Vyyo prepares to close $25 million stock, note sale; Bodisen's stock advances 13% on stock offering

By Sheri Kasprzak

New York, March 20 - Vyyo Inc. is gearing up to close a $24,997,642 offering with Goldman, Sachs & Co., sending the company's stock down more than 10% Monday.

Goldman agreed to buy a $10 million convertible note, a $7.5 million senior secured note and 1,353,365 shares at $5.54 each on March 22.

On Nov. 7, 2005, Vyyo had 15,629,496 outstanding common shares.

The investors will also receive warrants for 298,617 shares, exercisable at $0.10 each for five years.

The offering sent the company's stock down, losing 85 cents, or 10.24%, to close the day at $7.45 and another 7 cents in after-hours trading.

Even while the stock dropped, the volume of shares traded boomed with 237,340 shares traded compared to an average of 60,627 shares traded.

The 10% convertible note matures March 22, 2011 and is convertible into common shares at $10.00 each.

The senior secured note is due March 22, 2011 and bears interest at 9.5% annually.

Katalyst Securities LLC was the placement agent for the offering.

"We regard Goldman, Sachs' investment as a strong endorsement of our vision, our groundbreaking technology and the market opportunities in the cable and utility industries..." said Davidi Gilo, Vyyo's chief executive officer, in a news release.

"Goldman, Sachs has a track record of identifying high-potential technology companies, and supporting them with strategic advice as they grow. Its financial involvement combined with its counsel and expertise will help Vyyo achieve its strategic objectives in 2006 and beyond."

Moving to the company's latest earnings report, Vyyo reported a net loss of $8,911,000 for the quarter ended Sept. 31, 2005, compared a net loss of $6.61 million for the same quarter of 2004.

Atlanta-based Vyyo develops wireless broadband technologies used by cable television and telecommunications providers.

Bodisen gains after PIPE

One company whose stock was positively impacted by a PIPE offering Monday was Bodisen Biotech, Inc.

Bodisen's stock jumped 13.29%, or $2.11, to close at $17.99 Monday after the company announced the settlement of a $5,322,506 private placement.

The company issued 380,179 shares in the offering at $14.00 each to institutional investors, an 11.8% discount to the company's closing stock price of $15.88 on March 17.

Proceeds from the offering will be used to repay a $5 million short-term note the company issued in December 2005 to purchase raw materials. The company does not have any other outstanding debts.

Following the offering, Bodisen will have 18,176,917 outstanding common shares.

"Bodisen is focused on strengthening its balance sheet in anticipation of accelerated earnings growth in 2006 and beyond," said Karen Qiong, the company's CEO, in a statement released Monday morning.

"With approximately $26 million in cash and our current growth plan in place, we do not anticipate the need to raise any additional capital. Bodisen is the largest organic fertilizer company in China with an extensive nationwide distribution network. Our plans include having two new production facilities fully operations before next year's planting season, which could potentially enable us to double our revenues in 2007 compared to 2006, while targeting on average net profit margin of approximately 30% of sales."

Bodisen said in its latest form 8-K with the Securities and Exchange Commission expects to report its earnings for the fourth quarter ended Dec. 31, 2005 on March 27.

Bodisen is based in Yang Ling, China.

Tech deals in, biotech moving out

In the broader PIPE market Monday, one sellsider said he is seeing more technology offerings and fewer and fewer biotechnology deals.

"Biotech [stocks are] really mixed right now," said the market source. "There's been a pull back from [the PIPE market] I'd say over the past week or so. There was this huge boom of them for a while there, but buyers are getting a bit more selective. You're also seeing a lot of structures like equity lines. The [issuers] just can't price at levels they're comfortable with, so they have to turn to other methods. Tech, however, looks pretty good now. We're seeing quite a few of them."

LightPath closes $3.83 million PIPE

Speaking of the tech sector, LightPath Technologies, Inc. has wrapped a $3,832,500 stock deal Monday, sending the company's stock down more than 8%.

LightPath sold 730,000 shares to institutional investors led by Iroquois Master Fund Ltd.

The issuer's stock lost $0.48, or 8.09%, to settle at $5.45 (Nasdaq: LPTH), but gained a penny in after-hours trading.

The investors received warrants for 219,000 shares, exercisable at $7.41 each for five years.

Dawson James Securities was the placement agent.

Proceeds will be used for working capital.

"Our objective in this capital raise was to provide sufficient capital resources for potential new products and projects, to further reduce our costs and provide the necessary working capital requirements to accomplish our growth objectives," said Ken Brizel, the company's CEO, in a statement.

"We are pleased that these investors recognize the progress we have made in diversifying our customer base and expanding our product offerings while also improving our profitability and cash flow performance that this investment demonstrates."

As to the company's earnings, LightPath reported a net loss of $618,134 for the quarter ended Dec. 31, 2005, compared to a net loss of $893,014 for the same quarter ended Dec. 31, 2004.

Based in Orlando, Fla., LightPath produces optical networking items for the telecommunications industry.

Northern Peru leads Canadian PIPEs

Moving to Canada, Northern Peru Copper Corp. priced a C$13 million non-brokered stock deal on Monday, heading up activity north of the border.

The offering includes up to 4 million shares at C$3.25 each, a 10.4% discount to the company's closing stock price of C$3.63 on March 17.

On Monday, the stock lost C$0.07 to close at C$3.56 (Toronto: NOC).

Proceeds will be used for exploration on the company's Galeno property in Peru and for exploration on the Hilorico gold project. The remainder will be used for a pre-feasibility study and for working capital.

Northern Peru has tapped the PIPE market before for exploration capital, closing a $3,097,500 offering in December of 2005.

In that deal, the company sold 2,065,000 shares at C$1.50 each through a syndicate of agents led by Westwind Partners Inc.

Vancouver, B.C.-based Northern Peru is a copper exploration company.

Elsewhere in Canadian resources offerings, African Gold Group, Inc. negotiated a C$8 million offering, also comprised of 4 million shares.

Proceeds from that non-brokered deal will be used for working capital and for work on the company's Ghana and Mali gold properties, as well as the resumption of diamond drilling at the company's Kobada, Mali and Mankranho properties.

Toronto-based African is a gold exploration company.

The two offerings come as gold prices gained $1.30 to settle at $555.30 per ounce and on talk that gold may cruise past the $600 per ounce mark in the coming weeks.

"I'm hearing [gold] could definitely make it above $600 [per ounce] and probably soon," said one sellsider based in Vancouver, B.C. "It's good news."

Sunesis' stock drops

A day after announcing a $45 million PIPE, Sunesis Pharmaceuticals Inc.'s stock dropped Monday.

The stock fell $0.22, or 3.17%, to end at $6.71 (Nasdaq: SNSS) Monday after gaining 11.41% to close at $6.93 on Friday.

Share volume traded on Monday climbed even more with 142,512 shares changing hands compared to the average 22,665 shares traded. On Friday, 101,530 shares were traded.

Under the terms of the placement Sunesis plans to sell shares at $6.20 each to a group of including Alta Partners, Deerfield Management, Baker Brothers Investments and Warburg Pincus LLC.

Proceeds from the deal will be used for clinical development on the company's oncology products, including phase 2 clinical trails on its non-small cell and small-cell lung and ovarian cancer treatments and phase 1 and 2 clinical trails on SNS-595 to treat acute leukemia. The company will also use the proceeds on a phase 1 and 2 clinical trial in advanced solid tumors and a phase 1 trial in B-cell malignancies with its SNS-032 compound.

Headquartered in San Francisco, Sunesis develops small molecule therapeutics for cancer and other diseases.

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