Category Archives: Technology

Sports Technology blank check company goes public

Sportsmap Tech Acquisition, a blank check company, has completed its $100 million Initial Public Offering (IPO). The company is based in the Galleria area of Houston.



The business aims to make an acquisition in sports technology such as wearables, data analytics, new methods of fan engagement, and new esports and gambling platforms.

The CEO of the company is David Gow. In 2007, Mr. Gow formed Gow Media, a multi-platform media company that included ESPN Radio Houston and digital content sites such as CultureMap. He was also the CFO and later CEO of Houston-based Ashford.com which went public in 1999. At one point, the company was the largest luxury retailer online. Prior to that, Mr. Gow was the Director of Corporate Strategy at Compaq.

A couple of names well known to Houston sports fans are also Directors;

  • Reid Ryan, former President of the Houston Astros. He is the son of Nolan Ryan.
  • Oliver Luck, former General Manager of the Houston Dynamo and former CEO of the Houston Sports Authority.  He is the father of Andrew Luck, the number one draft pick in 2012.

Jacob Swain serves as the CFO. Between March and November 2019, he was the CFO and Chief Technology Officer at Bellatorum Resources, a mineral rights investment firm that later shut down due to fraud. Prior to that, he worked at BBB Tank Services between 2009 and 2016, first as CFO, later as CEO.

S-1 filing – Sportsmap Tech Acquisition

https://www.businesswire.com/news/home/20211018006029/en/SportsMap-Tech-Acquisition-Corp.-Announces-Pricing-of-100000000-Initial-Public-Offering

Houston Ecommerce blank check company completes $175 million IPO

Mercury Ecommerce Acquisition Corp has completed its $175 million Initial Public Offering. The Special Purchase Acquisition Corporation (SPAC), otherwise known as a blank check company, is seeking companies offering Software-as-a-Service (‘SaaS’) to enterprise customers.



The company has its head office in the Greenway Plaza area of Houston. The company is led by Chairman Blair Garrou, the co-founder and Managing Director of Mercury Fund, an early-stage venture capital firm. Previously, he was the Director of Operations for the Houston Technology Center and led the formation of the Houston Angel Network.

CEO Andrew White currently serves as a Special Limited Partner for Mercury Fund. He also his own investment vehicle where he has grown and sold a couple of businesses. He is the son of former Texas Governor, Mark White (1983-1987) and ran for the Democratic nomination for Governor in 2018, losing in the run-off to Lupe Valdez.

CFO Winston Gilpin is the founding CFO of Mercury Fund. He also is the co-founder of GSqr Consulting where he provides both fund administrative services to small venture funds and accounting services to Houston startups.

S-1 filing – Mercury Ecommerce

 

Good Works management team completes its second SPAC IPO

Good Works II Acquisition Corp, a Houston-based SPAC or blank check company, has completed its $200 million Initial Public Offering. It priced 20 million units at $10 each. The company will  trade on the Nasdaq.



The Company’s management team consists of Messrs. Fred Zeidman, Chairman, Douglas Wurth, Chief Executive Officer, and Cary Grossman, President. It’s the same team that completed a $150 million IPO in October 2020 for Good Works Acquisition Corp.

In March 2021, Good Works I announced it would take Cipher Mining Technologies, a bitcoin miner, public. It is still in the process of trying to close that deal, which has an enterprise value of $2 billion. Good Works I looked at a nanotechnology company and a genomic diagnostic lab before deciding on Cipher.

As with Good Works I, three officers have agreed to make available 750,000 founder shares (3% of the initial allotment) to be contributed to non-profit organizations, including those involved in the arts, human rights and the advancement of life sciences. These shares will be donated within six months of the IPO closing.

With Good Works I, it was Zeidman, Wurth and David Pauker, a non-exec director, who donated shares. This time it is Zeidman, Wurth and Grossman.

S-1 filing – Good Works II Acquisition Corp

Houston SPAC to take space technology company public

Credit: Made in Space (a Redwire company)

[UPDATE: Sept 2, 2021 – Deal has now closed]

Genesis Park, a Houston-based Special Purpose Acquisition Company (SPAC), has agreed to take Redwire, a space technology company, public.



Genesis Park went public in November 2020 in a $150 million IPO.

