Modigene raises $9.63 million from stock sale; Liberty Star pockets $4.4 million from notes

By Sheri Kasprzak

New York, May 15 - Several health care-related offerings sprung up in the PIPE market on Tuesday, led by a $9,628,212 offering from Modigene, Inc.

Meanwhile, in the broader market, the Dow Jones Industrial Average closed at a record high. Even so, one market source contacted Tuesday afternoon said he doesn't feel that will make much of a difference in PIPE volume.

"What the Dow does has little impact on what the PIPE market does," he said. "I happen to think that issuers are going to conduct offerings when they need the money. This tends to be at either the beginning of the year or the end of the year. The middle kind of gets quiet. At the end of the year, companies look at what their needs are going forward and at the beginning of the year, they're budgeting and getting ready for their projects and whatnot. We are in a bit of a dead zone."

The Dow ended the day at a new high of 13,383.84, up 37.06. The Nasdaq composite index, however, slipped by 21.15 to settle at 2,525.29, and the Standard & Poor's 500 composite index gave up 1.96 to close at 1,501.19.

Modigene raises $9.63 million

In the Modigene offering, the company sold 6,418,808 shares at $1.50 each to a group of individual investors that included Phillip Frost, Jane Hsiao, Steve Rubin and Rao Uppaluri. Perceptive Life Sciences Master Fund also participation in the offering.

The investors received warrants for 1,604,702 shares, exercisable at $2.50 each for five years.

The company's stock gained closed at $2.63 on Tuesday (OTCBB: MODG).

Located in Vienna, Va., Modigene develops long-acting versions of approved therapeutic proteins.

HepaLife's $2.5 million deal

In other health care-related news, HepaLife Technologies, Inc. sealed a $2.5 million private placement of convertible notes.

The zero-coupon notes mature in two years and are convertible into common shares at a price equal to 95% of the volume-weighted average price for the five trading days before conversion.

A single institutional investor bought the notes and received warrants for 670,000 shares, exercisable at $1.50 each for five years.

On Tuesday, the company's stock gained 4 cents to settle at $1.37 (OTCBB: HPLF).

Proceeds will be used for development on the company's bioreactor system, the main component of its bioartificial liver device. The rest will be used for working capital.

Boston-based HepaLife develops an artificial liver device.

Acrongenomics closes offering

Another health care-related company, Acrongenomics, Inc., pocketed $1.155 million from a private placement of 1.05 million units.

The units were issued at $1.10 each and include one share and one half-share warrant. The whole warrants are exercisable at $1.50 each.

Proceeds will be used for the development of the company's kidney and cardio markers. The rest will be used for working capital.

The stock fell 2 cents to settle at $1.23 on Tuesday (OTCBB: AGNM).

Based in Geneva, Acrongenomics invests in life sciences technologies.

I/OMagic secures $95 million

Moving to the tech sector, I/OMagic Corp. said Tuesday it penned an agreement with Jiangxi Greatsource Display Technology Co. Ltd. for a $95 million stock offering, set to close in three tranches.

News of the offering, released Tuesday afternoon, sent the company's stock up 7.41%, or 20 cents, to end at $2.90 (OTCBB: IOMGE).

The company plans to issue 21.75 million shares at varying prices to Jiangxi Greatsource Display Technology.

In the first closing, set to occur Sept. 30, the company will issue 8 million shares at $3.00 each for $24 million. In the second closing, expected to occur between March 31, 2008 and May 31, 2008, the company plans to sell 10 million shares at $4.10 each for $41 million. In the final closing, expected to occur May 31, 2008, the company will issue 3.75 million shares at $8.00 each for $30 million in proceeds.

The closings are contingent upon Jiangxi obtaining government approvals in the People's Republic of China to secure the funds necessary to complete the offering and upon the company's stock being listed for trade on the Over-the-Counter Bulletin Board.

I/OMagic manufactures peripherals for desktop and portable personal computers. The company has headquarters in Irvine, Calif.

Liberty Star wraps deal

In the resources sector, Liberty Star Uranium & Metals Corp. completed a $4.4 million offering of 8% senior unsecured convertible notes.

The notes, due in two years, are convertible into common shares at $0.65 each.

The investors also received warrants for 6,769,228 common shares, exercisable at $0.75 each for five years.

Hunter Wise Securities, LLC was the placement agent.

Proceeds will be used for general corporate purposes.

Liberty Star's stock ended the day up 2 cents at $0.51 (OTCBB: LBSU).

Based in Tucson, Ariz., Liberty Star is a uranium exploration company.

First Albany stock slips

A day after securing $50 million from a stock offering with MatlinPatterson Global Opportunities Partners II, First Albany Cos. Inc.'s stock dropped by 3.78%.

The stock fell 7 cents to end the day at $1.78 and fell another 3.61 cents in after-hours trading (Nasdaq: FACT).

On Monday, when the offering was announced, the stock climbed 15.62%, or 25 cents, to close at $1.85, putting on another 2.37 cents after hours.

In the placement, MatlinPatterson agreed to buy shares at $1.50 each, a 6.25% discount to the company's $1.60 closing stock price on Friday.

The deal is expected to wrap up Aug. 1, and once the deal does close, MatlinPatterson will be First Albany's majority shareholder.

Freeman & Co. Securities LLC was the placement agent.

New York-based First Albany is an investment bank that serves the institutional market, state and local governments and the corporate middle market.

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