PIPEs and Alternative Investments
PIPEs and Alternative Investments
The PIPEs Group at Kelley Drye consists of some of the foremost experts in the field of alternative investment structures—representing investors, investment banks, companies, underwriters, placement agents, hedge funds, SBIC funds and private offices in the structuring, negotiation and developments of PIPEs (Private Investments in Public Equity), registered direct offerings, CMPOs (Confidentially Marketed Public Offerings) and other related products.
While PIPEs have been around for many years, the PIPEs structure began as a method for distressed public companies to raise capital on an expedited basis to avoid bankruptcy.  Since the mid-90s, PIPEs have become a mainstream investment alternative, providing between $35 billion and $45 billion of financing annually to public companies.  The principal advantage of a PIPE transaction is the fact that the PIPE can be completed very quickly, usually with a small group of investors, without requiring the review or approval of the SEC.  In contrast, consummating a registered public offering often takes three to nine months and regulatory approval.  Securities in a PIPE are typically placed to investors in a private placement and subsequently registered on a resale registration statement with the SEC.

Direct public offerings, such as registered direct offerings and CMPOs, provide seasoned issuers with greater certainty both in price and timing than a traditional underwritten public offering.  In a registered direct offering, securities typically are sold by a placement agent on a best efforts basis (rather than a firm commitment underwriting) to a selected number of accredited and institutional investors.  Meanwhile, in CMPOs (sometimes referred to as ‘‘wall-crossed,’’ ‘‘pre-marketed’’ or ‘‘overnight’’ offerings) issuers obtain the benefits of a traditional public offering by an underwriter, on a firm commitment or best efforts basis, with the certainty of a minimum confirmed investment by a select group of accredited and institutional investors combined with a subsequent overnight retail offering.

At Kelley Drye, our PIPEs Group prides itself on providing cutting-edge solutions to navigate the challenges of modern capital raising.  Alternative investment structures demand a high level of specialized knowledge in technical aspects of the federal securities laws, including Reg D, Reg S, Rule 144A and the applicable SEC no-action letters.  Our PIPEs Group includes both private practitioners and former SEC attorneys with decades of experience negotiating with regulators and designing investment structures.
 
Offering Types
 
Security Types
 
  • PIPE Offering
  • Common Stock
  • Registered Direct Offering
  • Secured Convertible Notes
  • High-Yield Offering
  • Subordinated Convertible Notes
  • Private Equity Offering
  • Convertible Notes
  • Venture Capital Offering
  • Warrants
  • Pre-IPO Financing
  • Rights
  • CMPO
  • Convertible Preferred Stock
  • Hybrid Structure
  • ADS/ADR
 
  • Indentures
  • Represented lead investor in the $1 billion registered direct offering by Weatherford International plc, consisting of $456 million in ordinary shares and $543 million in warrants to purchase ordinary shares of Weatherford International plc.

  • Represented the sole investor in the $100 million registered direct offering by DryShips Inc. (DRYS) of convertible preferred stock, warrants to purchase convertible preferred stock, warrants to purchase common stock and shares of common stock of DryShips Inc.

  • Represented the sole investor in the $5.68 million PIPE issuance by Helios and Matheson Analytics Inc. of senior secured convertible notes (purchased with cash and a promissory note secured by cash and G10 assets).

  • Represented the sole investor in the $6.7 million PIPE issuance by Helios and Matheson Analytics Inc. of senior secured convertible notes (purchased with cash and a promissory note secured by cash and G10 assets).

  • Represented Great Basin Scientific, Inc. in the company’s PIPE issuance of $75 million of senior secured convertible notes and warrants.

  • Represented Great Basin Scientific, Inc. in the company’s restructuring of senior secured convertible notes into convertible preferred stock.

  • Represented Canaccord Genuity in a $35 million offering of common stock and three tranches of warrants for EnteroMedics.

  • Represented Canaccord Genuity in a $35 million offering of common stock and two tranches of warrants for Aeterna Zentaris.

  • Represented underwriter in a $3.1 million offering of common stock and warrants of Clean Diesel Energy.

