Geokinetics plans $55 million PIPE, acquisition; Homeland Security Network seals $5 million equity line

By Sheri Kasprzak

New York, Sept. 14 - With stocks settling mostly down Thursday, PIPE volume remained light as one sellsider noted that tech offerings may continue to be the big ticket in the market.

"Tech is everywhere and it's not showing any signs of slowing off," said the sellsider familiar with the tech sector. "Tech stocks are at record highs now and the market is ripe for more deals. Investor interest seems to be pretty strong, so that's good news for us, I guess."

Tech offerings, in fact, have already made up a great deal of the offerings in the PIPE market recently. Earlier this week, software developer MedcomSoft, negotiated a C$5 million stock deal and another software company, Quorum Information Technologies Inc. priced a C$3 million private placement of units.

Meanwhile, stocks in general were less than spectacular with the Dow Jones Industrial Average giving up 15.93 to close at 11,527.39 and the Standard & Poor's 500 composite index falling by 1.79 to end at 1,316.28. The Nasdaq composite index edged up by 1.06 to close at 2,228.73.

Moving to particular offerings, Geokinetics Inc.'s stock jumped on Thursday after announcing a $55 million private placement of convertible preferred stock in conjunction with its acquisition of seismic data provider Grant Geophysical Inc.

The stock gained 10.62%, or 17 cents, to settle the day at $1.77 (OTCBB: GOKN). Volume of the shares traded also took off with 43,200 shares traded compared to the average 5,333 shares.

In the placement, Geokinetics plans to sell 220,000 shares of the preferreds at $250.00 each to a group of investors that include Avista Capital Partners, LP; Avista Capital Partners (Offshore), LP; and Levant America S.A.

The full terms of the preferreds could not be determined by press time Thursday.

The placement is slated to close Oct. 26.

The deal is being conducted as part of Geokinetics' acquisition of Grant.

Under the terms of the acquisition, Geokinetics will pay $125 million in cash for all of the outstanding shares of Grant, a Houston-based company that provides seismic data to the oil and gas sector.

Looking to the company's latest earnings statement, Geokinetics reported a net income of $1,613,949 for the quarter ended June 30, compared to a net income of $118,179 for the corresponding quarter of 2005.

The company has tapped the private placement market before, raising $30,837,500 in an offering that closed in several tranches, settling in December 2005. In the deal, the company sold shares at $1.25 each. RBC Capital Markets Inc. was the placement agent for that deal, which was conducted to finance the acquisition of Trace Energy Services Ltd.

The company also completed a private placement of convertible preferreds in December 2005, selling 6% preferreds for proceeds of $2,499,900. The preferreds were convertible at $0.30 each.

Based in Houston, Geokinetics provides three-dimensional seismic data to the oil and natural gas exploration sector.

Homeland's $5 million line

Elsewhere, Homeland Security Network, Inc. secured a $5 million equity line of credit from eFund Cap Fund II, LP.

eFund agreed to buy shares of Homeland Security at 91% of the average of the four lowest bid prices for the five trading days before a draw.

Proceeds will be used for acquisitions, technology upgrades and marketing efforts.

After the company announced the equity line Thursday afternoon, the stock fell by 33.33%, or a penny, to close at $0.02 (OTCBB: HSYN).

Based in Frisco, Texas, Homeland Security provides tracking services for commercial trucking and cargo companies.

In the resources sector, Cambridge Resources Inc. obtained a $3 million equity line with Alpine Capital-Markets.

The full terms of that equity line could not be determined Thursday, but Alpine agreed to fund $83,333 each month over the course of 30 months.

The proceeds will be used to explore the Janvier IR 194 for oil and gas.

Cambridge, based in Calgary, Alta., is an oil and natural gas exploration company.

The stock remained unchanged at $0.17 Thursday (Pink Sheets: CBRP).

Glacier's stock climbs

A day after pricing a C$50 million private placement, Glacier Ventures International Corp.'s stock advanced by 2.85% on Thursday.

The stock gained 9 cents to close at C$3.25 (Toronto: GVC). The stock fell by 3.66%, or 12 cents, to end at C$3.16 on Wednesday.

In the placement, the company plans to sell shares and subscription receipts exchangeable for shares at C$3.00 each, an 8.5% discount to the company's C$3.28 closing stock price on Monday.

The offering of receipts is scheduled to close Sept. 14 and the receipts will be exchanged for common stock once the acquisition is concluded. The stock offering is set to close in mid-October.

The deal is being placed through a syndicate of agents led by Raymond James Ltd. and BMO Nesbitt Burns Inc.

Some of the proceeds will be used to finance the company's acquisition of 50% interest in Alta Newspaper Group. The rest will be used for general corporate purposes.

The acquisition is scheduled to cost $28.2 million.

Vancouver, B.C.-based Glacier Ventures acquires communications company through print, electronic and online media.

Dolce's stock drops 40%

Elsewhere in secondary market activity, Dolce Ventures, Inc., which completed a $6,876,802 PIPE earlier this week, watched its stock lose 40% on Thursday.

The stock fell by a penny to end the session at $0.015 (OTCBB: DLCV). The stock had climbed by 108.33%, or 1.3 cents, on Wednesday when the deal was announced to close at $0.025.

In the placement, which was concluded as part of a share exchange with GAS Investment China Co. Ltd., the company sold preferred stock at $2.74 each to Vision Opportunity Master Fund, Ltd.; SEI Private Trust Co. FAO - The IM Smucker Co. Master Fund and Coronado Capital Partners LP.

The preferreds are convertible on a one-for-one basis for common shares.

The offering was connected to a share exchange transaction between Dolce and GAS Investment China in which Dolce exchanged 14,361,647 shares of series A convertible preferred stock for all of the outstanding common shares of GAS. GAS Investment China, based in Beijing, owns and operates gas services in China.

Dolce is located in Syracuse, N.Y.

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