Two tech companies lead PIPE action including InfoLogix's $17 million stock offering

By Sheri Kasprzak

New York, Dec. 1 - Two technology companies led private placement activity to close out the week. Both InfoLogix, Inc. and NeoMagic Corp. grabbed headlines with their offerings as one sellsider noted that tech stocks are making some headway, in spite of broader market losses.

"Tech is starting to come back," said the New York-based sellsider. "For a while there, tech was mired in losses but we're starting to see some of the bigger names posting some decent gains and that seems to be impacting the smaller [tech] companies.

Meanwhile, stocks continued to take hits Friday with the Dow Jones Industrial Average giving up 27.80 to end at 12,194.13, the Nasdaq composite index falling 18.56 to close at 2,413.21 and the Standard & Poor's 500 composite index slipping 3.92 to settle at 1,396.71.

In the InfoLogix offering, the company sold shares at $2.00 each for proceeds of $17 million.

The deal was conducted as part of InfoLogix's merger with New Age Translation, Inc. After the merger, the company's name was changed to InfoLogix, Inc.

"2006 has been a monumental year for InfoLogix," said David Guilan, the company's chief executive officer and co-founder, in a statement released Friday morning.

"We have been recognized by Entrepreneur Magazine as the sixth fastest-growing company in the nation and have reached significant milestones in installing over 1,900 customer solutions and 1,100 solutions specifically for hospitals. With $17 million of equity financing behind us, we can confidently execute our growth strategy as a public company."

Proceeds will be used for business development efforts, acquisitions and working capital.

Hatboro, Pa.-based InfoLogix provides mobile information technologies to the healthcare and commercial markets.

NeoMagic plans direct deal

In another tech deal, NeoMagic Corp. negotiated the terms of an $11.45 million direct placement of its stock.

News of the offering sent the company's stock skyrocketing Friday along with the volume of NeoMagic shares traded.

The stock leapt $1.19, or 26.39%, to close at $5.70, gaining another 15 cents in after-hours activity. Volume took off with 1,204,102 shares traded compared with the average 118,146 shares.

The deal, set to close Dec. 6, includes up to 2.5 million shares at $4.58 each, a slight premium to the company's $4.51 closing stock price on Thursday.

The shares are being offered under the company's shelf registration.

The investors will also receive warrants for 1.25 million shares, exercisable at $5.20 each for five years.

A.G. Edwards & Sons, Inc. is the placement agent.

NeoMagic has tapped the PIPE market before, raising $9 million in December 2005. In that deal, the company sold 1.5 million shares at $6.00 each.

Headquartered in Santa Clara, Calif., develops semiconductor chips and software for multimedia applications used in handheld devices.

In other tech news, New Medium Enterprises, Inc. announced the completion of a $1.475 million private placement.

New Medium's stock also took off after word of the placement was announced, gaining 12.9%, or 4 cents, to settle at $0.35 (OTCBB: NMEN).

The company sold 5.9 million shares at $0.25 each to a group of foreign investors.

Proceeds will be used for working capital.

London-based New Medium provides optical disc technologies, file formats, encryption technologies, authoring tools and compression technologies to high-definition DVD producers.

Avicena raises $2.5 million

Moving to the biotech sector, Avicena Group, Inc. wrapped a $2.5 million offering of units comprised of series A convertible preferreds and warrants and hopes to pocket another $17.5 million from the offering.

The company's stock advanced by 4.31%, or 25 cents, to close at $6.05 (OTCBB: AVGO) Friday.

The company issued 500,000 units comprised of one share of series A preferred stock and one half-share warrant at $5.00 each.

Each warrant is exercisable at $7.00 each through Dec. 31, 2011.

The company intends to sell a total of 3.5 million units in the deal.

Holders of the preferreds may convert the preferreds between June 30, 2007 and Dec. 31, 2009 on a one-for-one basis for common stock. Any time after Dec. 31, 2008, Avicena may require the holders to either convert their preferreds for common stock on a one-for-one basis or redeem the preferreds at $5.00 per share.

Avicena, headquartered in Palo Alto, Calif., is a biotechnology company focused on developing treatments for rare diseases like Huntington's disease and Parkinson's disease.

Panda Ethanol to raise $8 million

Over in the energy sector, Panda Ethanol, Inc. secured $8 million from a stock offering with a group of accredited investors.

The investors have agreed to purchase 1,066,667 shares at $7.50 each, a 28.5% discount to the company's $10.50 closing stock price on Thursday.

Proceeds will be used for development and for general corporate purposes.

The stock remained unchanged Friday at $10.50 (OTCBB: PDAE).

Dallas-based Panda develops ethanol fuel plants.

Urex's stock advances 6%

In secondary market activity, Urex Energy Corp. watched its stock climb by 6.52% on Friday, a day after the company settled a $1 million private placement.

The company's stock gained 6 cents to settle at $0.98 (OTCBB: URXE). On Thursday, when the deal closed, the stock gained 3.95%, or 4 cents, to end at $0.92.

Urex issued units of one share and series A warrants for one-half share and series B warrants for one-half share at $0.25 each. The price per share was a 72% discount to the company's $0.89 closing stock price on Wednesday.

Proceeds will be used for working capital.

Headquartered in Prosper, Texas, Urex is a uranium exploration company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.