Tower Semiconductor raises $40 million; Knobias closes $1.53 million offering

By Sheri Kasprzak

New York, June 13 - Tower Semiconductor Ltd. led PIPE news on Wednesday with a $40 million offering of units comprised of convertible and non-convertible bonds with warrants.

The company issued 342 units at $116,959 each.

The units include NIS 250,000 - or $59,700 - in 8% long-term non-convertible bonds due December 2016 and NIS 262,500 - or $62,700 - in 8% long-term convertible bonds due December 2016.

The convertible bonds are convertible at NIS 17.2 or $4.11 each.

The bonds are linked to the Israeli Consumer Price Index and were sold at a 95.5% discount to par.

Each unit also includes warrants for 5,800 shares, exercisable for one year at $2.04 each.

Leader Capital Markets Ltd., Poalim I.B.I. Underwriting & Issuing Ltd. and Clal Financing Underwriting Ltd. were the placement agents.

Proceeds will be used for expansion of the company's Fab2 manufacturing capacity.

The company's stock gained 2 cents on Wednesday to close at $1.58 (Nasdaq: TSEM). The stock gave up almost two-tenths of a cent in after-hours trading.

Tower completed a $28.952 million offering of stock in March. The company sold 18.8 million shares at $1.54 each to a group of U.S.-based institutional investors.

Based in Migdal Haemek, Israel, Tower is a semiconductor company.

Tech companies have been conducting a lot of offerings lately.

"Tech stocks have been pretty strong lately, making it a good time for issuers in the sector to price," said one sellside market source. "We're seeing a few things now. There doesn't seem to be one type of tech company. We've seen software, semiconductor, pretty much everything."

Knobias raises $1.53 million

Speaking of tech companies, Knobias, Inc. announced the completion of a $1.53 million offering of senior secured convertible notes on Wednesday.

The notes due June 6, 2010 were sold to Camofi Master LDC. The notes bear interest at Prime rate plus 275 basis points and are convertible into common shares at 85% of the lesser of the daily volume weighted average price of the company's stock for the 10 trading days immediately before interest is due or the VWAP for the 10 trading days immediately before the interest payment shares are issued and delivered, if that occurs after the interest payment date.

The initial conversion price is $0.00622 each.

Of the proceeds, $200,000 will be used to pay off debt. The rest will be used for working capital.

The company anticipates raising another $1.47 million in the notes within the next 60 days.

Connected to the deal, $5.1 million in outstanding debt was converted into series B convertible preferred stock and the remainder of the company's debt, in principal of $250,000, was converted into four-year subordinated loans.

Also, holders of the company's series A preferred stock agreed to convert their holdings into common shares once a proposed 1-for-100 reverse stock split is completed.

The company's stock remained unmoved at $0.02 on Wednesday (OTCBB: KNBS).

Based in Ridgeland, Miss., Knobias is a financial software developer.

Acusphere stock drops

In secondary market action, Acusphere, Inc.'s stock dipped on Wednesday, a day after the company announced a $20,004,972 direct placement of units.

The stock gave up 2.98%, or 7 cents, to close at $2.28 (Nasdaq: ACUS). The stock fell another 1.3 cents in after-hours trading.

On Tuesday, shares of Acusphere gave up 9.62%, or 25 cents, to close at $2.35, losing another 2 cents in after-hours trading.

In the placement, the company plans to sell units of one share and one warrant for four-tenths of a share at $2.60 each. The whole warrants are exercisable at $3.10 each through June 15, 2012.

The underlying shares are being sold under the company's shelf registration.

Cowen & Co., LLC was the placement agent.

Based in Watertown, Mass., Acusphere is a pharmaceutical company focused on developing new drugs and improving formulations of existing drugs.

Composite stock slips

In other secondary market news, Composite Technology Corp. watched its stock edged downwards on Wednesday after closing a $20 million private placement.

The stock fell by a penny to close at $1.19 (OTCBB: CPTC). The stock gave up 7 cents to close at $1.20 on Tuesday.

The company sold units of one share and one quarter-share warrant at $0.99 per unit to a group of institutional investors.

Each whole warrant is exercisable at $1.40 for three years.

CapStone Investments was the placement agent.

Proceeds will be used for working capital and general corporate purposes.

Based in Irvine, Calif., Composite Technology manufactures high-performance electrical transmission and renewable energy generation products.

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