Acusphere places to Cephalon; Mandalay sells stake in AMV deal; Dynamic, Hawthorne fund development

By Kenneth Lim

Boston, Oct. 27 - Acusphere Inc. is placing $15 million worth of convertibles with Cephalon, Inc. through a private placement to help fund its product development needs.

Mandalay Media, Inc. said it sold $4.5 million of stock as part of its acquisition of AMV Holding Ltd.

Dynamic Resources Corp. finalized a planned $3.5 million offering of convertibles to fund developmental costs at a Louisiana property.

Meanwhile, Hawthorne Gold Corp. plans to sell C$2 million of stock through a private placement.

Acusphere takes $15 million

Acusphere is placing $15 million private placement of 8% convertible notes due 2011 with Cephalon.

The note is convertible any time during the first year into the greater of the number of common shares equal to $15 million divided by 90% of the average closing price of the company's common stock during the 10-day trading period prior to the settlement date and the number of common shares equal to 51% of the company's outstanding common stock on a fully-diluted basis on the date of conversion.

Acusphere common stock (Nasdaq: ACUS) closed at $0.57 on Monday, unchanged from its previous close.

Proceeds will be used to fund the development of Imagify, Acusphere's injectable coronary artery disease detection drug.

Based in Watertown, Mass., Acusphere is a pharmaceutical company focused on developing new drugs and improving formulations of existing drugs.

Cephalon also paid an additional $5 million to Acusphere for an exclusive worldwide license to AI-525, a pre-clinical stage injectable treatment for inflammation and pain.

"Our transaction with Cephalon accomplishes three important objectives for Acusphere," Acusphere president and chief executive Sherri C. Oberg said in a statement. "First, we secure necessary financing to advance Imagify through the FDA review process. Second, it provides us the potential to partner Imagify with Cephalon, whose success has been built on a strategy of marketing high growth, innovative products, building marketing and distribution channels and investing in unique compounds that may change the course of disease. We are pleased that Cephalon considers Imagify as a potential new product that fits this profile. Finally, it represents a significant strategic step for Acusphere as we build on our technology platform and become a multi-product company with Cephalon as a seasoned partner in the pain space pushing forward the development of AI-525 and providing an important choice in post-operative pain relief."

Mandalay raises $4.5 million

Mandalay Media placed $4.5 million of stock in a deal that was concurrent with its takeover of AMV Holding.

The company is selling about 1.69 million common shares at $2.67 apiece to ValueAct SmallCap Master Fund, LP, Trinad Capital Master Fund, Ltd. and Guber Family Trust. Mandalay common stock (OTCBB: MNDL) closed at $1.50 on Friday.

Investors also will receive 50% warrant coverage, with each warrant exercisable at $2.67.

The placement took place concurrently with Mandalay's acquisition of AMV Holding for $10.75 million in cash, a promissory note and 4.5 million common shares at $2.67 per share.

Mandalay Media, based in Los Angeles, is a global publisher and distributor of branded entertainment content.

"The acquisition of AMV allows us to almost triple our monthly mobile revenue while gaining the scale and profitability to be a worldwide force in the expansive mobile content arena," Mandalay Media chief executive Bruce Stein said in a statement. "Mobile is the first of several digital media businesses that Mandalay plans to build. The combination of [mobile subsidiary] Twistbox and AMV is a great example of what our team and platform is capable of creating in just eight months."

Dynamic sets terms

Dynamic finalized a $3.5 million offering of four-year convertible secured notes at a coupon of 4% and an initial conversion price of $0.12 per share.

Dynamic common stock (DYRFF) closed at $0.07 on Monday, down 17.65% or $0.015.

Investors also received about 21.875 million warrants, which are exercisable at $0.12 for four years.

Under certain share price performance conditions, Dynamic may adjust the conversion price.

Proceeds will be used to fund on-going development costs at the company's Sentell Field in Louisiana.

Las Vegas-based Dynamic is an oil and natural gas exploration company.

"These funds give Dynamic the ability to pursue our aggressive development of the Sentell Field," Dynamic president Robert Fedun said in a press release. "In our next phase of development, our plan is to drill additional Cotton Valley and Haynesville wells, and this financing gives Dynamic the capital to fund a portion of this program, and move the company towards capital self-sufficiency."

Hawthorne plans C$2 million offering

Hawthorne Gold plans to sell C$2 million of common stock through a private placement.

The deal comprises 10 million flow-through common shares at C$0.20 per share. Hawthorne common stock (TSX: HGC) rose 21.05% or C$0.04 to close at C$0.23 on Monday.

Proceeds will be used to fund the company's 2009 field work on its projects in British Columbia.

Hawthorne Gold is a Vancouver, B.C.-based gold exploration and development company with key properties located in British Columbia.

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