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Global VC Firm To Acquire Nearly 20% Of Retail Supplier
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Retail supplier David Energy Supply,
LLC reported a proposed transaction through which Cathay Innovation Global Fund III ('Cathay GF III')
will acquire up to 18.3% of the outstanding equity, and an independent board seat, in David
Energy Systems, Inc. ('DESI'), of which David Energy Supply is a wholly owned, indirect subsidiary (the 'Series A-1 Transaction')
Cathay GF III is a French professional investment fund managed by Cathay Innovation
('Cathay'), a French société par actions simplifiée.
"Cathay is a multi-stage venture capital
firm, focusing on sustainable investment in startups at the center of the digital revolution
positively impacting the world," David Energy said
Cathay GF III will initially acquire 9.99% of passive non-voting Series A-2 Preferred Stock in DESI. The Series A-2 Preferred Stock is passive non-voting equity in DESI
Upon FERC authorization of the Series A-1 Transaction (along with authorization of a previously reported prior seed round and similar transactions for which David now formally seeks FERC authorization) Cathay GF III’s passive Series A-2 Preferred
Stock holdings in DESI will automatically convert into active, voting Series A-1 Preferred Stock
and Cathay GF III will purchase for cash additional shares of such Series A-1 Preferred Stock for
an aggregate ownership amount of up to 18.3% of the total outstanding interests in DESI.
Upon
authorization of the Transactions and Cathay GF III’s additional investment, Cathay GF III will
have the right to appoint an independent member to the DESI board.
Other investors will acquire certain amounts of Series-A-1 Preferred Stock and/or Series-A-2 Preferred Stock
through the Series A-1 Transaction; however, no individual or entity other than Cathay GF III will acquire voting
equity in excess of $10MM or 10% of the outstanding voting interest in DESI solely as a result of the Series A-1
Transaction
As illustrated in a post-transaction chart filed at FERC, after the Series A-1 Transaction, the ownership of David Energy
Systems, Inc. will include the following (note that the percentages may reflect the "up to" amount of ownership):
Cathay
Innovation: 18.3%
Equal
Ventures: 10.8%
James
McGinniss: 13.8%
Keyframe Capital
Partners: 10.1%
Union Square
Ventures: 11.8%
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May 2, 2024
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Copyright 2010-24 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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