U.S. PIPE volume suffers as sell-siders worry about higher oil; BrainStorm may raise $10 million

By Sheri Kasprzak

New York, Aug. 24 - Private placement volume in the United States fell on Wednesday as stocks were pushed down by a surge in oil prices. The jump in oil has some sell-siders concerned about volume for the rest of the week.

Some market sources said they fear record-high prices could shove the stock market down, bringing PIPE volume down with it.

"I'm hearing it could get as bad as $70 [per barrel]," one market source said. "If that happens, I think it will probably be slow-going for a little while, at least until this storm passes over."

The storm isn't a metaphor. Oil was pushed up Wednesday as Tropical Storm Katrina moved toward the oil-producing regions of the Gulf of Mexico.

Prices settled up $1.61 to close at $67.31 a barrel.

"It could certainly impact us in some way," said another market source. "I imagine for the rest of the week we may see fewer things, but I don't think it's going to be too bad."

The stock market on Wednesday was certainly affected with the Dow losing 84.71 to end at 10,434.87. The Nasdaq composite index closed down 8.34 at 2,128.91, and the S&P 500 lost 8 to close at 1,209.59.

In Canada, where oil makes up a good portion of the PIPE market, one sell-sider said higher oil may actually be a boon for issuance there.

With energy stocks moving up, he said, more issuance is likely, but it could affect sectors other than energy positively.

"We could see some more mineral deals, other natural resources, those kinds of things tend to benefit from better oil," he said.

In fact, mineral and oil offerings dominated the Canadian PIPE market on Wednesday.

Moving to the broader private placement market, BrainStorm Cell Therapeutics Inc. is in the process of negotiating a $10 million private placement.

The company is in talks with a placement agent, according to a form 8-K filed with the Securities and Exchange Commission, but no details of the offering have been determined yet. The deal may be conducted in more than one offering, the SEC filing said.

"No assurances can be made that we will be able to complete one or more of these planned sales of common stock in this amount, in a timely manner, on favorable terms or at all," according to the filing.

The company's stock slipped $0.041 to close at $0.949 Wednesday.

BrainStorm, based in New York, now develops neural-like stem cell therapeutic products but had been in the mineral exploration business under the name Golden Hand Resources Inc.

According to its latest earnings report, BrainStorm sustained net losses of $733,788 for the quarter ended June 30, compared to $20,866 in net losses for the corresponding quarter in 2004.

The company reportedly had 21,754,683 outstanding common shares as of June 30.

pSivida raises $4.2 million

Looking elsewhere in the biomedical field, pSivida Ltd., which makes nanotechnology products, completed a $4.2 million private placement.

The company, based out of Perth, Australia, sold 650,000 American depositary receipts at $6.50 each to investors based mainly in the United States.

Each ADR represents 10 common shares, and the ADRs have an attached 1-for-10 warrant, exercisable at $12.50 each for three years.

"The funding will be utilized to further our expansion into the United States, the world's largest health care and financial market following the recent appointments of two U.S.-based non-executive directors to the pSivida board - David Mazzo, president and chief executive officer of Chugai Pharma USA, and Michael Rogers, chief financial officer of Indevus Pharmaceuticals Ltd. - and the inclusion of our ADRs in the Nasdaq Health Care Index," said Gavin Rezos, managing direct of pSivida, in a statement.

The company's ADRs climbed $0.0499 to close at $6.6499 Wednesday.

Azure raises C$13.43 million

Even though the majority of the offerings announced in Canada Wednesday were in the natural resources market, Azure Dynamics Corp., a Toronto company that makes hybrid electric and electric powertrains for military and commercial vehicles, led the pack with a C$13,431,500 deal.

The company is preparing to wrap the sale of 13,431,500 shares at C$1.00 each with a Boston-based institution.

The deal is slated to close Aug. 31.

Proceeds will be used for the company's commercialization strategy.

"We are pleased to secure this funding as it allows us to totally focus on two significant initiatives: ramping up production of our commercial vehicles and establishing a meaningful relationship with a strategic industry partner," said Campbell Deacon, the company's chief executive officer, in a statement. "The company is pleased with the pace of development of our targeted commercial vehicle market and we are now exploring how best to exploit our extensive hybrid electric intellectual property in the automotive sector."

The company's stock dropped a penny Wednesday to close at C$0.99.

Brazilian wraps C$5 million deal

Concord, N.H.-based Brazilian Resources, Inc. sealed a C$5 million unit and convertible debenture offering Wednesday.

The company sold 20 million units at C$0.10 each for C$2 million and issued C$3 million in convertible debentures.

The units are comprised of one share and one warrant. The warrants are exercisable at C$0.15 each for three years.

The 10% debentures mature in three years. Half of the principal of the debentures is convertible into common shares before maturity at C$0.20 each.

Kingsdale Capital Markets Inc. was the placement for the offering.

The company will used the majority of the proceeds to close the acquisition of 49% of the quota shares of Prometalica Mineracao Ltda. The remainder will be used for working capital.

Brazilian is a resource infrastructure development company.

The company's stock closed unchanged at C$0.09.

iMedia stock drops 13.5%

iMedia International, Inc.'s stock slipped almost 13.5% Wednesday.

The company's stock dropped $0.07 to close at $0.45.

iMedia's quarterly earnings report was released Wednesday morning, with the company reporting a net loss of $2,756,000 for the quarter ended June 30, compared to a net loss of $4,213,000 for the quarter ended March 31.

On Tuesday, iMedia closed a $4.92 million private placement, selling 4,920 units at $1,000 each. The units included convertible preferred stock, convertible into 2,500 common shares.

After the offering was announced, the company's stock remained unchanged at $0.52.

iMedia, based in Santa Monica, Calif., produces CD-ROMs and DVDs for marketing campaigns.

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