PNM Resources completes $100 million; Tercica gets $75 million equity line from Kingsbridge

By Sheri Kasprzak

New York, Oct. 14 - To round out the week, Albuquerque's PNM Resources, Inc. led PIPE news with word that it wrapped a $100 million offering of hybrid income term security units.

Cascade Investment, LLC bought 4 million of the units at $25.00 apiece.

Each unit has an initial coupon of 6.625% and includes a fractional undivided interest in a senior unsecured note and an obligation to buy stock in three years. The contract requires the holder to buy stock at an initial price per share of $25.116 on Nov. 16, 2008.

The underlying senior notes have a 5.1% initial interest rate, mature on Aug. 16, 2010 and are initially convertible into common shares at $20.93.

The sale has been in the works since August 2004 and is related to the company's acquisition of Fort Worth, Texas-based TNP Enterprises.

After the settlement was announced Friday afternoon, PNM's stock gained $0.28 to end that day at $26.22.

Moving to the company's earnings, PNM's net income for the quarter ended June 30, 2005 was down from the corresponding quarter of 2004. For the quarter ended June 30, 2005, PNM reported a net income of $1,541,000, down from a net income of $16,849,000 for the same quarter in 2004.

PNM provides electricity and natural gas to customers in New Mexico and Texas.

Meanwhile, in the broader PIPE market, one market source said falling oil and a rally in the stock market helped push more offerings as the week wrapped up.

Oil took yet another dive on Friday, losing $1.38 to end at $61.70.

Higher oil, said the market source based out of San Francisco, had been a thorn in the side of PIPE issuers, pushing down stocks in almost every sector other than energy.

"When you've got not just one day of [dropping] oil, it's kind of a sign that it's at least a temporary trend," he said. "[Stocks] come back up, market gets a little more appealing [to investors] and then you put the deals on the table."

But oil wasn't the only thing pushing the stock market on Friday, he noted. Positive data on retail sales also helped advance the three major stock indexes. The Dow Jones Industrial Average gained 70.75 to close at 10,287.34; the Nasdaq composite index ended up 17.61 to close at 2,064.83; and the Standard & Poor's 500 composite index closed up 9.73 at 1,186.57.

Tercica's $75 million equity line

Looking to the biopharmaceutical sector, Tercica, Inc. said late Friday that it has entered into a committed equity financing facility with Kingsbridge Capital Ltd.

Over the course of three years, Kingsbridge will buy shares of Tercica at the higher of $3.00 each or 90% of the closing share price over eight trading days ending the before a draw. The shares will be priced at discounts ranging from 6% to 10% depending upon the average market price during the pricing period.

Tercica also issued warrants for 260,000 shares, exercisable for five years at a 30% premium to the company's average closing stock price over the five trading days before the date of the agreement.

Based in Brisbane, Calif., Tercica is a biopharmaceutical company focused on developing and commercializing products to promote endocrine health.

The company's stock slipped $0.16 to end at $9.99 Friday.

Elsewhere in the biopharmaceutical sector, Bioaccelerate Holdings, Inc., a New York-based company that acquires and develops compounds used in cancer treatments, settled an $18,772,580 preferred stock deal.

Bioaccelerate sold 3,128,769 shares of series A convertible preferred stock at $6 each.

The preferreds are convertible into common shares on a one-for-four basis at an initial conversion price of $1.50.

The investors also received warrants for 6,257,523 shares, exercisable at $2.00 each for three years.

For each preferred purchased, the investors will also get four shares of subsidiary Cynat Oncology, Inc. and four shares of subsidiary Genaderm Inc.

Proceeds will be used for the development of compounds, as well as for working capital and general corporate purposes.

Bioaccelerate's stock ended the day down $0.05 at $2.95.

Motion DNA's $1 million deal

Motion DNA Corp. pocketed $1 million from a convertible loan purchased by the managing partner of a company attempting to buy it out.

Jamir Miller, managing partner of Formula 51-2 LLC, bought the one-year, interest-only loan. The loan is convertible into common shares at $0.50 each.

The full terms of the offering could not be determined by press time Friday.

Miller's Formula 51-2 has been in negotiations to buy out Motion DNA since June. The funding will provide Motion with working capital as negotiations continue.

"Mr. Miller recognized that the company was in need of capital and we desired to either end talks with his company to open the door for other suitors or come up with a solution to our immediate cash needs," said Motion DNA's chief executive officer Zig Ziegler, in a statement.

"This is [an] excellent start to what we envision will be a very lucrative business relationship between Formula 51-2 and our company. We will continue to negotiate in good faith and achieve terms and conditions with the ultimate goal of financial independence and enhancing shareholder value. This access to this capital comes at a crucial time for Motion DNA as we are intensifying our marketing campaign."

Based in Scottsdale, Ariz., Motion DNA provides diagnostic tests for athletes, medical professionals and sports organizations.

"We believe Motion DNA has something needed in the sports and medical marketplace with its technology and believe it is only a matter of time before Motion DNA testing is a household name in each market," said Miller, in a statement.

"We want to be a part of this in some way. We are excited to see how Motion DNA's relationship develops with the [National Football League] and Major League Baseball. We are in a position to infuse a lot of capital into the company, and I've agreed to introduce the company to the renowned sports agent Leigh Steinberg in hopes that Steinberg may be interested in helping facilitate professional contracts."

The company's stock lost 13.79%, or $0.04, to close at $0.25 Friday.

Guest-Tek leads Canadians

Heading to Canada, Guest-Tek Interactive Entertainment Ltd. wrapped a C$13 million stock deal Friday.

M.P. Technologies, Inc. bought 2 million shares at C$6.50 each, bringing its total ownership of Guest-Tek to 58.3%, or 9,100,945 shares.

The proceeds will be used to bring internet protocol technologies into the hospitality market. The rest will be used for new business opportunities and working capital.

"The MPT private placement concludes a series of transaction including an issuer bid which were announced in early 2005," said Arnon Levy, the company's chief executive officer, in a statement. "Guest-Tek is pleased to complete this private placement with MPT and we intend to diligently use these funds to invest in new opportunities. We are excited about the tremendous opportunity for growth in IP services within the hospitality market and the possibilities of leveraging our capabilities into other markets."

"MPT continues to believe in the growth potential of Guest-Tek and the appetite of the global hospitality market for a transition to IP-centric services," said Masuo Yoshimoto, chief executive officer of MPT, in a statement. "We are pleased with our investment and the consistent success we see from the Guest-Tek management team."

Based in Calgary, Alta., Guest-Tek provides broadband technology products to the hospitality sector.

Vical's stock closes up

Vical Inc., which priced a $22.56 million direct offering earlier this week, saw its stock rise slightly on Friday.

The company's stock went up $0.05 to close at $4.87 before losing $0.06 in after-hours trading.

On Thursday, the company's stock slid $0.02 to finish at $4.82 and on Wednesday, when the direct placement was first announced, its stock dipped $1.21 to settle at $4.84.

On Wednesday, the San Diego-based company announced that it plans to sell shares at $4.80 each on Oct. 17 to a group of institutional investors.

The shares will be sold under Vical's shelf registration.

Vical is focused on DNA delivery technologies used to prevent and treat diseases like cancer.

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