Discovery Labs inks three-year deal; Chindex selling stock to Fosun; Timminco wraps stock sale

By Stephanie N. Rotondo

Portland, Ore., June 14 - Double-digit deals were popular in Monday's PIPE market, as Discovery Laboratories Inc., Chindex International Inc., Timminco Ltd. and Jones Soda Co. announced financings ranging from $10 million to $35 million.

Discovery Labs said it had inked a deal with a single investor for a three-year $35 million equity facility. The company will use the funds to further its drug candidate pipeline.

Chindex also inked a deal with just one investor, announcing a nearly $30 million private placement of equity. The deal comes as the company and the investor announced a strategic alliance and resulting joint venture.

Meanwhile, Timminco said it had concluded a previously announced private placement of stock with a third and final tranche. All told, the company raised more than C$13 million.

And Jones Soda secured a $10 million two-year equity facility with a single investor. The funding will help the company fulfill its expansion plans.

Among other financings, NF Energy Saving Corp. said it would take in between $5 million and $6 million from a private placement of units. Starfield Resources Inc. meantime settled its own private placement of units, raising C$2.39 million.

Discovery Labs inks deal

Discovery Laboratories, a Warrington, Pa.-based developer of treatments for respiratory diseases, said it had secured a $35 million three-year committed equity financing facility from Kingsbridge Capital Ltd.

The deal was inked June 11.

Kingsbridge has committed to purchasing up to 31.6 million common shares over the course of the facility's term. The investor also received a warrant equal to 1.25 million shares.

The warrant is exercisable at $0.4459 per share for five years. The strike price is a 31.1% premium over the stock's closing price of $0.34 on June 11.

"This CEFF provides us with an important financing option," stated John G. Cooper, chief financial officer, in a press release. "The facility provides a competitive cost of capital and flexible structure and should further strengthen our position as we work to resolve the sole remaining issue necessary to potentially gain FDA approval for Surfaxin for the prevention of respiratory distress syndrome in 2011 and advance the development of Surfaxin LS and Aerosurf, which we believe hold the promise to significantly advance neonatal respiratory medicine."

Discovery's stock (Nasdaq: DSCO) traded up a cent, or 2.62%, to $0.35. Market capitalization is $57 million.

Chindex selling shares to Fosun

Chindex International will raise $29.86 million via a private placement of common stock, according to a regulatory filing and subsequent press release.

Fosun Industrial Co. Ltd. is the sole investor.

Chindex will sell approximately 1.99 million of the shares at $15.00 per share. The price per share is a 31.3% premium over the equity's closing price of $11.44 on June 11.

The financing comes as Chindex and Fosun announced a strategic alliance "to utilize respective strengths in China's medical industry," the company said in the press release. The alliance will result in a joint venture to be named Chindex Medical Ltd. The joint venture will focus on the manufacturing and distribution of medical devices in China.

The venture will be 51% owned by Fosun and 49% by Chindex.

"We are delighted to forge this landmark partnership with Fosun Pharma and we welcome their participation and expertise as one of our major shareholders. Their credibility and presence in China is an asset to us as we execute our plan to build the leading network of premium care hospitals and clinics across the country," commented Roberta Lipson, Chindex's president and chief executive officer, in the release.

"This strategic alliance is mutually beneficial for several reasons and we are particularly excited about launching Chindex Medical Ltd., our proposed joint venture in medical device distribution."

Chindex's shares (Nasdaq: CHDX) improved 14 cents, or 1.22%, to $11.58. Market capitalization is $171 million.

Chindex International is a Bethesda, Md.-based health care company.

Timminco wraps stock sale

Toronto-based Timminco said it closed on its third and final tranche of a previously announced private placement of stock, raising a total of C$13.1 million.

The deal originally priced at C$10.99 million on May 6 and was upsized to C$13.59 million on May 7. Timminco took in C$4.6 million on May 13, C$5.8 million on May 21 and C$2.6 million on June 11.

The company sold approximately 20.2 million common shares at C$0.65 per share. The price per share represented an 8.5% discount to the shares' C$0.71 closing price as of May 5.

AMG Advanced Metallurgical Group NV purchased all of the shares in the third tranche, as well as all the shares issued in the first tranche and 4.2 million out of 9 million shares issued in the second tranche. AMG now owns 42.5% of Timminco's outstanding equity.

Proceeds from the financing will be used to reduce debt.

Timminco's equity (Toronto: TIM) gained 3 cents, or 5.88%, to C$0.54. Market capitalization is C$104 million.

Timminco is a producer and marketer of alloy magnesium, silicon metal and specialty ferrosilicon, calcium and strontium alloys.

Jones secures equity facility

Jones Soda inked a $10 million two-year equity financing agreement with Glengrove Small Cap Value Ltd., according to a press release.

The Seattle-based soda maker will issue common shares to the investor at a pre-negotiated discount to the daily volume-weighted average price of Jones Soda's common stock over a preceding period of trading days. Jones can request up to 24 draws on the facility, with each draw limited to 2.5% of the company's market capitalization.

"This equity line provides us with an important financing option," said Bill Meissner, CEO, in the release. "The facility has a competitive cost of capital and flexible structure and offers a means to strengthen our financial position and support our continuing efforts to expand the distribution of our brands in new and existing markets."

Jones' stock (Nasdaq: JSDA) dropped 3 cents, or 1.64%, to $1.74. Market capitalization is $48.1 million.

NF Energy aims for $6 million

NF Energy Savings is seeking up to $6 million via a private placement of units, according to a regulatory filing.

The units will consist of 10,000 common shares and a warrant equal to another 10,000 shares. Each unit will be sold at $25,000.00 and each warrant is exercisable at $4.00 per share for five years.

The exercise price of the warrant is a 60% premium over the $2.50 closing price of the stock on June 11.

Proceeds from the financing will be used for the construction of a new manufacturing facility and for new equipment and machinery.

NF Energy's shares (OTCBB: NFEC) increased 35 cents, or 14%, to $2.85.

NF Energy Saving is a Shenyang, China-based energy technology company.

Starfield deal oversubscribed

Starfield Resources wrapped an oversubscribed private placement of units, pocketing C$2.39 million.

The deal originally priced at C$2.1 million on May 26.

Starfield issued approximately 28.05 million of the units at C$0.085 each. The units held one flow-through common share and one half-share warrant.

Whole warrants are exercisable at C$0.15 for one year. The strike price is an 87.5% premium over the May 25 closing price of C$0.08.

"It's great," said Connie Anderson, manager of investor relations, in an interview with Prospect News. "These days it's nice to get more than you expected."

Anderson said that "probably a majority" of the funds will be used to develop a hydrometallurgical process for "processing massive sulphides" derived from Ferguson Lake. The funds will also be used for exploration work.

Anderson said that Starfield did not have any current plans to re-enter the PIPE market for more money, but that they "will eventually need some hard dollars for our projects down in the U.S."

Starfield's stock (TSX Venture: SRU) was unchanged at C$0.08. Market capitalization is C$39.1 million.

Starfield Resources is a Toronto.-based resource exploration and development company.

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