Markets

Cloudy Fiscal Future Mars Growth Capital Formation

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Eleven months into the year, it’s clear that 2012 is shaping up as one of the worst capital raising environment for small growth companies in recent memory. While deal making in the first half of 2012 suggested that activity would at least match 2011, the pace of transactions have trailed off since July 1 amid uncertainty surrounding the elections and future tax and spending policies in Washington D.C.

So far this year, growth companies and investors have raised $11.8 billion in 379 growth equity private placements (GEPPs), according to PlacementTracker, a division of Sagient Research. By comparison, there were 417 transactions completed that generated $12.3 billion in financing in the first 11 months of 2011, and 538 deals valued at $13.8 billion over the same 2010 period. At the halfway mark of 2012, issuers had raised $6.6 billion in 216 deals. The growth equity private placement dataset comprised emerging growth companies with market capitalizations from $10 million to $1 billion with share prices over $1.

Markets

Reverse Merger Bridges Israel, U.S. Biomed Companies

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A typical reverse merger involves an operational private company and a public shell with no ongoing business, but a deal involving Tarrytown, N.Y.-based EpiCept Corp. (EPCT) and Israel's privately held Immune Pharmaceuticals Ltd. will combine two viable biotech companies -- and their pipelines. The pair will combine in a share exchange transaction that will leave Immune Pharma's shareholders with 77.5% of the outstanding shares in newly formed Immune Pharmaceuticals Inc. The company will focus on treatments for inflammatory diseases and cancer. The EpiCept deal is also unusual as a reverse merger in that the newly formed company will meld the management of both, while most reverse mergers culminate with the resignation of shell management. Immune Pharma's CEO and founder Daniel Teper will replace EpiCept's interim CEO, Robert Cook, who will become the new CFO.

Markets
Orion Financial Group

Orion Financial Takes Itself Public with Self-filing

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A self-underwritten public offering is a dicey move that may not give the issuer much immediate capital market visibility, but a self-filed offering from Orion Financial Group is part of a plan to fund a consulting operation dedicated providing exactly that visibility. Orion is seeking to raise as much as $4 million to run a strategic consulting business serving companies with revenues from $2.5 million to $100 million. Orion, which was incorporated in Wyoming this spring, "provides financing alternatives to executives that seek to purchase (buy-side), divest (sell-side), or recapitalize their public or private company," a regulatory filing says. Self-underwritten offerings are cheap compared to underwritten offerings, whose cost comes with institutional support. After the dot-com implosion and related scandals involving misleading research coverage of "hot" IPO companies, many market players questioned the value of underwritten IPOs.

Deals

Chardan Capital Places T3 Motion Convertibles

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T3 Motion (TTTM) announced that it has raised $2.88 million in a Convertible Senior Secured Debentures transaction. The company makes a unique electric powered three-wheeled stand up vehicle. The fixed conversion price of the Convertible Senior Secured Debentures is $0.10 per share, an approximate 69.7% discount to the market price ($0.33) of TTTM at deal announcement. A series of 30,386,321 60-Month Warrants with an exercise price of $0.10 per share (69.7% discount) was issued to the investors in this transaction. Additionally the Company issued 3,038,632 shares of Common Stock to the Investor.