eMagin raises $9.14 million from stock sale; Granite City wraps $5.34 million PIPE offering

By Sheri Kasprzak

New York, Oct. 21 - Heading up private placement activity in the United States to finish the week was eMagin Corp., which announced the impending settlement of a $9,143,000 stock deal.

The Bellevue, Wash.-based company intends to sell 16,623,636 shares at $0.55 each to investors, who will also receive warrants for 6,649,455 shares. As of Aug. 12, the company had 83,036,601 outstanding common shares.

The warrants are exercisable at $1.00 each through Oct. 20, 2010. The investors also received warrants for 3,324,727 shares, exercisable at $1.00 each through Oct. 20, 2010, but those warrants will be canceled if eMagin's net revenue for fiscal year 2006 exceeds $20 million or if the investor has sold more than 25% of the shares purchased under the agreement.

The offering was announced early Friday, and the company's stock plummeted almost 23%, losing $0.20 to end at $0.67.

The proceeds from the offering will be used for working capital.

Roth Capital Partners was the placement agent.

Gary Jones, the company's chief executive officer, had not returned calls for comment on the offering by press time Friday.

Looking to the company's earnings, eMagin sustained a net loss of $4,498,000 for the quarter ended June 30. For the same period ended June 30, 2004, the company reported a net loss of $1,399,000.

"We have not yet achieved profitability and we can give no assurances that we will achieve profitability within the foreseeable future as we fund operating and capital expenditures in areas such as establishment and expansion of markets, sales and marketing, operating equipment and research and development," said the company's latest earnings report.

eMagin develops organic light-emitting diode microdisplays and virtual imaging technologies.

Looking elsewhere in the PIPE market Friday, Granite City Food & Brewery Ltd. pocketed $5,340,747 from a stock offering with a group of investors including Solstice Investment Partners LP.

The investors bought 1,108,844 shares at $4.8165 each.

For each share purchased, the investors also received one warrant, exercisable at $6.50 each for five years.

After the offering was announced Friday afternoon, Granite City's stock slipped $0.02 to end at $5.05.

This is not the first PIPE for the Minneapolis-based restaurant chain operator.

Back on Nov. 4, 2004, the company completed an $8.5 million offering of 2,615,384 shares at $3.25 each.

The offering also included one warrant for every 2.5 shares purchased. The warrants were exercisable at $5.00 each for five years.

Oil prices encourage energy deals

Oil prices rose for the first time in a few sessions making energy offerings at least somewhat more palatable, one market source said.

"It helps things along," he said. "Oil seems to already have a pretty strong demand, but when oil prices go up, it makes it more appealing. We don't really know what's going on with this hurricane right now, so it could fluctuate from day to day for a while. The general consensus is that if the hurricane is bad, oil will head back up. That's really what's driving demand."

To cap off the week, oil prices gained $0.54 to settle at $60.63 per barrel.

On Thursday, oil slipped $2.01 to close at $60.09 per barrel, and on Wednesday, oil dropped $1.16 to close at $62.10.

Leading the energy offerings was a C$5 million unit deal from WellStar Energy Corp., a Vancouver, B.C.-based oil explorer.

The company intends to sell, through placement agent Research Capital Corp., 5 million units of one share and one half-share warrant.

The whole warrants allow for the purchase of another share at C$1.50 each for one year.

Proceeds will be used for exploration and development of the company's projects and for working capital.

WellStar's stock lost 12%, or C$0.12, to close at C$0.88 after the deal was announced Friday morning.

Another offering, this one priced late Thursday night, comes from Blackdog Resources Ltd. for up to C$3 million.

The Calgary, Alta.-based oil exploration company plans to sell up to 2.5 million common shares at C$0.40 apiece and up to 4 million flow-through shares at C$0.50 each.

The deal is part of the company's acquisition of Lamplighter Energy by means of a reverse takeover.

Proceeds will be used for the acquisition of oil- and gas-producing properties in western Canada.

Gold may benefit from gains in oil

Even though gold prices have been heading southward, one market source said the increase in oil prices on Friday may boost gold prices and, in turn, encourage more PIPE offerings within that sector.

"Looks like oil may benefit [gold prices]," he said. "There have been a few [gold deals] the past couple of days. [It] may continue."

Dynasty Gold Corp. led the few gold offerings priced on Friday with a C$1.3 million unit deal.

The Vancouver gold exploration company intends to sell 7,222,222 units at C$0.18 each.

The units are comprised of one share and one warrant. The warrants allow for the purchase of another share at C$0.30 each for one year.

Dynasty's stock gained half a cent to end at C$0.195 Friday.

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

Cloudbreak Resources Ltd., another Vancouver gold explorer, didn't price a deal on Friday but did increase the size of a much smaller offering priced back in August.

The company now plans to sell up to 10 million units at C$0.10 each.

The units consist of one share and one warrant. The warrants allow for the purchase of one additional share at C$0.15 each for two years.

The deal was first announced Aug. 4 as being comprised of 3 million units under the same terms.

The company's stock gained C$0.01 to end at C$0.13 Friday.

Crosstex stock loses 0.37%

The stock of Dallas-based Crosstex Energy LP dipped slightly on Friday, two days after announcing a $105 million private placement of trust units.

The company's stock slipped $0.14, or 0.37%, to close at $37.55 Friday.

On Thursday, the company's stock edged up $0.19, or 0.51%, to end at $37.69 and on Wednesday, when the offering was first announced, the company's stock closed unchanged at $37.50.

A group of institutional investors has agreed to buy senior subordinated series B units at $36.84 each from Crosstex.

Crosstex is a mid-stream natural gas company.

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