Discovery Technologies closes $20.52 million placement; Searchlight wraps $5 million, plans more

New York, Jan. 3 - Discovery Technologies, Inc. led PIPEs news with the announcement of a $20.52 million private placement of common stock.

The company sold 6,313,617 common shares to 31 investors for $3.25 per share.

If the company does not meet certain income and earnings targets for 2009, it will be required to issue up to more 3,156,808 shares to the investors.

Proceeds will be used to expand the company's manufacturing and production capacity and facilities as well as for working capital.

Discovery is a fertilizer manufacturer based in Xi'an, China.

From the natural resources sector, Searchlight Minerals Corp. said it completed a $5 million Regulation S private placement of units on Dec. 26. It also priced two future placements to raise another $5 million.

In the completed deal, the company sold 3,125,000 units at $1.60 apiece to the Arlington Group Ltd., a non-U.S.-based investor.

Each unit consists of one common share and one half-share warrant, with each whole warrant exercisable at $2.40 for two years.

In addition, the company will issue an additional 156,250 common shares to the Arlington Group, equal to 5% of the total number of units sold, for no additional cost as a commission. As a result, the company issued a total of 3,281,250 shares and 1,562,500 share purchase warrants.

In addition to this private placement, Searchlight Minerals has approved two more private placements to raise an additional $5 million.

The first Regulation D private placement includes 1,875,000 units at $1.60 per unit in the United States for $3 million and the second Regulation S offering is for 1.25 million units at the same price, which will be offered overseas, for $2 million. These units will have the same terms as those sold to the Arlington Group.

"The additional capital raised in the private placement with the Arlington Group, and any additional capital raised under the U.S. and foreign offerings, will provide the company with significant financial flexibility in achieving its key 2008 goals," stated Ian McNeil, president and chief executive officer.

"Optimizing and establishing the feasibility of the first production module, laying the groundwork for a 2,000 ton-per-day commercial production facility at the Clarkdale Slag Project, and continuing the exploration program at the Searchlight Gold Project continue to remain the company's top priorities."

Based in Henderson, Nev., Searchlight is a mineral exploration company.

Its stock (OTCBB: SRCH) closed at $2.90 on Dec. 26 and $2.46 on Thursday.

RxElite sells $10.5 million

Meanwhile RxElite, Inc. secured $10.5 million from a private placement of convertibles, stock and warrants.

The company issued a senior secured convertible note with a principal amount of $10.5 million, 5,594,033 common shares, a series A warrant for 13,985,083 shares and a series B warrant for 4,661,694 shares.

The note matures on Dec. 31, 2009 and bears interest at 5% per year. It is convertible into common stock at $1.1262 per share. The conversion price will be lowered if RxElite fails to meet certain EBITDA benchmarks.

Holders may require redemption of up to half of the principal amount of the note at 120% of par, beginning on Sept. 30, 2008. At any time, RxElite may call the first half of the note for 120% of par and the rest of the note at par plus the amount of interest that that would have been paid through redemption.

Both series of warrants have a strike price of $1.1262 and expire on the earlier of Dec. 31, 2014 and five years after the effectiveness of a registration statement for all of the shares underlying the notes and warrants.

The series A warrants are immediately exercisable. The series B warrants will become exercisable only if RxElite exercises its right to early redeem the second half of the note.

Up to $6.5 million of the proceeds will be used for mergers and acquisitions. RxElite may also use the proceeds to repay a note for $74,105.21 and to redeem 350,000 common shares a $4.00 apiece. Other than that, the proceeds may not be used to repay debt, redeem securities or settle claims against the company.

"We believe this institutional funding clearly reflects confidence in RxElite's technology, products, and business outlook," said Jonathan Houssian, company chief executive officer.

"It is our belief that with this financing we are adequately capitalized to sustain our course toward profitability and pursue other avenues that may deliver value to our shareholders."

Based in Meridian, Idaho, RxElite produces generic prescription drugs.

Its stock (OTCBB: RXEI) closed at $0.88 on Dec. 31 and $0.70 on Thursday.

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