Netsmart raises $5.7 million in unit offering; mineral companies dominate Canadian PIPE issuance

By Sheri Kasprzak

New York, Sept. 20 - Netsmart Technologies, Inc. led private placement news Tuesday with $5.7 million in units sold to institutional investors.

The company, which is acquiring CMHC Systems Inc., said it has received definitive agreements from institutional investors for 653,623 units at $8.72 each.

Netsmart reportedly had 5,390,950 outstanding common shares as of Aug. 3.

The units are comprised of one share and one quarter-share warrant. The full details of the warrants could not be determined Tuesday.

Griffin Securities, Inc. was the placement agent on the offering, which is expected to close before Nov. 3.

After the offering was announced Tuesday afternoon, the company's stock gained 3.75%, or $0.43, to end at $11.90.

Under the terms of the merger, which is expected to close later this month, Netsmart will pay $13 million in cash and issue 435,730 of its shares.

Financially, Netsmart's net income slipped slightly in the second quarter of 2005 compared to the same quarter of 2004. The company's net income for the three months to June 30, 2005 was $449,439 compared to $492,924 for the same period in 2004.

Based in Great River, N.Y., Netsmart develops software used in the health and human services sector.

In the broader PIPE market, one market source said that U.S. private placement activity took a hit on a struggling stock market.

Stocks took a dip on word that interest rates will be climbing.

The Dow Jones Industrial Average lost 76.11 to close at 10,481.52, the Nasdaq composite index dipped 13.93 to end at 2,131.33, and the Standard & Poor's 500 composite index edged down 9.68 to close at 1,221.34.

The market is "just slow in general because of lower stocks is all," he said, noting he thinks volume will improve as the week progresses, especially with more biotech issuers and even more from the natural resources sector.

Minerals rule Canadian offerings

On the natural resources front Tuesday was a slate of Canadian offerings from mineral exploration companies.

Kelowna, B.C.'s Metalex Ventures Ltd. led the group with the pricing of its C$6.3 million stock offering.

The company intends to sell 8.4 million shares at C$0.75, with some of the shares issued on a flow-through basis.

The proceeds will be used to advance the company's diamond exploration projects. The rest will be used for working capital.

The offering was announced Tuesday morning, and Metalex's stock sank 4%, or C$0.03, to close at C$0.72.

Blackstone Ventures Inc. priced a unit offering for up to C$5 million and at least C$2.5 million on Tuesday.

The company plans to sell up to 15,151,515 units and a minimum of 7,575,757 units at C$0.33 each.

The units are made up to one share and one half-share warrant. The whole warrants are exercisable at C$0.50 each for one year.

Toll Cross Securities Inc. is the agent for the offering.

Blackstone said it also plans to complete a non-brokered deal with Falconbridge Ltd. for C$350,000, selling 1,060,606 units under the same terms.

The two offerings are expected to close together on Oct. 6.

The proceeds will be used for exploration on the company's Norway nickel projects.

Blackstone is based in Vancouver, B.C. The company's stock remained unchanged at C$0.33 on Tuesday.

A gold exploration company, Robex Resources Inc., also announced the terms of a private placement on Tuesday, this one for C$2.35 million.

The offering, which will be placed through agent Loewen, Ondaatje, McCutcheon Ltd., includes up to 9.4 million units at C$0.25 each.

The units include one share and one half-share warrant. The whole warrants allow for the purchase of another share at C$0.30 each for two years.

The deal was announced late Monday, and on Tuesday, the company's stock dove 18.64%, or C$0.055, to finish at C$0.24.

The proceeds will be used for exploration on the company's gold properties and for acquisition programs in the Republic of Mali. The rest will be used for general corporate purposes.

Robex is based in Montreal.

Tasker raises $5.04 million

Back in the United States, Tasker Capital Corp. is gearing up to close a $5,035,618 offering composed of 2,288,913 units.

The units will be sold to institutional investors at $2.20 each and include one share and one half-share warrant. The whole warrants are exercisable at $3.00 each for five years.

Tasker had 84,189,500 outstanding common shares as of Aug. 5.

The proceeds will be used to accelerate the rollout of the company's pen spray, poultry processing product and Unifresh Footbath.

The company's net losses have increased significantly over the second quarter of 2004. For the quarter ended June 30, 2005, the company reported a net loss of $3,713,087, up from a net loss of $1,762,514 for the same quarter in 2004.

Based in Danbury, Conn., Tasker Capital manufactures and markets consumer products like breath fresheners.

On Tuesday, Tasker's stock lost $0.06 to close at $2.44.

Geocan's C$17.58 million offering

Moving to the energy sector, Calgary, Alta.-based Geocan Energy Inc. has priced a C$17,575,000 stock deal.

The company plans to issue 9.5 million shares at C$1.85 each through a syndicate of underwriters led by Octagon Capital Corp.

The underwriters have a greenshoe for up to 1 million additional shares.

Proceeds will be used for the company's 2005 and 2006 exploration and development program.

On Tuesday, the company's stock dropped 4.5%, or C$0.09, to close at C$1.91.

Gastar stock slips 1.23%

Elsewhere in the energy sector, Gastar Exploration Ltd.'s stock took a slight dip on Tuesday.

The Houston-based oil exploration company lost C$0.05 to close at C$4.00.

On Monday, when the company announced that Oklahoma City-based Chesapeake Energy Corp. agreed to buy up to C$89 million in its stock, the company's stock jumped 13.13%, or C$0.47, to finish at C$4.05.

Under the terms of the agreement, Chesapeake will buy 19.9% of Gastar's outstanding shares at a price equal to the lesser of C$3.31 each or the average closing price of Gastar's stock for the three trading days immediately before the offering closes.

Chesapeake will also receive a 33% working interest in Gastar's Deep Bossier play in eastern Texas and the two will establish an area of mutual interest for exploration in 13 eastern Texas counties.

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