Sutura raises $7 million; natural resources dominate PIPE market for second straight session

By Sheri Kasprzak

New York, Sept. 9 - Sutura, Inc. led private placement news as the week wrapped up, closing a $7 million offering to investor Whitebox Advisors, LLC.

Other details of the offering were not available on Friday, and the company's chief executive officer, Anthony Nobles, did not return requests for more information. But in a news release, the company did comment on the issuance.

"Securing this latest round of financing is an extremely important milestone for the company, providing us with the necessary funding to implement our business plan and execute our worldwide sales and marketing program," Nobles said in a statement released Friday morning. "We believe the $7 million will take us well through the next level of our development as we move toward capturing market share within the health care industry."

Sutura, based in Fountain Valley, Calif., makes sutured closures used in surgeries. Its main product is called SuperStitch.

"This financing clears the way for the full implementation of the SuperStitch sales and marketing plan, including the hiring of additional experienced vascular product sales representatives."

On Friday, Sutura's stock finished down $0.03 at $0.92.

Moving to the broader PIPE market, sellside sources said the coming week may look a lot like this past week, with still more natural resources offerings leading private placement action.

"You'll see more oil deals, more than likely," said one market source.

On Thursday, natural resources companies made up the majority of the private placement offerings priced in both the United States and Canada, fueled by last week's record-high oil. The same was true again on Friday for Canadian issuance.

Oil slipped $0.41 on Friday to close at $64.08 per barrel, driving up stocks in both the United States and Canada.

"There is a demand among [natural resources] issuers," said one Canadian sell-sider. "Oil, minerals all seem likely into next week. Stocks for both are up."

Resin leads Canadians

Heading up private placements in Canada Friday was a C$25 million offering priced by Resin Systems Inc.

Resin intends to sell up to C$25 million unsecured convertible debentures to fund expansion and make future acquisitions.

The five-year debentures bear interest at 8.5% annually and are convertible into common shares at C$2.90 each.

After the pricing was announced Friday morning, Resin's stock gained C$0.04 to close at C$2.41.

Resin is no stranger to the PIPE market.

In February, the company priced two different unit offerings.

The first, priced on Feb. 4, called for the sale of up to 6,521,740 units at C$1.15 each for proceeds of C$7.5 million. The units included one share and one half-share warrant, the whole of which was exercisable at C$1.65 each for six months and C$2.00 each for one year.

The second offering of the year was priced on Feb. 10 for up to C$2.5 million.

The deal was composed of up to 2,173,914 units at C$1.15 each. The units were sold with the same terms as the offering priced on Feb. 4.

Kingsdale Capital Markets Inc. was the placement agent on both deals priced in February.

Based in Edmonton, Alta., Resin Systems makes resin coatings for use in the automotive and electronics sectors.

Two new energy offerings

Also in Canada Friday, two new PIPE deals from oil and natural gas companies emerged.

The largest - from Calgary, Alta.-based Trimox - calls for the sale of 2.2 million class A shares at C$2.25 each for proceeds of C$4.95 million.

FirstEnergy Capital Corp. is the placement agent.

Trimox plans to use the proceeds to develop Trimox's Retlaw, Worsley and Niton properties.

The company's stock advanced 2%, or C$0.05, to close at C$2.55 Friday.

The other offering comes from Odyssey Petroleum Corp., a Vancouver, B.C.-based oil explorer.

The C$2.1 million deal includes 7 million units at C$0.30 each.

The units are comprised of one share and one warrant. The warrants are exercisable at C$0.40 each for one year.

The proceeds will be used for the company's oil and natural gas projects in the Puckett and Pelahatchie fields in Mississippi and for working capital.

Odyssey's stock gained half a cent to end at C$0.38 Friday.

Romarco prices C$4 million deal

Elsewhere in Canada, another natural resources company, Romarco Minerals Inc., arranged a C$4 million private placement to help fund its merger with Western Goldfields Inc.

Romarco plans to sell up to 23,529,411 units at C$0.17 each.

The units include one share and one warrant. The warrants allow for the purchase of an additional share at C$0.21 each for two years.

The deal was announced Friday afternoon, and Romarco's stock edged up a penny, or 6.25%, to finish at C$0.17.

US Global Investors, Latitude Resources plc and RMB Australia Holdings Ltd. have all been named as potential investors in the deal, which is expected to wrap up on Sept. 14.

The proceeds will be used to pay for costs associated with the Western Goldfields' merger. Any leftover proceeds will be used for holding costs on the company's mineral properties and for working capital.

In connection with the merger, Western Goldfields and Romarco announced the execution of a stock option agreement in late August. Under the terms of the option, Western Goldfields may buy shares of Romarco equal to up to 19.9% of the Romarco's outstanding shares and Romarco may buy shares of Western up to the same amount. The price per share of Western's stock is US$0.16 each under the option, and the price for Romarco's shares is US$0.175.

The company also announced that it will not be proceeding with the C$10 million private placement it announced on Aug. 4.

Under the terms of that offering, as previously reported by PIPE Daily, Romarco had intended to sell up to 25 million units at C$0.20 each and up to 25 million subscription receipts at C$0.20 each.

The units had been comprised of one share and one half-share warrant, the whole of which would have been exercisable at C$0.25 each for two years.

The receipts were to be exchangeable for one share and one half-share warrant, exercisable under the same terms as the units, upon the completion of the Western Goldfields merger.

Research Capital Corp. and Westwind Partners Inc. were the agents.

Romarco, according to its second-quarter earnings statement released Sept. 1, sustained more significant net losses for the quarter ended June 30 than it did for the same quarter last year. The company reported net losses of $709,618 for the quarter ended June 30, compared to net losses of $295,874 for the corresponding quarter in 2004.

Vancouver, B.C.-based Romarco is a mineral exploration company.

Access Pharma's stock up more than 13.8%

On word that it is renegotiating some of its debt to make it through a rough patch, Access Pharmaceuticals, Inc.'s stock made some significant gains on Friday.

The Dallas-based pharmaceutical company's stock ended up 13.85%, or $0.09, to close at $0.74 Friday.

Friday afternoon, the company announced that investors in its convertible notes due on Sept. 13, 2008 had agreed to extend the maturity of the notes to Sept. 13, 2010.

And holders of convertible debentures due on Sept. 13, 2005 and on Sept. 13, 2008 agreed to either convert the interest due on Sept. 13 to common shares or defer the payment until next year.

Access said in a statement that it has enough cash on hand to cover operations through September, but the company will be selling off undesirable business units.

The pharmaceutical company is also in talks to renegotiate some of its other debt.

Access is focused on developing novel low-development risk product candidates and longer-term products, including a treatment for cancer.

Quest Oil stock drops 9.3%

A day after announcing its intention to raise up to $8 million in a convertible debenture offering, Quest Oil Corp.'s stock took a dip.

The company's stock lost 9.29%, or $0.039, Friday to end at $0.381.

On Thursday, when the offering was first announced, the company's stock slipped 16%, or $0.08, to close at $0.42.

The series B convertible debentures Quest hopes to sell are convertible into common shares at a price equal to the volume weighted average price for 10 trading days before the closing date.

Quest is an Arlington, Texas-based oil exploration company.

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