Deals
KonaRed

KonaRed Completes $1.3M APO

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A Hawaiian health food and juice maker completed an alternative public offering (APO) by reverse-merging with a shell company and raising $800,000 and exchanging stock for $500,000 in debt on October 10. The company, KonaRed Corp., merged into shell company TeamUpSport Inc., a defunct New Zealand company that had sought to develop an online network for sport fans. KonaRed sold the APO shares to Littlebird Capital, which purchased 1.7 million shares for 45 cents each, and purchased the debt from Maxam Capital Management in exchange for an additional 1.1 million shares. KonaRed announced it will seek to raise an additional $300,000 through a private placement of stock and warrants. The company intends to trade over-the-counter under the symbol KRED.

Executive Moves

FBR Acquires Trading and Research Staff from Lazard Capital Markets

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Investment banker and placement agent FBR & Co. (FBRC) has acquired 29 traders and research analysts from Lazard Capital Markets in what the middle market firm called a “negotiated transaction.” Included in the deal are six senior research analysts, six sales traders, three position traders, and four institutional sales people. FBR and Lazard declined to name the staff involved. With the acquisition of the Lazard staff FBR with initiate research coverage in the healthcare sector and expand coverage in the technology, media, telecom and consumer sectors. In total, the firm will provide research on nearly 500 public companies.

Executive Moves

Growth Capital Personnel Moves

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SEC Appoints Mark Kronforst to Chief Accountant of CorpFin
The U.S. Securities and Exchange Commission announced Mark Kronforst as chief accountant of its Division of Corporation Finance. Kronforst has been one of the division’s associate directors for disclosure operations since October 2010. He previously served in several positions within the division including as the division’s deputy chief accountant. Before joining the SEC, Kronforst was the director of financial reporting for Solectron Corporation and an audit senior manager at the accounting firm of KPMG LLP. Kronforst succeeds Craig Olinger.

Markets
crowdfunding

Advertising Poised to Shake Up Emerging Growth Capital Markets

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The end to the ban on general solicitation in private securities offerings has ushered in an extraordinary capital markets transformation that could lead to more capital for small companies and startups, more investment opportunities for accredited investors, and more fraud. Observers compare the change to when securities trading eventually moved from the realm of broker-dealers to online trading platforms like E-Trade and Charles Schwab amid the ramp up of the Internet and other technological innovations. “We’re really on the verge of a paradigm shift as to how transactions are marketed, and it is because of this regulatory change,” said chief JOBS Act promoter and pioneer David Weild IV. “It will take a little bit of time, but the good news is that general solicitation has everybody talking about equity and small companies, and small companies are where jobs are created.”

Preparing for Change

The JOBS Act directed the Securities and Exchange Commission to end the ban on general solicitation under Title II, and market participants have wasted no time positioning themselves to take advantage of the newfound freedom. Companies and investment funds have already filed dozens of Form Ds indicating that they’re going to market their private offerings to the public.