All it takes is some news to make you realize the risk involved in smallcap investing. That news came in the form of a horrific earnings report last night from Origin Agritech (NASDAQ: SEED), showing revenues and margins decreasing along with guidance that was more than 50% below the estimates of the one analyst that covers the company.

I often advise against trusting any company whatsoever, but it's rare that one lets investors down so greatly. I had no position in the stock, but along with Converted Organics (NASDAQ: COIN) and Titan Machinery (NASDAQ: TITN), I profiled Origin back in January as an up and coming agriculture stock. Since then, two of those three stocks have broken out to new highs in a similar fashion to this hot sector's leaders like Potash Corp. of Saskatchewan (NYSE: POT), Mosaic (NYSE: MOS), Monsanto (NYSE: MON) and Agrium Inc. (NYSE: AGU).

Performance aside, those billion dollar behemoths are established companies, with global investors and brands, while these new kids on the block are the exact opposite. Plagued by having few products, fund raising problems and debt issues, this 50% shortfall exemplifies just one of the many issues with which small-cap companies struggle. I mean they are really fighting for lives! And that's why they are priced the way they are and derided by Wall Street.

Shares of Converted Organics (NASDAQ: COIN) have been on a tear of late, rising from under $6 to Tuesday's closing price of $12.58 in the first weeks of January alone.

The Boston-based company describes itself as "dedicated to producing a valuable all natural, organic soil amendment or fertilizer product through food waste recycling" but so far has not reported any revenue. The company has not reported any substantive events so far this year (i.e. not a single 8-K or 10-Q or 10-K filed with the SEC in 2008), but investors have certainly been flocking to the stock.

One area of concern surrounding the company is this press release that it issued on December 18th:

Converted Organics Inc. (NASDAQ: COIN, COINW, COINZ) today declared a quarterly common stock dividend of one (1) share of common stock for each twenty (20) shares of common stock outstanding, payable to all holders of record of the common stock on the last day of December 2007. No fractional shares will be issued in connection with this stock dividend program. This dividend will be payable on January 14, 2008 to all shareholders of record on December 31, 2007.

Wall Street's equity market has a full plate of offerings on its the table, with 16 deals on the docket, including 5 IPOs.

Those deals tentatively scheduled to price include:

IPOs:

• AeroViroment (AVAV), a 6.7M-share IPO for ths unmanned aircraft manufacuturer. AVAV has a $14.00-$16.00 filing range
• Converted Organics (COIN), a 2M-share IPO for this fertilyzer company. COIN has a $5.00-$6.00 filing range.
• Meruelo Maddux Properties (MMPI), a 40M-share IPO to pay-off debt and for other corporate purposes. MMPI has a $12.00-$14.00 filing range.
• Oculus Innovative Sciences (OCLS), a 3.5M-share IPO for this developer of wound/infection treatments. OCLS has a $8.00-$10.00 filing range. This IPO was re-scheduled from December 2006.
• Oritani Financial (ORIT), a 10.575M-share IPO for this savings & loan holding company.

Secondaries:

• Alllis-Chambers Energy (ALY), a 4.5M-share Secondary. ALY is engaged in oilfield services.
• Baldor Electric (BEZ), a 6.25M-share Secondary. BEZ designs and manufactures electric motors.
• Covanta (CVA), a 5.77M-share Secondary for this diversified utility.
• Edge Petroleum (EPEX), a 9.2M-share Secondary to finance the pending acquisition of oil and gas properties from Smith Production Inc. and to refinance Edge's existing revolving credit facility.
• Inverness Medical Innovations (IMA), a 5M-share Secondary to repay outstanding debt and for
• working capital and other general corporate purposes.
• J Crew Group (JCG), a 7.5M-share Secondary to fund the business growth/development.