Comstock Growth Fund Open to Interested Accredited Investors
RESTON, Va.--(BUSINESS WIRE)--
Comstock Holding Companies, Inc. (Nasdaq:CHCI)
("Comstock" or the "Company"), a homebuilding and multi-faceted real
estate development and services company in the Washington, D.C.
metropolitan area, today announced the initial closing of a private
placement offering (the "Offering") by Comstock Growth Fund, L.C.
("CGF"), the latest in a series of private placement offerings sponsored
by the Company to raise capital to fund its growth initiatives.
The initial closing on CGF is anchored by a $10 million investment
received from Comstock Development Services, L.C. ("CDS"), an entity
that is wholly-owned by Christopher Clemente, Comstock's Chairman and
Chief Executive Officer. CGF received additional commitments from
members of Comstock's board of directors and management. CGF will seek
to raise up to $20 million in the aggregate, including the amounts
invested by insiders.
The capital raised by CGF will be used to provide mezzanine financing to
Comstock (the "CGF Loan"). Comstock will use the proceeds of the CGF
Loan to refinance all, or a portion of, Comstock's prior private
placements and project mezzanine loans, and to capitalize Comstock's
expansion plans including its current and future development pipeline;
and for general corporate purposes. Promptly upon the initial funding of
the CGF Loan, Comstock redeemed all equity interests of Comstock
Investors VII, L.C., one of two existing private placements.
The maximum amount available for borrowing by the Company under the CGF
Loan is $20 million. Comstock will pay CGF interest on the outstanding
balance of the CGF Loan based on a floating rate of LIBOR plus 9.75%
with a 10% floor and will pay CGF a loan origination fee of 1%. The
Company is required to make principal curtailments annually in an amount
equal to 10% of the average outstanding balance of the CGF Loan for the
prior year. The CGF Loan has a three-year term. Comstock is the manager
of CGF but does not have an ownership interest in CGF.
In connection with the private placement, the Company has agreed to
issue warrants ("Warrants," and each a "Warrant") to purchase shares of
the Company's Class A Common Stock (the "Class A Common Stock") to
purchasers other than CDS who purchase an amount that equal or exceed a
minimum investment amount of $100,000. The Warrants represent the right
to purchase an aggregate amount of between 500,000 to 1,000,000 shares
of the Class A Common Stock, depending upon the investment amount of
each purchaser.
Any Warrants issued to a purchaser who is a third-party accredited
investor will have an initial exercise price (subject to certain
restrictions as indicated on each Warrant) equal to the average of the
closing price of the Class A Common Stock over the 20 trading days
preceding the issuance of the Warrant.
Any Warrants issued to a purchaser who is a member of the Company's
management or board of directors will have an initial exercise price
representing a premium to the closing price of the Class A Common Stock
on the day before the Warrant is issued in accordance with NASDAQ
requirements.
Prospective accredited investors interested in the CGF Offering or
Comstock should contact Stephen Trauner, Vice President-Investments at strauner@comstockcompanies.com or
703.230.1293. To participate in the Offering, an investor must be
qualified as an "accredited investor" as defined in Rule 501(a) of
Regulation D under the Securities Act of 1933, as amended. Generally,
individuals are considered "accredited investors" if they have (i) gross
income (or joint gross income together with a spouse) in excess
of $200,000 ($300,000 jointly) in each of the last two calendar years
with the expectation of the same in the current year, or (ii) a net
worth greater than $1,000,000 (excluding their primary residence).
About Comstock Holding Companies, Inc.
Comstock is a homebuilding and multi-faceted real estate development and
services company that builds a wide range of housing products under its
Comstock Homes brand through its wholly owned subsidiary, Comstock Homes
of Washington, LC. Our track record of developing numerous successful
new home communities and more than 5,500 homes, together with our
substantial experience in building a diverse range of products including
apartments, single-family homes, townhouses, mid-rise condominiums,
high-rise condominiums and mixed-use (residential and commercial)
developments, has positioned Comstock as a leading residential developer
and homebuilder in the Washington, D.C. metropolitan area. Comstock
Holding Companies, Inc. is a publicly traded company, trading on NASDAQ
under the symbol CHCI. For more information about Comstock or its new
home communities, please visit www.comstockhomes.com.
Cautionary Statement Regarding Forward-Looking Statements
This release contains "forward-looking" statements that are made
pursuant to the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve known
and unknown risks and uncertainties that may cause actual future results
to differ materially from those projected or contemplated in the
forward-looking statements including incurring substantial indebtedness
with respect to projects, the diversion of management's attention and
other negative consequences. Additional information concerning these and
other important risks and uncertainties can be found under the heading
"Risk Factors" in the Company's most recent Form 10-K, as filed with the
Securities and Exchange Commission. Comstock specifically disclaims any
obligation to update or revise any forward-looking statements, whether
as a result of new information, future developments or otherwise.
Comstock Holding Companies, Inc.
Steve Trauner, 703-230-1293
Vice
President - Investments
or
Investor Relations
LHA
Harriet
Fried / Jody Burfening, 212-838-3777
hfried@lhai.com
Source: Comstock Holding Companies, Inc.
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