Ag Growth plans C$21.5 million deal; Lake Shore plans, upsizes offering

By Sheri Kasprzak

Atlanta, March 16 - Private placement volume boomed Wednesday as gold, mineral and resource issues dominated the market.

Natural resources companies in particular headed to the private placement trough in droves Wednesday, powered by stronger stocks.

Resources companies like Birim Goldfields Inc., Thelon Ventures Ltd., Abcourt Mines Inc., Baja Mining Corp. and Superior Diamonds Inc. all announced their intentions to raise funds through private offerings.

"Gold had actually dropped a bit during the first part of the week, but made a bit of a recovery today," said one Canadian sell-sider familiar with natural resources markets. "Other resources seem to be doing well. I suspect the oil issuers will come tomorrow [Thursday] or later in the week considering the jump in prices today."

Oil prices closed at record highs Wednesday, gaining $1.41 to end at $56.46 per barrel.

Another sell-sider in the United States also assumed oil issuers were gearing up for some deals.

"I would expect to see some out there in the coming days as well," the source said. "With oil that high, I fully anticipate some energy companies will be out there."

Subsequently, stock prices were pushed down by climbing oil. The Dow Jones Industrial Average ended down 112.03 at 10,633.07; the Nasdaq composite index lost 19.23 to close at 2,015.75 and the S&P 500 dipped 9.68 to close at 1,188.07.

Heading up private placement action Wednesday was a C$21.5 million offering from Ag Growth Income Fund.

The company plans to sell 1,592,592 trust units at C$13.50 in an effort to acquire The Edwards Group of Companies, an agricultural equipment manufacturing company.

TD Securities Inc. is the placement agent.

Both the acquisition and the private placement are scheduled to close March 31.

Ag Growth plans to use the proceeds to acquire all of the assets of The Edwards Group of Companies. The acquisition is expected to close C$20 million, with expenses related to the acquisition totaling C$1.5 million. That acquisition is expected to close at the same time the private placement is scheduled to close.

Based in Rosenort, Manitoba, Ag Growth manufactures portable grain handling equipment.

On Wednesday, Ag Growth's stock closed down C$0.10 at C$13.80.

Lake Shore upsizes deal to C$8 million

Lake Shore Gold Corp. announced and the upsized a private placement to C$8,006,500 from C$6,006,500.

The company will sell 5.27 million flow-through shares at C$0.95 each and 3.75 million non flow-through shares at C$0.80 each.

The deal is being placed through a syndicate of underwriters led by Haywood Securities Inc.

According to one market source who had seen the offering, it's no surprise the deal size was increased.

"It's certainly an appealing deal for investors because there's no discernable discount and I suppose the reasoning behind upsizing is that if you can get more at a good price - or if you have a need for that much - you probably should," the source said.

"As for why it priced well, gold saw some gains today. It's really more a virtue of sector strength than any particular strength attributed to this company."

The offering was first announced Wednesday morning as including 5.27 million flow-through shares at C$0.95 each and 1.25 million non flow-through shares at C$0.80 each for proceeds of C$6,006,500.

The offering is expected to close March 31.

Vancouver, B.C.-based Lake Shore is a gold and base metals exploration company. It plans to use the proceeds for ongoing exploration and development programs and working capital.

Business Bank raises $4.2 million

Business Bank of Nevada said it sold 120,040 shares in a private placement for proceeds of $4,201,400.

The company sold the shares at $35 each.

"We are very pleased with the demand for our stock and the additional capital we were able to raise through our private offering," said Business Bank's president and chief executive officer John Guedry in a statement. "This capital will help us move forward with our branch expansion plans and the overall growth of our company, which will provide customers with greater convenience and access to the bank."

The offering was announced early Wednesday afternoon, pushing the company's stock up $1 to end at $40.

Hoefer & Arnett was the placement agent in the deal.

Based in Las Vegas, Business Bank of Nevada is a community bank owned by Business Bank Corp. The proceeds will be used to fund future growth, as outlined in the company's three-year strategic and capital plans.

Wave's losses reflected in deal

According to one sell-side source familiar with Wave Systems Corp.'s $4.1 million direct placement of stock, the company's fourth-quarter net losses may have impacted the pricing of the deal negatively.

The company announced its plans to sell 4,659,090 class A shares $0.88 each to accredited investors.

The shares will be sold under Wave's shelf registration.

"This is a direct deal, where most of the time you really can't get better pricing," said the market source. "Here we have an offering priced at about an 18% discount. I really do think that the losses they recently reported for the fourth quarter forced them to price low."

Wave reported that it suffered net losses of $3 million or $0.04 per share for the fourth quarter.

After the deal was announced Wednesday morning, Wave's stock dropped $0.14 to close at $0.94.

Based in Lee, Mass., Wave provides hardware and software that enable digital content providers to distribute digital movies and music over the internet.

Bodisen wraps $3 million deal

Bodisen Biotech, Inc. raised $3 million in a private placement of a convertible debenture.

The debenture bears interest at 9% annually, matures in one year and is convertible into common shares at $4.80 each.

The investor received warrants for 187,500 shares at $4.80 each for three years.

"We believe the financing with a fixed conversion price is favorable to Bodisen and to our strategic institutional investor," said Oiong Wang, Bodisen's chief executive officer, in a statement. "We are pleased about the completion of this financing, which will help us execute our growth and expansion plans in 2005."

Based in New York, Bodisen is a biotechnology company focused on the production of organic fertilizers. The proceeds will be used to expand the company's production capacity with new manufacturing facilities. The proceeds will also be used for the purchase of raw materials and for general corporate purposes.

Bodisen's stock closed up $0.05 at $5.50 Wednesday.

Syscan raises $1.86 million

Syscan Imaging, Inc. completed a private placement of series A convertible preferred stock for $1,865,000, the company said Wednesday.

The preferreds are convertible into common shares at $1 each.

The investors also received warrants for 932,500 shares at $2 each for five years.

"This financing is a very important step in our growth," said the company's president and chief executive officer Darwin Hu, in a statement. "It's a vote of confidence in our business plan and recognition of our ability to execute. We plan to use the financing proceeds to fund sales, marketing, research and development and to provide working capital."

Based in San Jose, Calif., Syscan manufactures mobile image scanning systems and image-display products.

On Wednesday, Syscan's stock closed unchanged at $1.75.

Loon director to invest in offering

Loon Energy Inc. said a director of the company sold 3 million shares at C$0.95 each in a block trade in order to participate in the C$15 million private placement the company announced Wednesday.

The director will use the proceeds from the sale of his shares to buy 3 million shares in the private placement.

Loon plans to sell 15,789,478 shares at C$0.95 each through a syndicate of underwriters led by Canaccord Capital Corp.

Based in Calgary, Alta., Loon is an oil and gas development company focused on projects in south-central Europe and Colombia. The proceeds will be used for the drilling of exploration and development wells and the shooting of a 3-dimensional seismic in Colombia. The remainder will be used for working capital and expanded capital expenditures.

On Wednesday, Loon's stock closed unchanged at C$1.02.

ParkerVision's stock drops

A day after announcing the closing of a $21.6 million private placement, ParkerVision, Inc.'s stock closed down slightly, after gaining $0.94 to close at $10.10 Tuesday.

On Wednesday, ParkerVision's stock was down $0.011 to close at $10.089.

The company is gearing up to release its fourth-quarter earnings report.

ParkerVision, based in Jacksonville, Fla., develops and markets semiconductor technologies for wireless applications.

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