Hampton deal sells out at $255 million; QCR issues preferreds; Bacterin settles first tranche

By Stephanie N. Rotondo

Portland, Ore., July 1 - The first day of the new quarter saw several PIPE deals getting done, including financings by QCR Holdings Inc., Bacterin International Holdings Inc. and Tower Financial Corp.

Hampton Roads Bankshares, Inc. announced the largest deal of the day, however, saying its $255 million private placement of stock was fully subscribed. The company did not disclose the expected settlement date.

Among the completed transactions, QCR sold $25 million worth of convertible preferred shares. QCR received cash and previously issued preferreds in exchange for the new preferreds.

Bacterin meantime said it had wrapped the first tranche of a private placement of stock, taking in $7.51 million. The company is seeking nearly $18 million from the private financing, which is being done in connection with a reverse merger.

And, Tower Financial raised almost $3 million from a private placement of common equity. The shares were issued at a 10% discount.

In newly announced deals, Kangaroo Resources Ltd. said it was aiming for $14 million from a private placement of convertible notes. Proceeds will be used for coal exploration.

Hudson Technologies Inc. said it was conducting a registered direct offering of units for proceeds of $5.48 million. The funds could be used to repay debt.

Hampton deal sells out

Hampton Roads Bankshares, a Norfolk, Va.-based holding company for Bank of Hampton Roads and Shore Bank, said its previously announced $255 million private placement of stock was fully subscribed.

The deal was originally announced on May 24. The company is also conducting a $20 million rights offering at the same terms as the private placement.

Investors participating in the financing include the Carlyle Group and Anchorage Advisors LLC. Both investors will subscribe for 168.8 million shares each, generating proceeds of $72.57 million.

"We are very pleased to have received agreements representing a full subscription of the private placements," said John A.B. "Andy" Davies, Jr., president and chief executive officer, in a press release.

"This is another significant step forward in the process of substantially strengthening our balance sheet and providing a solid foundation for the future."

Proceeds will be used to bolster subsidiary banks' balance sheets, as well as for general corporate purposes.

The company did not return calls seeking comment on Thursday.

Hampton Roads' stock (Nasdaq: HMPR) gained 10.8 cents, or 14.4%, to $0.858. Market capitalization is $19.01 million.

QCR wraps preferred sale

QCR Holdings settled a $25 million private placement of convertible preferred shares, according to a press release.

The deal closed June 30.

The company sold 25,000 of the 7% series E non-cumulative convertible perpetual preferred shares at $1,000.00 each.

In exchange for the shares, investors surrendered $20.9 million in series B and C preferred shares and paid $4.1 million in cash.

The preferreds are initially convertible into common shares at $12.15. The company has the option after three years to force conversion if the stock trades at $17.22 or higher for 20 trading days in a 30-day period.

The shares can be redeemed after five years.

"We are very pleased with the successful completion of this private placement," stated Doug Hultquist, president and CEO, in the release. "This capital transaction provides us with $4.1 million of new capital to further bolster our strong capital position and at the same time slightly reduces the level of preferred dividends that we must pay each quarter."

"The series E private placement is an important part of our long-term capital plan," added Todd Gipple, chief operating and financial officer. "This transaction further strengthens our already strong capital and liquidity positions, provides $25.0 million in Tier-1 capital at a preferred dividend cost that is slightly less than the cost of the $20.9 million in series B and series C preferred that it replaced, and provides the mechanism to convert this $25.0 million of preferred equity into common equity over the next several years."

QCR's shares (Nasdaq: QCRH) fell 32 cents, or 3.24%, to $9.55. Market capitalization is $43.85 million.

QCR Holdings is a Moline, Ill.-based bank holding company.

Bacterin settles first tranche

Belgrade, Mont.-based Bacterin International took in $7.51 million in the first tranche of its $17.93 million private placement of stock, the company announced.

The financing is being done in connection with a reverse merger, which the company said had been completed as well.

Bacterin - formerly K-Kitz Inc. - is selling approximately 11.2 million common shares at $1.60 per share. About 4.93 million shares were issued in the first tranche.

Also, some investors participating in the deal converted previously issued notes in exchange for the shares. Those investors received a 10% discount, bringing the price per share down to $1.44.

Investors also received warrants equal to 1.57 million additional shares.

"Today launches a new era for our company," remarked Guy Cook, president and founder of Bacterin and president and CEO of the newly merged company, in a press release. "The funds raised will be utilized to expand our sales force and increase our marketing activities."

"With the cash infusion from this raise, we will be able to accelerate the build-out of our biologics direct sales force to address the growing demand for our revolutionary bone graft material allowing us to remain confident in achieving our forecasted revenue and profit goals."

"The increase in our planned sales efforts will effectively support the achievement of the company's revenue goal of $20.6 million for 2010, and should enhance its growth pace for the foreseeable future."

Bacterin's equity (OTCBB: KKTZ) was unchanged at $3.50.

Bacterin international is a processor of innovative, biologic allografts for transplantation.

Tower raises $2.91 million

Tower Financial took in $2.91 million from a private placement of equity, according to a regulatory filing.

The deal settled June 30.

The company issued 461,111 common shares at $6.30 per share, which represented a 10% discount to the June 29 closing price of $7.00.

Proceeds will be used for general corporate purposes.

The company did not return calls seeking comment on Thursday.

Tower's stock (Nasdaq: TOFC) held steady at $7.00. Market capitalization is $28.66 million.

Tower Financial is a Fort Wayne, Ind.-based bank holding company.

Kangaroo seeks $14 million

Kangaroo Resources intends to raise $14 million from a private placement of a convertible note instrument, according to a press release.

The deal will be done in two tranches, with $2.55 million coming in the first portion and the remaining $11.45 million in the second.

The two-year note bears interest at 10% and is convertible into ordinary shares at $0.116 per share.

Additionally, investors will receive 100% warrant coverage, the equivalent of 120 million warrants. Each warrant is exercisable at $0.116 for five years.

"The completion of this funding represents a tremendous result for the company, which has been achieved in a very challenging market environment, said Mark O'Keefe, managing director, in the release. "We have a great portfolio of assets in Indonesia and these additional funds will enable the company to build on the production base it has already established."

Kangaroo's equity (Australia: KRL) closed at A$0.115.

Kangaroo Resources is a Burswood, Australia-based coal mining company.

Hudson heralds direct deal

Hudson Technologies aims to raise $5.48 million via a registered direct offering of units, the company said in a press release.

Hudson will sell the units - consisting of one common shares and one warrant - at $2.00 each. The warrants are exercisable at $2.60 for five years.

The strike price represents a 27.45% premium to the June 30 closing share price of $2.04.

All told, the company will issue up to approximately 2.73 million common shares and 1.39 million warrants.

Proceeds will be used for working capital and general corporate purposes, including potential acquisitions. The funds might also be used to reduce debt. Settlement is expected July 7.

The company did not return calls seeking comment on Thursday.

Hudson's shares (Nasdaq: HDSN) dropped 16 cents, or 7.84%, to $1.88. Market capitalization is $39.4 million.

Hudson Technologies is a Pearl River, N.Y.-based provider of services to the refrigeration industry.

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