vlao options 3.3c ; vla shares 5.6c ???, page-11

What a bargain now!!!
listed bio-technology company Viralytics Ltd (VLA) has cleverly locked in sufficient funding to cover its planned research programs for as much as two years.

This will underpin the companys planned Phase II trials on melanoma sufferers due to begin in coming months under the rules of the US Food and Drug Administration rules.

Last week Viralytics shares traded up to 7.9 before closing the week at 5.6 after the company announced a placement of 28,650,000 new shares at 5.3 a share to professional investors, to raise a gross $1,518,500. The placement, to clients of HC Securities Pty Ltd, was made at a 20% discount to the 10-day weighted average price of the stock between March 9 and March 22.

It is believed the surprise placement is the result of an unexpected telephone call from HC Securities to Viralytics managing director Bryan Dulhunty, after the financial services company had followed up on a positive research report produced by a Sydney tipsheet on March 14.

The new funds will top up current cash of about $850,000 held by Viralytics plus an available convertible loan facility worth $US4 million. (In June, 2009, the company entered into a convertible loan facility with La Jolla Cove Investors Inc of California for a total of $US6 million, broken into four tranches of $US1.5 million. One tranche has been used up already and $US1 million has been drawn down from the second tranche.)

Better, Viralytics has also secured HC Securities to underwrite the exercise of 28.65 million options at 4 a share due by June 30, 2010, to raise a further $1.146 million. That has been done through granting Viralytics a put option to enable the company at its own election to place any of the 28.65 million shares not taken up by option holders.

The latest placement of 28.65 million shares takes issued capital to 404.61 million shares, which at 5.3 gives the company a market capitalisation of $21.4 million. Viralytics shares have traded as high as 12 this year.

Among positive conclusions reached in Wise-owl.coms research paper, is the suggestion that success by any one of at least seven companies worldwide investigating oncolytic viruses could re-rate Viralytics as it would validate the field.