Ironridge Global Partners, LLC: Filling The Gap For Small-Cap Companies

In a highly risky sector of the market, where a complete loss is a real possibility, Ironridge Global is willing to write large checks and give companies an opportunity to succeed.

Ironridge Global Partners is an equity investor in micro-cap public companies. Ironridge is a long only institutional investor, which means they never short stocks. Their transaction sizes range from $250,000 to $25 million each. The principals of Ironridge have successfully completed billions of dollars in financial transactions over the last 20 years and have devised some processes that allow their firm to structure transactions based upon each company’s unique situation.

In a highly risky sector of the market, where a complete loss is a real possibility, Ironridge Global is willing to write large checks and give companies an opportunity to succeed. I have known John C. Kirkland, who is the Co-Founder and Managing Director of Ironridge, since he was the partner in charge of the securities group at Luce Forward. Prior to that, John was the partner in charge of the securities practice at the Los Angeles office of megafirm Greenberg Traurig, so I was always confident in his abilities. In fact, a few months ago, international corporate finance publication, Finance Monthly, voted John Kirkland as a winner of the Finance Monthly CEO Awards 2014 for North America. Brendan T. O’Neil, CFA and Keith Coulston, round out the Ironridge management team. Brendan was President and Chief Investment Officer for Enable Growth Partners LP from its inception in 2003. Enable was one of the largest and most active funds in the micro-cap space, completing over 500 financing transactions and investing more than $600 million in life science, technology, energy, cleantech, and consumer companies. Brendan held senior Investment Banking and Sales positions at Sutro & Company, Morgan Stanley Dean Witter & Co., and Salomon Smith Barney, and has earned the coveted Chartered Financial Analyst designation. Keith also has nearly two decades of experience in the securities markets.

One thing that strikes me most about Ironridge Global Partners is the large number of repeat deals they do for the same companies. This is about the strongest evidence I can think of that they make a good financial partner. Ironridge Global has done three deals for $5 million with Marley Coffee maker Jammin Java Corp. (OTCQB: JAMN). According to founder and chairman, Rohan Marley, son of legendary performer Bob Marley for whom the brand is named, “Ironridge is absolutely the best investment partner we’ve ever dealt with. With each round of investments, we have been able to grow the company in a way that the market and our shareholders have supported.” It doesn’t get much better than that. Ironridge has done four deals with Ascent Solar Technologies, Inc. (NASDAQ: ASTI) for $16 million. Victor Lee, Ascent’s president and CEO, calls Ironridge “a sophisticated and well recognized technology investor.” PositiveID Corp. (OTCQB: PSID) has done multiple deals with Ironridge Global over more than three years. “During that time, without exception, Ironridge has followed the financing structures as defined and documented,” according to PostiveID CEO, Bill Caragol. “Further, at times when these financing agreements presented challenges in their operation, I found the principals at Ironridge to be very cooperative in attempting to find solutions,” says Caragol, who adds, “I always found that the principals of Ironridge tried to use reasonable business judgment to do what was in the best interest of the company and its stockholders.” Such an investor is a rare breed in today’s world.

What differentiates Ironridge from other institutional investors is that it is a completely passive investor. They write the check and pray for the best outcome. They do not ask for a board seat, restrict the use of proceeds, or even vote their shares. On every transaction, Ironridge Global puts their full faith, along with a significant amount of capital, into the company they are investing in, as well as the company’s business plan. Should the company fail, Ironridge stands to lose everything. Should the company prosper and do well, Ironridge stands to make a significant amount of money–along with the other common shareholders. They specifically look for situations where additional capital can fuel explosive growth. One such situation Ironridge was involved in was Advaxis, Inc. (NASDAQ: ADXS). Ironridge invested in ADXS in late December 2012, even though the market was going into the tax selling season. Two months later, the stock was up over 450%. ADXS was able to use the money invested by Ironridge to push their company forward and the shareholders prospered. Ironridge Global’s first funding was MEI Pharma, Inc. (NASDAQ: MEIP), which has done well since. Since then Ironridge has done over 70 deals for up to $25 million each, including over $1 million for AVT, Inc. (OTC: AVTC), whose stock more than doubled to $5.00 per share from when Ironridge funded until the deal concluded. Ironridge Global is still a common stockholder of every portfolio company it has invested in since inception.

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