Quantum raises $12.5 million in stock sale; BPZ Energy leads oil offerings with $12.33 million PIPE

By Sheri Kasprzak

New York, July 6 - Technology companies continued to grab PIPE headlines on Thursday as Quantum Technologies, Inc. wrapped up a $12,496,000 private placement.

The investors, which included both existing and new investors, bought 4.4 million shares at $2.84 each, a 10% discount to Quantum's June 29 closing stock price of $3.15.

The investors also came away with warrants for 880,000 shares, exercisable at $3.94 each.

Quantum had 53,740,363 shares outstanding as of March 3.

"I guess they did what they had to do," said one sellside tech market source. "It doesn't look that great to me and [their] stock isn't taking it well."

The company's stock took a hit and fell 8.17%, or 29 cents, to end at $3.26 (Nasdaq: QTWW).

Canaccord Adams Inc. was the placement agent.

"This financing will bolster Quantum's balance sheet and provide us capital to pursue near-term strategic initiatives," said Alan Niedzwiecki, Quantum's chief executive officer, in a statement. "We are grateful to the Canaccord Adams team for a quality placement."

Quantum reported a net loss of $9.84 million for the quarter ended Jan. 31, compared with a net loss of $2.92 million for the corresponding quarter of 2005.

Quantum, which has headquarters in Irvine, Calif., manufactures packaged fuel systems for specialty vehicles, like hybrids and fuel cell vehicles.

In the broader market, stocks picked up after hitting a slump Wednesday, which was good news for PIPE issuers, according to one market source.

"Things are picking up in general, I think," said the New York-based sellsider. "Better stocks help."

The Dow Jones Industrial Average ended the day up 73.48 to close at 11,225.30, and the Nasdaq composite index climbed 1.75 to end at 2,155.09. The Standard & Poor's 500 composite index ended up 3.17 to close at 1,274.08.

Meanwhile, in the energy sector, oil companies headed back to the PIPE market, even as oil prices fell slightly, after prices hit an intraday record of $75.40 per barrel on Wednesday.

Oil prices dipped by 5 cents to settle at $75.14 per barrel Thursday.

Heading up those oil offerings was a $12,325,500 offering from BPZ Energy, Inc.

Houston-based BPZ issued 4,482,000 shares at $2.75 apiece, a 31.2% discount to the company's $4.00 closing stock price on Friday, to eight institutional and accredited investors.

The offering was not brokered.

The company's stock remained unchanged at $4.00 Thursday (Pink Sheets: BPZI).

BPZ plans to use the proceeds to develop the Corvina and Albacora fields in northwestern Peru.

"We are very pleased with the results of this private placement as it will allow us to accelerate the redevelopment of the Albacora oil field which complements our gas-to-power and gas-exports strategy," said Manolo Zuniga, BPZ's chief executive officer, in a news release. "Further, we are grateful for the trust and continued confidence that these investors have shown in the company, as some of them have also participated in prior company offerings."

BPZ has used private placements before to fund development at Albacora.

On March 13, the company closed a $5.01 million offering of 1.67 million shares at $3.00 each.

Source raises $6 million

Elsewhere in the oil sector, Source Petroleum Inc. raised $6,004,991 in a private placement of 4,003,327 units.

The deal was announced Thursday morning, and by the end of the day, Source's stock fell 14.58%, or 35 cents, to settle at $2.05 (OTCBB: SOPO).

The units of one share and one warrant were sold at $1.50 each.

Each warrant in the offering is exercisable at $2.25 through July 5, 2008.

Proceeds will be used for working capital.

Source is based in Vancouver, B.C.

Another Vancouver-based oil company, Strategic Oil & Gas Ltd. closed the final tranche of a C$5 million private placement for C$889,600.

The company sold a total of 3,125,000 units at C$1.60 each and a total of 556,000 units in the last tranche.

The units are comprised of one share and one half-share warrant. The whole warrants are exercisable at C$2.00 each for one year.

The expiry will be accelerated to 30 days if the stock trades above C$2.50 for more than 21 consecutive trading days.

Proceeds will be used for exploration on oil and gas lands in Wyoming and for drilling costs.

At the end of the day, the stock had fallen 5.88%, or 10 cents, to close at C$1.60 (TSX Venture: SOG).

Gemcom's C$12.08 million PIPE

In other Canadian private placement, Gemcom Software International Inc. announced that it plans to settle a PIPE for C$12,075,000.

The placement, offered through a syndicate of agents led by Clarus Securities Inc., includes up to 10.5 million subscription receipts at C$1.15 each.

The receipts are exchangeable for units of one share and one half-share warrant once the company's acquisition of Surpac Minex Group Pty. Ltd. is completed.

The whole warrants associated with the deal will be exercisable at C$1.45 each for two years.

The deal is expected to close July 12, and the acquisition is expected to close July 17.

Under the terms of the acquisition, Gemcom will acquire all of the outstanding shares of Surpac for C$13,174,455 in cash and 13,084,871 shares.

The stock closed unchanged at C$1.15 Thursday (Toronto: GCM).

Gemcom, based in Vancouver, B.C., develops mine production management software.

DrugMax stock edges up

A day after wrapping a $10 million private placement of notes with warrants, DrugMax, Inc.'s stock climbed slightly on Thursday.

The stock gained 1.75%, or a penny, to end at $0.58 (Nasdaq: DMAX). On Wednesday, when the deal settled, the stock lost 5 cents to close at $0.57.

In the placement, Deerfield Special Situations Fund, LP and Deerfield Special Situations Fund International, Ltd. bought five-year notes with warrants for 16.5 million shares.

Of the warrants, 3 million are exercisable at $0.61 each, 5.5 million at $0.75 each, 5.5 million at $0.78 each and 2.5 million at $0.92 each.

Some of the proceeds will be used to repay a convertible debenture and to terminate $23 million in outstanding subordinated debt held by AmerisourceBergen Drug Corp.

Based in Farmington, Conn., DrugMax is a specialty pharmaceutical company.

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