HSW snags $18.4 million investment; Mountain Lake plans sale; Oxigene gets $40 million financing deal

By Kenneth Lim

Boston, Feb. 20 - HSW International Inc. closed an $18.4 million sale of stock to hedge fund Eastern Advisors LLC as the company's strategic restructuring gathers steam.

Mountain Lake Resources Inc. said it will sell C$1.2 million of stock-and-warrant units in a private placement aimed at developing its mining projects in eastern Canada.

Meanwhile, Oxigene Inc. entered into a $40 million three-year committed equity financing facility with Kingsbridge Capital.

HSW raises $18.4 million

HSW on Wednesday said it sold $18.4 million of stock on Feb. 15 to Eastern Advisors Fund LP and Eastern Advisors Offshore Fund Ltd.

Eastern Advisors is a long/short equity fund founded in 2003 by Scott Booth with seed capital from Julian Robertson, the company said in a statement.

The 5 million shares in the deal were sold at $3.68 apiece. HSW stock (Nasdaq: HSWI) closed at $3.44 on Feb. 15. The stock jumped 15.05% or 56 cents to close at $4.28 on Wednesday after the deal was announced.

HSW in an Atlanta-based provider of online information to consumers in emerging digital economies.

HSW also said Wednesday that it is spinning off its wireless telephone training and educational software businesses to focus on its core Internet business, part of a strategy outlined when it merged with Intac International in October.

"The two transactions are part of a strategy the company's been executing since October with its merger with Intac," HSW spokesman Brion Tingler told Prospect News. "This is the third placement that the company has done since October and it's really helping the company to build up the capital base to fund its operations in China and Brazil."

The placement to Eastern Advisors will bring to about $57.8 million the total cash that HSW has raised since October 2007. Other institutional investors that have taken stakes in HSW include Ashford Capital Management, Capital Research and Management, Chartwell Investment Partners, Chilton Investment Co., Deka Investment and Nordinvest.

"HSWI has been trying to attract some institutional investors that understood their target markets, and Eastern Advisors" has strong expertise in Asia, Tingler said.

The company was pleased to receive Eastern Advisors' support, he added.

"It's a great day for HSWI," Tingler said. "They've managed to pare down their non-core businesses, and when this deal closes they'll have all of their assets in this core internet business. I think they're very pleased to get an investor like Eastern Advisors. In fact, they're great investors. They know the space very well."

Mountain Lake plans deal

Mountain Lake hopes to raise C$1.2 million from a private placement of stock-and-warrant units to develop its existing projects.

The Vancouver, B.C.-based diversified junior mining and exploration company said it has engaged Scarsdale Equities LLC to place 2 million units of one share and one half-share warrant at C$0.60 per unit. Each two-year warrant will have a strike price at C$0.75.

Mountain Lake's Toronto-listed common stock (TSX:MOA) rose C$0.01 on Wednesday to finish at C$0.57.

"The proceeds of the financing will be used to develop their gold and base metal projects in eastern Canada," Mountain Lake spokesman Greg Lytle told Prospect News.

Lytle said the pricing of the deal was based strictly on the stock's current market value.

"The shares of Mountain Lake's trade on the Toronto Venture Exchange under the symbol 'MOA', and the price of the financing announced today is based on the recent trading range," Lytle said.

The company expects a good mix of investors when the deal closes.

"Our followers obviously tend to be people who have an interest or follow the junior exploration and mining sector," Lytle said. "I expect the investors participating in this offering to be a mix of institutional investors and high-net worth individuals."

Lytle said debt financing was not a suitable option at the moment.

"In terms of debt versus equity, it's pretty much standard practice with junior exploration companies that don't have revenue to do equity offerings," Lytle said.

Oxigene gets $40 million line

Oxigene has received a $40 million three-year equity financing facility commitment from Kingsbridge Capital Ltd.

The agreement will see Kingsbridge, a private investment group, buy the lesser of about 5.7 million common shares or $40 million of common stock over the term of the facility.

Oxigene may draw on the capital in tranches of either 2% of Oxigene's market capitalization at the time of the draw down or the lesser of 3.5% of Oxigene's market capitalization at the time of the draw down and an alternative draw down amount, calculated based on a Oxigene's average trading volume and closing prices at the time of the draw down.

Kingsbridge will buy the shares at discounts of 5% to 12% to the average market price of the stock during the pricing period, with a floor of $1.25 per share. Kingsbridge also received five-year warrants for 250,000 shares, exercisable at $2.74 each.

Oxigene stock (Nasdaq: OXGN) closed at $2.05, down by 3.76% or 8 cents on Wednesday.

Oxigene is a pharmaceutical company located in Waltham, Mass.

"We're pleased to establish a relationship with Kingsbridge, a leader in the CEFF [committed equity financing facility] field, which has established similar facilities with a number of clinical-stage biopharmaceutical companies," Oxigene vice president and chief financial officer Jim Murphy said in a press release. "We expect the CEFF to enhance Oxigene's financial flexibility as we work to advance our drug development programs and business development initiatives."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.