Arrowhead Research to raise $19.56 million; sellsiders say volume picks up as week winds down

By Sheri Kasprzak

New York, Jan. 13 - Arrowhead Research Corp. led a more active PIPE market to round out the week, announcing the impending completion of a $19,565,000 stock deal with two institutional investors.

The news, announced Friday morning, sent the company's stock down 15 cents, or 3.21%, to finish the day at $4.52 (Nasdaq Capital: ARWR).

In the offering, York Capital Management and Knott Partners, LP agreed to buy 5.59 million shares at $3.50 apiece. The investors will also receive warrants for 1,397,500 shares, exercisable at $5.04 each.

As of Sept. 30, Arrowhead had 27,984,194 outstanding common shares.

Proceeds, the company said in a statement, will be used to help fuel growth.

"We think Arrowhead's innovative and scalable business model will position it well in this growth industry," said Alexander Klabin, senior vice president of York Capital, in a statement. "We are delighted to partner with Bruce [Stewart, Arrowhead's chief executive officer] and Leon [Ekchian, Arrowhead's president,] and the Arrowhead team, helping them to accelerate their plans for investment and growth."

"We are excited to increase our ownership position to approximately 12.5% from 9.5% in this promising emerging growth company," said John Schneller of Knott Partners, in a statement.

"We are extremely pleased to partner with well-established institutions of this caliber," said Ekchian in a statement released Friday morning. "This capital infusion enables Arrowhead to expand its existing subsidiaries and make additional strategic investments and acquisitions, as appropriate."

Virginia Dadey, a spokeswoman for Arrowhead, did not immediately return calls for additional comment on the offering Friday.

Looking to the company's earnings, Arrowhead reported a net loss of $6,624,824 for the year ended Sept. 30, 2005.

Based in Pasadena, Calif., Arrowhead is a research company focused on nanotechnology for use in electronics, life sciences and energy.

In the broader PIPE market Friday, two sellside sources said volume picked up slightly as the week came to a close.

"Some [issuers] are probably just now getting around to [pricing offerings]," said one of the market sources. "Stocks have been down and it probably just wasn't that appealing of a market to do anything."

In fact, stocks were mostly higher, but just barely, on Friday. The Dow Jones Industrial Average, after topping 11,000 earlier in the week, lost 2.49 to end at 10,959.87. The Nasdaq composite index gained just 0.35 to finish at 2,317.04, and the Standard & Poor's 500 composite index ended the day up 1.55 at 1,287.61.

Another sellsider agreed that volume did appear to be up.

"We're back from the holidays; it just takes a while for this stuff to get done," he noted, adding that he couldn't really point to anything in particular that had pushed down volume earlier in the week.

China Agritech's $12 million deal

Back to more specific offerings, China Agritech, Inc. settled a $12 million private placement on Friday, selling 4.8 million shares at $2.50 each.

"This is a significant milestone in the development of our company," said Chang Yu, China Agritech's CEO, in a statement. "We are very encouraged by the positive response to our private placement and the support for our business plan evidenced by this response.

"The company's recent growth has been gratifying but we remain committed to aggressively expanding our business and continuing to build our now well-established brand throughout China and internationally. We expect our ability to serve farmers in China, and indeed the world, will be accelerated as a result of this funding."

The company said it plans to use $8 million of the proceeds to expand production and distribution capabilities at its Harbin, China, plant. The rest will be used for internet technology infrastructure, marketing and working capital.

In other news, Richard Dean was named vice president of strategic planning for China Agritech.

On Friday, the company's stock remained unchanged at $3.15 (OTCBB: CAGC).

Based in Beijing, China, Agritech is a fertilizer manufacturer.

Glacier wraps offering

Heading up PIPEs north of the border, Glacier Ventures International Corp. raised C$29.6 million in the private placement of subscription receipts.

The company issued 10,385,965 receipts at C$2.85 each. The subscription receipts are exchangeable on a one-for-one basis for common shares once the company finishes its acquisition of 3120574 Nova Scotia Co.

Proceeds will be used to fund the acquisition.

If the acquisition does not close by Feb. 28, the receipts will be returned to the investors.

A syndicate of placement agents led by Raymond James Ltd., BMO Nesbitt Burns Inc. and CIBC World Markets Inc. arranged the offering.

On Friday, the company's stock fell 2.7%, or C$0.10, to close at C$3.60 (Toronto: GVC).

Glacier, based in Vancouver, B.C., is a communications company focused on acquiring businesses in the print, electronic and online media sector.

Elsewhere in Canada, Quorum Information Technologies Inc. priced a C$4.1 million unit offering Friday.

The company intends to sell up to 2 million units at C$2.05 each. The units include one share and one warrant. The warrants allow for the purchase of another share at C$2.50 each for 18 months.

The deal is expected to close Jan. 20.

Proceeds from the non-brokered deal will be used for the development of the company's Xsellerator automotive dealership management system software and for the expansion of the company's business into the United States.

The company's stock lost 3 cents, or 1.32%, to settle Friday at C$2.25 (TSX Venture: QIS).

Based in Calgary, Alta., Quorum develops software used to streamline and integrate automotive dealership information.

Golden Queen stock gains 12%

After announcing the pricing of a C$3.6 million unit deal Friday afternoon, Golden Queen Mining Co. Ltd.'s stock took off, gaining 12%.

The company's stock gained 6 cents to end at C$0.56 (Toronto: GQM).

In the offering, Golden Queen said it plans to sell 7.2 million units of one share and one warrant. The warrants are exercisable at C$0.60 each for two years.

Proceeds will be used for the update of the company's geological model and mine design, permit costs and general corporate purposes.

Vancouver, B.C.-based Golden Queen is a gold exploration company.

Health Benefits shares up 11%

Health Benefits Direct Corp.'s stock gained more than 11% on Friday, a day after it announced the completion of a series of private placements totaling $14.7 million.

The company's stock gained 11.11%, or 30 cents, Friday to end at $3.00 (OTCBB: HBDT).

On Thursday, the company's stock closed up 30 cents, or 12.5%, at $2.70.

Health Benefits Direct Corp. sold units at $50,000 apiece. Each unit includes 50,000 shares and warrants for 25,000 shares.

Based in Pompano Beach, Fla., Health Benefits Direct is a health insurance company.

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