Private placements stall on lower stocks; Vistula closes $8.4 million offering

By Sheri Kasprzak

Atlanta, March 8 - As stocks took a dip Tuesday, private placements also fell flat, market sources said.

"Stocks started out okay, but then took a turn down," said one sell-side source. "Oil really pushed stocks down, so I think a lot of issuers backed down a bit and are biding their time until market conditions improve."

The Dow Jones Industrial Average closed down 24.24 at 10,912.62; the Nasdaq composite index ended down 16.66 at 2,073.55 and the S&P 500 slipped 5.88 to close at 1,219.43.

Meanwhile, oil continued to make gains Tuesday, climbing $0.70 to close at $54.59 per barrel.

In Canada, sell-side sources said the natural resources, oil and gold markets were driving volume, even though issuance was down compared to recent days.

"Volume wasn't as good today as it has been," said one Canadian sell-sider. "That's not to say volume was weak. It's just to say that it was lower than usual. Resources have been driving issuance over the past month or so and I think that's a trend we'll continue to see. Gold shows no signs of losing strength and oil certainly doesn't either."

"That seems fair to say," said another Canadian sell-sider. "Resources are what is pushing this market and it is a trend that will probably last for a while."

Heading up private placement action in the United States, Vistula Communications Services, Inc. said it closed an offering for $8.4 million.

The company sold convertible debentures bearing interest at 8% annually and maturing Feb. 18, 2008. The debentures are convertible into common stock at $0.75 each.

"The closing of this round of financing further validates our business plan and the projected growth of our company," said the company's chairman Rupert Galliers-Pratt in a statement. "The quality of the leading institutional investors that have invested in our company also confirms our view of the [voice over internet protocol] market potential that we are addressing."

Based in New York, Vistula is a telecommunications services provider.

Implant wraps $7.8 million deal

Implant Sciences Corp. completed a private placement for $7,808,635, the company said.

The company issued 1,080,780 shares at $7.225 each, a 15% discount to the company's closing price March 3.

The investors also received warrants for 270,195 shares at $9.35 each, exercisable through Sept. 4, 2010.

The investors also have additional investment rights for 588,235 shares at $8.50 each exercisable beginning Sept. 4 for six months.

"This financing is an extremely important step in the growth of Implant Sciences," said the company's chief executive officer Anthony Armini in a statement. "The financing demonstrates empirically that long-term institutional investors believe in our business plan and our management's ability to execute on the plan. And as part of our plan, the company intends to utilize a substantial portion of the financing proceeds for an acquisition which is currently in process."

Based in Wakefield, Mass., Implant Sciences develops ion technology for the homeland security, semiconductor and medical industries.

On Tuesday, the company's stock closed down $0.37 at $8.63.

Northern Star plans C$4.5 million deal

Northern Star Mining Corp. said it will head to the private placement market with an offering of up to C$4.5 million.

The deal includes up to 10 million units at C$0.45 each.

The units consist of one share and one half-share warrant. The whole warrants allow for an additional share at C$0.55 each for 18 months.

"The warrants look good on this one," said one Canadian market source who had seen the deal. "Again, gold is a strong resource right now and I think they'll come away from this pretty well off."

The deal is being placed through a syndicate of agents including Canaccord Capital Corp. and Octagon Capital Corp.

Based in Vancouver, B.C., Northern Star is a gold exploration company. It plans to use the proceeds for exploration on its Midway project and for working capital.

The company's stock closed down C$0.02 at C$0.475 on Tuesday.

CanAlaska announced C$3.02 million offering

CanAlaska Ventures Ltd. announced its plans Tuesday to raise up to C$3,016,000 in a non-brokered offering.

The company plans to sell up to 5.2 million shares at C$0.58 each.

"I think they can do a pretty good job, non-brokered, because the mineral market right now is strong enough to support a deal like this," said one market source. "Their stock is solid and the pricing of the offering looks good to me. I think in terms of the pricing, you could probably point to the sector more than the company itself. Expect it to go well."

Based in Vancouver, B.C., CanAlaska is a mineral exploration company focused on uranium exploration. It plans to use the proceeds from the private placement for the acquisition, exploration and development of its uranium projects. The remainder will be used for working capital.

CanAlaska's stock closed down C$0.07 at C$0.52 Tuesday.

Producers' stock down

A day after announcing a C$80 million private placement, Producers Oilfield Services Inc.'s stock continued to dip.

The company closed down C$0.08 Tuesday at C$8.42.

On Monday, when the deal was priced, the company lost C$0.30 to close at C$8.50.

The company plans to sell subscription receipts at C$8 each.

Based in Calgary, Alta., Producers Oilfield is an energy services company.

Oxigene suffers losses

After last week's closing of a $15,012,526 direct placement, Oxigene Inc.'s stock closed down Tuesday.

The company closed down $0.10 at $4.46 Tuesday, but gained $0.01 in after-hours trading.

On Monday, the company closed up $0.11 at $4.56.

On Friday, when the closing was first announced, the company's stock lost $0.88 to close at $4.45.

The company sold shares at $4.50 each.

The shares are being sold under Oxigene's shelf registration.

Based in Waltham, Mass., Oxigene is a pharmaceutical company focused on small-molecule therapeutics used to treat cancer and eye diseases.

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