DHB Industries wraps $14.82 million PIPE as part of lawsuit settlement; InSite secures $6.28 million

By Sheri Kasprzak

New York, Aug. 3 - As the week winds down, DHB Industries, Inc. led PIPE activity, closing a $14,824,998 private placement linked to a class action securities lawsuit settlement.

The company issued 3,007,099 shares at $4.93 each to former chief executive officer David H. Brooks.

The company had 45,337,575 outstanding common shares as of Nov. 7, 2005.

Brooks also exercised existing warrants for 3.75 million shares for proceeds of $8.25 million.

The offering was conducted as part of a settlement agreement connected to a class action securities lawsuit against the company and some of its former and current directors and officers by investors who purchased shares of DHB between April 2004 and August 2005.

The suit, filed in September 2005, alleged that DHB violated federal securities laws by issuing false and misleading statements that inflated the market price of its securities.

The total settlement is equal to $22,324,998 with the placement making up the majority. The settlement funding has been placed in escrow pending approval from the U.S. District Court for the Eastern District of New York.

On Thursday, the company's stock gained 4.4%, or 11 cents, to close at $2.61 (Pink Sheets: DHBT).

The company has not filed an earnings statement since November 2005. For the quarter ended Sept. 30, 2005, DHB reported a net loss of $41.65 million, compared with net income of $8.15 million for the corresponding 2004 quarter.

DHB Industries, based in Pompano Beach, Fla., develops and manufactures body armor.

In the broader market, stocks continued to climb even as PIPE volume remained fairly low.

The Dow Jones Industrial Average gained 42.66 to close at 11,242.59; the Nasdaq composite index climbed 13.53 to end at 2,092.34; and the Standard & Poor's 500 composite index ended up 1.72 at 1,280.27.

InSite stock gains 13.64%

Moving to the biotech sector, InSite Vision Inc. saw its stock skyrocket by 13.64% after the company secured $6,288,000 from a private placement and received acceptance of two abstracts related to its second pivotal trial of its AzaSite topical eye drop antibiotic.

The stock gained 18 cents to close at $1.50 (Amex: ISV).

In the placement, the company received agreements from some of its current investors for 4.8 million shares at $1.31 each.

The investors, Balyasny Asset Management, PTV Sciences and a Boston-based institutional investment management firm, also received warrants for 1 million shares, exercisable at $1.51 each for five years.

RBC Capital Markets Corp. was the placement agent.

Proceeds will be used for the development of In Site's AzaSite to treat bacterial conjunctivitis and for other general corporate purposes.

On Thursday, InSite had two abstracts related to the second trial of AzaSite accepted for presentation by the American Academy of Ophthalmology. The meeting will be held in November.

In the first phase 3 clinical study of AzaSite, it was determined that the drug, dosed twice daily for the first two days and once daily for three or more days, was equivalent to tobramycin dosed four times daily for five days in treating bacterial conjunctivitis.

The second phase 3 trial showed similar results.

"These clinical trial results support AzaSite's value proposition of established efficacy and coverage with the convenience and compliance of a once-a-day dosing regimen," said Kumar Chandrasekaran, InSite's CEO, in a statement.

Based in Alameda, Calif., InSite develops treatments for disorders of the eye.

Whiterock raises C$10 million

In Canada, Whiterock Real Estate Investment Trust settled a C$10 million private placement of 7.5% subordinated convertible debentures.

The company sold series D convertible debentures to an affiliate of Kimco Realty. The debentures due July 31, 2011 are convertible into trust units at C$3.75 each.

The proceeds from this offering will be used to redeem all of the company's outstanding 9% series B convertible debentures. The company has C$8.1 million in series B debentures currently outstanding, and those debentures have been called for redemption by Aug. 16.

On Thursday, the company's stock edged up by 0.62%, or 2 cents, to close at C$3.25 (Toronto: WRK).

Toronto-based Whiterock is a real estate investment trust focused on commercial and industrial assets.

Max Petroleum stock drops

As oil prices dropped, Max Petroleum plc watched its stock drop on Thursday after pricing a $75 million private placement of convertible bonds on Wednesday.

The stock fell 7.50p on Thursday to end at 110p (London: MXP). On Wednesday, when the deal was announced, the stock lost 3.5%, or 4.25p, to close at 117.50p

In the placement, the company plans to sell 6.75% bonds that are convertible at 133p each, a 24% premium to the volume weighted average price for the 30 consecutive trading days before pricing.

JPMorgan Cazenove Ltd. is the bookrunner.

Proceeds from the offering will be used to accelerate and expand the company's drilling program in the A&E blocks in Western Kazakhstan.

Max Petroleum, based in London, is an oil and natural gas exploration company.

Oil prices lost 35 cents on Thursday to end the day at $75.46 per barrel.

Killam stock up

In Canadian secondary market activity, Killam Properties Inc.'s stock edged up on Thursday.

The stock gained 4.86%, or 12 cents, to close the session at C$2.59 (Toronto: KMP). The company's stock settled up 9 cents, or 3.78%, to close at C$2.47 on Wednesday when the company finalized the pricing terms of a C$15,088,000 private placement.

In the placement, Killam plans to sell shares at C$2.30 each by Aug. 21.

The placement was first announced on Monday and was priced Wednesday afternoon. At the end of the day, the company's stock had climbed 9 cents, or 3.78%, to end at $2.47 (Toronto: KMP). When the deal was first announced, without terms, the stock gained 2 cents to close at C$2.40.

The offering is being placed through a syndicate of agents led by Desjardins Securities Inc. Proceeds will be used to fund recent acquisitions and future growth.

Killam, based in Halifax, N.S., is a real estate company and manages multi-family residential rental properties.

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