Workstream secures $20 million; Pure Cycle raises $9.3 million in direct placement

By Sheri Kasprzak

New York, July 25 - Workstream Inc. led PIPEs news on Wednesday with word that it is planning to wrap a $20 million offering of warrants.

The company plans to sell warrants for 16 million common shares at $1.25 each.

The offering includes warrant coverage for up to 4 million additional shares, exercisable at $1.40 each for five years.

On Wednesday, the stock remained unmoved at $1.24 (Nasdaq: WSTM).

Workstream plans to use the proceeds to repay existing debt and payables, as well as to accelerate sales and marketing efforts and expand its technology foundation.

The deal is set to close in 10 days.

"Workstream has put in place a winning management team that is committed to creating value for shareholders and focused on delivering scalable solutions to clients," said Mike Balkin, small cap growth portfolio manager and partner at Magnetar Capital, in a statement. "Along with other long-time existing Workstream investors, we were pleased to make an additional investment.

"Over the coming weeks and months, Workstream appears to be well positioned to win significant enterprise and mid-market accounts, building on its leadership in pay-for-performance solutions as well as other human capital applications and services."

"The success of this round of financing is a strong confirmation of the market potential of our integrated suite of talent management applications and our business plan to reach the goal of becoming the industry leading on-demand solution," said Deepak Gupta, chief executive officer of Workstream, in a news release.

"We are pleased to have our current investors continue to invest and their confidence validates our view that Worksteam is well poised to take the lead in the on-demand talent management market space that leading industry analyst firms like Yankee Group and Forrester Research expect to grow beyond $3 billion in 2010."

Based in Burlingame, Calif., Workstream provides on-demand compensation, performance and talent-management solutions.

Pure Cycle's offering

In other PIPE offerings, Pure Cycle Corp. Wednesday closed a $9.3 million direct placement of shares.

The company issued 1.2 million shares at $7.75 each.

The shares will be sold under the company's shelf registration.

Also, the company's selling shareholders intend to sell 1,656,697 shares.

William Smith Securities Inc. and Flagstone Securities, LLC were the placement agents.

On Wednesday, Pure's stock gained 18 cents, or 2.37%, to end at $7.77 and gained another penny in after-hours trading (Nasdaq: PCYO).

Trading volume was off slightly with 30,042 shares traded compared with the average 53,300 shares.

Based in Thornton, Colo., Pure Cycle is a wastewater treatment service provider focused on the Denver metropolitan area.

Lucas Energy stock climbs

A day after closing a $12 million private placement of stock, Lucas Energy, Inc.'s stock gained 5.47% on Wednesday.

The stock climbed 11 cents to end at $2.12 (OTCBB: LUCE). On Tuesday, the company's stock fell by 19 cents to end at $2.01.

In the placement, the company sold 6,956,522 shares at $1.15 each and issued 6,956,522 warrants, each exercisable at $2.00.

Houston-based Lucas is an oil and natural gas exploration and development company.

Princeton Review stock gains

In other secondary market news, The Princeton Review, Inc.'s stock gained 6.67% on Wednesday, a day after the company announced the pending completion of a $60 million offering of convertible preferred stock.

The stock climbed by 35 cents to end at $5.60 (Nasdaq: REVU). The stock fell by 8.95 cents in after-hours trading.

In the placement, Bain Capital Ventures and Prides Capital agreed to buy 6% preferred stock, which is convertible into common shares at $6.00 each, a 23% premium to the company's $4.85 closing stock price on Monday.

On Tuesday, the company's stock gained 40 cents, or 8.25%, to end at $5.25, gaining another 3.86 cents in after-hours trading.

New York-based Princeton Review is a test preparation services company.

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