SmarTire raises $190 million in private placements; oil surges over $61 a barrel, fueling energy offerings

By Sheri Kasprzak

New York, July 6 - SmarTire Systems Inc. led private placement news Wednesday with word that it secured $190 million from two offerings. In the broader market, oil prices jumped over $61 per barrel, bringing in several new deals from the energy sector.

In the first of its two deals, SmarTire received a $160 million standby equity distribution agreement with Cornell Capital Partners LP. SmarTire will sell shares at 98% of the lowest closing bid price for five trading days after notice of a draw. The equity line has a two-year term, but may be extended to five years.

Newbridge Securities Corp. was the placement agent for the equity line.

The other offering was a $30 million convertible debenture deal.

SmarTire sold a $20 million debenture and an $8 million debenture to Cornell. Highgate House Funds, Ltd. bought a $2 million debenture.

The debentures mature June 23, 2008, bear interest at 10% annually and are convertible into common shares at $0.1125 each.

Cornell received two warrants for 58,337,500 shares and Highgate House received a warrant for 4,162,500 shares, exercisable at $0.16 each for five years.

"This major financing represents one of the most important milestones in the history of our company," said Jeff Finkelstein, the company's chief financial officer, in a statement.

"Completion of this financing sends a very clear and positive message to our customers, suppliers and strategic partners that SmarTire now has the resources necessary to execute on its business plan. The company has expanded its business strategy beyond tire monitoring opportunities to include a wider range of wireless sensing and control applications that utilize SmarTire's patented technologies. This financing enables us to launch and maintain a long-term sales and marketing program into this exciting market sector."

SmarTire, based in Richmond, B.C., develops technologies used to monitor tire pressure.

SmarTire's stock slipped 3% to close at $0.13 on Wednesday.

Energy sector active

In the broader market, energy deals dominated issuance Wednesday as oil prices climbed $1.69 to end at $61.28 per barrel.

"Definitely," said one sell-sider familiar with oil when asked if the surging prices were pushing volume among oil and natural gas companies. "Whenever you get a push like this, you see more of them. Frankly, I feel like the tomorrow will be the biggest day for them. It generally takes about a day before the demand really kicks in."

Chamaelo sells C$22.5 million

Leading those oil offerings was a C$22.5 million deal from Chamaelo Exploration Ltd.

Calgary, Alta.-based Chamaelo plans to sell 3 million shares at C$7.50 each through a syndicate of underwriters led by Sprott Securities Inc.

The proceeds from the deal will be used for the company's 2005 capital program and for general corporate purposes.

Chamaelo's stock remained unchanged at C$7.10 on Wednesday.

Another Calgary, Alta.-based oil exploration company, Breaker Energy, announced a C$7,935,000 offering on Wednesday and later announced that a syndicate of underwriters led by Tristone Capital Inc. exercised a greenshoe, bringing the total proceeds to C$10,005,000.

Breaker plans to sell 2.9 million shares at C$3.45 each, including 600,000 from the greenshoe.

The proceeds will be used to expand and accelerate the development of the company's core properties in the Southern Focus area, including the Provost area, the Medicine Hat area and the Suffield area.

Breaker's stock gained a nickel to close at C$3.75 on Wednesday.

Peregrine Energy Ltd., also based in Calgary, said it plans to head to the private placement market with a C$2.5 million offering to its new managers and third-party investors.

The deal includes 1,190,500 shares at C$2.10 each.

On Wednesday, Peregrine's stock closed down C$0.22 at C$2.30.

One oil offering closed Wednesday. Apollo Resources International, Inc., based out of Dallas, closed a $3 million private placement of senior secured convertible notes.

The notes bear interest at 8% annually and are convertible into common shares at $0.25 each. The notes are self-liquidating with the principal and interest due beginning the six months after the closing of each note until the notes are paid off.

The investors also received 2 million warrants for each $500,000 in notes purchased. The warrants are exercisable at $0.30 each for five years.

H.C. Wainwright & Co. Inc. was the placement agent.

The proceeds will be used for working capital, debt repayment and capital expenses.

The company's stock closed down $0.02 at $0.57 Wednesday.

Endologix's $16.6 million offering

Moving to the biotech sector, Endologix, Inc. said it has secured $16.6 million from a private placement of stock.

The company will sell 4.15 million shares at $4 each to accredited investors.

The proceeds will be used to launch the company's Powerlink System, which treats abdominal aortic aneurysms.

"Our focused launch of the Powerlink System indicates that hospitals are receptive to adopting new technologies, such as the Powerlink, as demonstrated by our ability to establish a number of commercial accounts since the beginning of this year," said Paul McCormick, the company's president and chief executive officer, in a statement.

"This financing will provide us with additional resources to expand our sales and marketing program and to hire additional sales representatives to capitalize on these market opportunities as we move toward full commercialization."

Based in Irvine, Calif., Endologix develops minimally invasive treatments for vascular diseases.

The company's stock lost $0.05, or 1.09%, to close at $4.55 and lost another $0.08 in after-hours trading.

Convera's stock closes up

After wrapping up a $29.84 million private placement Tuesday, Convera Corp.'s stock climbed Wednesday.

The company's stock gained $0.31 to close at $5.60.

On Tuesday, when the closing was announced, the company's stock closed up $0.31 to end at $5.29.

Convera sold shares at $4.50 each and $4.84 each to two investors.

Based in Vienna, Va., Convera produces search and categorization software.

Sirna Therapeutics' stock edges up

A day after closing a $28 million private placement, Sirna Therapeutics, Inc.'s stock made slight gains on Wednesday.

The company's stock edged $0.05 higher to end at $1.67 Wednesday.

On Tuesday, when the closing was first announced, the company's stock slid $0.05 to close at $1.62.

Sirna sold shares at $1.60 each

Based in Boulder, Colo., Sirna is a biotechnology company focused on RNA interference technologies.

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