  • Represented underwriter in a $5.1 million registered direct offering of common stock and warrants of Clean Diesel Energy.

  • Represented underwriter in a $1.9 million offering of common stock of Ocean Power Technologies, Inc.

  • Represented underwriter in a $4 million offering of common stock and warrants of Ocean Power Technologies Inc.

  • Represented lead investor in the $1.26 billion common stock and preferred stock PIPE investment in XPO Logistics, Inc.

  • Represented lead investor in $30 million multi-tranche preferred stock offering by RLJ Entertainment, Inc.

  • Represented lead investor in $35 million convertible notes, convertible preferred stock and warrants offering by Ascent Solar Technologies, Inc.

  • Represented lead investor in $27 million convertible notes and warrants offering by The Wet Seal, Inc.

  • Represented investor in $11 million common stock offering by MRI Interventions, Inc.

  • Represented investor in $17.5 million convertible notes offering by Cadiz, Inc.

  • Represented lead investor in $38 million convertible notes offering by FuelCell Energy, Inc.

  • Represented lead investor in $26.3 million common stock and warrants offering by Kandi Technologies Group.

  • Represented lead investor in $98 million ADR/ADS, ordinary shares and warrants offering by JA Solar Holdings, Inc.

  • Represented lead investor in $13 million convertible notes and warrants offering by OCZ Technology Group, Inc.

  • Represented investor in $10 million convertible notes and warrants offering by Odyssey Marine Exploration, Inc.

  • Represented investor in $32.9 million common stock and warrants offering by American Standard Energy Corp.

  • Represented investor in $50 million convertible notes and warrants offering by A123 Systems Inc.

  • Represented lead investor in $10.4 million convertible preferred stock offering by Pershing Gold Corporation.

  • Represented lead investor in $25 million convertible notes and warrants offering by American Superconductor Corporation.

  • Represented investor in $400 million convertible preferred stock offering by Halcon Resources Corporation.

  • Represented investor in $225 million common stock offering by Acacia Research Corporation.

  • Represented investor in $12 million convertible notes and warrants offering by Liquidmetal Technologies Inc.

  • Represented investor in $10.7 million common stock and warrants offering by USA Technologies, Inc.

  • Represented investor in $15 million common stock offering by Biodelivery Sciences International, Inc.

  • Represented investor in $35 million common stock and warrants offering by Tengion, Inc.

  • Represented investor in $32 million common stock offering by KV Pharmaceutical Company.

  • Represented investor in $12 million common stock and warrants offering by Cereplast, Inc.

  • Represented investor in $3.8 billion common stock and warrants offering by General Growth Properties, Inc.

  • Represented lead investor in $35 million convertible notes and warrants offering by Pacific Ethanol, Inc.

  • Represented lead investor in $10 million common stock and warrants offering by Armco Metals Holdings, Inc.

  • Represented lead investor in $83 million common stock and warrants offering by A-Power Energy Generation Systems Ltd.

  • Represented lead investor in $10 million convertible notes and warrants offering by Kandi Technologies Group.

  • Represented XO Communications, Inc. in the bankruptcy restructuring of approximately $1.0 billion of senior debt and $4.2 billion of senior and subordinated notes and subsequent $216 million rights offering.

  • Represented manufacturing company in its $105 million acquisition of a floor care company.




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Overview

The PIPEs Group at Kelley Drye consists of some of the foremost experts in the field of alternative investment structures—representing investors, investment banks, companies, underwriters, placement agents, hedge funds, SBIC funds and private offices in the structuring, negotiation and developments of PIPEs (Private Investments in Public Equity), registered direct offerings, CMPOs (Confidentially Marketed Public Offerings) and other related products.
While PIPEs have been around for many years, the PIPEs structure began as a method for distressed public companies to raise capital on an expedited basis to avoid bankruptcy.  Since the mid-90s, PIPEs have become a mainstream investment alternative, providing between $35 billion and $45 billion of financing annually to public companies.  The principal advantage of a PIPE transaction is the fact that the PIPE can be completed very quickly, usually with a small group of investors, without requiring the review or approval of the SEC.  In contrast, consummating a registered public offering often takes three to nine months and regulatory approval.  Securities in a PIPE are typically placed to investors in a private placement and subsequently registered on a resale registration statement with the SEC.

