MediaBay raises $35 million in private placement; Victhom closes C$18.35 million deal

By Sheri Kasprzak

Atlanta, March 22 - Oil companies led issuance in the private placement market Tuesday, even as the cost of crude dipped.

"Oil prices were down, but I think issuers are still out there because of the high prices," said one sell-sider. "When you look at it in terms of prices being at all-time highs, losses really make no difference. The pricing pushes energy stocks up and energy companies know they can get good pricing on these deals."

Energy companies like Nordic Oil and Gas Ltd. and Strike Petroleum Ltd. announced new private placements, even as oil lost $1.43 to close at $56.03 per barrel.

Mineral exploration companies were also still making deals, sell-siders said.

"The market is definitely still appealing to natural resources companies," said one sell-sider. "Gold keeps going up and down, so we're seeing some gold, but minerals are stronger across the board."

But leading private placement news Tuesday was a company from a whole other industrial category, MediaBay, Inc., which wrapped a $35 million offering of preferred stock.

The company sold 35,900 shares of convertible preferreds at $974.93 each to institutional investors.

The preferreds are convertible into common shares at $0.55 each and accrue dividends at 6% annually.

The investors also received warrants for 32,636,364 shares, exercisable at $0.56 each for five years.

"This financing is another major step in the turnaround of MediaBay," said Joseph Rosetti, the company's chairman, in a statement. "Our board of directors has been committed to debt reduction as a way to match our capital structure with the early stage of our new digital media business. This restructuring will reduce our leverage and interest and dividend expense, and increase our financial flexibility going forward."

The company plans to use the proceeds to retire its borrowings and increase its capital reserves to $16 million with the proceeds from the offering. The balance sheet restructuring will allow the company to fund the rollout of its digital distribution strategy.

Merriman Curhan Ford & Co. was the placement agent.

Based in Cedar Knolls, N.J., MediaBay is a digital media and publishing company focused on spoken-audio products.

MediaBay's stock closed up $0.01 at $0.70 Tuesday, and gained another $0.04 in after-hours trading.

Victhom closes upsized deal

Victhom Human Bionics, Inc. sold more convertible debentures than it intended and closed a C$18,354,400 offering Tuesday.

The debentures mature March 22, 2010, bear interest at 7% annually and are convertible into common shares at C$1.35 each, a 22.7% premium to the company's closing price March 21.

The investors will also receive warrants for half the number of share issued upon conversion. The warrants are exercisable at C$1.60 each for five years.

"This new financing, which for the most part has come from American investors, represents a solid vote of confidence in our various technological platforms, our business model and our development plan," said Benoit Cote, the company's chief executive officer, in a statement. "We now have all of the financial resources we need to pursue our business plan and begin a new phase of value creation for our shareholders."

The offering was upsized from the initial C$18 million announced March 9.

The offering was placed through a syndicate of underwriters led by Dundee Securities Corp.

Based in Quebec City, Victhom develops and commercializes bionic devices aimed at people suffering from physical dysfunctions. The proceeds will be used to accelerate the development of the company's Bionic Closed Loop System platform.

The company's stock closed down $0.02 at $1.08 Tuesday.

Chindex raises $6.5 million

Chindex International, Inc. closed a private placement for $6.5 million.

The company issued 1,080,397 shares at $6.02 each.

The investors will also receive warrants for 378,137 shares at $9.10 each for five years.

"This deal is under-priced," said one market source. "If you ask me, with companies like this, that operate outside of the U.S., there are instruments of instability that may force the company to price a little lower. Things like investor interest in the type of business they're doing, even things like political instability that can affect the pricing of a deal like this.

"In this case, its stock has really taken a beating."

After the deal was announced Tuesday morning, Chindex's stock lost $0.95, or 12.87%, to close at $6.43.

Oppenheimer & Co. Inc. was the placement agent in the deal.

Based in Bethesda, Md., Chindex is healthcare products distribution company serving the People's Republic of China. The proceeds from the deal will be used to repay vendor financing. The remainder will be used for working capital.

Standard Management raises $4.75 million

Standard Management Corp. closed a private placement of a secured convertible term note for $4.75 million Tuesday.

Laurus Master Fund, Ltd. bought the note, which matures March 21, 2008 and bears interest at Prime plus 200 basis points, with a 7.25% floor.

The note is convertible into common shares at $3.28 each.

Laurus also received a warrant for 532,511 shares at $3.90 each for five years.

"We look forward to working with Laurus to provide financing in connection with future acquisitions in the institutional pharmacy industry," said Ronald Hunter, Standard's chairman, in a statement. "Such potential acquisitions would allow the company to build to critical mass in terms of both customers served and human and technological capital."

Based in Indianapolis, Standard Management is a financial holding company for Standard Life Insurance Co. of Indiana. The company plans to use the proceeds for the expansion of its health-services segment.

On Tuesday, the company's stock closed up $0.06 at $3.02.

Nordic plans C$5.6 million deal

Nordic Oil and Gas Ltd. announced its plans to raise up to C$5.6 million in the private placement market.

The company plans to sell up to 11.2 million common-share units at C$0.50 each or up to 9,333,333 flow-through units at C$0.60 each.

The common-share units are comprised of one share and one half-share warrant. The whole warrants provide for an additional share at C$0.75 each for one year.

The flow-through units include one flow-through share and one half-share warrant. The full warrants provide for an additional share at C$0.90 each for one year.

"This financing will most certainly put Nordic Oil and Gas on a new and higher level," said Donald Benson, the company's chief executive officer, in a statement. "It will allow us to move forward with more expediency and quicken the timetable for advancing our exploration and drilling programs at each of our three locations. "This will position us to accelerate our coal bed methane program in Joffre, Alta., and commence drilling the proposed 15 wells in the region."

First Associates Investments Inc. and Wellington West Capital Inc. are the placement agents in the offering.

Based in Winnipeg, Man., Nordic is an oil and natural gas exploration company. It plans to use the proceeds for its exploration and drilling activities.

Nordic's stock closed up C$0.01 at C$0.51 Tuesday.

Kereco's stock dips

A day after announcing its plans to raise C$121 million in a private placement, Kereco Energy Ltd.'s stock took a dip.

The company's stock lost C$0.27 Tuesday to close at C$11.60.

Kereco's stock gained C$0.77 Monday after the deal was first announced to close at C$11.87.

The company plans to sell shares at C$11 each.

Kereco, based in Calgary, Alta., is a natural gas exploration company.

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