Redwire, is based in Jacksonville, FL and manufactures space-capable robotics, solar arrays and antennas, and other equipment used in space. It plans to manufacture and assemble components in-space using 3D printing. The company was formed in June 2020 from the merger of two companies, with backing from AE Industrial Partners. Since then, it has made five more acquisitions.

Redwire becomes the seventh space venture in the past year to announce a SPAC deal. It had revenues of $120 million in 2020 and is currently cash flow positive. By 2025, it expects to grow to $1.4 billion. The transaction values the company at $615 million enterprise value.

Its CEO, Peter Cannito, was previously the CEO of Polaris Alpha, a high-tech solutions provider that developed systems for the Department of Defense. He’s also spent 12 years working for PE-backed companies in the defense, technology and government services market.

Jonathan Baliff, the CFO of Genesis and former CFO at Bristow Group, will join the Board of Redwire as a non-executive director.

The deal is expected to close by June 2021.

Investor Presentation – Genesis Park Redwire

Houston blank check company to take security screening company public

 

NewHold Investment Corp will take Evolv Technology public in a transaction that values the business at $1.25 billion. Evolv is a leader in AI touchless security screening with its head office in the Boston area.



The technology uses artificial intelligence and data science to screen people for weapons and other threats. The company says its platform eliminates the need for devices like metal detectors and physical security checks. It is used at venues such as Six Flags amusement parks, the Lincoln Center in New York and at the stadiums of the New England Patriots, Chicago Cubs and Manchester City.

Evolv has some high profile backers. Bill Gates is a shareholder and the $300 million stock private investment (PIPE) will include investments from Peyton Manning, Andre Agassi, Steffi Grafi, Joe Torre and Theo Epstein.

Customers pay a monthly subscription for using the service, rather than buy hardware. In 2020 the company had 209 units deployed, generating revenues of $4.3 million. It lost $26 million at the EBITDA level. However, the company projects it will have over 8,000 units deployed by 2025 and revenues of $595 million.

NewHold raised $150 million in an IPO in July 2020. The deal is expected to close in the second quarter.

Evolv Investor Presentation

Houston blank check company to take bitcoin miner public

Good Works Acquisition Corp has agreed to a reverse takeover of Cipher Mining Technologies. Cipher is a newly-formed US-based Bitcoin mining company that is being carved out of New York-based Bitfury Group. Bitfury provides Bitcoin mining hardware and other blockchain software and services.



Good Works went public in October 2020 with an initial public offering of $150 million.

The transaction values the combined group at $2 billion. In addition, the business will have $500 million of cash on hand (and no debt). That will allow Cipher to build out its operations.

Currently there are about 18.6 million Bitcoins in circulation out of a maximum supply of 21 million. That was set in 2008 by its inventor, Satoshi Nakamoto (probably a pseudonym for unknown persons). As part of its records creation process, more and more computing power is needed to create new Bitcoins. Currently China accounts for about 65% of all Bitcoins mined globally.

Cipher intends to initially build 4 data centers (3 in Texas, 1 in Ohio) with a power capacity of 445 MW. These will be built in 2021 and 2022. The business plans to expand these data centers between 2023-2025 with an additional 300 MW of power. By 2025, the business intends to mine 21,000 Bitcoins.

The company states that it has 5 year supply contracts with CloudHQ and Vistra for Texas at an average price of 2.7 cents per kWH. However, the small print in the investor presentations state these are letter of intent prices. It will be interesting to see if proposed solutions to the recent Texas power grid problems will significantly impact the rate.

SEC filing – Good Works Cipher merger

 

Houston blank check company finds acquisition target

Houston blank check company, Peridot Acquisition Corp, has agreed to buy Li-Cycle for $1.1 billion in a reverse takeover. Li-Cycle is a lithium-ion battery recycling company, based in Toronto.



Peridot went public in September 2020 with the aim of finding an acquisition in the environmental infrastructure or renewables sector, so Li-Cycle definitely fits the bill.

Li-Cycle aims to recycle electric vehicles batteries. In addition to end of lifecycle recycling, 5%-10% of battery production is rejected as waste during the manufacturing process. As EV production ramps, Li-Cycle sees a big and growing market. It uses a non-thermal process to recycle the batteries, allowing it to recover 95% of the battery mass.

