Cano stock climbs on word of $81 million PIPE; Attunity gears up to wrap $5 million stock offering

By Sheri Kasprzak

New York, Aug. 29 - Cano Petroleum, Inc. led light PIPE activity on Tuesday after announcing its plans to close a private placement of $80,917,913. The offering includes both convertible preferred and common stock.

The Cano deal comes as oil prices dropped below $70 per barrel on Tuesday, giving up 90 cents to close at $69.71 per barrel. It's the second straight session in which oil prices have sustained substantial losses. Oil lost $1.90 on Monday to close at $70.61 per barrel.

After the Cano offering was announced Tuesday morning, the company's stock advanced by 4.18%, or 20 cents, to end at $4.99 (Amex: CFW). Volume of Cano shares traded on Tuesday also jumped with 201,300 shares traded, compared with the average of 94,040 shares.

Cano agreed to sell 49,116 convertible preferreds at $1,000 each and 6,584,247 common shares at $4.83 each to a group of institutional investors.

Cano had 26,832,158 common shares outstanding as of May 2.

The preferreds are convertible into common shares at $5.75 each, a 22.3% premium to the company's closing stock price on Monday.

The price per common share is equal to the three-day average closing price before Aug. 25.

The common shares include warrants for 1,646,061 shares, exercisable at $4.79 each.

The company's chief financial officer, Sam Smith, did not immediately return calls for comment on the offering Tuesday.

Proceeds will be used to retire $69 million in debt. The remainder will be used for working capital and for general corporate purposes.

Cano is certainly no stranger to the PIPE market, having completed a slate of offerings in 2005.

In March 2005, the company completed a private placement of 1.35 million shares at $3.75 each for proceeds of $5,026,500. After the deal closed on March 28, the company's stock gained 14 cents to end at $4.10.

The company closed two offerings in September 2005. On Sept. 13, 2005, the company sold 2,603,864 shares at $4.14 each for $10,779,996 in proceeds, and on Sept. 19, 2005, the company issued 2.1 million shares at $4.14 each for proceeds of $8,694,000. After the Sept. 13 offering closed, the stock lost 16 cents to close at $4.14, and after the Sept. 19 offering, the stock gained 7 cents to end at $4.05.

Looking to the company's latest earnings statement, Cano reported a net loss of $1.13 million for the quarter ended March 31, compared with a net loss of $775,282 for the corresponding quarter of 2005.

Cano, based in Fort Worth, Texas, is an oil and natural gas exploration and production company.

Attunity to raise $5 million

In the tech sector, Attunity, Ltd. agreed to wrap a $5 million PIPE. The offering may be one of many tech offerings to hit the PIPE market in the coming weeks, one tech-focused sellsider said Tuesday.

"Tech stocks are improving," he said. "It's an area with a lot of investor interest so I think we can expect to see more in the coming month or so."

In fact, several offerings this week and last week were from technology companies.

VuBotics, Inc. closed a $2,219,940 private placement on Monday, selling 7,399,799 units of one share and one warrant at $0.30 each. Atlanta-based VuBotics develops software to provide text for online, small screen and broadcast applications. The stock lost 2.27%, or a penny, on Tuesday to close at $0.43 (OTCBB: VBTC). On Monday, the stock gained 18.92%, or 7 cents, to close at $0.44.

In an offering that closed Aug. 25, Applied Digital Solutions, Inc. raised $13.5 million from the sale of term notes with warrants. The warrants for 1,719,745 shares are exercisable at $1.88 each. Applied Digital's stock climbed 2.98%, or 5 cents, to close Tuesday at $1.73 (Nasdaq: ADSX). When the deal closed Friday, the stock advanced by 2 cents, or 1.23%, to end at $1.65.

Applied Digital Solutions, based in Delray Beach, Fla., develops a chip that, when inserted under the skin, can check patient vital signs.

Back to the Attunity offering, the company said a group of institutional and private investors have agreed to buy 4 million shares at $1.25 apiece.

The investors, which include members of the company's management and board of directors, will also receive three-year warrants exercisable at $1.25 each.

The company's stock gained 10.83%, or 13 cents, to close at $1.33 (Nasdaq: ATTU) on Tuesday.

Attunity has sought financing from the PIPE market before, selling 727,272 shares at $2.75 each on Jan. 25, 2005. The shares in that offering were sold at a 1.8% premium to the company's $2.70 closing stock price on Jan. 25.

Based in Burlington, Mass., Attunity develops computer integration software.

Bois d'Arc stock climbs

Bois d'Arc Energy, Inc.'s stock settled up on Tuesday after announcing its plans to sell $35,865,000 in stock to Comstock Resources, Inc.

On Tuesday, the stock gained 44 cents, or 2.66%, to close at $16.96 (NYSE: BDE). On Monday, when the deal was announced, the stock climbed by 3.64%, or 58 cents, to end at $16.52.

Also on Monday, the company announced its plans to buy another 20% working interest in the Ship Shoal 113 Unit for $19.2 million. Some of the placement proceeds will be used to make that acquisition, which is scheduled to close in September.

In the placement, Comstock agreed to buy shares at $15.94 each. The price per share was on par with the company's Aug. 25 closing stock price.

Houston-based Bois d'Arc is an oil and natural gas exploration company.

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