Access Pharmaceuticals gets $2.7 million, plans return to market; Quepasa nets $7 million financing

By Sara Rosenberg

New York, Jan. 29 - Access Pharmaceuticals Inc. closed, but has not yet funded, an offering of series A convertible preferred stock and the company expects to attempt additional offerings later on in the year.

In other news, Quepasa Corp. arranged a $7 million private placement of 10-year subordinated promissory notes as it opted for a non-dilutive transaction that its largest shareholders were willing to support.

Also on Tuesday, Kootenay Gold Inc., Radiant Energy Corp. and Romarco Minerals Inc. announced plans for new private placements of units.

Access Pharmaceuticals closed on a series A convertible preferred stock with institutional and accredited investors that generated gross proceeds of $2.7 million, although funding is still a few days away, an informed source told Prospect News on Tuesday.

The source went on to say that the company anticipates coming back to market in 2008.

"[They] don't have revenues from operations yet. Money [already raised] will take [them] into the first part of 2009. Will have to have other placements or secondary offerings later on in the year."

The newly issued preferred stock is initially convertible into 908,000 shares of the company's common stock.

"[Stock] closed at $2.90 yesterday. This deal is a slight premium to what [it] closed at. This closed at $3.00," the source said.

The investors will also receive warrants to purchase an additional 454,000 shares of the company's common stock at an exercise price of $3.50.

This preferred stock transaction was somewhat like a follow-on offering to the company's November 2007 deal so as "to close the people that [they] couldn't close back then," the source remarked.

In November, Access Pharmaceuticals arranged a $9.5 million private placement of series A convertible preferred stock that was initially convertible into 3,179,999 common shares, a conversion price of about $2.99 per share. The investors received warrants for 1.59 million common shares, exercisable at $3.50 per share.

Proceeds from this latest offering will be used for operations. The additional new capital will fund a number of the company's key objectives including pursuing and expanding a clinical trial program for its anti-cancer compound, ProLindac, a novel, proprietary DACH platinum which is currently in phase 2 development.

Access' stock closed up $0.10, or 3.45%, at $3.00 (OTCBB: ACCP).

Access Pharmaceuticals is a Dallas-based biopharmaceutical company that develops and commercializes propriety products for the treatment and supportive care of cancer patients.

Quepasa secures $7 million

Quepasa has entered into an agreement with its two largest investors - Mexican and Americans Trading Together, Inc. and Richard L. Scott Investments LLC - for a $7 million private placement that will be used for working capital.

According to an informed source, the company chose to do this specific transaction "because it's not dilutive and the shareholders who currently have warrants outstanding agreed to put the cash up."

Mexican and Americans Trading Together loaned $5 million and Richard L. Scott Investments loaned $2 million in exchange for 10-year subordinated promissory notes.

Interest will accrue on the notes at a rate of 4.46%, compounded annually, until the principal amount is paid in full.

The company will only be required to pay interest on the notes on their maturity or upon prepayment.

In addition, the strike prices of all of the warrants held by the investors have been lowered to $2.75 per share.

"We welcome this capital infusion and vote of confidence by these two significant shareholders. We believe this infusion of capital will enable us to execute on our vision, which is to create a truly unique social Hispanic experience at Quepasa.com. We expect to introduce some innovative networking concepts that will be new to both the Latino and Anglo markets," said John C. Abbot, chief executive officer, in a news release.

As for whether the company has any plans to do another transaction like this one, the informed source explained that it depends on how the relaunch of the website goes and how much traffic and revenues are generated. If the relaunch doesn't go well, the company won't have enough money to keep going, the source added.

The company's stock ended the day up $0.4399, or 15.71%, at $3.2399 (Nasdaq: QPSA).

Quepasa is a Scottsdale, Ariz.-based bicultural, Latino online community.

China Housing sells $20 million convertibles

In one of the day's biggest deals, China Housing & Land Development, Inc. said it will raise $20 million from a private placement of 5% five-year senior secured convertible notes.

Of the notes, $9 million are convertible into common shares and carry an initial conversion price of $5.57 per share, which can be increased if certain stock price thresholds are met.

Additionally, forced conversion can also occur if certain stock price thresholds are met.

The notes are secured by real estate assets and common shares owned by the company's chairman and chief executive officer Pingji Lu.

Investors also received 1,437,467 five-year warrants exercisable at $6.07, which are callable if certain stock price thresholds are met.

The company may redeem $11 million of the notes at par, plus unpaid interest.

Merriman Curhan Ford & Co. was the financial advisor.

Proceeds will be used to fund infrastructure work and land planning expenses related to the company's Baqiao project.

"China Housing & Land is very pleased to complete this notes offering which adequately positions us to capitalize on both our near and long term goals for developing and monetizing our Baqiao project," stated Lu in a news release. "We believe these funds will enable us to successfully execute our 2008 growth plan and achieve our investor make-good target of $35.8 million in after-tax net income. We would like to welcome our new investors and believe the quality of the institutions which participated underscores their confidence in the organization we have built during the past several years."