Li-Cycle is still in a start-up phase. It currently has three locations in North America that shred and mechanically separate batteries. The company is also developing a hub in Rochester, New York that will produce, at scale, lithium carbonate, Nickel Sulphate and other high-grade minerals for resale.

It has signed 40 commercial contracts with suppliers, including over $900 million in contracted off-take.

The deal values Li-Cycle at 10 times 2023 projected EBITDA. At close, the business will have $566 million in cash on hand. That will allow Li-Cycle to fund the capital expenditures required to complete its business plan.

The combined company will be led by Li-Cycle CEO Ajay Kochhar. Fellow co-founder Tim Johnson will be the Executive Chairman. Peridot CEO Alan Levande will join the Board, as will Scott Prochazka, ex-CEO of Centerpoint Energy.

SEC filing – Peridot Li-Cycle acquisition

 

Houston scientist settles grant fraud allegations

Dr. Rouzbeth Shahsavari has agreed to pay nearly $150,000 to resolve allegations that he and his company defrauded the National Science Foundation (NSF) and the Navy.



Dr. Shahsavari is the owner and chief scientist at C-Crete Technologies Ltd in Stafford, SW Houston. He started his company while completing his PhD at Massachusetts Institute of Technology (MIT).  The company is developing new uses for advanced materials using nanotechnologies and advanced computations.

The company applied for grants to NSF and the Navy in 2015 and 2016. One of the conditions of any grant was that the applicant must have a subaward agreement with a collaborating research partner. Dr. Shahsavari said he had such an agreement with Rice University when, in fact, he did not. (He is, though, an Assistant Professor at Rice).

The company also failed to notify Navy personnel that their designated principal investigator had stopped working for the company almost three months before the grant was awarded.  Assuming the allegations were true, in both circumstances, the company was ineligible to receive the $147,589 grant.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

https://www.justice.gov/usao-sdtx/pr/houston-scientist-settles-grant-fraud-allegations

ION Geophysical agrees to out-of-court restructuring

Poseidon

ION Geophysical, based in west Houston, has reached agreement with 84% of its senior note holders for a debt-for-equity swap that will reduce debt by up to $120 million. The deal was made without going through Chapter 11 restructuring.



The company was originally an offshore seismic data provider. More recently, it has been trying to grow its business in mission critical software to optimize vessel movements and operations.

The company has debt, net of cash, of $92 million and negative shareholders’ equity of $61 million. It has $121 million of loan notes due in December 2021. The agreement calls for these notes to be redeemed for $18 million of cash and $107 million of new convertible notes due in 2025.

If all the loan note holders convert, the company will no long-term debt and equity of $73 million. At the midpoint of the conversion price range, the loan note holders will own approximately 74% of the proforma equity. Existing shareholders will be diluted down to 21%. The remaining 5% is from a $25 million rights issue the company is planning to make. The company expects that most of the participants in the rights issue will elect to receive loan notes rather than equity.

ION has relatively new senior management. CEO Christopher Usher was appointed to the role in May 2019, though he joined the company in 2012. Mike Morrison has been interim CFO since his predecessor, Steve Bate, retired in February. Mr. Morrison joined the company back in 2002.

[Update 12-29-20 The company issued an 8-K announcing that Mr. Morrison was appointed CFO back in September. Oops. Base salary $300k]

ION’s largest shareholder is China National Petroleum Corporation, who own 10.6% of the stock.

SEC filing – ION Geophysical restructuring – Project Poseidon

Houston oilfield telecoms company to be acquired

Rignet, based in west Houston, has agreed to be acquired by Viasat, in an all-stock transaction that values Rignet at $222 million enterprise value.



Rignet originally provided remote communication networks for the offshore sector. More recently the company has been diversifying into mission-critical IoT (Internet of Things) applications and systems integrations for energy telecom projects.

The company has revenues of $225 million. However it also has debt of over $100 million that primarily expires in 2022. Rignet went public via an IPO in 2010. Its largest shareholder is a Kolhberg Kravis Roberts, who own 25%.

Viasat is based in Carlsbad, California and is a leader in satellite-based networking products and services to the consumer, enterprise and government. It has revenues of $2.3 billion and a market capitalization of over $2 billion.

The existing management team of Rignet will operate the business from the Houston headquarters.

The companies expect the deal to close in mid-2021.

SEC filing – Rignet takeover