PharmaFrontiers prices $23 million stock offering; FacePrint gets $10 million equity line

By Sheri Kasprzak

New York, Feb. 23 - PharmaFrontiers Corp. headed up PIPE activity Thursday, pricing a $23 million stock offering that jumpstarted trading in its existing equity.

The offering was announced late Thursday morning. By 2 p.m. ET, the company's stock had advanced by 17.78%, or 8 cents. At the end of the day, the stock had gained 11.11%, or 5 cents, to close at $0.50 (OTCBB: PFTR).

PharmaFrontiers intends to sell 46 million shares in the deal.

As of Nov. 8, the company had 20,619,545 outstanding common shares.

Proceeds from the deal will be used to fund the phase 2b clinical trials for Tovaxin - a vaccine for multiple sclerosis, the phase 1 clinical trials for the company's treatment of rheumatoid arthritis and the preclinical trial for a stem cell technology used to treat type 1 diabetes.

"They have been trying to raise [funds] for quite some time," said one buysider familiar with the company. "I still have my doubts that they'll be able to do so, although the stock is quite cheap if they have anything whatsoever. We still need to see some validation in the autologous T-cell vaccine technology. It's too risky for us at this stage. If they raise the capital, they'll have the resources to find out if it works."

"With three separate therapies that we believe hold great promise, PharmaFrontiers is at a critical stage as we are about to embark upon clinical trials to support this promise," said David McWilliams, the company's chief executive officer, in a statement. "With that in mind, the board has taken this action with the intent of ensuring that the company has adequate resources to achieve these milestones."

Looking to the company's earnings, PharmaFrontiers reported a net loss of $4,726,848 for the quarter ended Sept. 30, 2005, compared with a net loss of $628,250 for the quarter ended Sept. 30, 2004.

"As of Sept. 30, 2005, the company had cash of approximately $4,353,000," said the earnings statement. "We believe we have sufficient cash to fund current operations through February 2006. The company's burn rate in the third quarter of 2005 was $550,000 per month. Our burn rate is expected to increase in the fourth quarter of 2005 as we prepare for our Tovaxin phase 2b clinical trial.

"The company believes we will need a minimum of $2.6 million to fund our operations for the fourth quarter of 2005. This money will be used for the ramp up of our Tovaxin phase 2b clinical trial, for research and development, capital expenditures and for general and administrative expenses. The company anticipates that it will need to engage in best-efforts sales of its securities to raise needed working capital. Failure to raise necessary working capital will cause us to curtail operations."

Based in The Woodlands, Texas, PharmaFrontiers develops cell therapies to treat diseases like multiple sclerosis, rheumatoid arthritis and cardiac conditions.

FacePrint's $10 million equity line

In the tech sector, FacePrint Global Solutions Inc. received a $10 million equity line from Cornell Capital Partners, LP.

Under the terms of the line, Cornell may buy shares of FacePrint at a discount to the current market price. The full terms of the equity line could not be determined by press time Thursday.

There is a $550,000 limit on each draw.

Proceeds from the deal will allow the company to finalize its product line, including its EZ-Face law enforcement three-dimensional facial composite software.

"We believe that this investment will greatly enhance our ability to grow," said Pierre Cote, the company's CEO, in a statement. "It will also help us to get EZ-Face out onto the frontlines this year, as well as boost our marketing strategies."

"We look forward to working with FGS [FacePrint] as they continue to develop their exciting product line in the biometrics industry," said Michael D'Ecclesiis in the statement.

Based in Fresno, Calif., FacePrint develops face recognition software used for identity verification.

The company's stock gained 22.52%, or $0.034, to close at $0.185 Thursday (OTCBB: FCPG).

Shumate raises $2.25 million

Moving to the natural resources sector, Shumate Industries, Inc. settled a $2.25 million private placement.

Through placement agent First Montauk Securities Corp., the company issued 3.75 million shares at $0.60 each with the lead investor buying $250,000 of the offering in December.

In conjunction with the private placement, Shumate's senior lender agreed to forgive $2 million of its outstanding $5.6 million term loan as incentive to attract investors to the private placement. The restated term loan has a balance of $3.6 million and bears interest at Prime rate plus 200 basis points.

"The originally targeted amount of $1.5 million was raised to $2.25 million based on strong investor interest in our technology-oriented energy services company," said Matthew Flemming, the company's chief financial officer, in a statement. "We intend to use this capital for the launch of our new Hemiwedge valve technology, working capital and general corporate purposes.

The company's stock advanced by 2 cents on Thursday to close at $1.20 (OTCBB: SHMT).

Based in Conroe, Texas, Shumate is an energy field services company.

Primeline leads Canadian PIPEs

Canadian private placement offerings Thursday were led by an English company.

Primeline Energy Holdings Inc. priced a C$25 million unit deal.

The offering includes up to 16,666,666 units at C$1.50 each. The units comprise of one share and one half-share warrant. Each whole warrant is exercisable at C$2.00 for two years.

Jennings Capital Inc. is the placement agent for the deal, which is scheduled to close March 31.

In connection with the private placement, Primeline's majority shareholder, Primeline International Holdings Inc., will convert C$7.9 million in debt into 5,266,667 units of one share and one half-share warrant at C$1.50 each.

Proceeds will be used for three-dimensional seismic data, drilling and working capital.

Primeline, based in London, is an upstream oil and natural gas exploration company.

Olympus's C$10 million deal

Elsewhere in Canada, Olympus Pacific Minerals Inc. announced its intention to raise up to C$10 million in a stock deal.

The pricing terms will be set at a later time based on market conditions.

Paradigm Capital Inc. and M Partners Inc. are the placement agents and have a greenshoe for up to C$1 million in additional proceeds.

The proceeds from the offering will be used to rehabilitate the company's Bong Mieu underground project and to develop its Dak Sa underground project. The rest will be used for general corporate purposes.

Olympus settled a $2 million convertible note offering on Dec. 22, 2005. The note is due June 30, 2007 and bears interest at Libor plus 275 basis points.

Toronto-based Olympus is a gold exploration company.

The company's stock closed down 7 cents, or 10.45%, to end at C$0.60 Thursday (TSX Venture: OYM).

Columbia Metals stock gains 7.8%

Columbia Metals Corp.'s stock advanced Thursday after the company settled a C$4,155,000 private placement Wednesday.

The company's stock gained 7.81%, or 5 cents, to end at C$0.69 (TSX Venture: COL).

On Wednesday, when the deal closed, the stock lost 2 cents to close at C$0.64.

In the placement, Columbia sold units at C$0.50 each.

Proceeds will be used for development on the company's Mexican properties, property acquisitions and working capital.

Based in Toronto, Columbia is a metals exploration company.

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