Microvision raises $10 million from PIPE; Battle Mountain Gold prices $10 million deal for acquisition

By Sheri Kasprzak

New York, Dec. 1 - Microvision, Inc. settled a $10 million offering of notes and stock, kicking off the final month of PIPEs activity this year.

The Bothell, Wash.-based company issued $7 million in principal of senior secured convertible notes and sold 837,986 shares at $3.58 each.

The notes bear interest at Libor plus 300 basis points with a 6% floor and an 8% ceiling and mature on March 15, 2007. The notes are also convertible into common shares at $3.94 each.

As of Oct. 31, Microvision had outstanding 24,002,000 common shares.

The investors of the offering also received warrants for 1,089,386 shares, exercisable at $3.94 each for five years.

Proceeds will be used for working capital.

The settlement was announced Thursday morning, and Microvision's stock gained 3 cents, or 0.7%, to close at $3.60 but lost 3 cents in after-hours trading.

Calls to chief executive officer Richard Rutowski and chief financial officer Jeff Wilson were not returned by press time Thursday.

Back in March, Microvision completed a private placement of $10 million in senior secured convertible notes that bear interest at Libor plus 300 basis points with a 6% floor and an 8% ceiling. The two-year notes had been convertible into common shares at $6.84 each, with the option to convert into shares of subsidiary Lumera Corp. at $5.64 each.

In August, the company completed a private placement of stock for $5 million, selling 952,381 shares at $5.25 each.

Microvision posted a net loss of $11,182,000 for the quarter ended Sept. 30, compared with a net loss of $10,031,000 for the corresponding quarter of 2004.

"We will require additional capital immediately to continue to fund our operations and to implement our business plan," said the company's latest earnings report. "If we do not obtain additional capital, we may be required to curtail our operations substantially. Raising additional capital may dilute the value of current shareholders' shares."

Microvision develops high-resolution displays and imaging systems used in military, medical, industrial and consumer applications.

Battle Mountain's offering

Heading to the natural resources sector, Battle Mountain Gold Exploration Corp. jumped on the gold offering bandwagon, pricing a $10 million issue of subscription receipts.

The offering comes in a week where gold companies have headed to the PIPE market en masse as gold prices continue to rise.

"It's not just gold," said one market source familiar with the sector. "Copper is going up too, relative to gold. It's making for some really interesting [PIPE] deals. I expect it to continue as long as gold is going up."

Gold prices on Thursday continued to climb, moving as high as $503 per ounce, to the highest levels in 23 years.

In the Battle Mountain deal, the company plans to sell 22,222,222 receipts at $0.45 each.

The receipts are exchangeable for units of one share and one half-share warrant once the Reno-based gold explorer settles its acquisition of Imagold Corp.

The whole warrants are exercisable at $0.62 each for two years.

The deal is expected to close Dec. 22, and acquisition is expected to close in January.

Placement agent Northern Securities Inc. has an over-allotment option for up to $2 million.

Proceeds will be used to complete the purchase of Imagold's royalty assets and for working capital. Additional financing for the acquisition will be funded through a $7 million loan facility from Macquarie Bank Ltd.

As to its earnings, the gold explorer reported a net loss of $14.3 million for the quarter ended Sept. 30 compared with a net loss of $18.1 million for the same quarter of 2004.

The company's stock gained a penny on Thursday to close at $0.53.

Issuers keep an eye on oil

One sellside source said Thursday that PIPE volume tapered off a bit in the United States as issuers turn an eye toward colder weather - and higher oil prices.

"Every time the wind blows the wrong direction, everything comes to a grinding halt," he quipped. "Oil prices were up a bit today but stocks still looked good."

Oil prices gained $1.15 to settle at $58.47 per barrel after sustaining a series of losses earlier this week.

Meanwhile, the Dow Jones Industrial Average gained 106.70 to end at 10,912.57; the Nasdaq composite index ended up 34.35 at 2,267.17 and the Standard & Poor's 500 composite index edged up 15.19 to close at 1,264.67.

Atna prices C$7 million deal

Moving north of the border, Vancouver, B.C.'s Atna Resources Ltd. led PIPE news there with its C$7.02 million special warrants offering.

The deal, which is being placed through a syndicate of underwriters led by Canaccord Capital Corp., is comprised of 5.2 million special warrants at C$1.35 apiece.

The special warrants are exchangeable for common shares on a one-for-one basis once a prospectus is filed. If the prospectus is not cleared by Jan. 31, 2006, each special warrant will be exchangeable for 1.1 common shares.

The syndicate has an over-allotment option for up to 2.25 million additional special warrants, exercisable for up to two days before closing.

The deal is slated to wrap up on Dec. 15.

Proceeds will be used for exploration and development and for working capital.

Atna is a mineral exploration and development company.

On Thursday, the company's stock gained C$0.13, or 8.55%, to end at C$1.65.

Elsewhere in the Canadian natural resources sector, Western GeoPower Corp., another Vancouver-based concern, announced its intentions to raise a minimum of C$6 million from the sale of 30 million units.

The units include one share and one warrant. The warrants are exercisable at C$0.35 each for three years.

Dundee Securities Corp. is the placement agent.

Up to C$1 million of the financing may be substituted with 5 million flow-through shares at the same price.

The deal is scheduled to close Dec. 9.

Proceeds will be used for flow-testing of geothermal wells and for working capital.

Western GeoPower is a geothermal energy production company.

The company's stock slipped C$0.01 on Thursday to end at C$0.20.

SCO Group stock loses 2.9%

The SCO Group, Inc.'s stock suffered a slight drop on Thursday after wrapping a $10 million stock deal on Wednesday.

The company's stock fell 12 cents to close out at $4.04 Thursday.

On Wednesday, when the closing was announced, the Lindon, Utah-based software company's stock gained 8 cents, or 1.96%, to end at $4.16.

In the placement, the company sold 2,852,449 shares at $3.50 each to institutional investors and at $3.92 each to a board member.

The SCO Group develops UNIX software technology for distributed, embedded and network-based systems.

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