Jazz keeps options open with deal; ROO, Microfield issue stock and warrants; Western Standard sells stock

By Kenneth Lim

Boston, May 8 - Jazz Pharmaceuticals Inc. said it negotiated a $75 million equity financing facility with an eye on flexibility as it pushes out a new product.

Meanwhile, ROO Group Inc. announced a $15 million private placement of stock and warrant units that it said will help fund acquisitions and cap its restructuring efforts.

Microfield Group Inc. announced a $3.6 million sale of stock and warrants that it said will fund it for the rest of the year.

Western Standard Energy Corp. said it is selling $15 million of stock to Infinity Energy Investments to fund its exploration and production projects in anticipation of strong oil prices.

Jazz aims for flexibility

Jazz Pharmaceuticals said it has entered into a $75 million equity financing facility agreement with Kingsbridge Capital Ltd.

The deal commits Kingsbridge to buying up to 4.9 million common shares of Jazz stock for up to $75 million over three years. Jazz may access the capital in tranches up to a maximum of between 1.5% and 3% of its market capitalization at the time of the draw down.

The shares will be issued and priced over an eight-day pricing period and sold at discounts ranging from 6% to 10%.

Kingsbridge also receive a warrant for 220,000 common shares, exercisable at $11.20 per share for five years. Kingsbridge may not short the stock.

Jazz common stock (Nasdaq: JAZZ) closed at $9.01 on Thursday, up by 3.09% or $0.27.

Jazz is a Palo Alto, Calif.-based pharmaceutical company.

"The...agreement with Kingsbridge provides us with flexibility to have additional funds available as needed over a three year period to support Jazz Pharmaceuticals' product development and commercialization efforts," Jazz chief financial officer Matt Fust said in a statement. "Our ability to choose the timing and amount of these financings has the potential to minimize dilution for our stockholders."

Fust told Prospect News that the company did not have any specific use for the proceeds, but sought the deal to keep its options open in the future.

"We view this as important from a flexibility standpoint," Fust said. "This is a facility that we have the option but not the obligation to draw from."

The additional capital could be useful in the wake of Jazz's recent launch of its Luvox CR treatment for social anxiety disorder and obsessive compulsive disorder in adults, Fust said. Jazz will be stepping up its marketing of the drug, and has been raising capital, Fust added.

"We actually just back in March expanded our senior term debt facility as another component of our capital structure, we added $40 million to our $80 million senior debt," Fust said.

Fust declined to provide specific cash requirement guidance, but said the company expects to raise money through equity this year.

"We have provided guidance that we do expect to raise equity in 2008," he said. "We have yet to decide whether we will raise it through this equity facility or some other way."

Overall, the deal's terms were satisfactory, Fust said.

"We're very pleased with the pricing," he said. "There are a number of transactions which Kingsbridge Capital has done over the course of the last several years, and the terms tend to be fairly similar."

ROO raises for acquisition

ROO Group said it raised $15 million to fund acquisitions and to strengthen its balance sheet despite a tough fundraising environment.

ROO sold 75 million units of one common share and one warrant at $0.20 apiece. The warrants are exercisable at $0.34. ROO common stock (RGRP) fell 19.12% or $0.065 to close at $0.275 on Thursday.

ROO, a New York-based internet video content developer that operates as KIT digital, said it will use the proceeds to fund its acquisitions of Sputnik Agency and Kamera Content AB, to pay debt and for operational expenses.

"It is currently a difficult time for most small-cap technology companies to raise equity capital in the public markets," ROO chief executive Isaza Tuzman said in a statement.

"We are very pleased with the vote of confidence in KIT digital evidenced by investors in this transaction. We believe that having a solid balance sheet and a certain degree of buying power will be particular strengths for us vis-a-vis competitors and other potential market entrants during a time of competitive shakeout and potential consolidation.

"We also wanted to raise a sufficient amount of capital such that we would not have to raise capital again in the marketplace, removing the overhang of forward financing-related dilution from which many similar companies suffer."

The financing wraps up ROO's recent restructuring, Tuzman said in the statement.

"In January, when I came on as CEO, we set out to narrow the company's strategic focus, introduce new management with a 'sales culture,' reduce costs, enhance core revenues, and clean up the company's complex capital structure. We feel good about the progress we have made on all of these fronts and this $15 million financing was the last box to check off, so to speak, in the company's intensive restructuring phase.

"Now, as a team, we can set our sights clearly on business development through the rest of the calendar year, and consequently on our goal of being the first profitable company in the IPTV provisioning industry. Management believes that KIT digital is poised to be the clear leader in the B2B provisioning segment of the growing online video space, particularly in markets outside of the U.S."

Microfield raises for year

Microfield said it sold $3.6 million of stock and warrants in a private placement that will fund its requirements for the rest of the year.

The deal involved 9 million common shares at $0.40 each. Investors also received 4.5 million warrants exercisable at $0.60.

Microfield, a Portland, Ore.-based equipment supplier for electricity providers and consumers, did not say how it will use the proceeds. The loss-making company reported on Thursday that it had unrestricted cash worth $118,000 at the end of the quarter ended March 29, 2008.

"This financing is anticipated to be sufficient for all cash needs of the company through 2008," Microfield chief financial officer Randy Reed said in a statement. "This has been a difficult environment in which to raise funds, so we have chosen to limit the raise, while still funding growth in 2008 as planned."

Western Energy raises $15 million

Western Standard Energy said it is selling $15 million worth of common stock to Infinity Energy Investments.

Infinity will buy the stock in increments of $250,000 within five days of receiving notice from Western Standard, a London-based oil and gas company.

Proceeds will be used to finance the company's ongoing exploration and production strategies and for general working capital purposes.

"This financing helps us to further secure the development of our current Lodgepole reef prospects in North Dakota and if we are able to prove commercial quantities, to fund completion operations of the Federal 1-19 discovery well in Valley County, Montana," Western Standard president and chief executive Dan Bauer said in a press release. "The timing of this agreement is excellent for us given that the consensus from recently released reports show long term oil price estimates to remain around the $100 per barrel point, allowing for excellent potential profit margins from areas such as the Bakken formation in Montana and North Dakota, if we can prove commercial quantities of oil or gas there."

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