Advanced Viral Research sells $2.75 million in convertibles; Cell Therapeutics shares dip

By Sheri Kasprzak

New York, July 27 - Advanced Viral Research Corp. led a sluggish day for PIPEs with news that it closed a $2.75 million offering of 9% secured convertible debentures.

The offering comes as drug stocks followed the downward slide of the broad stock market.

A sellside market source said Friday that drug stocks had been performing well for the past week or so but recently slipped along with the broader stock market.

On Friday, the Dow Jones Industrial Average dove by 208.10 to close at 13,265.47 and the Nasdaq composite index gave up 37.10 to end at 2,562.24. The Standard & Poor's 500 composite index fell by 23.71 to settle at 1,458.95.

"This is evidence, I would say, that the stock market is making an impact on [PIPE] volume," said the sellsider, who is focused on tech and biotech offerings. "The drop in stocks has been substantial enough. Sometimes when there's a small dip, it really won't matter that much."

Another sellsider said he felt the real reason there were few offerings announced Friday was because it's a Friday in the summer.

"People take off on Friday; it's vacation season; I can think of several reasons," he said. "Yes, stocks are down, but I think it's more likely that it's just Friday in the summer."

In the Advanced Viral offering, Cornell Capital Partners, LP bought series A debentures in principal of $750,000 and series B debentures in principal for $2 million.

Both series of debentures are due July 24, 2010. The series A debentures are convertible into common shares at the lesser of $0.0312 each or 95% of the lowest volume weighted average price for the 30 consecutive trading days before conversion. The series B debentures are convertible into common shares at the lesser of $0.0262 each or 95% of the lowest VWAP for the 30 consecutive trading days before conversion.

Cornell also received warrants for 24,038,462 shares, exercisable at $0.0312 each, and 76,335,878 shares, exercisable at $0.0262 each. Both sets of warrants expire in five years.

The company's stock fell by less than a penny, or 5.88%, to close at $0.03 on Friday (OTCBB: ADVR).

Volume was up with 2,547,777 shares traded compared with the average 1,504,740 shares traded.

Advanced Viral, based in Yonkers, N.Y., develops treatments for cancer.

Cell Therapeutics' stock slips

In other biotech news, Cell Therapeutics, Inc.'s stock dipped on Friday when the company closed a $20.25 million direct placement of series C convertible preferred stock.

The stock fell by 7 cents, or 1.75%, to close at $3.94 (Nasdaq: CTIC).

In the placement, the company sold shares of the 3% preferred stock at $1,000 each.

The preferreds are convertible into common shares at $3.90 each, and the investors will receive a number of warrants equal to half of the investment divided by $3.90. Each warrant is exercisable at $4.53 for six months.

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

Rodman & Renshaw, LLC is the placement agent.

Based in Seattle, Cell Therapeutics develops, acquires and commercializes treatments for cancer.

Western GeoPower to close PIPE

In Canadian offerings, Western GeoPower Corp. secured commitments for a C$6.25 million private placement.

The company plans to sell 25 million shares at C$0.25 each to Geysir Green Energy and Glitnir Bank, two strategic investors based in Iceland.

Connected to this offering, 46,026,668 warrants, exercisable at C$0.25 each, were exercised for proceeds of C$11,506,667. Of the total warrants, 15,333,334 free-trading shares will be issued to some subscribers and 30,693,334 units will be issued to other subscribers. Those units include one share and one warrant. The warrants are exercisable at C$0.35 each through Dec. 30, 2008.

The expiry of the warrants associated with the units may be accelerated to 30 days if the company's stock trades above C$0.50 for more than 10 consecutive trading days.

"We are pleased to report that the C$18.38 million of funding represents most of the equity component of the project finance for drilling the wells and constructing our proposed 25.5 megawatt power plant at The Geyers Geothermal Field in California," said Kenneth MacLeod, chief executive officer of Western GeoPower, in a statement. "As an added benefit, having Geysir Green Energy and Glitnir Bank as strategic investors reinforces our ability to secure the remainder of the project finance on favorable terms."

The company's stock gained 2 cents to end at C$0.295 (TSX Venture: WGP).

Based in Vancouver, B.C., Western GeoPower is a renewable energy company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.