VaxGen closes $31.5 million private placement; House of Brussels raises $6 million

By Sheri Kasprzak

Atlanta, March 31 - In a day with new issuance pushed down by a depressed stock market, VaxGen, Inc. led private placement news Thursday when it announced the upcoming closing of a $31.5 million private placement.

The company sold senior subordinated convertible notes to accredited investors.

The notes bear interest at 5.5%, mature April 1, 2010 and are convertible into common shares at $14.76, a 20% premium over its closing level on Wednesday.

"VaxGen has entered into some pretty lucrative agreements over the past month and it's our feeling that the pricing of the notes reflects that," said one market source familiar with VaxGen and the offering.

After the offering was announced Thursday morning, VaxGen's stock gained $0.18 to close at $12.48.

The company expects to receive the proceeds from the offering on April 5.

Based in Brisbane, Calif., VaxGen is a biopharmaceutical company focused on the development, manufacture and commercialization of biologic products.

Elsewhere, issuance faltered even as several deals priced earlier this month wrapped up, according to one sell-sider.

"I just think stocks were down today, issuance was off," the sell-sider said.

The Dow Jones Industrial Average ended the day down 37.17 at 10,503.76; the Nasdaq composite index closed down 6.44 at 1,999.23; and the S&P 500 edged down 0.82 at 1,180.59.

House of Brussels's $6 million deal

In other private placement news, House of Brussels Chocolates Inc. wrapped up a private placement for $6 million.

The company sold $3.5 million in a secured convertible note and $2.5 million in a secured revolving note and a minimum borrowing note to Laurus Master Fund, Ltd.

The convertible note matures in three years, bears interest at Prime plus 200 basis points and is convertible into common shares at $0.88 each.

The maximum amount available under the revolving note and the minimum borrowing note is equal to the lesser of $2.5 million, less reserves, or 90% of the eligible accounts receivable, less reserves.

Laurus also received warrants for 1.5 million shares at $1.20 each for seven years.

"We are delighted to have completed this important financing," Grant Petersen, chief executive officer of House of Brussels, said in a statement. "Our company is faced with significant growth opportunities. This infusion of capital provides the resources we've been seeking to support the expansion in production required by our increasing sales volumes. We are exceptionally pleased to have a long-term strategic financing partners like Laurus Funds."

Based in Houston, House of Brussels is a chocolate manufacturing company. It plans to use the proceeds from the offering for its ongoing operations.

On Thursday, the company's stock closed up $0.05 at $0.94.

Emgold arranges C$12.4 million deal

In new offerings announced Thursday, Emgold Mining Corp. announced its intentions to raise up to C$12.4 million in a non-brokered deal.

The company plans to sell up to 24.8 million units at C$0.50 each.

The units consist of one share and one warrant. The warrants allow for an additional share, exercisable at C$0.70 each for two years.

"Gold in general has been making gains, for the most part," said one sell-side source who had seen the Emgold deal. "It looks like it's priced pretty well, just considering gold in general. We've been seeing, over the past few days, some gains not only in gold but in resources stocks."

Emgold, based in Vancouver, B.C., is a gold exploration and development company. The proceeds from the offering will be used for exploration and development on its Idaho-Maryland project in California, the ongoing development and commercialization of the Ceramext project and for general administrative purposes.

On Thursday, Emgold's stock gained C$0.02 to close at C$0.47.

Milestone raises $3 million

Milestone Scientific Inc. said it has closed a private placement for $3 million.

The company sold 101,044 units at $29.69 each. The unit price is 10 times the average closing price during the first 10 of 12 trading days before the offering closed.

The units are comprised of 10 shares and two warrants. Each warrant allows for an additional share, exercisable at $4.89 each through Feb. 16, 2009.

"We are gratified by the receptivity of investors to a new investment in our common stock and the speed with which our investment bankers responded to our need for capital," said Leonard Osser, the company's chairman and chief executive officer, in a statement.

"The additional capital will help accelerate the development of commercial products using our revolutionary new CompuFlo technology for safely administering injections of local anesthetics and other medications and aspirating bodily fluids. Importantly, the funds will expedite the filing of FDA applications for our epidural anesthetic injection device, both of which use our CompuFlo technology. In addition, the equity raise goes a long way toward resolving continued listing questions for our securities on the American Stock Exchange."

I-Bankers Securities, Inc. was the placement agent.

Based in Livingston, N.J., Milestone develops, manufactures and markets computer-controlled local anesthetic delivery systems for medical and dental uses. The proceeds will be used to accelerate the development of commercial products.

Milestone's stock closed up $0.26 at $4.11 Thursday.

First Potomac's stock drops

Two days after announcing a $44,997,500 direct placement that boosted its stock, First Potomac Realty Trust's stock took a dip on Thursday.

The company's stock ended down $0.14 Thursday to close at $22.85 after gaining $0.82 to close at $22.99 Wednesday.

On Tuesday, when the deal closed, the company's stock rose $0.12 to close at $22.17.

The company plans to sell shares at $21.95 each to RREEF America, LLC.

Based in Bethesda, Md., First Potomac develops, acquires and operates industrial properties.

Dobi's stock ends down

After announcing the closing of a $10.5 million private placement, Dobi Medical International, Inc.'s stock continued to dip.

The company's stock closed down $0.02 at $0.75.

On Wednesday, Dobi's stock slipped $0.03 to close at $0.77.

The company issued shares at $0.50 each.

One market source has commented that the shares were sold at a large discount.

Based in Mahwah, N.J., Dobi is a medical imaging company focused on diagnosing cancer.

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