China North East receives $15 million; Niblack, Wave Systems to sell stock; Stinger raises $2.15 million

By Kenneth Lim

Boston, March 3 - China North East Petroleum Holdings Ltd. said it received a $15 million financing commitment from a special situations fund.

Meanwhile, Niblack Mining Corp. announced plans to sell up to C$10 million of stock-and-warrant units in a private placement.

Wave Systems Corp. also said it will raise $3.49 million of its class A common stock in a direct placement.

Stun gun maker Stinger Systems Inc. received a further $2.15 million from shareholder Castlerigg Master Investment Ltd., a hedge fund vehicle, following a private convertible note placement.

China North East raises $15 million

China North East said it received $15 million from Lotusbox Investments Ltd. following a private placement of 8% debentures.

Lotusbox is a subsidiary of Harmony Investment Fund Ltd., which is in turn managed by Singapore-based special situations specialist Harmony Capital Managers Ltd.

The initial funding of $1.75 million has closed, and the remaining $13.25 million will be released from escrow when certain post-closing conditions have been met within the next 30 days, the company said.

Harmony Investment Fund will also receive three tranches of five-year detachable warrants. The initial strike prices are $0.01 for 1.2 million shares, $3.20 for 1.5 million shares and $3.45 for 2.1 million shares. The warrants with a strike price of $3.20 are callable after one year if the company's stock is trading at or above $4.80.

The warrants have an average strike price of about $2.51, a 17% premium to China North East's Wednesday closing stock price. China North East common stock (OTCBB: CNEH) closed at $2.34 on Monday, up by 19 cents, or 8.84%, following the announcement.

In connection with the deal, China North East is also required to obtain a listing on a U.S. exchange within one year.

About $10 million of the proceeds will be used for the drilling of 100 new wells. The rest will be used for potential acquisitions, to implement technologies to increase production of existing wells and for working capital.

China North East is a crude oil production company based in Harbin, China.

"This transaction marks a major corporate milestone for our company," China North East president Wang Hong Jun said in a press release. "We are extremely excited to enter into this agreement with our new partners, Harmony Capital Managers. We have explored different ways of financing our expansion; we believe this structure causes minimal dilution to shareholders and puts CNEH in a strong financial position to take advantage of the compelling opportunities that lie ahead of us."

In the release, Harmony Capital chief investment officer Suresh Withana described the deal as "an exciting opportunity for the Harmony Fund to invest in the domestic oil production industry in China."

"It has a highly experienced management team implementing a robust business model," Withana stated. "We are confident that with our financial support, CNEH can increase its oil production much more rapidly, both by drilling new wells and through the acquisition of additional production leases."

Niblack eyes C$9 million

Niblack Mining said it plans to place up to C$9 million in a private placement of units.

The Vancouver, B.C.-based mineral exploration company said it will sell up to 20 million units of one share and one half-share transferable warrant at C$0.45 per unit. Each whole warrant will be exercisable at C$0.70 for 18 months.

The unit sale price represents a 10% discount to Niblack's Friday closing stock price of C$0.50. Niblack common stock (TSX: NIB) slipped C$0.02, or 4%, to close at C$0.48 on Monday.

The placement agents have an over-allotment option for up to 2.2 million additional units, or about C$0.99 million in proceeds.

Niblack said the proceeds will be used to finance further underground exploration at its property in southeast Alaska and for working capital.

Wave Systems to sell stock

Wave Systems said it plans to sell $3.49 million of its class A common stock in a direct placement.

The company said it will sell about 3.2 million shares at $1.10 apiece. Investors will also receive five-year warrants for 952,050 class A shares with a strike price of $1.15 per share.

The sale price of the stock is a 14.7% discount to its Friday close of $1.29. Wave Systems stock (Nasdaq: WAVX) closed at $1.10 on Monday. The placed shares form 6.4% of Wave Systems' pre-diluted outstanding class A stock and 6% of its expected diluted outstanding class A stock.

Wave Systems, a Lee, Mass.-based developer of security software, said it will use the proceeds to fund its operations.

"The need for hardware security solutions to protect the enterprise continues to grow," Wave Systems chief executive Steven Sprague said in a statement. "Wave provides enterprise software solutions to manage and utilize the Trusted Platform Module and Hardware Full disk Encryption. Our active development, sales, marketing and customer support activities during these early stages of the market require Wave to raise equity capital to fund these initiatives. We are pleased to have secured this funding and we appreciate the support of our investors."

Stinger investor takes more convertibles

Stinger Systems said it placed $2.15 million of 9.95% convertible senior notes with existing investor Castlerigg Master Investments.

The convertibles mature on March 1, 2011. The total interest due on the notes - a total of $641,775 - was prepaid on the settlement date.

The convertibles have an initial conversion price of $1.25 per share, a premium of 48.8% over Stinger's Friday closing stock price. Stinger common stock (OTCBB: STIY) closed at $0.85 on Monday, up by 1.19%, or $0.01.

Castlerigg also received 1.25 million common shares and a warrant for 3 million common shares. The warrant is exercisable for 90 months at $0.7054 per share.

Castlerigg, a fund controlled by New York hedge fund manager Sandell Asset Management Corp., also invested about $3 million in Tampa, Fla.-based Stinger in 2007.

Stinger is a maker and developer of stun guns that are expected to compete against the Taser brand guns. It had a net loss of $4.5 million in the three months ended Sept. 30, compared with a net loss of $1.1 million in the same quarter of 2006.

© 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.