Tower Semiconductor secures $28.95 million from stock sale; USA Technologies seals $10 million PIPE

By Sheri Kasprzak

New York, March 15 - Even as the stock market made some improvements on Thursday, PIPE volume remained light and the few offerings announced came from the tech sector, a fact that didn't surprise at least one market source.

"Technology is like the one bright spot we have right now," he noted. "I'm cautiously optimistic though. I happen to think things will get better. The [stock] market is just now recovering from a couple of big knocks, so we'll see what happens, but I want to believe volume will pick up."

Another sellsider said there is a light at the end of the tunnel.

"Stocks are starting to move up in spite of this whole subprime lending situation," he said. "It'll blow over before too long. The economy is still strong."

On Thursday, the Dow Jones Industrial Average gained 26.28 to close at 12,159.68; the Nasdaq composite index closed up 6.96 to end at 2,378.70; and the Standard & Poor's 500 composite index edged up 5.11 to close at 1,392.28.

Heading up tech offerings on Thursday was a $28.952 million offering from Tower Semiconductor Ltd.

In the deal, a group of U.S.-based institutions agreed to purchase 18.8 million shares at $1.54 each. The investors also will receive warrants for 9.4 million shares, exercisable at $2.04 each.

News of the deal sent Tower's stock up 2 cents to end at $1.72 and up another 6 cents in after-hours trading activity (Nasdaq: TSEM).

Volume tapered off with 40,845 shares traded compared with the average 112,300 shares.

Citigroup Global Markets Inc. and C.E. Unterberg, Towbin, LLC were the placement agents.

Tower, based in Migdal Haemek, Israel, manufactures integrated circuits used in semiconductors.

USA raises $10 million

In other technology news, USA Technologies, Inc. sealed a $10 million stock offering with S.A.C. Capital Associates, LLC.

S.A.C. bought 1,666,667 shares at $6.00 apiece and received warrants for 833,333 shares, exercisable at $6.40 each.

The company's stock advanced by 8.22%, or 53 cents, Thursday to settle the day at $6.98 (OTCBB: USAT). The company's stock got off to a positive start, gaining 45 cents, or 6.98%, by 9:50 a.m. ET.

Volume of USA Technologies shares traded also rose with 177,639 shares traded compared with the average 32,221 shares.

Malvern, Pa.-based USA Technologies develops networked devices used for non-cash payment methods, data reporting and remote monitoring.

In yet another tech offering, ImageWare Systems, Inc. announced the closing of a $1.5 million offering of series D convertible preferred stock.

The 8% preferreds are convertible into common shares at $1.90 each, a 15.5% discount to the company's $2.25 closing stock price on March 5, the day before the offering settled.

On Thursday, the company's stock gained 17 cents, or 8.06%, to close at $2.28 (Amex: IW). Volume was up slightly with 88,200 shares traded. On average, there are 62,723 shares of ImageWare traded.

The investors also received warrants for 59,207 shares, exercisable at $2.33 each from Sept. 9, 2007 through Sept. 9, 2012.

The offering was not brokered.

The placement caused all amounts due under a $1.55 million loan issued March 17, 2006 to be due and payable immediately. As of March 9, there was $1,196,259 in principal and $19,319 in interest outstanding under the notes.

"We are pleased to receive this support by some of our existing shareholders, which demonstrates a vote of confidence in ImageWare," said Jim Miller, the company's chief executive officer, in a news release. "This retirement of our debt strengthens our balance sheet and is a positive event for the company."

San Diego-based ImageWare develops identity management and digital imaging technologies.

e-Future stock ends up

In secondary market action linked to the tech sector, e-Future Information Technology Inc. saw its stock climb on Thursday after sealing a $10 million offering of convertible notes on Wednesday.

The company's stock rose 91 cents, or 4.65%, to settle at $20.47 but lost 27 cents in after-hours trading (Nasdaq: EFUT).

On Wednesday, the stock gave up $1.76, or 8.26%, to close at $19.56.

The five-year notes were sold to three funds associated with two institutional investors and are convertible at $24.99 each.

The notes bear interest at 3% for the first year, at 5% for the second year, at 7% for the third year and at 10% for the fourth and fifth years.

Westminster Securities Corp. was the placement agent.

Proceeds will be used for working capital and general corporate purposes, which may include strategic acquisitions.

Beijing-based e-Future develops supply chain management software in China.

Genta stock edges up

A day after Genta Inc.'s stock sank by more than 20%, the biopharmaceutical company's stock crept its way back up on Thursday.

The stock gained a little more than six-tenths of a cent on Thursday, or 1.73%, to close at $0.3766, putting on another six-tenths of a cent in after-hours trading (Nasdaq: GNTA).

On Wednesday, when the company closed a $10.8 million direct placement of shares, the company's stock dove by 21.23%, or 10 cents, to end at $0.37.

In the placement, a group of institutional investors agreed to buy shares at $0.36 each, a 21.7% discount to the company's $0.46 closing stock price on Tuesday.

The shares are being sold under the company's shelf registration, and the deal is expected to wrap up on Friday.

Rodman & Renshaw, LLC is the placement agent.

Proceeds will be used to diversify and develop the company's product portfolio. Proceeds may also be used for research and development, commercialization, licenses and acquisitions of products, technologies or businesses. The rest will be used for general corporate purposes.

Located in Berkeley Heights, N.J., Genta is a biopharmaceutical company focused on treatments for cancer.

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