U.S. private placement volume improves; eMagin finishes $10.8 million deal

By Sheri Kasprzak

Atlanta, Oct. 26 - U.S. private placement volume got better Tuesday even as Canadian companies dominated activity with smaller deals.

"I think volume is pretty good today," said one U.S. sell-side source. "We're seeing a few bigger deals. It's not where I'd like it to be, but compared to last week, I think it's better. It could be because of stronger key markets, like technology and biotech."

The Canadian market continued to see higher volume, riding on a strong natural resources market.

"I think companies are still taking advantage of a stronger oil and gas market, which is why you're seeing a lot of offerings from energy companies," said a Canadian sell-side source.

Heading up U.S. market action was eMagin Corp., which received $10.8 million through the sale of common stock and warrants.

The company sold 10,259,524 shares at $1.05 per share and series F common stock purchase warrants to buy 5,129,762 shares of common stock at $1.21 per share.

The warrants are exercisable from April 25, 2005 through April 25, 2010.

WR Hambrecht & Co. served as placement agent in the deal and Larkspur Capital Corp. served as an advisor.

eMagin, based in Hopewell Junction, N.Y., is a virtual imaging technology company. The company plans to use the funds from the financing for general corporate purposes.

eMagin's stock closed down $0.08 at $1.09 Tuesday.

QMed finishes $2 million deal

QMed Inc. said Tuesday it has finished a $2 million private placement.

The company sold 298,507 at $6.70 per share to Quest Diagnostic Ventures LLC, one of its existing stockholders.

QMed is an Eatontown, N.J.-based provider of clinical testing, information and services to health-care companies. The company's stock closed at $6.77 Tuesday.

Care Concepts raises $18.2 million

Care Concepts I Inc., a media holding company, announced Tuesday that it closed the sale of $18.2 million in 10% notes and preferred shares on Oct. 19.

The company issued $9.525 million of the 10% notes to 18 investors. The notes, due Sept. 15, 2009, are payable in cash or half in cash with the balance due in shares with a conversion price equal to 50% of the average closing price of the company's stock for five trading days before conversion. The minimum conversion price is $3.

The company also raised $3.5 million from the sale of 35,000 shares of series E preferred stock to Monarch Pointe Fund LP. The stock pays a dividend of 6% per year and is senior, at a rate of $100 per share, on liquidation and sale of control to Care Concepts' outstanding series A, series B, series C and series G preferred stock.

The series E shares have a minimum conversion price of $3 or 50% of the market price of the company's stock.

The company also received $5.45 million from the sale of 34,500 shares of series F preferred stock to Castlerigg Master Investments Ltd. The shares pay a dividend of 10% per year and are payable either in cash or half in cash with the balance due in shares at 50% of the volume weighted average price for five trading days before the dividend payment. The shares have a conversion floor price of $3 per share and come with three-year warrants for 386,194 shares at $3.

The series F stock, unless previously converted into common shares, is convertible at the holder's option at $100 per share plus dividends owed on Sept. 15, 2009.

The company also holds $2 million in the series F preferred stock in escrow for a total of 30,791,666 shares subject to potential issuance as escrowed shares.

A total of 29,929 shares of series G preferred stock issued to GMI Partners, a Care Concepts subsidiary, represent the total amount of escrowed shares. Those escrowed shares will be converted into 39,916,666 common shares on Dec. 31.

Care Concepts may also elect to sell an additional $5.475 million in the 10% notes.

Care Concepts I, based in Deerfield Beach, Fla., is a media and marketing holding company which owns an equity interest in Penthouse Media Group Inc., as well as online auction and radio programming concerns. The company's stock closed down $0.10 at $0.60 Tuesday.

Geocan plans C$10.7 million deal

Toronto-based oil and gas company Geocan Energy Inc. said Tuesday morning it plans to raise C$10.7 million in a private placement.

The deal includes the sale of five million units of one share and one half-share purchase warrant at C$1.40 for proceeds of C$7 million. The whole warrants allow investors to buy an additional share at C$1.75 for 18 months from closing.

The remaining two million flow-through shares will be sold at C$1.85 per share for a total of C$3.7 million.

Octagon Capital Corp. will act as lead placement agent in the deal.

Octagon has the option to raise the size of the offering by up to 10% to cover over allotments.

Geocan is targeting investors in Alberta, British Columbia and Ontario.

It plans to use the funds from the private placement for its 2004 and 2005 exploration and development program. Geocan's stock closed down C$0.13 at C$1.42.

BRC offers C$2.5 million

BRC Diamond Corp. said it plans to raise C$2.5 million in a private placement.

The company plans to sell up to a million shares at C$2.50. The deal is scheduled to close Dec. 3.

Kingsdale Capital Markets Inc. is acting as placement agent in the offering.

BRC is a Toronto-based diamond exploration company and plans to use the proceeds for the exploration of properties in the Lubao district of the Democratic Republic of the Congo and for general corporate purposes.

BRC's stock closed at C$2.25 on Oct. 21, its last trade.

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