U.S. private placement action remains weak; Ener1 sells $15 million in preferreds

By Sheri Kasprzak

Atlanta, Oct. 21 - U.S. private placement volume remained comparatively sluggish Thursday, despite the hopes of some sell-siders, even as smaller Canadian deals continued to dominate the market.

One sell-side source said some companies may still be afraid to get into the market because deals have been pricing low.

"I have the sense that some companies are just feeling out the market right now," the source said.

Heading up U.S. private placement deals was Ener1 Inc.'s $15 million series B 7% convertible preferred stock sale.

The Fort Lauderdale, Fla.-based lithium-battery and fuel-cell manufacturer announced it sold 150,000 shares the securities at par to Cofis Compagnie Fiduciaire SA, a Swiss trust company.

The shares have a liquidation preference of $100.00 per share.

Two 10-year warrants to buy 4,166,666 shares of common stock each were included in the deal with a strike price of $1.25 per share and $1.50 per share.

The company also entered into an agreement with Ener1 Group, Inc., its majority shareholder, under which Ener1 Group agreed to purchase any time Ener1 requests up to 30,000 shares of the series B preferreds at $100.00 per share and warrants for 833,334 shares of common stock at an exercise price of $1.25 per share and warrants for 833,334 shares of common stock at an exercise price of $1.50 per share.

On Thursday, Ener1's stock closed up $0.08 at $0.74.

Icoria raises $5 million

Icoria Inc. sold $5 million in a secured convertible term note to Laurus Master Fund Ltd., the company said Thursday.

The three-year notes pay interest at Prime plus 250 basis points.

The conversion price on the notes is $0.53 and the deal comes with warrants for 1.65 million shares at an average weighted price of $0.79. Equal portions of the warrants expire in two and five years.

"This financing represents an important milestone in strengthening our liquidity position, as we move closer to financial self-sustainment," Icoria's chief financial officer Philip Alfano in a statement. "With the proceeds from this financing, we have repaid our existing equipment loan to General Electric Capital Corp., which carried an interest rate over 11% and placed restriction on our cash. This financing also helps us with our current loan covenants."

Icoria, based in Research Triangle Park, N.C., is a biology company specializing in drug discovery and development.

Icoria's stock closed up $0.02 at $0.44 Thursday.

Canadian deals

In Canadian private placements Thursday, Imperial Metals Corp. sold C$15.6 in common and flow-through shares to both investors and directors, officers and employees.

Investors bought 900,000 common shares at C$7.50 and 300,000 flow-through common shares at C$9. The directors and employees bought 425,000 common and 400,000 flow-through shares under the same terms.

Imperial is a base and precious metals exploration company based in Vancouver, B.C. The company plans to use the proceeds from the financing to fund operations at its Mount Polley mine and general working capital.

Its stock closed up C$0.01 at C$7.90 Thursday.

Mart Resources' C$6.3 million deal

Mart Resources said Thursday it was heading to the private placement market with a C$6.3 million deal.

The deal consists of 14 million shares at C$0.45.

Mart, based in Calgary, Alta., is an oil, gas and power company with projects based mainly in Africa. The proceeds from its private placement will be used to contract a service rig for testing and for activities in the company's Nigerian oil and gas fields.

Mart's stock closed up C$0.05 at C$0.49 Thursday.

Everton Resources plans C$3.5 million private placement

Everton Resources said Thursday it is entering the private placement market with a C$3.5 million deal.

The deal consists of 10 million units of one share and a one-half share purchase warrant at C$0.35 per unit.

The whole warrants are exercisable at C$0.40 for two years from the closing date.

The agents in the deal - Canaccord Capital Corp. and Haywood Securities Inc. - may increase the offering by an additional C$1.05 million.

Everton is an Ottawa-based gold exploration company. The funds from the financing will be used for gold and base metal exploration and for working capital.

On Thursday, Everton's stock closed up C$0.01 at C$0.36.

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