Vasogen stock gives up 18% on $20.3 million unit sale; Spare Backup raises $4.33 million

By Sheri Kasprzak

New York, Nov. 9 - Vasogen Inc. watched its stock dive by 18.33% Thursday after the biotech announced the imminent completion of a $20.3 million registered direct sale of units.

Meanwhile, in the broader PIPE market, issuance volume took a break as stocks settled down and oil prices rebounded.

Vasogen said it plans to sell 43.2 million units at $0.47 each to a group of institutional investors led by Federated Kaufman Fund and RA Capital.

Word of the offering sent the company's stock down 11 cents to close at C$0.49 (Toronto: VAS). Volume of the company's stock traded Thursday took off with 1,135,740 shares traded compared to the average 363,555 shares.

The units are comprised of one share, one warrant for two-fifths of a share and one warrant for one-tenth of a share. The whole two-fifths warrants are exercisable at $0.63 each for five years and the whole one-tenth share warrants are exercisable at $0.53 each for six months.

The offering is scheduled to close Friday.

Rodman & Renshaw, LLC was the placement agent.

Proceeds will be used for the development of the company's Celacade technology and for the development of the drug VP025. The rest will be used for working capital.

Vasogen, based in Mississauga, Ont., develops treatments for chronic inflammation underlying cardiovascular and neurological disease.

Hollis-Eden stock climbs

In other biotech news, Hollis-Eden Pharmaceuticals, Inc.'s stock advanced by 2.68% Thursday, a day after the company announced its plans to settle a $26 million direct placement of its stock.

The stock gained 16 cents on the day to end at $6.13 (Nasdaq: HEPH) but gave up a penny in after-hours trading.

On Wednesday, when the direct placement was announced, the stock dove by 18.66%, or $1.37, to close at $5.97.

Volume remained slightly elevated with 958,377 shares traded compared with the average 308,220 shares. On Wednesday, 2,041,614 shares were traded.

Under the terms of the placement, Hollis-Eden plans to sell 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.

Rodman & Renshaw, LLC is the bookrunner for the deal, which is set to close Monday.

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

Oil prices shove stocks down

In the broader PIPE market Thursday, volume trailed off after two substantial days of action as stocks cooled and oil prices heated up.

"Stocks are generally going to take a beating any time oil [prices] come back," said one market source when asked about the slump in activity Thursday afternoon. "Volume did drop off, but it will be back as soon as stocks improve. A day or so is all."

Oil prices gained $1.33 on the day to close at $61.16 per barrel.

Meanwhile, the Dow Jones Industrial Average gave up 73.24 to end at 12,103.30 and the Nasdaq composite index lost 8.93 to close at 2,376.01. The Standard & Poor's 500 composite index fell 7.39 to settle at 1,378.33.

Spare Backup's PIPE

Moving to the tech sector, which market sources have said will be a particularly popular sector for PIPEs in the coming months, software company Spare Backup, Inc. sealed a $4,334,553 offering of 1,926,468 units.

Between July and October, the company sold the units at $2.25 each to 104 investors. The company expects to raise another $301,000 from the deal.

The units include five shares and two warrants. Each warrant is exercisable at $0.60 each for two years. The units were sold between July and October.

When the deal was announced Thursday afternoon, the stock gained 3 cents, or 6.82%, to close at $0.47 (OTCBB: SPBU).

Brookstreet Securities Corp. was the placement agent.

Proceeds will be used for debt reduction, sales expenses and working capital.

Spare Backup, located in Palm Desert, Calif., develops online backup software.

In other technology news, Neutron Enterprises, Inc. closed a $1.2 million offering 600,000 units.

The units consist of one share and one half-share warrant with each whole warrant exercisable at $2.50 for two years.

The closing is part of a larger proposed deal for up to $8 million. The non-brokered deal is still ongoing.

On Thursday, the company's stock fell by 5 cents, or 2.1%, to close at $2.33 (OTCBB: NTRN).

Neutron, based in Mississauga, Ont., develops point-of-sale and digital media technologies.

Cordero settles C$10.5 million deal

As oil prices rose, Cordero Energy Inc. concluded a private placement of flow-through shares at C$10.56 million.

The offering sent the company's stock up 6%, or 39 cents, to close at C$6.89 (Toronto: COR).

The company sold 1.2 million flow-through shares at C$8.80 each. The shares were sold at a 35.4% premium to the company's C$6.50 closing stock price on Wednesday.

The shares were sold through a syndicate of underwriters led by Peters & Co. Ltd.

Proceeds will be used for ongoing exploration on the company's properties in northern Alberta and northeastern British Columbia.

Calgary, Alta.-based Cordero is an oil and natural gas exploration and development company.

Southern Pacific plans offering

In other energy news, Southern Pacific Resource Corp. negotiated a flow-through unit placement for C$3 million.

The new portion includes up to 5,454,545 flow-through units at C$0.55 each.

The units are comprised of one share and one half-share warrant. The whole warrants are exercisable at C$0.80 each for one year.

Proceeds will be used to acquire an 80% interest in the 25 contiguous sections of Leismer South Oil Sands.

The company's stock gave up 3.33%, or 2 cents, to close at C$0.58 (TSX Venture: STP).

Southern Pacific, also based in Calgary, Alta., is an oil sands exploration company.

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