Metalink plans $8 million bridge loan with investor; Arrowhead settles upsized $6.96 million PIPE

By Devika Patel

Knoxville, Tenn., Sept. 9 - Metalink Ltd. plans to take in $8 million through a short-term bridge loan it arranged with a single institutional investor. Company shares (Nasdaq: MTLK) dropped 14.56% after the announcement, or 15 cents, to close at $0.88 on Tuesday.

Separately, Arrowhead Research Corp. pocketed a bit more than it had planned, selling $6.96 million of units in a direct offering that initially was meant to raise only $5 million. The company took in $2.53 million in a second tranche on Sept. 5, according to a prospectus supplement filed Tuesday.

Canada's ONA Energy Inc. priced a C$15 million placement of units with agent D&D Securities Co. Tuesday, the proceeds of which will be used to acquire an 80% interest in the company's 60%-owned Yongxing power plant in China.

Metalink gets loan

Yakum, Israel's Metalink negotiated an $8 million one-year short-term secured loan Tuesday, which is to settle in two tranches, with $3.5 million expected to settle within a few days and up to $4.5 million settling at the company's request in a second tranche.

"The bridge loan is a welcome vote of confidence by our lender - both in Metalink as a company and in its achievement in creating the world's most advanced 802.11n-compliant technologies and chipsets. The funding structure will allow us to increase our flexibility as we evaluate our strategic options while minimizing existing shareholders' dilution," Metalink chief executive officer Tzvi Shukhman said in a press release.

The loan, arranged through agent Rodman & Renshaw, LLC, has a 10% coupon that is payable on a quarterly basis in cash or shares.

The loan may be prepaid at any time and is secured by a first-priority fixed charge on all of the company's intellectual property and a first-priority floating charge on all of its other assets.

As part of the initial tranche, the investor also will receive five-year warrants for 2 million common shares, with 1 million exercisable at $0.01 and the remaining 1 million exercisable at $0.50.

In the second tranche, the investor will receive five-year warrants for 2.2 million shares, with 1.87 million exercisable at $0.01 and the remaining 330,000 exercisable at $0.50.

Metalink provides and develops wireless and wireline broadband communication silicon technologies.

Arrowhead: $6.96 million

Arrowhead took in another $2.53 million in a direct offering of units, bringing its total proceeds to $6.96 million. The company sold $4.43 million of the units in an Aug. 22 tranche and initially intended to raise only $5 million but exceeded its goal and closed the deal earlier than expected.

The deal was conducted with both outside investors as well as members of the company's senior management. Insiders were charged slightly more, with the units sold at $1.80 to outside investors and at $1.83 to members of the company.

The company sold a total of 3,863,989 units of one common share and a warrant, with each warrant exercisable at $2.00.

Proceeds will help fund operations and contribute to Arrowhead's runway to monetization events of its subsidiaries.

"As we announced on Aug. 26, we were interested in increasing our liquidity during this period of market uncertainty, but with a keen eye to limiting dilution of our shareholders," Arrowhead chief executive officer Christopher Anzalone said in a press release. "The offering initially sought to raise up to $5 million, but the unsolicited response from current shareholders was strong.

"By accepting the additional capital provided by the over subscriptions and closing the offering early, we believe we have balanced our dual goals of increasing our ability to grow the company while maintaining a capital structure that is fair to our shareholders."

Located in Pasadena, Calif., Arrowhead develops nanotechnology used in life sciences, electronics and energy. The company's shares (Nasdaq: ARWR) fell 6.1%, or 10 cents, to close at $1.54 Tuesday.

ONA to get C$15 million

ONA Energy said it hopes to seal a C$15 million private placement of units with D&D Securities Co.

The company will sell units at C$0.60 each. Each unit consists of one common share and one half-share warrant, with each full warrant exercisable at C$0.90 for 18 months.

The company may force holders to exercise their warrants under certain circumstances.

Proceeds will be used to finance the second 60-MW unit at the company's 60%-owned Yongxing power plant in the Hunan province of China and to begin the feasibility study on the third and fourth units at the power plant.

The proceeds also will be used to acquire an additional 20% interest in the power plant from one of the minority shareholders, thus increasing ONA's interest in the plant to 80%.

"Now that that first 60-MW unit is up and running in Yongxing, ONA intends to complete construction of the second unit as quickly as possible," the company's president and chief executive officer, John Wong, said in a news release. "This equity raise will be used as a base for further debt financing of this second 60 MW unit. Once the financing is completed, the second unit is expected to be in operation within a year."

The Vancouver, B.C.-based energy company's shares (CNQ: OEIX) remained unchanged Tuesday, closing at C$0.55.

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