Hollis-Eden stock dives on $26 million direct stock deal; Lumera to close $16.95 million PIPE

By Sheri Kasprzak

New York, Nov. 8 - Hollis-Eden Pharmaceuticals, Inc. led PIPE news Wednesday after the company's stock took a hit after announcing its plans to close a $26 million registered direct stock offering.

The stock dove 18.66%, or $1.37, to end the session at $5.97 (Nasdaq: HEPH).

Volume of Hollis-Eden shares traded Wednesday also took off with 2,041,614 shares traded compared with the average 279,588 shares.

Under the terms of the offering, Hollis-Eden plans to sell 4 million shares at $6.50 each, an 11.44% discount to the company's $7.34 closing stock price on Tuesday.

The shares will be sold under the company's shelf registration.

The investors, which are both new and existing institutional investors, will also receive warrants for 800,000 shares. The warrants are exercisable at $8.75 each for four years.

Rodman & Renshaw, LLC was the bookrunner with Canaccord Adams, Inc. as co-agent.

The deal is set to close Nov. 13.

"The stock offering is not bad news as long as the company's fundamental is sound and its future outlook is promising," said a buysider based in Chicago. "Give it a week or two for the Street to digest the news and you will see [the] share price rise gradually to its pre-announcement level or even higher. I definitely would not be shorting this one."

Hollis-Eden concluded a similar placement of stock, also for $26 million, on Feb. 2.

In that deal, the company also sold 4 million shares at $6.50 each. The price per share was a 10% discount to the company's then-current $7.22 closing stock price.

The investors also received warrants for 800,000 shares in that deal, exercisable under the same terms as the current offering.

Rodman & Renshaw, LLC was the bookrunner of the deal.

San Diego-based Hollis-Eden develops small molecule compounds used in adrenal steroid hormones.

Cytogen stock climbs

A day after announcing a $20,000,012 private placement, Cytogen Corp.'s stock gained 1.57% on Wednesday.

The stock advanced by 4 cents to end at $2.59 (Nasdaq: CYTO). In after-hours trading, the company's stock gained another 3 cents. On Tuesday, when the deal was announced, the stock fell 7.94%, or 22 cents, to end at $2.55.

In the placement, the company said it plans to sell units of one share and one half-share warrant at $2.82 each. The price per unit is a 1.8% premium to the company's $2.77 closing stock price on Monday.

Proceeds will be used to launch Caphosol, a medical device used to treat oral mucositis and dry mouth. The remainder will be used for clinical programs, in-licensing opportunities and general corporate purposes.

Cytogen, located in Princeton, N.J., develops treatments for cancer and for pain related to cancer.

Lumera's stock deal

Elsewhere, Lumera Corp. said it is gearing up to conclude a $16.95 million private placement of its stock with a group of institutional and other investors.

The investors have agreed to buy 2,825,000 shares at $6.00 apiece.

Lumera will receive warrants for 423,750 shares. The warrants are exercisable at $6.25 each for five years.

The offering and the company's third-quarter earnings statement were announced in the morning. By the end of the day, the company's stock went on to lose 9.63%, or 90 cents, to close at $8.45. The stock lost another 11.24%, or 95 cents, in after-hours activity.

In the earnings statement, Lumera reported a net loss of $2.7 million, compared with a net loss of $2.03 million for the corresponding quarter of 2005. Revenues for the third quarter rose to $1.03 million from $681,000 for the same 2005 quarter.

Robert W. Baird & Co. Inc. was the placement agent.

Located in Bothell, Wash., Lumera develops molecular structures and polymer compounds used in bioscience and communications.

Viaspace gets equity line

In other PIPE news, Viaspace Inc. obtained a $20 million standby equity distribution agreement from Cornell Capital Partners, LP. The company also sold $3.8 million in secured convertible debentures to Cornell.

The offering sent the company's stock down 2 cents, or 2.67%, to close at $0.73 (OTCBB: VSPC).

Under the terms of the three-year equity line, Cornell may buy shares of Viaspace at 97% of the lowest volume weighted average price for the five trading days before a draw.

Newbridge Securities Corp. was the placement agent.

Also, Cornell purchased $3.8 million in principal of 10% convertible debentures. The five-year debentures are convertible into common shares at $0.60 each.

Cornell also received warrants for 1.5 million shares, exercisable at $0.50 each for five years; a warrant for 2 million shares, exercisable at $0.60 each for five years; a warrant for 885,000 shares, exercisable at $0.75 each for five years; a warrant for 790,000 shares, exercisable at $0.95 each for five years; and a warrant for 600,000 shares, exercisable at $1.15 each for five years.

Gilford Securities Inc. was the placement agent for the debenture offering.

Proceeds will be used for the expansion of the company's direct methanol fuel cell business.

Viaspace, based in Pasadena, Calif., develops hardware and software used by NASA and the U.S. Department of Defense.

Great Western plans C$9.45 million deal

Looking to Canadian private placement offerings, Great Western Minerals Ltd. priced a C$9.449 million offering of flow-through and non flow-through units.

The deal includes up to 10.9 million flow-through units at C$0.50 each and 9.3 million non flow-through units at C$0.43 each.

The flow-through units consist of one share and one warrant. The warrants are exercisable at C$0.70 each for two years. The non flow-through units include one share and one warrant. The warrants are exercisable at C$0.60 each for two years.

D&D Securities Co. is the placement agent.

The deal is scheduled to close Nov. 30.

Proceeds will be used for exploration on the company's Hoidas Lake project and for working capital.

On Wednesday, the stock fell a penny to close at C$0.43 (TSX Venture: GWG).

Based in Saskatoon, Sask., Great Western is a mineral exploration company.

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