Microfield taps PIPEs players for $15 million; in a light session, Chembio closes $1.3 million deal

By Ronda Fears

Memphis, July 3 - The U.S. markets were shortened Monday ahead of the Fourth of July holiday and the Toronto market was closed, so it was no big surprise that the PIPEs market was extremely quiet. There was more surprise that anything was on the tape and, in fact, there was a pair of deals.

"It was dead today; nobody was in," said a sellside market source in Canada who answered an inquiry from his Blackberry. "I'm not even in today."

Microfield shares off 7%

In the only bona fide new deal of the day, Microfield Group, Inc. announced Monday that on Friday it closed a $15 million private placement of 7.5 million shares plus 5.625 million warrants to purchase shares at $3.00 each.

Portland, Ore.-based Microfield said proceeds will be used for general working capital purposes and to further the development of the EnergyConnect business acquired in October 2005.

Microfield shares (OTCBB: MICG) dropped 22 cents on Monday, or 7.17%, to settle at $2.85 with 22,850 shares traded versus the norm of 105,071 shares.

"We are pleased by the support of new and existing institutional investors participating in this financing," commented Rod Boucher, chief executive of Microfield, in a news release, "and we look forward to a mutually beneficial relationship over the next several years."

Microfield supplies high value technologies and services to electricity providers and consumers. Its services also include support for wind and solar generation, building controls, telecommunications and security.

Chembio steady as deal closes

In another bit of news on the wires, Chembio Diagnostics, Inc. said Monday that it has completed a $1.3 million private placement of secured debentures with warrants sold to four institutional investors.

The debentures mature after 90 days and pay interest at 0.667% per month (8% annualized) and include five-year warrants for 400 shares per $1,000 principal amount exercisable at $0.75 per share. In addition, the investors have the right to participate in a subsequent financing at a price 12.5% less than paid by other investors. They will be able to buy up to 40% of the financing, with a cap of $2 million.

Chembio shares (OTCBB: CEMI) were unchanged at $0.76 on Monday with 2,200 shares traded versus the norm of 62,663 shares.

The debentures are secured by the assets of its subsidiary, Chembio Diagnostic Systems, Inc.

Medford, N.Y.-based Chembio develops and manufactures rapid diagnostic tests for infectious diseases, such as AIDS, tuberculosis and Mad Cow Disease. The company received FDA approval in late May for its Sure Check HIV 1/ 2 and HIV 1/ 2 Stat-Pak rapid tests, which can detect HIV antibodies within minutes.

"The proceeds will be used primarily for working capital purposes, including for sales and marketing, royalties and accounts payable," commented Lawrence Siebert, president and chief executive of Chembio, in a prepared statement.

In April, the company raised another $1 million in a private placement of series B convertible preferreds, with 20 shares of the 9% issue sold at $50,000 each to Crestview Capital Master, LLC. The preferreds are convertible into common shares at $0.61 each. Crestview also received five-year warrants for 1,557,377 shares with a strike price of $0.61.

The first tranche of the placement closed on Jan. 28, 2005 for $5,047,500, when the company sold 100.95 shares of the preferreds and issued warrants for 7,860,860 shares. The company had agreed to sell up to $6 million in the offering and with the April transaction had raised $6,047,500.

Cadiz unchanged after deal

Cadiz Inc. was the headliner in Friday's light PIPEs action with a $36.375 million private placement, which boosted the stock sharply at that time, but the stock was idle in the stilted market Monday.

After a more than 5% gain Friday, Cadiz shares (Nasdaq: CDZI) were steady Monday at $17.01 - where the stock closed Friday.

Cadiz on Friday announced a convertible note transaction that Peloton Partners, LLP arranged, along with participation from other lenders. The lenders can convert $10 million of principal and accrued interest into stock at $18.15 per share and $26.375 million of principal and accrued interest into stock at $23.10 per share. Interest is at 5% for the first three years, stepping up to 6% after that. Before the deal, Peloton held 9% of Cadiz's stock.

Los Angeles-based Cadiz acquires and develops water-related land and agricultural assets in San Bernardino County, Calif.

With the financing, the company said it has the financial security that will be critical in meeting long-term objectives, particularly completion of the final entitlement process necessary to implement the Cadiz Valley Groundwater Storage Program.

Proceeds were used to repay Cadiz's existing credit facility with ING Capital LLC.

Nyfix off 2% in wake of deal

Nyfix, Inc. had another sizable PIPE transaction from Friday, and the stock took a hit by more than 2% in its wake.

The New York-based provider of trading workstations, trade automation and communication technologies raised $12.6 million with the sale of 2.713 million shares at $4.65 each to clients of a "large Boston-based institutional investor."

Nyfix shares (Pink Sheets: NYFX) lost 11 cents on Monday, or 2.31%, to close at $4.65. On Friday, the stock dipped just 0.83%.

Proceeds will be used for general corporate purposes.

On Thursday, Nyfix announced revenues for 2005 and unaudited revenues for first-quarter 2006.

Revenues for first-quarter 2006 were $25.4 million, up 7% from $23.8 million of restated revenues for first-quarter 2005, the company said. For 2005, revenues were $97.6 million, an increase of 30% over the $74.8 million of restated revenues for 2004.

Nyfix said it had some 4,150 institutional buyside connections to its Nyfix Network at year-end 2005, up 73% from about 2,400 institutional buyside connections at year-end 2004.

The company is restating previously reported results due to issues of stock option and warrant compensation, among other issues, that were identified in an internal accounting review. There is an ongoing re-audit of financial statements for 2004 and 2003.

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