PIPE volume takes off as stocks improve; Teleplus raises $35 million from Cornell

By Sheri Kasprzak

New York, July 19 - Private placement volume got a boost Tuesday from improved stocks, but word that oil prices may rise on an expected decline in supply might affect volume later this week, some sell-siders said.

"Stocks are up," said one sell-sider when asked why volume had picked up so much. "With what's going on in oil right now, I'd have to say it's probably temporary though. I've a feeling oil's about to pick up again because of the talk about declining supplies. It's always wait-and-see, but I wouldn't expect this level of volume all week."

Another market source agreed.

"It won't last," he said. "Stocks went up a bit, so everyone runs to get the deal out, but once oil jumps, we'll see [volume] fall off."

On Tuesday, the Dow Jones Industrial Average gained 71.57 to end at 10,646.56; the Nasdaq composite index closed up 28.31 at 2,173.18, and the S&P 500 edged up 8.22 at 1,229.35.

Oil, on the other hand, made meager gains, settling up $0.14 to close at $57.46 per barrel.

Leading PIPE news on Tuesday was a $35 million equity line secured by Teleplus Enterprises Inc.

Teleplus, a Montreal-based wireless telecommunications provider, received the standby equity distribution agreement from Cornell Capital Partners, LP.

Cornell will buy shares at 98% of the lowest volume weighted price for five trading days after notice of a draw.

There is a $2 million limit on each draw.

Cornell also received two warrants for 20 million shares. Each warrant allows for 10 million shares. The first warrant is exercisable at $0.38 each for three years and the second warrant at $0.25 each for three years.

Newbridge Securities Corp. was the placement agent on the equity line.

Teleplus reported that as of May 12 it had 73,558,342 outstanding common shares.

In its most recent earnings report, the company posted net revenues of $2,958,755 for the quarter ended March 31, up from $2,382,281 for the same period in 2004. The company incurred a net loss of $571,199 for the quarter ended March 31 compared to a net loss of $351,945 for the corresponding period in 2004.

On Tuesday, Teleplus's stock closed up $0.05 at $0.37.

Access Integrated's $18.13 million deal

Morristown, N.J.-based Access Integrated Technologies Inc. said it has raised $18,136,592 in a private placement of class A common shares.

The company sold 1,909,115 shares at $9.50 each.

The deal also includes warrants for 477,275 class A common shares, exercisable at $11.00 each for five years.

Access Integrated plans to use the proceeds to fund capital investments in the company's planned 2,500-screen Digital Cinema systems and for working capital.

"This financing will begin the process of deploying systems to be installed in the fourth quarter of calendar 2005 and provide the initial equity required by our lenders to provide funding for the remaining systems," said company chief executive officer Bud Mayo in a statement. "We are gratified by the enthusiastic support we received from the well-known institutional investors who took part in this round of financing."

Access Integrated makes storage and electronic delivery service products for movie theaters.

The company's stock slipped $0.27 to close at $10.26 Tuesday.

Cytogen raises $13.9 million

Moving away from private placements, biopharmaceutical company Cytogen Corp. said it has received agreements for its $13,969,710 direct offering.

The company will sell 3,104,380 shares at $4.50 each and issue warrants for 776,095 shares. The warrants are exercisable at $6.00 each.

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

Proceeds will be used for general corporate purposes, including sales, marketing and clinical development.

Based in Princeton, N.J., Cytogen is focused on the development of molecules used in oncology and other medical specialties.

On Tuesday, the company's stock dropped a nickel to close at $4.81.

PIPE investors are 'well-connected'

A spokesman for American Technology Corp. said in an interview Tuesday that some of the investors lured by the company's $14 million private placement closed earlier this week are "well-connected."

Robert Putnam told Prospect News that the investors who took part in the stock-for-cash offering had also participated in a $10 million offering closed in July 2003. Two funds managed by Pequot Capital Management, however, were new to the company and those investors, Putnam said, could be good for American Technology in the future.

"There are certain individuals at those funds who are well-connected," Putnam said.

Of the deal itself, Putnam said the structure was appealing because it is "more transparent" to investors.

"What we prefer to do is something with equity, so [the investor] will know what price the shares will be, unlike with a convertible preferred when you're wondering if there are other considerations," Putnam said.

As previously reported, American Technology sold 2,868,851 shares at $4.88 each. The shares were sold at a 12.5% discount to the company's closing stock price on July 14.

The investors who bought the shares include Special Situations Fund III, LP; Special Situations Fund, LP; Special Situations Technology Fund, LP; Special Situations Technology Fund II, LP; SDS Capital Group SPC, Ltd.; Iroquois Master Fund Ltd.; Pequot Scout Fund, LP and Pequot Mariner Master Fund, LP.

The investors also received class A warrants for 717,213 shares, exercisable at $6.36 each through July 2009 and class B warrants for 864,706 shares, exercisable at $7.23 each for six months after the registration statement is declared effective.

Olympus Securities, LLC was the placement agent.

Based in San Diego, American Technology produces directed-sound technologies and long-range acoustic devices.

On Tuesday, American Technology's stock lost $0.10 to close at $5.47.

Two oil deals from Canada

Two new energy deals were announced in Canada Tuesday, and news was released of other already-announced oil offerings being expanded or closed.

"Some [energy companies] are probably looking at the fact that oil is likely going to be going up in the next few sessions," said one Canadian market source. "We'll probably see a few more than usual in the coming days."

The largest deal was announced by Vancouver, B.C.-based Golden Dynasty Resources Ltd. for C$4.5 million. The company plans to sell 30 million shares at C$0.15 each to fund a drilling program in Australia.

In Calgary, Alta., Petro-Reef Resources Ltd. said it plans to raise up to C$1,575,000 in a unit offering.

The deal includes up to 3.5 million units at C$0.45 each.

The units consist of one share and one warrant. The warrants allow for the purchase of an additional share at C$0.70 each for 18 months.

The company plans to use the proceeds for exploration and development expenses.

Golden Dynasty's stock closed unchanged at C$0.14 Tuesday, and Petro-Reef's stock also closed unchanged at C$0.45.

Big Sky's stock gains a penny

A day after announcing its plans to raise $25 million in a private placement, Big Sky Energy Corp.'s stock lifted by $0.01.

The company's stock closed at $1.00 Tuesday.

On Monday, when the deal was first announced, the company's stock remained unchanged at $0.99.

One market source familiar with the sector said it could either be a general lift in oil prices or the private placement itself that affected Big Sky's slight gain in its stock price.

The company plans to sell shares at $1.00 each.

Based in Calgary, Alta., Big Sky is an oil and natural gas exploration company.

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