NS8 wraps $3.16 million private placement; unpredictable oil prices may push alternative fuel deals

By Sheri Kasprzak

New York, Nov. 17 - NS8 Corp. led light private placement news on Thursday with word that its $3.16 million convertible debenture offering with Cornell Capital Partners LP has closed.

The 10% debentures mature in three years and are convertible into common shares at the lesser of $0.075 each or 90% of the average of the three lowest volume weighted average prices for the 30 trading days before conversion.

Cornell had already purchased $1.86 million of the debentures in May and June. In the most recent settlement, the investor bought $1.3 million in principal of the debentures.

Cornell received warrants for 5 million shares, exercisable at $0.075 each, for 10 million shares, exercisable at $0.06 each and for 10 million shares at $0.05 each.

On Thursday, the Seattle-based company's stock gained a penny, or 7.14%, to finish the day at $0.09.

Looking to its earnings, NS8 reported a net loss of $1,914,336 for the quarter ended June 30, compared with a net loss of $3,243,381 for the same quarter of 2004.

"The company has suffered recurring losses from developmental activities and operations since its inception and has accumulated a deficit of $20,270,051 at June 30, 2005," said the company's latest earnings report. "The recovery of the company's assets is dependent upon continued operations of the company as well as future events, the outcome of which is undetermined.

"The company intends to continue to attempt to raise additional capital, but there can be no certainty that such efforts will be successful."

NS8 develops smart-encryption and server-based technologies used in internet protocol television content.

Elsewhere in the PIPE sector Thursday, one sellside market source said shifts and unpredictability in the oil sector may be pushing a recent increase in the number of private placement from alternative fuel development companies.

"It's certainly pushing the demand for those kinds of products," the source noted when asked about oil prices and the demand for synthetic and renewable fuels. "Oil is shaky, up and down, unpredictable. It's the same reason hybrids [automobiles] are gaining popularity. People are looking for alternatives to oil or for ways to cut back. That makes them [alternative fuel deals] more appealing."

On Thursday, Clyvia Inc., a Point Roberts, Wash.-based company that develops technologies for producing diesel fuel and heating oil from recyclable waste materials, priced a $2 million unit offering.

The company plans to issue 1,801,802 units at $1.11 each to two corporate investors.

The units include one share and one warrant. The warrants are exercisable at $1.35 each for two years.

After the offering was announced Thursday afternoon, Clyvia's stock gained 6.38%, or $0.09, to close at $1.50.

That offering follows news Wednesday that Rentech Development Corp., a company that develops synthetic gasoline from gas-to-liquids and coal-to-liquids technologies, completed a $35 million convertible debenture deal.

On Thursday, Rentech's stock gained 35 cents, or 12.28%, to end at $3.20.

Oil prices took a dive Thursday after gaining almost $1 Wednesday. Oil ended down $1.55 to settle at $56.33 per barrel. On Wednesday, oil gained $0.90 to close at $57.88 per barrel.

In the broader PIPE market Thursday, one sellsider said volume seemed quiet as the week comes to a close.

"I don't think we'll see much for the rest of the week," he said of general volume. "Nothing I can really point to. I just don't see much lined up."

Tuscany leads Canadians

Moving back to the energy sector, Tuscany Energy Ltd. led PIPE news north of the border Thursday, pricing a C$3 million offering of flow-through shares and units.

The deal, which is being placed through agent Blackmont Capital Inc., includes up to 4 million flow-through shares at C$0.50 each and up to 2,222,222 units at C$0.45 each.

The units are comprised of one share and one half-share warrant. The whole warrants allow for the purchase of another share at C$0.65 each for one year.

Proceeds will be used for working capital in order to repay interim financing provided by Humboldt Capital Corp.

The deal sent the company's stock up 14.29%, or C$0.05, to end at C$0.40 Thursday.

Based in Calgary, Alta., Tuscany is an oil and natural gas exploration, acquisition and development company.

Elsewhere in Canadian energy deals, Marksmen Resources Ltd. dropped the unit portion of its previously announced private placement and reduced the price of the flow-through shares offered.

The reduction pulled the size of the offering down to C$2,625,000 from C$4.5 million.

"Looks like their stock has really been hit," said one Canadian market source of the reduction. "Oil prices were way down today, so that could be part of it. I don't think they had much choice but to cut it back."

The company's stock gained C$0.005 to end at C$0.25 Thursday. When the offering was first priced, on Nov. 4, the company's stock was traded at C$0.35.

A statement from Marksmen released late Thursday said the deal was reduced to "better reflect current market conditions."

The offering had originally consisted of up to 7.5 million flow-through shares at C$0.40 each and up to 5 million units at C$0.30 each. The units were comprised of one share and one half-share warrant.

Jennings Capital Inc. is the placement agent.

Proceeds will be used for drilling in southeast Saskatchewan and for exploration and development on new projects.

Based in Comox, B.C., Marksmen is an oil and natural gas exploration company.

Advanced BioPhotonics stock up 15%

A day after announcing a $4 million convertible note issue, Advanced BioPhotonics, Inc.'s stock gained 15%.

The company's stock rose 3 cents to end at $0.23 Thursday.

On Wednesday, when the offering was announced, the company's stock gained 25%, or $0.04, to finish at $0.20.

Four institutional investors agreed to buy the notes, which are convertible into common shares at a 40% discount to the average of the three lowest trading prices for the 20 trading days before conversion.

Based in Bohemia, N.Y., Advanced BioPhotonics develops medical imaging products using infrared technology to observe and measure changes in photonic activity within tissue.

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