Akorn secures $19.4 million from private placement; Procera closes $6 million stock deal

By Sheri Kasprzak

New York, March 1 - Akorn, Inc. led PIPE activity on Wednesday with word that it is preparing to close a private placement for $19,402,510.

The company will issue a total of 4,311,669 shares at $4.50 each and warrants for 1,509,088 shares, exercisable at $5.40 each.

The company announced Wednesday morning that it had received agreements for 3,356,113 shares and 1,174,642 warrants.

The additional shares were announced Wednesday afternoon.

Banc of America Securities is the placement agent.

The company's stock slipped 13 cents, or 2.8%, to finish at $4.52 (Amex: AKN).

"The fact that Akorn is now trading above $4.50 on above-average volume is a very bullish sign of strength," said a sellside trader. "Keep an eye on $4.50 because a weekly close below this price will be a short-term negative."

"We intend to use the proceeds to invest in manufacturing upgrades at our Decatur, Ill., facility and to invest in clinical product development efforts, as well as general corporate purposes," said Arthur Przybyl, the company's chief executive officer, in a statement. "We welcome our new institutional investors to Akorn."

Akorn completed a $14.1 million private placement of series B convertible preferred stock on Aug. 18, 2004. The conversion price of those preferreds was $2.70.

Leerink Swann & Co. was the bookrunner for that deal.

Looking to the company's latest earnings report, Akorn sustained a net loss of $2,614 for the quarter ended Sept. 30, 2005, compared with net income of $2,587 for the quarter ended Sept. 30, 2004.

Based in Buffalo Grove, Ill., Akorn develops sterile ophthalmic pharmaceuticals.

Procera's $6 million stock deal

Moving to the tech sector, Procera Networks, Inc. settled a $6 million stock offering that sent its stock down more than 9%.

The company's stock fell 9.38%, or 6 cents, to end at $0.58 (OTCBB: PRNW).

In the placement, the company will sell 15 million shares at $0.40 each to institutional and accredited investors. The price per share represents a 42% discount to the company's closing stock price of $0.69 on Feb. 24.

Procera had 30,780,317 outstanding shares as of Oct. 2.

"The company's board of directors accepted the terms for the sale of the shares after pursuing all financing alternatives and based upon advice from its placement agents," according to a form 8-K the company filed with the Securities and Exchange Commission.

Chadbourn Securities, Inc. was the placement agent.

"Procera Networks is leading the way in the new open application-driven networking paradigm, and this funding is indicative of the financial community's recognition that Procera is a leader in this rapidly emerging market," said Doug Glader, the company's CEO, in a news release. "We believe Procera's innovative approach to application-driven networking solves real problems for network-centric software application and appliance providers.

"Procera's CP3600 products greatly enhance such providers' existing offerings by increasing throughput to end users and lowering the costs of delivering network and applications services. Procera's CP3600 products accomplish this by allowing software solutions providers to integrate their software with wire-speed smart switching through a highly efficient XML-based policy engine."

Procera will use the proceeds from the deal to accelerate marketing, sales and development for its OpimANAT CP3600 application-driven networking platform.

As to the company's earnings, Procera reported a net loss of $1,531,362 for the quarter ended Oct. 2, 2005. For the same quarter of 2004, the company sustained a net loss of $1,962,743.

Based in Los Gatos, Calif., Procera Networks is a network infrastructure supplier.

Higher stocks can't help PIPE volume

Private placement volume slumped on Wednesday despite a surge in volume on Monday when stocks climbed substantially.

One market source said a combination of earnings statements and a drop in stocks on Tuesday may be pulling volume back down.

"It really was kind of a brutal day," he said. "Biotech still looks pretty strong. I've got a feeling that's going to fizzle out pretty soon. Tech seems to be getting a bit stronger, so that's something we might be seeing more of soon."

Oil prices are also causing some concern.

"Oil moved back up, so lots of [issuers] are sitting on their hands to see how the market responds," said the market source.

Oil prices gained $0.56 Wednesday to settle at $61.97 per barrel.

Meanwhile, the Dow Jones Industrial Average advanced 60.12 to end at 11,053.53; the Nasdaq composite index moved up 33.25 to close at 2,314.64; and the Standard & Poor's 500 composite index gained 10.58 to settle at 1,291.24.

Gateway leads Canadian offerings

As gold prices climbed, Gateway Gold Corp. priced a C$10 million private placement of units.

Gold advanced by $1.90 on Wednesday to close at $563.40 per ounce.

In the Gateway placement, the company plans to sell of 8 million units of one share and one half-share warrant on a non-brokered basis. The full warrants are exercisable at C$1.60 each for one year.

Proceeds will be used for exploration on the company's Nevada gold properties, as well as for working capital.

On Wednesday, the company's stock fell 1 cent to end at C$1.54 (Toronto: GTQ).

Based in Vancouver, B.C., Gateway is a gold exploration company.

Elsewhere in Canadian resources offerings, Fortuna Silver Mines Inc. arranged a C$9 million unit offering.

The deal is comprised of up to 6 million units at C$1.50 each. Each unit consists of one share and one half-share warrant. The full warrants are exercisable at C$1.85 each for two years.

A syndicate of placement agents led by Pacific International Securities Inc. and Salman Partners Inc. has a greenshoe for up to 1.5 million additional units.

The deal is expected to close March 30.

Proceeds will be used for capital expenses from the reopening of the company's Caylloma Mine in Peru. The rest will be used for exploration on the company's Peruvian and Mexican properties and for working capital.

Fortuna's stock dropped 1 cent to settle at C$1.74 Wednesday (TSX Venture: FVI).

Based in Vancouver, B.C., Fortuna is a silver exploration company.

Antares stock gains 2.3%

A day after announcing a $10,962,500 private placement, Antares Pharma, Inc.'s stock advanced Tuesday.

The stock climbed 3 cents, or 2.29%, to close at $1.34 (Amex: AIS).

On Tuesday, when the offering was announced, the company's stock fell 7.74%, or 11 cents.

In the placement, the company will sell shares at $1.25 each.

Proceeds will be used for acquisitions, in-licensing products, capital expenses and working capital.

Based in Exton, Pa., Antares is a biotechnology company focused on drug delivery systems and injectable device engineering capabilities.

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