Deals

Car Charging Group Running on PIPE Power

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Car Charging Group (CCGI) closed its third PIPE, raising $2.5 million to fund its electric car charging services. The company said in an April 3 news release that the deal closed March 22, when undisclosed investors bought common stock at $0.50 per share, an approximate 58% discount to the market price ($1.20) at deal announcement. Investors also received 4.59 million 36-month Warrants with an exercise price of $2.25 per share (87.5% premium). (Issuer counsel was Anslow & Jaclin.)

While electric cars are becoming increasingly popular, vehicles designed without an auxiliary gas motor have limited driving range, often less than one hundred miles. Car Charging Group is working on two different ways to make charging easier for electric vehicle enthusiasts.

Markets
Energy

Energy Deal Pricing Turns on Trading Dollar Volume

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Energy companies have consistently been among the busiest equity private placement issuers over the past several years, particularly in light of the growing ability to tap stubborn shale reserves, the rise of income-generating master limited partnerships that process, store and transport fuel, and the continued push for alternative energy. While the booming sector to date has largely failed to dissuade investors from ignoring liquidity realities when structuring energy growth equity private placements (GEPPs) and PIPEs, in some cases buyers have nonetheless pursued aggressive gambles on the smallest and most unproven and illiquid issuers, according to a review of such deals. Using Sagient Research’s market monitor PlacementTracker, Growth Capital Investor analyzed energy private placements over 24 months ended March 15. In addition to surveying only unregistered common stock transactions, the focus was limited to energy companies with market capitalizations of $1 billion or less, and issuers were further divided by their 30-day average trading dollar volume, industry focus, and share price. Over that time, energy issuers in the sample raised $1.3 billion in 67 transactions for an average deal size of $19.4 million.

Legal
crowdfunding

Online Angel Funding Model Greenlighted by SEC?

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While rulemaking to implement the equity crowdfunding mandates of the JOBS Act remains in limbo awaiting the seating of a new SEC chair, the agency moved last week to approve an online angel funding group’s compensation model that would be exempt from some of the JOBS Act’s more costly and vexing requirements for crowdfunding platforms. The approval of FundersClub’s “carried interest” model  paves the way for angel platforms to begin raising funds from accredited crowd investors immediately. In a No-Action letter published last week the SEC said that FundersClub’s proposed compensation model, which relies solely on carried interest in its funded companies, qualified for the angel platform exemption from registration, general solicitation and broker-dealer requirements for Title II and III equity crowdfunding platforms in the JOBS Act’s Section 201(c). The SEC’s move is significant because it allows online funding platforms that restrict their investors to bona fide accredited investors and only take compensation from the investment gains of stakes held in the platform’s portfolio companies to begin fundraising immediately without further rulemaking from the agency. The rulemaking to implement Title II-style equity crowdfunding has been stalled for seven months after the SEC released a proposed rule addressing the mandated repeal of the general solicitation rule for restricted securities which was widely criticized as opening the flood gates to fraud. Former SEC chair Mary Shapiro left the agency in December without finalizing the repeal of the solicitation rule, reportedly fearing a repeal would ruin her legacy as a securities regulator.

Legal
Corey Ribotsky

AJW Liquidators Sue NIR, Ribotsky in New York State Court

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PwC Corporate Finance and Recovery, Cayman Islands liquidators of several AJW funds managed by Corey Ribotsky and NIR Group, has sued Ribotsky and NIR for damages in the New York State Supreme Court. The move follows the liquidators’ successful attempt to obtain Chapter 15 recognition from a U.S. Bankruptcy Court in February. Funds managed by NIR, which include four AJW entities and New Millennium Capital Partners II, committed $225 million to 144 PIPEs from 1999 through 2010, according to PlacementTracker data. Ribotsky and NIR have not yet answered or responded to the New York state suit. Ribotsky has previously lodged extensive and detailed objections to allegations made by the SEC and by the liquidators in their bankruptcy case.