MRU to raise $25 million from convertibles; North American Technologies raises $6.5 million

By Sheri Kasprzak

New York, Jan. 5 - MRU Holdings, Inc. led PIPE news on Thursday with word that it has received agreements for a $25 million convertible preferred stock offering.

The series B preferreds will be purchased by Battery Ventures and Merrill Lynch Investment Managers Private Equity Partners on Feb. 10.

The full terms of the offering couldn't be determined Thursday.

Proceeds will be used for the company's growth strategy in the student loan market.

"The funding from Battery Ventures and MLIM Equity Partners is very important in the growth of our company and will dramatically broaden the scope of our private student loan program while increasing access to educational funding for students," said Edwin McGuinn, the company's chief executive officer, in a statement. "We are extremely pleased with the support from these two top-tier investors."

"There is incredible demand for a highly efficient and scalable underwriting engine for private student loans, and MRU has shown through its rapid development that they have the technology and underwriting methodologies to meet that demand," said Michael Brown, partner of Battery Ventures. "The innovation in the industry continues at a rapid pace, and we look forward to working with the MRU management team to execute the strong growth trajectory and assist them in their strategy to scale to high-volume production."

MRU completed a private placement of series A convertible preferreds in February 2005. The company sold $11,375,000 in series A convertible preferreds, which were convertible into common shares at $3.50 each.

MRU had 13,751,578 outstanding common shares at Sept. 30.

For the six months ended Sept. 30, the company reported a net loss of $2,690,685. For the same period ended Sept. 30, 2004, the company reported a net loss of $719,795.

Based in New York, MRU is a finance company that provides loans to students for higher education.

The company's stock lost 20 cents, or 3.88%, to end at $4.95 on Thursday.

Looking to the broader PIPE market, volume took a dip Thursday as stocks remained less than stellar and both oil and gold prices took a dip.

"It's pretty quiet," said one market source of activity in the United States.

Stocks, according to that source, didn't really make substantial gains and he also noted that some issuers may just be assessing their needs now that we're in a new calendar year.

"We're just coming back from the holidays," he noted. "Things'll pick up once [the issuers] figure out what they need."

The Dow Jones Industrial Average closed up 2 to end at 10,882.15; the Nasdaq composite index gained 13.41 to close at 2,276.87; and the Standard & Poor's 500 composite index ended up 0.02 at 1,273.48.

Meanwhile, dropping oil and gold prices forced down PIPE activity in Canada, said one sellsider there.

"There's really not much going on today," he noted. "Oil's off; gold's off. Those were kind of the two things pushing [volume] along."

Oil prices closed off $0.63 to end at $62.79 per barrel after making some gains earlier this week. Gold prices plummeted $7.60 to close at $526.10 per ounce.

North American Tech raises $6.5 million

Moving back to specific offerings, North American Technologies Group, Inc. wrapped a $6.5 million private placement of 7% convertible debentures.

The debentures mature on Dec. 31, 2006.

The conversion price of the offering could not be determined Thursday.

The company's stock jumped 12.67%, or $0.019, to end at $0.169 on Thursday after the deal was announced in the afternoon.

Some of the proceeds will be used to bring the company's Marshall, Texas, production lines to full capacity. The rest will be used for working capital.

Based in Houston, North American makes railroad crossties.

Hy-Drive's C$5.08 million deal

Heading up to Canada, Hy-Drive Technologies Ltd. wrapped a C$5,084,215 private placement of stock.

The company issued 7,944,087 shares at C$0.64 each to 19 investors. Hy-Drive also issued warrants for 4,681,366 shares, exercisable at C$0.80 each for two years.

Capstone Investments and Octagon Capital Corp. were the placement agents.

Based in Toronto, Hy-Drive is an energy technology firm that has developed a hydrogen generating system used in combustion engines.

Hy-Drive's stock gained 5 cents, or 5.26%, to close at C$1.00 Thursday.

Elsewhere in Canada, Watch Resources Ltd. priced a C$4 million private placement of non flow-through and flow-through shares.

The offering includes up to 6 million non flow-through shares at C$0.25 each and up to 10 million flow-through shares at C$0.25 each.

Proceeds will be used for working capital.

Calgary, Alta.-based Watch is an oil and natural gas exploration company.

Watch's stock remained unchanged Thursday at C$0.27.

Calypso stock slips 3.5%

A day after pricing a C$3 million private placement of units, Calypso Acquisition Corp.'s stock fell Thursday.

The company's stock ended down 3 cents, or 3.53%, to close at C$0.82.

On Wednesday, when the deal priced, the company's stock gained 19.72%.

In the PIPE, Calypso plans to sell units at C$0.48 each.

Calypso also announced Wednesday that it plans to buy the outstanding shares of Energia Mineral SA for 4.6 million shares of Calypso. Once the acquisition is completed, Roney Long will be appointed director and president of the company.

Based in Vancouver, B.C., Calypso acquires and operates mineral exploration companies.

Simtek stock continues to rise

Simtek Corp.'s stock rose for the second straight session since the company announced the completion of an $11 million private placement.

On Thursday, the company's stock gained 3.7%, or 1 cent, to end at $0.28.

On Wednesday, the company's stock closed up 3.85%, and on Tuesday, when the deal was first announced, the company's stock fell 10.34%.

On Tuesday, the company announced that it sold shares at $0.16 each to a group of institutional investors led by Crestview Capital Master LLC.

Simtek is also in the process of purchasing the nvSRAM product line from Zentrum Mikroelektronik Dresden AG.

Simtek, based in Colorado Springs, Colo., provides non-volatile memory for storage systems, hard disks, copiers, printers and other applications.

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