Private placement volume grinds to halt on dismal stocks; Ashford plans $75 million offering

By Sheri Kasprzak

Atlanta, Jan. 4 - The private placement market hit a lull Tuesday as stocks tumbled.

Better oil prices, however, have some sell-side sources, especially in Canada, hopeful that volume will improve over the course of the week.

"Today has really been slim for new deals," said one market source. "The good news is that oil prices were up, which could mean more oil companies in the market as the week goes on."

"There's really nothing to report," said a Canadian source. "It's just a really slow day."

The Dow Jones Industrial Average closed down 98.65 at 10,630.78, the Nasdaq composite was down 44.29 to end at 2,107.86 and the S&P 500 ended 14.03 lower at 1,188.05.

Oil prices ended the day up $1.79 at $43.13 per barrel.

Leading private placement action in the United States was an offering from Ashford Hospitality Trust Inc.

The company said Tuesday it is in talks to sell up to $75 million in series B cumulative preferreds.

Security Capital Preferred Growth Inc. has agreed to buy up to 5,162,000 series B-1 preferreds and up to 2,285,865 series B-2 preferreds at $10.07 each.

The preferreds are initially convertible at $10.07 per share.

Ashford Hospitality, based in Dallas, is a real estate investment trust that owns hotels and hotel mortgages.

On Tuesday, the company's stock closed down $0.23 at $10.53.

Procera closes $4.61 million deal

Procera Networks Inc. said Tuesday it sold 5,762,500 shares in a private placement for $4.61 million.

The shares were sold at $0.80 each to institutional and accredited investors, a 54% discount to the company's closing stock price on Dec. 29.

Three-year Warrants were also issued in the deal for 1,728,750 shares at $1.25 each and 1,728,750 shares at $1.37 each.

"I don't have a lot of details on this particular company, but from what I've seen of the deal it looks very under-priced," said one source who had seen the deal. "Just looking at where they've been trading, it's a huge discount."

On Tuesday, the company's stock closed down $0.19 at $1.55.

Seidler Companies and Pacific Wave Capital were the placement agents in the deal.

Procera, based in Campbell, Calif., produces network management equipment for internet service providers and other companies.

Nordic American wraps deal

Nordic American Inc. closed a private placement deal with some of its existing shareholders for $2.6 million.

The company sold about 1.2 million shares at $2.16 each, a price equal to a 25% discount of the company's 50-day trading average.

"We need money for some of our projects," said Arthur Skagen, a spokesman for the company, in an interview. "The trouble with going through other markets is that we're a Pink Sheet company and we felt it would be easier and faster to get the money from existing shareholders. We have a strong shareholder base and we felt it was easier to go this route."

"Investment of these funds by our existing shareholder base shows their strong commitment to the company and provides the company with all of the strength necessary to meet our business objectives," said Nordic American's president Bjorn Jonasson in a statement.

Nordic American is a Vancouver, B.C.-based holding company for financial businesses and other companies.

On Tuesday, Nordic American's stock closed unchanged at $4.

Prescient raises $1.5 million

Prescient Applied Intelligence Inc. closed a private placement of preferreds for $1.5 million.

The company sold 150 shares of series F convertible preferred stock at $10,000 each.

The preferreds are convertible into common shares at $2 each and are callable at 110% of face value if the company completes an equity financing for at least $3 million after its merger with Prescient Systems Inc.

The private placement was a condition of the completion of the merger.

Burnham Hill Partners was the placement agent in the offering.

Based in West Chester, Pa., Prescient Applied Intelligence provides technology-based products to suppliers and retailers. It plans to use the proceeds from the offering for working capital and for costs associated with its merger.

The company's stock closed down $0.16 at $0.99 on Tuesday.

Canadian offerings

Heading up action north of the border, Rockwater Capital Corp. announced its plans to raise C$35 million in a private placement.

The company will issue senior unsecured convertible debentures, which bear interest at 6.75% and mature Dec. 31, 2010.

Starting June 30, 2005, the debentures are convertible at a price based on the average market price calculated at closing.

Rockwater, based in Toronto, is a financial services company focused on wealth management, asset management and capital markets. The proceeds from the deal will be used to repay a bridge loan from a Canadian chartered bank and for general working capital.

Rockwater's stock closed up C$0.02 at C$0.80 on Tuesday.

Cascadia closes offering

Cascadia International Resources Inc. said Tuesday it sold 3,262,500 units at C$0.40 for C$1,305,000.

The units include one flow-through share and one half-share warrant. The whole warrants allow for an additional share at C$0.60 each for one year.

Cascadia is a Calgary, Alta.-based resources mining company. The company plans to use the proceeds from the offering for exploration and development expenses, in particular drilling expenses on the company's Norton property in Ontario.

On Tuesday, the company's stock closed unchanged at C$0.32 Dec. 31, its last trade.

Campbell raises C$1.8 million

Campbell Resources Inc. closed a private placement Tuesday for C$1.8 million.

The company sold 2,690,367 flow-through shares at about C$0.67 each.

Campbell is a gold and gold-copper mining and exploration company based in Montreal. The proceeds from the private placement will be used for the company's exploration program on the Meston, Corner Bay, Jaculet and Eastmain projects.

On Tuesday, Campbell's stock closed up $0.005 at $0.475.

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