Power Air stock climbs on word of $5 million PIPE; Valence seals $1 million note sale

By Sheri Kasprzak

New York, July 21 - A $5 million private placement announced by Power Air Corp. led news in the quiet PIPE market Friday.

The offering sent the company's stock up by 3.41%, or 2.9 cents, to end the day at $0.879 (OTCBB: PWAC). The stock had closed unchanged at $0.85 on Thursday.

Volume of the company's shares traded Friday also took off with 326,700 shares traded, compared with an average of 9,258 shares traded.

The terms of the placement have not been determined at this time, but TerraNova Capital Partners, Inc. will be the placement agent.

Power Air had 43,000,646 outstanding common shares as of May 12.

This is not the first time Power Air has gone to the PIPE market for funding.

In May, the company issued 2,525,254 units at $1.10 each for proceeds of $2,777,779.

In an earlier private placement, the company sold 3,183,371 units for proceeds of $2,069,191. From Aug. 22, 2005 to Sept. 30, 2005, the company sold 2,077,454 units at $0.65 and followed that up with another 1,090,532 units at $0.65 each in the quarter ended Dec. 31. On March 15, the company sold 15,385 units at $0.65 each. All of the units were comprised of one share and one warrant.

"Having achieved all of our early targets, Power Air's board is now confident that we are ready for the more extensive diligence of institutional investors," said chief executive officer Remy Kozak in a news release. "TerraNova came highly recommended as an equity raising partner by FBP Capital, the group that advised us on our first two private placements."

"Power Air is precisely the type of company we look to work with," said Andre Schwegler, managing director of public capital markets for TerraNova, in a statement. "With oil prices still going up, Power Air's alternative-fuel technology has attracted a lot of positive attention. Add to that a well-defined product and market with defensible advantages and the company appears to have a very bright future."

Looking to the company's last earnings statement, Power Air reported a net loss of $512,130 for the quarter ended March 31, compared with a net loss of $121,845 for the same quarter ended March 31, 2005.

Located in Livermore, Calif., Power Air develops fuel cell-based commercial products.

In the broader market, PIPE activity practically crept to a halt on Friday as stocks continued to fall and, as one market source put it, everyone took off for the day.

"It is deserted," he said of his office. "I imagine that's the way it is a lot of places. It's a Friday in the summer, [stocks] are still in the toilet; nothing's getting done. There's stuff out there, but nothing worth even looking at, if you ask me."

The Dow Jones Industrial Average continued to take a beating, losing 59.72 to close at 10,868.38. The Nasdaq composite index gave up 19.03 Friday to close at 2,020.39 and the Standard & Poor's 500 composite index dipped by 8.84 to settle at 1,240.29.

Valence raises $1 million

Moving to the tech sector, Valence Technology, Inc. wrapped a $1 million private placement.

The company sold an 8% convertible promissory note with Berg & Berg Enterprises, LLC.

The note is convertible into common shares at $1.33 each, on par with the company's closing stock price on Thursday.

The note is due on Oct. 20, 2006.

At the end of the day Friday, Valence's stock gained 3.76%, or 5 cents, to end at $1.38 (Nasdaq: VLNC).

Valence concluded a similar offering with Berg & Berg on Feb. 15.

In that offering, Berg & Berg bought $1.5 million of the 8% notes, which were due March 30, 2006 and were convertible at a price equal to 85% of the average closing bid price for the five trading days before conversion, with a $1.93 floor.

After the Feb. 15 offering closed, Valence's stock closed at $1.97.

Austin, Texas-based Valence develops a phosphate-based lithium-ion battery technology.

Cannasat cuts size of PIPE

Heading to light Canadian PIPE activity, Cannasat Therapeutics Inc., citing unfavorable market conditions, cut the size of its previously announced private placement to C$1 million from C$5 million.

The company now plans to sell up to 5 million units and at least 3.25 million units at C$0.20 each.

The units are comprised of one share and one half-share warrant with each whole warrant exercisable at C$0.30 for two years.

The private placement will now be non-brokered. Dominick & Dominick Securities Inc. and Canaccord Capital Corp. had been the agents.

The deal will close on July 31.

The placement priced on June 7 as a C$5 million offering of 15,151,515 units at C$0.33 each.

Proceeds will be used for ongoing research and development and for working capital and general corporate purposes.

On Friday, the company's stock fell by a penny to close at C$0.23 (TSX Venture: CTH).

Toronto-based Cannasat is a research company focused on discovering the therapeutic benefits of cannabis and on the development of cannabis-based pharmaceutical products.

SatCon stock slips

In secondary market action Friday, SatCon Technology Corp.'s stock fell after announcing its plans Thursday to close a $12 million private placement of convertible notes.

The company's stock lost 7 cents, or 5.04%, to end at $1.32 (Nasdaq: SATC). The stock gained 2 cents in after-hours trading.

The stock fell 17.26%, or 29 cents, to settle at $1.39 Thursday when the offering was announced.

The notes are convertible at $1.65 each, a 6% premium to the average of the company's last five trading days.

Proceeds will be used to accelerate the expansion of the company's alternative energy stationary power business.

Boston-based SatCon develops power electronic and control products for the alternative energy markets.

Plains All American stock dips

A day after announcing the imminent completion of a $159.1 million direct placement of common units, Plains All American Pipeline, LP saw its stock drop slightly, losing 14 cents on the day.

The stock closed off by 0.31% to end at $45.26 (NYSE: PAA). On Thursday, when the deal was announced, the stock gained 50 cents, or 1.11%, to close at $45.42.

A group of institutional and private investors led by Vulcan Capital, Kayne Anderson Capital Advisors and Tortoise Capital Advisors agreed to buy units at $43.00 each, a 4% discount to the company's $44.92 closing stock price on Tuesday.

Plains' general partner agreed to make a proportionate capital contribution that would bring the total proceeds from the deal to $163 million.

Plains expects the deal to close by the end of the month.

Houston-based Plains is an intrastate and interstate crude oil transportation, gathering, marketing and storage provider.

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