U.S. private placement volume holds steady; Walker Financial plans $6 million offering

By Sheri Kasprzak

Atlanta, Dec. 1 - Private placement activity in the United States remained moderate Wednesday with smaller deals in the pipeline.

"We've seen mostly smaller deals today," said one sell-side source. "Volume looks okay, but there aren't many big deals out there. Oil prices dropped today, which helped the market some because it boosted stocks."

Oil fell $3.64 to close at $45.49 per barrel Wednesday.

Even though oil prices fell, Canadian stocks were boosted by a strong technology market, said one Canadian sell-sider.

The S&P/Toronto Stock Exchange composite index rose 19.26 points to end at 9,049.44.

"I think whatever losses were incurred because of lower oil were offset by tech gains," said the source.

In private placement news in the United States, Walker Financial Corp. said it will raise up to $6 million in an offering comprised of 60 million shares at $0.10 each.

Fusion Capital Fund II LLC has agreed to buy the shares in a deal that will be conducted over two years.

The pricing of the deal will be based on the market price for a specified period before the date of sale.

Walker is a Garden City, N.Y.-based record-keeping and management services provider for funeral homes and cemeteries.

On Wednesday, the company's stock closed unchanged at $0.58 Wednesday.

Family Room raises $2 million

Family Room Entertainment Corp. received $2 million through the private placement of a convertible note and warrants to Longview Equity Fund LP.

The convertible note, which matures Nov. 17, 2006, bears interest at Prime plus 400 basis points with a floor of 10%.

The note is convertible into shares at $0.15 each and also includes warrants for 23,333,334 class A and class B shares at $0.15 per share.

The class A warrants expire in five years and the class B warrants in 180 days.

Family Room, based in Beverly Hills, Calif., develops, produces and performs production-related services for the entertainment industry. It plans to use $1 million of the proceeds from the deal to acquire rights and for an independent film production. The remainder of the funds will be used for working capital.

Family Room's stock closed up $0.005 at $0.085 Wednesday.

ADM wraps $3.64 million deal

ADM Tronics Unlimited Inc. sold units comprised of $100,000 in promissory notes and two warrants for $3,637,500.

The 6% notes are convertible into either shares of ADM at $0.29 each or into shares of subsidiary Ivivi Technologies Inc. at $8.30 each.

The units are also comprised of one warrant for 334,828 shares of ADM at $0.41 each and one warrant for 12,048 shares of Ivivi Technologies at $5.70 each.

Maxim Group LLC was placement agent in the deal.

Investors in the offering include ProMed Partners, Guerilla Capital Management, Kensington Partners and AFA Private Equity Fund, among other accredited and institutional investors.

"We are pleased to have attracted such high-caliber investors in this private placement," ADM chief executive officer Andre DiMino said in a statement. "This new capital infusion enables us to accelerate our sales and marketing efforts as well as development of next-generation SofPulse products."

ADM, based in Northvale, N.J., develops and manufactures therapeutic non-invasive electronic medical devices, environmentally safe chemical products and topical dermatological products.

On Wednesday, ADM's stock closed down $0.009 at $0.39 Wednesday.

Insignia raises $2.49 million

Insignia Systems Inc. said Wednesday it sold 2.49 million shares at $1 each for $2.49 million in a private placement.

The deal, which is scheduled to close Dec. 3, was offered through placement agent T.R. Winston & Co.

"It looks like it probably priced a little below market," said one sell-sider familiar with the deal. "It could have priced a bit higher."

The source said compared to where the company's stock has been trading - between $1.57 and $1.10 throughout November - the deal could have come to market more aggressively. On Wednesday, the company's stock closed down $0.06 at $1.17.

"It does seem like a lot of these companies are undervalued, though," the source added.

"After completing this private placement, our cash position will be approximately $6 million," said Insignia's president and chief executive officer Scott Drill in a statement. "The combination of our bank line and cash puts us in a strong position to fund our working capital needs for the foreseeable future. We are optimistic about our prospects for 2005 based on continued improvement in our point-of-purchase services business."

Based in Minneapolis, Insignia develops and markets in-store advertising products, programs and services to retailers and consumer-goods manufacturers. The company plans to use the proceeds for working capital.

PacificNet gets $1.83 million

Internet technology service provider PacificNet Inc. wrapped up a private placement for $1.83 million, the company said Wednesday.

On Nov. 17, the company sold 588,410 restricted common shares at $3.11 each.

Warrants were also issued to investors to buy one common share for every five shares bought in the offering at $3.89 each for five years.

PacificNet is based in Hong Kong and its stock dropped $0.57 Wednesday to close at $10.82.

Ventures-National completes $1 million deal

Ventures-National Inc. has received $1 million through the private placement of a convertible promissory note to Frank. P. Crivello.

The note bears interest at 10% per year and matures Jan. 30, 2005.

Crivello may elect to convert some or all of the principal and interest of the note into shares at $0.12 each.

So far, Crivello has paid a total of $100,000 in advances on the note and may make additional advances of up to $1 million.

Based in Fremont, Calif., Ventures-National, through its holding company Titan General Holdings Inc., produces prototype and pre-production circuit boards for electronics companies. On Wednesday, the company's stock closed down $0.05 at $0.25.

Canadian offerings

Heading up news north of the border, Pelorus Energy Corp. announced a C$15 million offering.

The company will sell 166,666,667 flow-through common shares at C$0.09 each.

The offering is being placed through a syndicate of underwriters led by GMP Securities Ltd.

Based in Calgary, Alta., Pelorus is an oil and natural gas exploration, development and production company. It plans to use the proceeds from the offering for eligible Canadian exploration expenses.

Pelorus' stock closed unchanged at C$0.10 Wednesday.

Canadian Superior's deal

Canadian Superior Energy Inc. also raised C$15 million in a private placement.

The company sold 5 million flow-through common shares at C$3 each.

Placement agents in the offering include Maison Placements of Canada Inc. and Acumen Capital Finance Partners Ltd.

"Well, obviously it's a good deal for them because it's priced at a premium to market," said one Canadian sell-sider. "It's priced quite a bit higher than the average trading price, which seems to be around C$2.50 or C$2.55."

On Wednesday, the company's stock closed down C$0.22 at C$2.41.

Based in Calgary, Alta, Canadian Superior is an oil and gas exploration and production company. It plans to use the proceeds from the deal for its exploration program and qualifying expenditures.

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