Rentcash proposes C$24.65 million deal; oil reaches new highs, may spark new issuance

By Sheri Kasprzak

Atlanta, April 1 - Rentcash Inc. led private placement activity to close out the week in a day marked by heavy issuance.

The new Rentcash deal includes 1.7 million subscription receipts at C$14.50 each. The receipts are exchangeable for common shares on a one-for-one basis after the company completes an acquisition within the industry.

If the company does not make an acquisition within 60 days of the closing, Acumen Capital Finance Partners Ltd., the lead underwriter in a syndicate placing the deal, may automatically redeem the receipts.

The syndicate has an over-allotment option for up to 700,000 additional receipts.

The deal is expected to close April 21.

"Its stock responded well to it," said one market source of the offering. "The discount is very small, so just basing it upon the discount and their closing stock today, I think it will go well."

Based in Edmonton, Alta., Rentcash is a cash advance company. The proceeds from the offering will be used for an acquisition within the industry, even though there is no assurance the company will make such an acquisition.

Elsewhere in the market, sources in Canada said they expect issuance among energy companies to rise sharply at the beginning of next week. After oil prices hit new record highs Friday, oil companies in need of capital may be turning to the PIPEs market, according to Canadian sources.

"Look for energy companies early next week," said one Canadian sell-sider. "Every time oil prices jump like this, energy companies get their deals into the market."

Oil climbed $1.87 to close at $57.27 per barrel. The last record high for oil was $56.72 per barrel, reached on March 18.

NewTech arranges $22 million deal

NewTech Brake Corp. announced its plans to head to the private placement market with a $22 million offering of debentures. The company will also raise $3 million in a private placement of stock.

The company will issued 40 class A units and 48 class B units comprised of debentures with a face value of $250,000.

The debentures mature in five years, pay a return on investment equal to 15% and are convertible into common shares at $1 each.

The debentures will be sold in two closings of $10 million and $12 million.

The company also plans to sell 3,947,368 shares at $0.76 each.

Based in Blainville, Quebec, NewTech develops brake pedal technologies. It plans to use the proceeds to initiate production in China and working capital.

On Friday, NewTech's stock closed unchanged at $1.05.

Emisphere's $15.74 million deal

Moving away from private placements, Emisphere Technologies, Inc. closed a direct placement for $15.74 million.

The company issued 4 million units at $3.935 each.

The units include one share and one warrant for 0.375 of a share. Each warrant allows for an additional share at $4 each.

The shares associated with the offering are being placed under the company's shelf registration.

Harris Nesbitt Corp. was the placement agent.

Based in Tarrytown, N.Y., Emisphere is a biopharmaceutical company focused on the oral delivery of injectable drugs. The proceeds will be used to repay outstanding debt to affiliate Elan Corp. plc. The remainder will be used for current operations.

Emisphere's stock closed unchanged at $3.67 on Friday.

Staar wraps $14.35 million offering

Staar Surgical Co. closed a private placement Friday for $14.35 million.

The company issued 4.1 million shares at $3.50 each to institutional investors.

After the closing was announced Friday morning, Staar's stock gained $0.19 to close at $4.10 and gained another $0.01 in after-hours trading.

Pacific Growth Equities LLC was the placement agent.

Based in Monrovia, Calif., Staar develops, manufactures and markets ophthalmic products.

Nutrition 21 raises $9.6 million

Nutrition 21, Inc. has completed a private placement for $9.6 million.

The company issued 9,600 preferred shares at $1,000 each to four institutional investors.

The preferreds pay annual dividends of 6% and are convertible into common shares at $1.25 each.

The offering also includes warrants for 2,948,662 shares, exercisable at $1.31 each from Oct. 1, 2005 through March 31, 2010.

"This financing provides us with a significantly improved balance sheet to help us capitalize on our successful research initiatives," said Paul Intlekofer, the company's chief financial officer, in a statement.

"Both the size of the financing and the quality of these new investors validates our excitement about the potential applications of our proprietary chromium products and the future prospects for our company. The long-term orientation, sophistication and industry expertise of these investors should be valuable in attracting business opportunities and relationships to our company."

Based in Purchase, N.Y., Nutrition 21 develops and markets chromium-based nutritional supplements. The proceeds will be used to improve the company's balance sheet.

The company's stock closed up $0.01 at $1.29 on Friday.

Bakers Footwear's $8.75 million deal

Bakers Footwear Group said it will raise $8.75 million in a private placement.

The company sold 1 million shares at $8.75 each to six institutional investors.

The investors will also receive warrants for 250,000 shares, exercisable at $10.18 each through 2010.

After announcing the offering early Friday afternoon, Bakers' stock gained $0.24 to close at $10.39.

"We are very pleased to have entered into this private placement with outstanding long-term investors," said Peter Edison, the company's chairman and chief executive officer, in a statement. "The transaction, when completed, will greatly expand our financial flexibility, allowing us to capitalize on the positive momentum of our new format stores in both our Bakers and Wild Pair chains.

"Following the closing, we will accelerate store openings in 2005 to between 35 and 40, up from 25 to 30. We also plan to accelerate our store remodelings in 2005 to 25 stores from 20 stores previously planned. In addition, we look forward to continuing our growth in 2006 and beyond."

Based in St. Louis, Bakers Footwear operates a retail footwear store. The proceeds will be used to accelerate new store openings and expand the company's new format of stores.

Recom's stock drops after deal closes

Recom Managed Systems, Inc.'s stock dipped $0.25 to close at $3 on Friday after the company wrapped a private placement for $5 million.

The company sold 1,562,500 shares at $3.20 each to one institutional investor.

The company issued warrants for 1.5 million shares at $1.60 each.

"The warrants are a 50% discount," said one market source familiar with the offering. "I think that's probably what drove their stock down today. It's a start-up company and I'm assuming that that's why the warrants are priced so low."

Based in Los Angeles, Recom is a life sciences company focused on monitoring and detecting diseases through biomedical signal monitoring.

VaxGen's stock closes down

VaxGen, Inc.'s stock closed down Friday after announcing its $31.5 million private placement.

The company's shares sank $0.08 to finish at $12.40.

On Thursday, after the company announced the offering, its stock closed up $0.18 at $12.48.

The company sold senior subordinated convertible notes with a conversion price of $14.76.

Based in Brisbane, Calif., VaxGen is a biopharmaceutical company focused on the development, manufacture and commercialization of biologic products.

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