Merge gets $41 million; Herald sells preferred, common shares; PC Gold seeks exploration funds

By Stephanie N. Rotondo

Portland, Ore., April 5 - The trend in Monday's PIPE market was deals getting done, according to data compiled by Prospect News.

Merge Healthcare Inc. announced it had raised more than $41 million from a private placement of both preferred and common shares. Herald National Bank also issued preferred and common stock, raising $32 million.

Meanwhile, PC Gold Inc. brought one of the day's few new deals, a C$9.1 million private placement of stock. The deal was lifted from its previous amount of C$7.01 million.

Novus Gold Corp., another gold exploration company, wrapped a C$3.11 million placement of stock. The financing's over-allotment option was partially exercised.

Fund.com Inc. meantime settled three private placements of stock, raising over $2 million. The shares were sold to three investors.

And, Xenonics Holdings Inc. said it would conduct a registered direct offering of shares in its effort to raise $2 million.

Merge raises $41.75 million

Merge Healthcare took in $41.75 million from a private placement of common and preferred shares, according to a regulatory filing and subsequent press release.

The company issued 41,750 of the 15% series A preferreds at $627.40 each. Additionally, approximately 7.52 million common shares were sold at $2.07 per share.

Merge said that 14 institutional and other accredited buyers participated in the deal.

The proceeds from the financing will be used to finance Merge's planned acquisition of Amicas Inc. The company announced the merger March 19, as a Merge subsidiary launched a tender offer for Amicas' outstanding shares.

Calls seeking further comment were not returned Monday.

Merge's shares (Nasdaq: MRGE) gained 22 cents, or 11.06%, to $2.21. Market capitalization is $165 million.

Merge Healthcare is a Milwaukee-based developer of medical imaging and information management software and services.

Herald sells preferred, common shares

Herald National Bank also sold preferred and common shares in a private placement, raising $32 million.

The deal came in two tranches, with $7.5 million raised on Dec. 30 and the remaining $24.5 million settling March 31.

The Clinton Group was the lead investor, taking 24.9% of the placement offerings. Other investors included Blue Atlantic Capital, Triumph Investment Funds, ALDA Capital, LLC and Raymond A. Nielsen.

The New York-based company sold a total of 10.7 million shares at $3.00 per share.

"The capital raise enhances Herald National Bank's capital position and increases our pro-forma tier one capital ratio to a level considerably in excess of that required of de novo banks, which is significantly higher than the ratio required of older more established banks," stated David S. Bagatelle, the bank's president, in a press release. "We are pleased to have the support of our institutional investors and look forward to working with them as we continue to build our relationship based franchise in the New York metropolitan area."

"The investors in this offering have reaffirmed their confidence in our business plan and our ability to execute," added Raymond A. Nielsen, chairman and chief executive officer. "Unlike many offerings in the financial services sector these days, our offering was not about balance sheet repair, rather the capital we raised strengthens our bank's ability to work with and lend to many of the premier middle market businesses in our market area."

Herald's equity (Amex: HNB) improved by 11 cents, or 3.79%, to $3.01.

PC Gold to raise exploration funds

PC Gold is seeking C$9.1 million from a private placement of equity, the company said in a press release.

The deal originally priced at C$7.01 million on Monday and was increased a few hours later.

PC Gold will sell 5 million flow-through common shares at C$1.82 per share on a guaranteed agency basis.

Proceeds will be used for exploration work at the company's Pickle Crow gold mine. Settlement is expected by April 20.

Calls seeking further comment were not returned Monday.

PC Gold's stock (Toronto: PKL) increased by 17 cents, or 11.72%, to C$1.62. Market capitalization is C$67.8 million.

PC Gold is a Kanata, Ont.-based gold exploration company.

Novus takes in C$3.11 million

Novus Gold wrapped a C$3.11 million private placement of equity, according to a press release.

The deal originally priced at C$3 million with a C$1 million greenshoe on March 16.

MineralFields Group participated in the investment.

The company issued approximately 7.76 million flow-through common shares at C$0.40 each. Of the shares sold, 262,500 were part of the partially exercised greenshoe.

"We are very pleased to be entering into this relationship with MineralFields Group," said Mike Magrum, president and CEO, in the release. "We consider this to be an important milestone in the growth of Novus Gold Corp. and we look forward to working with MineralFields Group as we develop our holdings in the Northwest Territories."

Novus' shares (TSX Venture: NOV) slipped half a cent, or 1.54%, to C$0.32. Market capitalization is C$6.66 million.

Novus Gold is a Vancouver, B.C.-based gold exploration company.

Fund.com wraps three deals

Fund.com settled several private placements conducted in February and March, raising proceeds of $2.33 million.

The company issued approximately 9.05 million class A common shares to COS Capital Partners I, LLC for proceeds of $1.9 million on Feb. 10. On March 1, 952,381 shares were sold to LH Capital Partners LLC for proceeds of $200,000.

Also in March, Fund.com sold 952,381 shares to Recovery Capital for proceeds of $227,000.

Proceeds will be used to acquire all membership interests in Weston Capital Management LLC. Fund.com acquired the company on March 29.

E-mails seeking further comment were not returned Monday.

Fund.com's stock (OTCBB: FNDM) dropped 10 cents, or 14.29%, to $0.60. Market capitalization is $31.5 million.

Fund.com is a New York-based fund-tracking website.

Xenonics plans direct placement

Xenonics Holdings announced a $2 million registered direct offering of equity.

The Carlsbad, Calif.-based company raised $1.45 million in the first tranche, which settled April 1.

Xenonics is selling 4 million common shares at $0.50 each. Approximately 2.9 million shares were issued in the first tranche.

Investors will also receive warrants equal to another 4 million shares. The warrants are exercisable at $0.65 for five years.

Proceeds will be used for general corporate purposes, working capital and capital expenditures. Settlement is expected by April 6.

Xenonics' equity (Amex: XNN) declined by $0.0299, or 6.10%, to $0.4601. Market capitalization is $10.2 million.

Xenonics Holdings is a developer of high-intensity illumination products used by the military, law enforcement officers and public safety officials.

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