Based in Xi'an, China, China Housing develops residential and commercial properties within Xi'an.

Kootenay Gold plans new issue

Kootenay Gold said on Tuesday that it plans to conduct a C$8.25 million non-brokered private placement of units.

The company intends to sell up to 5.5 million units of one share and one half-share warrant at C$1.50 per unit. Each warrant will be exercisable at C$1.80 for 18 months.

Proceeds will be used for additional work on the company's Promontorio property and other properties and for general working capital.

Kootenay, a Vancouver, B.C.-based gold and silver company, saw its stock end the day down $0.06, or 3.53% (CDNX:KTN.V).

Radiant attempts C$3.5 million PIPE

Radiant Energy has engaged Brant Securities Ltd. to raise gross proceeds of up to $3.5 million from accredited investors on a best efforts basis through a private placement of units.

"The company wishes to take advantage of improving market opportunities for the company's InfraTek product. The net proceeds of the private placement will allow Radiant to hire additional staff and provide the needed working capital to achieve our sales plans," said Colin Digout, chairman of the board, in a news release.

Radiant intends to sell up to 29,166,666 units of one share and one half-share warrant at C$0.12 per unit. Each whole warrant will be exercisable at C$0.30 for 18 months.

If the company's common shares close higher than C$0.40 for 20 consecutive trading days, the warrants may expire 30 days after the company notifies holders.

Closing of the offering is expected to occur in February.

Shares of Radiant ended the day down $0.02, or 14.29% (TSXV:RDT.V).

Based in Port Colborne, Ont., Radiant produces an infrared pre-flight aircraft de-icing system.

Victoria raises £15.25 million

In other happenings, Victoria Oil & Gas plc raised £15.25 million in a £20 million private placement of shares that priced Dec. 21, by selling 101,666,667 ordinary shares at 15p apiece to investors.

Another 6,666,667 shares will be bought by HJ Resources Ltd., the company said at pricing.

The company also said at pricing that it would raise $10 million in an offering of convertible loan notes.

The loan notes will mature in 2012. SPV will buy $2 million on completion of the company's the repayment and conversion of its outstanding £18.75 million secured convertible bonds due 2009. It will buy $8 million more of the notes upon ratification of the extension of the company's West Medvezhye license.

The notes will carry a 2.5% interest rate per annum, payable semiannually and may be converted into ordinary shares at any time at 16.5p per share.

The notes may be redeemed in all or in part by the SPV on Dec. 31, 2010, converted at any time or redeemed at maturity on Dec. 31, 2012. If the notes are redeemed at maturity, the interest rate will be adjusted to a fixed rate of 6.5% on a compound basis.

Proceeds will be used to finance the company's current working capital requirement, its ongoing development operations at its West Medvezhye gas and gas condensate exploration project in Russia and the Kemerkol oil field in Kazakhstan and to redeem some of its outstanding bonds.

The company also intends to enter into arms-length contracts with Blackwatch Petroleum Services Ltd. and GeoDynamics Research srl for their advice on the development of its assets in Russia and Kazakhstan.

"These events signal a major turnaround for Victoria Oil & Gas. We have retired the old bond and provided sufficient working capital for 2008. We will have access to first-class technical resources in Blackwatch and secured a valuable partnership with GeoDynamics. Most importantly, we have strengthened our Board considerably with highly-respected and professional people. The re-build has commenced," said Kevin Foo, chairman, in a news release.

Victoria stock (AIM: VOG) closed at 20.75p on Tuesday, down 0.50p, or 2.35%.

Victoria, based in London, is an oil and natural gas exploration company.

MedeFile wraps PIPE

MedeFile International, Inc. announced that it received total net proceeds of $1.95 million from three separate private placement transactions.

Deals closed on Nov. 16, 2007 and Jan. 22 yielded $1.79 million in gross cash proceeds from the private placement of 11.9 million restricted shares of common stock and warrants to purchase an aggregate of 7.2 million restricted shares of common stock.

And, then on Jan. 28, the company received an additional $160,000 in gross proceeds from the private placement of 1.1 million restricted shares of common stock and warrants to purchase an aggregate of 640 thousand restricted shares of common stock.

Furthermore, the company announced that its largest stockholder and primary creditor has converted $2.1 million in debt into 14 million restricted shares of common stock, resulting in a reduction in the company's debt to the stockholder to approximately $940,000 from approximately $3.04 million.

In connection with the conversion, the stockholder also received warrants to purchase an aggregate of 8.4 million restricted shares of common stock.

"Collectively, these debt conversion and equity transactions have served to materially strengthen our balance sheet, while providing us with additional working capital to help fund our strategic organic growth. This financing and debt conversion will enable management to further its current sales and marketing initiatives aimed at increasing the number of subscribers to the MedeFile system," said Milton Hauser, chairman and chief executive officer, in a news release.

Shares of MedeFile ended the day unchanged (OTCBB: MDFI).

MedeFile is a Cedar Knolls, N.J.-based company specializing in portable electronic medical records management solutions.

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