Direct public offerings, such as registered direct offerings and CMPOs, provide seasoned issuers with greater certainty both in price and timing than a traditional underwritten public offering.  In a registered direct offering, securities typically are sold by a placement agent on a best efforts basis (rather than a firm commitment underwriting) to a selected number of accredited and institutional investors.  Meanwhile, in CMPOs (sometimes referred to as ‘‘wall-crossed,’’ ‘‘pre-marketed’’ or ‘‘overnight’’ offerings) issuers obtain the benefits of a traditional public offering by an underwriter, on a firm commitment or best efforts basis, with the certainty of a minimum confirmed investment by a select group of accredited and institutional investors combined with a subsequent overnight retail offering.

At Kelley Drye, our PIPEs Group prides itself on providing cutting-edge solutions to navigate the challenges of modern capital raising.  Alternative investment structures demand a high level of specialized knowledge in technical aspects of the federal securities laws, including Reg D, Reg S, Rule 144A and the applicable SEC no-action letters.  Our PIPEs Group includes both private practitioners and former SEC attorneys with decades of experience negotiating with regulators and designing investment structures.
 
Offering Types
 
Security Types
 
  • PIPE Offering
  • Common Stock
  • Registered Direct Offering
  • Secured Convertible Notes
  • High-Yield Offering
  • Subordinated Convertible Notes
  • Private Equity Offering
  • Convertible Notes
  • Venture Capital Offering
  • Warrants
  • Pre-IPO Financing
  • Rights
  • CMPO
  • Convertible Preferred Stock
  • Hybrid Structure
  • ADS/ADR
 
  • Indentures

Experience

  • Represented lead investor in the $1 billion registered direct offering by Weatherford International plc, consisting of $456 million in ordinary shares and $543 million in warrants to purchase ordinary shares of Weatherford International plc.

  • Represented the sole investor in the $100 million registered direct offering by DryShips Inc. (DRYS) of convertible preferred stock, warrants to purchase convertible preferred stock, warrants to purchase common stock and shares of common stock of DryShips Inc.

  • Represented the sole investor in the $5.68 million PIPE issuance by Helios and Matheson Analytics Inc. of senior secured convertible notes (purchased with cash and a promissory note secured by cash and G10 assets).

  • Represented the sole investor in the $6.7 million PIPE issuance by Helios and Matheson Analytics Inc. of senior secured convertible notes (purchased with cash and a promissory note secured by cash and G10 assets).

  • Represented Great Basin Scientific, Inc. in the company’s PIPE issuance of $75 million of senior secured convertible notes and warrants.

  • Represented Great Basin Scientific, Inc. in the company’s restructuring of senior secured convertible notes into convertible preferred stock.

  • Represented Canaccord Genuity in a $35 million offering of common stock and three tranches of warrants for EnteroMedics.

  • Represented Canaccord Genuity in a $35 million offering of common stock and two tranches of warrants for Aeterna Zentaris.

  • Represented underwriter in a $3.1 million offering of common stock and warrants of Clean Diesel Energy.

  • Represented underwriter in a $5.1 million registered direct offering of common stock and warrants of Clean Diesel Energy.

  • Represented underwriter in a $1.9 million offering of common stock of Ocean Power Technologies, Inc.

  • Represented underwriter in a $4 million offering of common stock and warrants of Ocean Power Technologies Inc.

  • Represented lead investor in the $1.26 billion common stock and preferred stock PIPE investment in XPO Logistics, Inc.

  • Represented lead investor in $30 million multi-tranche preferred stock offering by RLJ Entertainment, Inc.

  • Represented lead investor in $35 million convertible notes, convertible preferred stock and warrants offering by Ascent Solar Technologies, Inc.

  • Represented lead investor in $27 million convertible notes and warrants offering by The Wet Seal, Inc.

  • Represented investor in $11 million common stock offering by MRI Interventions, Inc.

  • Represented investor in $17.5 million convertible notes offering by Cadiz, Inc.

  • Represented lead investor in $38 million convertible notes offering by FuelCell Energy, Inc.

