Free Initial Consultation
Laura Anthony, Founding Partner
Toll Free: 800-341-2684
Phone: 561-514-0936
Fax: 561-514-0832
LauraAnthonyPA@aol.com |
West Palm Beach
Legal & Compliance, LLC
330 Clematis Street, Ste. 217
West Palm Beach, FL 33401 |
Miami Beach
Legal & Compliance, LLC
940 Lincoln Road, Ste. 319
Miami Beach, FL 33139 |
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Private
Placements
Private Placements are one of the most attractive financial
instruments for both large and small companies seeking to raise
equity. Private Placements are desirable due to their flexibility
and simplicity. Approximately the same amount of paperwork is
required for a large corporation to raise $5,000,000 as for
a smaller company to raise $500,000.
Private Placements or private stock offerings are "private"
equity transactions and are generally less expensive to complete
than an initial public offering such as an IPO.
Although Private Placements are exempt from mandatory registration
with the Securities and Exchange Commission or SEC, the services
of an experienced securities attorney must still be retained
to draft the Private Placement Memorandum or PPM. This securities
attorney or corporate and securities law firm then makes every
possible effort to keep the offering in compliance with the
registration exemption as well as state securities laws. It
should be noted that Private Placements are not exempt from
the fraud provisions of the Securities Act of 1933.
The Private Placement Memorandum (PPM)
The Private Placement Memorandum or PPM is a disclosure document
that includes the details and potential risk scenarios of the
offering and the financial condition of the company. The Private
Placement Memorandum is required so that potential investors
understand the nature of and the risks associated with the investment.
The Private Placement Memorandum contains information required
by law that must be provided to unaccredited investors and should
be provided to accredited investors so that they can make an
informed decision whether or not to participate.
The Private Placement Memorandum protects the investor by detailing
the risks involved with the Private Placement offering and also
protects the company by demonstrating that full disclosure has
been made.
In summary, a well-drafted Private Placement Memorandum proves
that the investor had the ability to perform a thorough due
diligence. In the event of a dispute, the quality of the PPM
can save the issuing company from having to make court-ordered
restitution to investors. The Private Placement Memorandum is
often the cornerstone evidence substantiating that the issuing
company did not violate the fraud provisions of the Securities
Act of 1933.
The Subscription Agreement
The Subscription Agreement is the "buy" document executed
by the investor and returned to the Company. This document establishes
the investor's level of sophistication and accredited status.
Just as the PPM provides disclosure to the client regarding
the company's financial status, the Subscription Agreement provides
full disclosure to the company regarding the investor's financial
status. In the Subscription Agreement the investor provides
assurances to the issuing company that an absolute loss of their
investment capital will in no way impact their standard of living
or jeopardize their financial picture as a whole. These qualified
investors are typically referred to as "accredited investors."
PIPE Financing
Publicly traded companies can benefit from Private Placements
as well by undertaking a variation referred to as a PIPE (Private
into Public Entity) transaction. PIPE's are typically comprised
of a tight cluster of high net worth investors or in some cases
a single investor known as an "Angel Investor."
Once the company completes the PIPE they provide the investor
with a structure that will eventually allow their investment
to become liquid, otherwise known as an exit strategy. The PIPE
investor is usually required to satisfy a holding period of
one year before being able to sell (assuming he or she is not
an affiliate or company insider). The company may also prepare
a resale registration statement that allows short-term liquidation.
Private Placement Memorandums and Ongoing Corporate
Support
Legal & Compliance, LLC is a national corporate and securities
law firm that serves a diverse client base. Our attorneys draft
thorough Private Placement Memorandums and Subscription Agreements
for a variety of private equity scenarios. Our attorneys also
provide invaluable "follow through" counseling to
make certain that our valued clients receive the necessary legal
support to complete their offering smoothly.
Should the client require secondary financing or desire to launch
an Initial Public Offering (IPO) or structure a Reverse Merger,
Forward Merger or Reverse Triangular Merger, our legal staff
provides the advice, counsel and document preparation required
to generate the most beneficial results, regardless of the simplicity
or complexity of the equity transaction.
We maintain a long-term perspective on each and every client;
whether they are a multi-million dollar national conglomerate
or a start-up company with little more than a solid concept
and a talented management team. Our attorneys understand that
the corporate giants of tomorrow are the industrious development-stage
companies of today. |
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Reverse Mergers
Contracts 
