CanArgo Energy to settle $13 million note deal; stocks push more PIPE volume as oil prices retreat

By Sheri Kasprzak

New York, Jan. 23 - CanArgo Energy Corp. led PIPE news to kick off the week, announcing the pending settlement of a $13 million convertible note offering.

Meanwhile, in the broader market, sellsiders said a slight bump in the major stock indexes may have nudged up volume on Monday as oil prices dipped.

"Looks like more [activity] than we have been seeing," said one sellside source based in New York. "Could be better stocks, could just be that more [issuers] are finally getting around to pricing."

Another sellsider agreed that volume was boosted on Monday and suggested that later in the week, some medical device and biotechnology companies may be heading to the market.

"I would keep an eye out for medical device companies," he said. "I've been looking at a few of those myself and the [field] in general seems to be gaining some steam. Apart from that, biotech may be coming back this week."

The Dow Jones Industrial Average climbed 21.38 to end at 10,688.77 after sustaining a dive of 213.32 Friday.

The Nasdaq composite index gained 0.77 to close at 2,248.47, and the Standard & Poor's 500 composite index settled up 2.33 to end at 1,263.82.

Oil prices, on the other hand, fell $0.38 to end the day at $68.10 per barrel after realizing gains for the majority of last week.

An oil explorer, however, led private placement offerings Monday with a $13 million offering of subordinated convertible guaranteed loan notes.

CanArgo Energy agreed to sell the notes to a group of accredited investors.

After the offering was announced late Monday afternoon, CanArgo's stock gained 2.92%, or 4 cents, to end the day at $1.41 (Amex: CNR).

The notes mature on Sept. 1, 2009, initially bear interest at 3% and are convertible into common shares at $1.37 each. After Dec. 31, 2006, interest begins to accrue at 10% annually. The investors will receive warrants for 13 million shares, exercisable for two years at $1.37 each.

The deal is slated to close in mid-February.

Proceeds will be used for the development of the Kyzyloi gas field in Kazakhstan and on commitments on exploration programs through Tethys Petroleum.

"These funds will go directly into our Kazakhstan assets allowing us to progress the current development program on the Kyzyloi field and install the infrastructure necessary to achieve first gas and generate cash flow," said David Robson, the company's chief executive officer, in a statement. "We look forward to further progressing the Kazakhstan projects which we believe offer good long-term value with significant upside."

Robson did not return calls for additional comment late Monday afternoon.

On June 9, 2005 CanArgo completed a $25 million private placement of convertible notes. The notes are due on June 30, 2009 and are convertible, in part, at $0.90 each.

Looking to its earnings, CanArgo reported a net loss of $2,941,930 for the quarter ended Nov. 30, 2005, compared with a net loss of $2,548,790 for the same quarter ended Nov. 30, 2004.

Based in New York, CanArgo is an oil and natural gas exploration company.

eMerge's $2.88 million stock deal

Elsewhere in PIPE activity Monday, eMerge Interactive, Inc. is gearing up to settle a $2.88 million stock deal within 15 days.

The company has entered into agreements to sell 8 million shares at $0.36 each.

As of Nov. 8, 2005, eMerge had 51,536,808 outstanding shares.

The investors will receive warrants for 5 million shares, exercisable at a price equal to 110% of the closing market price on the day before the private placement closes. The warrants expire in five years.

Also, the investor agreed to exercise an existing warrant for 800,000 shares at $0.36 each, for additional proceeds of $300,000.

On Monday, the company's stock lost 3 cents, or 6.12%, to end at $0.46 (Nasdaq Capital: EMRG).

"We are pleased that this transaction will increase our working capital and strengthen our balance sheet, and we believe it should address our previously disclosed liquidity concerns for 2006," said David Warren, the company's CEO, in a statement. "It will also allow us to continue our process of evaluating alternative strategies concerning liquidity and shareholder value, including potential capital sources, investors, acquirers, licensees and merger partners, for all or part of our business.

"Without increasing revenue from operations or implementing one of the alternative strategies described above, additional liquidity may become an issue in the future."

As to the company's earnings, eMerge reported a net loss of $1,554,987 for the quarter ended Sept. 30 compared with a net loss of $715,151 for the corresponding quarter of 2004.

"We have continued to take steps to reduce expenditures, while preserving our ability to develop our business," said the company's latest earnings report. "These steps include elimination of certain exclusive and management positions, significant reduction in planned outside testing costs, elimination of outside investor relations advisors and certain outside marketing expenses, and reductions in other support costs.

"At the same time, like most other companies, we have experienced increases in our medical benefits and related insurance expenses. We plan to continue to keep a sharp focus on expenses and in 2006 we plan to significantly reduce our facilities expenses when our current least expires."

eMerge, based in Sebastian, Fla., is a technology company focused on developing contamination detection systems used in the foodservice sector.

BrazMin prices C$5 million units

Moving to Canada, BrazMin Corp. led PIPE news, pricing a C$5 million unit offering and, later in the day, increasing the size of the greenshoe on the deal.

The offering includes 2.5 million units of one share and one half-share warrant. The full warrants are exercisable at C$2.75 each for two years.

Canaccord Capital Corp. is the placement agent and has a greenshoe for up to 2.5 million additional units. When the deal was announced Monday morning, the over-allotment option had been set at 900,000 units.

The deal is slated to close Feb. 6.

The company's stock slipped 5 cents, or 2.4%, to end at C$2.04 (Toronto: BZM).

Proceeds will be used for general corporate purposes.

Based in Tortola, British Virgin Islands, BrazMin is a gold exploration company.

Elsewhere in Canada, PMI Ventures Ltd. arranged a C$2 million unit deal.

The deal includes up to 8 million units of one share and one half-share warrant. The full warrants allow for the purchase of another share at C$0.35 each for two years.

PMI may force the exercise of the warrants if its stock trades above C$0.50 for more than 20 consecutive trading days.

After the offering was announced Monday afternoon, PMI's stock gained 8.7%, or 2 cents, to end at C$0.25 (TSX Venture: PMV).

Proceeds will be used for exploration on the company's Ghana projects and for working capital.

Vancouver, B.C.-based PMI is a mineral exploration company.

Underground Solutions stock slides

For the second straight session, Underground Solutions, Inc.'s stock slipped, this time losing more than 10%.

The company's stock dropped 10.53%, or 6 cents, to end the day at $0.51 (Pink Sheets: UGSI).

On Friday, the company's stock lost 10 cents, or 14.93%, to close at $0.57, and on Thursday, when Underground Solutions announced the closing of an $18.8 million private placement, the company's stock gained 11.67%, or 7 cents, to finish at $0.67.

In the private placement, the company issued shares at $0.08 apiece to Wynnefield Partners Small Capital Value, LP I; The Water Fund, LP; and DHW Water Partners.

Based in Poway, Calif., Underground Solutions develops underground infrastructure and pipeline rehabilitation methods.

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