Deals

Arca Biopharma Closes $8.7M CMPO via Dawson James

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Arca Biopharma, Inc. (ABIO) announced that it has raised $8,697,588 in a CMPO/Overnight transaction. The common stock was sold at $1.70 per share, an approximate 10% discount to the market price ($1.89) of ABIO at deal announcement. A series of 1,279,057 60-Month Warrants with an exercise price of $2.13 per share (12.44% premium) was issued to the investors in this transaction. Dawson James Securities, Inc. acted as the Sole Book-Runner on the transaction. Underwriter counsel was Ellenoff Grossman & Schole LLP and issuer counsel was Cooley LLP.

Deals

Catasys Raises $1M at 56% Discount from Crede CG

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Catasys, Inc. (CATS) announced that it has raised $1,000,002 in a Common Stock transaction. The common stock was sold at $0.58 per share, an approximate 56% discount to the market price ($1.33) of CATS at deal announcement. A series of 1,724,141 60-Month Warrants with an exercise price of $0.58 per share (56.39% discount) was issued to the investors in this transaction. The investors include Crede CG III, Limited. Issuer counsel was Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, PC.

Deals

Torchlight Energy Raises $7M at 16% Discount via National Securities Corp.

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Torchlight Energy Resources, Inc. (TRCH) announced that it has raised $7,000,000 in a Units (Common Stock + Warrants) transaction. The common stock was sold at $4.00 per share, an approximate 16% discount to the market price ($4.74) of TRCH at deal announcement. A series of 437,541 60-Month Warrants with an exercise price of $6.00 per share (26.58% premium) was issued to the investors in this transaction. National Securities Corporation acted as the exclusive agent on the transaction. The transaction closed on December 31, 2013.

SEC
Legal

Florida Professors Nabbed in Naked Shorting Scheme

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Two college professors were caught using a complicated scheme to naked short over 20 stocks using call and put options from 2010 to 2012. The Securities and Exchange Commission levied fines of over $670,000 against the duo, after discovering the fraud while monitoring unusual trading in one of the companies whose options they traded. The scheme shows how delivery rules for shorting stocks leave gaps in option brokers’ ability to monitor trade settlement. Milen Kostov, assistant professor of engineering at Florida University in Tallahassee, came up with the trading strategy, which involved purchasing and writing two pairs of options for the same underlying stock to generate over $400,000 in profits. Around $800 million worth of call options were sold and at least $1.2 billion of common stock was purchased off an initial investment of only $100,000.