  • Represented lead investor in $26.3 million common stock and warrants offering by Kandi Technologies Group.

  • Represented lead investor in $98 million ADR/ADS, ordinary shares and warrants offering by JA Solar Holdings, Inc.

  • Represented lead investor in $13 million convertible notes and warrants offering by OCZ Technology Group, Inc.

  • Represented investor in $10 million convertible notes and warrants offering by Odyssey Marine Exploration, Inc.

  • Represented investor in $32.9 million common stock and warrants offering by American Standard Energy Corp.

  • Represented investor in $50 million convertible notes and warrants offering by A123 Systems Inc.

  • Represented lead investor in $10.4 million convertible preferred stock offering by Pershing Gold Corporation.

  • Represented lead investor in $25 million convertible notes and warrants offering by American Superconductor Corporation.

  • Represented investor in $400 million convertible preferred stock offering by Halcon Resources Corporation.

  • Represented investor in $225 million common stock offering by Acacia Research Corporation.

  • Represented investor in $12 million convertible notes and warrants offering by Liquidmetal Technologies Inc.

  • Represented investor in $10.7 million common stock and warrants offering by USA Technologies, Inc.

  • Represented investor in $15 million common stock offering by Biodelivery Sciences International, Inc.

  • Represented investor in $35 million common stock and warrants offering by Tengion, Inc.

  • Represented investor in $32 million common stock offering by KV Pharmaceutical Company.

  • Represented investor in $12 million common stock and warrants offering by Cereplast, Inc.

  • Represented investor in $3.8 billion common stock and warrants offering by General Growth Properties, Inc.

  • Represented lead investor in $35 million convertible notes and warrants offering by Pacific Ethanol, Inc.

  • Represented lead investor in $10 million common stock and warrants offering by Armco Metals Holdings, Inc.

  • Represented lead investor in $83 million common stock and warrants offering by A-Power Energy Generation Systems Ltd.

  • Represented lead investor in $10 million convertible notes and warrants offering by Kandi Technologies Group.

  • Represented XO Communications, Inc. in the bankruptcy restructuring of approximately $1.0 billion of senior debt and $4.2 billion of senior and subordinated notes and subsequent $216 million rights offering.

  • Represented manufacturing company in its $105 million acquisition of a floor care company.




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Partner
Email (212) 808-7540(212) 808-7540
Michael Adelstein is one of the foremost attorneys in the field of “alternative investments” and is the chair of Kelley Drye’s PIPEs and Alternative Investments group.  Mich...
Partner
Email (212) 808-7660(212) 808-7660
Jane Jablons chairs the firm’s Mergers and Acquisitions and Venture Capital groups.  Her practice is focused on corporate finance, with concentrations in mergers and acquisitions, ventu...
Partner
Email (212) 808-7714(212) 808-7714
Bruce Kraus is a partner in the New York corporate practice and chair of the Corporate Finance and Securities practice group. A leading practitioner in mergers & acquisitions, corporate financ...
Partner
Email (202) 342-8829(202) 342-8829
Martin Teckler is one of the few attorneys in the country experienced in the programs of the Small Business Administration (SBA) and other federal agencies that provide capital to small businesses...
Special Counsel
Email (212) 808-5038(212) 808-5038
Carol Sherman practices in the area of corporate and securities law.  Her experience includes SEC reporting and compliance, equity and debt offerings, corporate governance and mergers and acqu...
Senior Associate
Email (212) 808-7956(212) 808-7956
Raxak Mahat is a senior associate in the firm's New York office.  He focuses his practice on corporate law.  Raxak has experience representing public and private companies in merger ...
Associate
Email (212) 808-5076(212) 808-5076
Jason Katz is an associate in the firm’s New York office. He focuses his practice on securities, mergers and acquisitions, corporate governance, and general transactional matters. Jason has ...
Law Clerk
Email (212) 808-7646(212) 808-7646
Stephanie Estey is a law clerk in the firm’s New York office and is not admitted to any Bar.

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Michael A. Adelstein
Practice Chair
(212) 808-7540
madelstein@kelleydrye.com

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