used for the development of the company's lead product candidate, picoplatin, a treatment for tumors.

On Wednesday, the company's stock gained a penny to end at $0.81 (Nasdaq: NERX).

Seattle-based NeoRx develops treatments for cancer.

Looking to the apparel sector, Jeantex Group, Inc.'s stock fell more than 7% after the company entered into a $10 million equity line with Cornell Capital Corp.

The agreement sent the company's stock down 7.14%, or 5 cents, to close the day at $0.65 (OTCBB: JNTX).

Cornell has the right to buy shares of Jeantex at a discount to the then-current market price over two years.

The full pricing terms of the agreement were unavailable at press time Wednesday.

"We are pleased to have successfully secured this funding with Cornell Capital," said Henry Fahman, the company's chief executive officer, in a statement. "We believe this investment will strengthen our financial position and will allow us greater flexibility to execute our growth strategy through private label manufacturing, branded sales, auxiliary denim services and strategic acquisitions.

"While we have no obligation to sell shares under this firm commitment from Cornell, the SEDA will be there if and when we need it."

Jeantex reported a net loss of $2,359,816 for the quarter ended Sept. 30, compared with a net loss of $546,333 for the same quarter ended September 2004.

"The company has accumulated deficit of $13,445,255 as of Sept. 30, 2005," said the company's latest earnings report. "Management has taken various steps to revise its operating and financing requirements, which it believes are sufficient to provide the company with the ability to continue on in the subsequent year. Management devoted considerable effort during the period ended Sept. 30, 2005, toward management of liabilities and improving the operations management believes that the above actions will allow the company to continue its operations through the next fiscal year."

Los Angeles-based Jeantex designs and produces apparel.

FreeStar's $9.2 million deal

Moving elsewhere in the PIPE market, FreeStar Technology Corp. is gearing up to close a $9.2 million private placement with a European finance group.

The investors, led by Swedish financier Soren Moberg, plan to buy 46 million shares at $0.20 each.

FreeStar will issue warrants for 14 million shares, exercisable at $1.50 each for two years and additional warrants for 36 million shares at prices ranging from $2.50 to $8.50 each.

After the deal was announced Wednesday morning, FreeStar's stock dove 17.4%, or 20 cents, to close at $0.95 (OTCBB: FSRT).

C20 Investments is the placement agent.

"This financing represents a significant commitment to FreeStar Technology," said Paul Egan, the company's CEO, in a statement released Wednesday morning. "It will strengthen our balance sheet as well as provide capital to grow our business. Coupled with expected cash flow from our growing revenue base, we anticipate that this financing will enable us to expand and enrich our programs to meet the needs of our new and existing customers."

Investor Moberg said in a statement that the investment was part of a long-term investment strategy.

"In negotiating this investment, we coordinated a group of Swiss, Swedish and British investors that regard FreeStar Technology as a key long-term investment because of our belief that it is a strong company with exceptional potential," he said.

Dublin, Ireland-based FreeStar develops payment-processing technologies.

Resources activity improves

In the broader PIPE market Wednesday, one sellside source said mineral exploration companies may be looking to private placements more this week because of improved gold prices.

When asked about a recent influx of uranium offerings, the market source said it's not so much uranium as minerals in general.

"I don't really think it's just uranium," the Vancouver, B.C.-based source said. "What's happening is gold has been steadily rising and that's pushing things like copper, uranium even. I'd say it's mostly because of gold prices."

Even so, gold prices took a dip on Wednesday after making some gains earlier this week. Gold prices lost $1.20 Wednesday to end at $569.50 per ounce.

Despite the loss, the sellsider said gold prices are stronger in general.

The stronger gold prices sparked a surge in gold offerings Wednesday. In particular, New Gold Inc. priced a C$50.4 million unit offering.

As to the activity among uranium issuers this week, UEX Corp. upsized to C$53.11 million a previously announced C$42 million deal on Tuesday, and on Monday, Universal Uranium Ltd. priced a C$5.03 million unit offering.

DynaMotive raises $4.28 million

Elsewhere in private placement news Wednesday, DynaMotive Energy Systems Corp. completed a $4,284,000 stock offering.

The deal included 6.3 million shares at $0.68 each and warrants for 1.3 million shares, exercisable at $1.01 each for two years.

Separately, the company released its key objectives for the 2006 development and capital program. Those objects include the development of two 200-tonne per day projects and develop a program of advanced technology development and testing.

"We are pleased to announce the success of our financing initiatives and the implementation of a capital spending program that will result in accelerated development of advanced pyrolysis plants and a more aggressive market penetration program," said Andrew Kingston, the company's CEO, in a statement. "In December, after careful review of our near-term revenue expectations, our outstanding warrant and option positions, project finance capabilities and capital requirements for 2006 and 2007, we were able to reduce our near-term financing requirements and have thus avoided unnecessary dilution to shareholders.

"Protecting and enhancing shareholder value is a key object for management. Through the implementation of this strategy, we are in a position to deliver on both counts."

The company's stock gained 2.2%, or 2 cents, to end at $0.93 (OTCBB: DYMTF).

Vancouver, B.C.-based DynaMotive develops technologies to turn organic materials into fuel.

New Gold's C$50.4 million unit deal

Back to the New Gold offering, the company plans to sell 5.6 million units at C$9.00 each.

The units are comprised of one share and one half-share warrant. The whole warrants allow for the purchase of another share at C$12.00 each for two years.

The deal is expected to close on Feb. 23.

Proceeds will be used for underground and surface exploration and development on the company's New Afton and Ajax copper-gold projects. The rest will be used for general corporate purposes and working capital.

The company's stock gained 5 cents to settle at C$9.05 Wednesday (Toronto: NGD).

Based in Vancouver, B.C., New Gold, formerly known as DRC Resources Corp., is a gold and diamond exploration company.

In other gold offerings, Unigold Inc. settled a C$3,228,923 deal.

The company sold 20,180,770 shares at C$0.16 each to Shairco Ltd.

Proceeds will be used for the company's exploration program.

On Jan. 17 the company closed a C$1 million offering of 4,444,444 shares at C$0.225 each.

On Wednesday, Unigold's stock remained unchanged at C$0.58 (TSX Venture: UGD).

Based in Toronto, Unigold is a gold exploration and development company.

First Community Bancorp stock edges up

After wrapping up a $109,456,057 direct placement it announced on Tuesday, First Community Bancorp's stock moved up slightly Wednesday.

The company's stock gained 51 cents, or 0.85%, to close at $60.61 (Nasdaq: FCBP).

On Tuesday, when the offering was announced, the stock advanced 3.42%.

In the placement, First Community sold shares at $57.88 each to a group of accredited investors. The price per share is a slight discount to the company's closing stock price of $58.11 on Jan. 30.

Based in Rancho Santa Fe, Calif., First Community operates a chain of banks in California and Texas.

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