October at Stradling

A report on Q1 & Q2 crowdfunding; Patent Venue after TC Heartland; noteworthy deals, and a Proposition 65 pre-litigation victory

Report - A First Look at Equity Crowdfunding in the US: Q1 & Q2 2017: In recent years, crowdfunding websites have become a popular way for people to solicit charitable contributions to raise money for projects. This report – compiled by Stradling - gives a first look at the equity crowdfunding that took place during the first two quarters of 2017 in the United States.

Although the TC Heartland patent decision significantly lowered the likelihood of being sued in Texas and other districts, where companies are not incorporated, patent venue still remains far from certain. Shareholder Steve Hanle and Ryan Lindsey, senior IP counsel for Edwards Lifesciences, explored this issue in an article for the Orange County Business Journal, entitled, “Patent Venue after TC Heartland: Is Your Business Safe From the Long Arm of the Eastern District of Texas.”

On behalf of a national food manufacturer and distributor, a Stradling litigation team obtained a full withdrawal of an alleged violation of Proposition 65 prior to any formal legal proceedings. Read more about the case.

October was a busy month for our corporate clients who announced several new deals:

• A Stradling M&A team represented Combimatrix in its acquisition by Invitae (NYSE: NVTA) . Combimatrix is a biotechnology company that specializes in prenatal diagnosis, miscarriage analysis, and pediatric developmental disorders.
• Stradling client POW! Entertainment, a media production company formed by Gill Champion, Arthur Lieberman, and former Marvel Comics editor and publisher Stan Lee, completed its sale to Hong Kong-based firm First Creative International Limited
• On October 11, Stradling client Monogram Capital Partners, completed its majority investment in PF Atlantic Holdings, LLC, resulting in the acquisition of 16 Planet Fitness franchised fitness clubs. Planet Fitness is one of the largest franchisors of fitness centers with more than 1,400 clubs in operation today.
• A Santa Barbara-based deal team represented Okapi Ventures as the lead investor in the Series Seed financing of TrackStreet, Inc., a Santa Barbara company focused on internet brand protection and expansion.
• Stradling client Digital-Telepathy, a San Diego-based design firm, was acquired by ServiceNow. Digital-Telepathy specializes in user experience design for startups.
• Viseon Spine Inc., a developer of visualization and illumination technologies designed for use in minimally invasive spine surgery procedures, closed a $5 million Series A financing. Irvine-based HBM-MedFocus led the round, along with New York-based Invus Opportunities Fund and affiliates of Wexford Capital LP with offices in Greenwich, Connecticut and West Palm Beach, Florida. Stradling represented Viseon, a developer of visualization and illumination technologies designed for use in minimally invasive spine surgery procedures.
• Stradling client King Engineering announced its merger with Ardurra Group, a Texas, Louisiana, and New York civil engineering and disaster recovery firm. King Engineering is an engineering and construction services company that sells services to public and private sectors throughout the southeastern United States.
• Represented KonaRed in a $2.5 million growth capital financing. Santa-Monica-based Venice Brands, LLC acted as the primary investor. KonaRed Corporation (OTCQB: KRED), based in San Clemente, makes ready-to-drink bottled cold brew coffee.
• Cambridge Companies SPG, LLC acted as the lead investor in the private placement of convertible notes of Simple Health, LLC d/b/a Tosi, a producer of nutritional shakes, snacks and dietary supplements. Cambridge also invested in the Series A Preferred Stock of Matchabar, Inc. Matchabar’s Better Energy drink sources their matcha from a family farm in Nishio, Japan. Recording artist Drake is also one of the company’s early investors and is on the company’s advisory board.
• Stradling advised DASH Systems Inc. in its seed financing round with MiLA Intuitive Objects Fund, LP. DASH designs and manufactures unmanned aerial vehicles (UAVs), commonly known as drones, for the purpose of unmanned aerial delivery.

Ryan Gaglio rejoined the firm as a shareholder in the corporate and tax practice groups in our Newport Beach office on October 21st. Ryan’s practice focuses on tax planning, tax controversy and transactional matters.

• On October 2nd, Bruce Feuchter and Jeff Estes presented during OCTANe’s Life Science Startup Series held at UCI Applied Innovation. Their presentation outlined the key topics that define a life science company’s success rates.
• On October 12th, Jeff Dinkin presented a workshop, “Startup Labor Woes”, for Tech Coast Venture Network also held at UCI Applied Innovation. The workshop was aimed at startups that are building teams with equity and/or unpaid interns and the huge fines that could be associated with that practice.
• On October 19th, Steve Hanle moderated a panel, “Patent Venue Issues, Litigation Strategies and Unanswered Questions in the Wake of TC Heartland”, during the LAIPLA Fall Patent Dinner.
• On October 26th, Marc Alcser and Kyle Leingang both spoke at the Craft Beer Finance & Investment Conference held in Denver, Colorado. Marc was a panelist for “A Conversation Regarding M&A Trends and Strategies”, which featured a conversation on M&A activity in the craft brewery world, and Leingang presented “An Overview of Recent Craft Beer Deals”.