GTC raises finance for new drugs; Sierra to boost capacity; Kimber eyes C$5 million sale

By Kenneth Lim

Boston, Feb. 8 - GTC Biotherapeutics Inc. will sell about $6 million worth of its common stock in a registered direct offering to support its drug development activities, a company spokesman said.

Meanwhile, Canada's Sierra Minerals Inc. is trying to raise up to C$3.2 million through a best-efforts placement of share-and-warrant units.

Kimber Resources Inc. of Canada also announced a non-brokered private placement that aims to raise C$5 million with a possible over-allotment of an additional C$1 million.

Wherify Wireless Inc. said it entered into a forbearance agreement with Yorkville Advisors LLC, which had given notice of default on Wherify's convertible debentures, which have an outstanding balance of about $4.875 million in principal amount and $611,054 in interest.

GTC finances for growth

GTC, a biotechnology company that is trying to develop therapeutic proteins using animals, said it will conduct a $6 million direct offering of stock and warrants.

Framingham, Mass.-based GTC will sell 6,896,550 common shares at $0.87 per share. Investors also will receive warrants for 6,896,550 common shares, which are exercisable at $0.87 for seven years.

GTC common stock (Nasdaq: GTCB) fell 17.24% or 15 cents to close at $0.72.

The deal is slated to settle on Feb. 12.

Proceeds will be used for general corporate purposes.

GTC corporate communications vice president Thomas Newberry told Prospect News that the offering is targeted at qualified institutional investors.

Newberry said the financing was necessary because GTC was a "high growth company and as such we need to raise capital to continue to grow."

GTC on Feb. 4 announced that its proprietary ATryn, a form of the human protein antithrombin produced in goat milk, was shown to be as good as plasma-derived versions of the protein in the treatment of patients with hereditary antithrombin deficiency undergoing high-risk surgical or childbirth procedures. The company also said it is seeking appropriate licenses for its product.

"We're a drug development company and it's very expensive to develop drugs," Newberry said. "There's the certification process, regulatory process, and we felt that this money would be helpful at this time."

Newberry said the common stock's sharply negative reaction to the placement is typical of equity-based fundraising.

"Any initial reaction to such an investment is usually negative," Newberry said. "That's because there are new shares being issued and it's dilutive to the existing shares.

"But that is often an over-reaction because it's dilutive only when based on a static picture of your business," he added. "But as a high-growth company, if you want to establish yourself, there's no other way to grow. The hope is that because of the investment the company will become hugely more valuable. In the short term, if you just look at the stock price, it's down, but in the long term it could be a lot more valuable."

Sierra hopes for C$3.2 million

Sierra Minerals said has hired Max Capital Markets Ltd. to place up to 8 million share-and-warrant units at C$0.40 apiece on a best-efforts basis.

Each unit will comprise one common share and one half of a warrant. One whole warrant will be exercisable at C$0.70 for two years. Sierra Minerals stock (TSX: SIM) closed at C$0.41 on Friday, down by 2.38% or C$0.10.

Proceeds of the deal will be used for mine expansion.

Sierra is a Toronto-based precious metals producer.

Sources close to the company said Sierra will likely use the money to improve its crushing circuit and other equipment. Sierra currently has a capacity of about 18,000 ounces per year at its Cerro Colorado gold mine in Sonora, Mexico. The company expects to boost production to 30,000 ounces per year using the proceeds of the offering.

Kimber to raise C$5 million

Vancouver, B.C.-based Kimber Resources, a gold and silver exploration company, said it will sell 6.67 million share-and-warrant units at C$0.75 each in a non-brokered private placement.

Kimber is hoping to raise C$5 million, with an over-allotment possibility for a further C$1 million.

Each unit comprises one common share and one half-share warrant. Each whole warrant will be exercisable at C$1.25 for two years.

"The funds raised will allow Kimber to resume drilling at its Monterde gold-silver project in the prolific Sierra Madre gold-silver belt of Mexico," Gordon Cummings, Kimber president and chief executive, said in a press release.

"Evidence from other gold-silver deposits in the Sierra Madre and deeper drill holes completed by Kimber, combined with our improved geologic understanding of the Monterde property, suggests there is excellent potential to extend higher grade mineralization to depth. This could significantly enhance the potential economics of the Monterde project."

Wherify in default, gets forbearance

Wherify Wireless said Friday that it received notice of default from convertible debenture holder Yorkville Advisors LLC, but has received a 30-day grace period to work out a resolution.

Redwood Shores, Calif.-based Wherify, a developer of wireless infrastructure products, said Yorkville, whose YA Global Investment LP held convertible debentures worth about $4.875 million in principal and $611,054 in interest, will refrain from exercising its rights under the notes until March 6.

The three-year debentures bear 7% annually and are convertible at the lesser of $1.60 or the lowest closing bid price for the 15 trading days before the registration statement was filed with the Securities and Exchange Commission. The debentures were first issued in March 2006.

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