Tip of the Week
Tip of the Week: Make Sure You Should be Public
By David Feldman at 23 October, 2011, 5:24 pm
I often tell my clients, if you can benefit from being public, and can bear the risks of doing so, you should seriously consider it, regardless of your stage of development. However, in any well formulated decision, it is important to review the pros and cons. There are four well-recognized disadvantages to being public. First, [...]
Read More >>Tip of the Week: Don’t Forget to File Form D Timely
By David Feldman at 6 August, 2011, 1:12 pm
As mentioned below, the SEC’s Regulation D is a safe harbor that allows companies to offer securities privately without the burdens of registration of a public offering as long as the offering meets the requirements of Regulation D. Reg D Rule 503 requires a notice filing be made with the SEC on Form D whenever [...]
Read More >>Tip of the Week: Shells – The Clean, the Dirty and the Messy
By David Feldman at 21 February, 2011, 5:08 pm
The ideal shell is one that is squeaky clean: well-kept, organized and current records, with no history of unsavory behavior. These are not always easy to find. Form 10 shells are formed as blank check companies solely for the purpose of a reverse merger and generally are much less likely to raise these concerns. In [...]
Read More >>Tip of the Week: Does a Shell Need Shareholders?
By David Feldman at 24 January, 2011, 9:36 pm
The marketplace for shells generally deems its shareholder base as an asset. The more shareholders a shell has, the better. Why? Several reasons. First, in general the more shareholders the more likely it is that heavier trading will develop, so goes the theory. Second, the OTC Bulletin Board unofficially requires at least 35-40 unaffiliated shareholders, [...]
Read More >>Tip of the Week: Best IPO Alternative?
By David Feldman at 24 December, 2010, 1:23 pm
I am often asked to recommend the best type of shell for a reverse merger where the company has determined that a shell merger makes the most sense. Also of course we often examine whether a “self-filing” may be preferential to a shell merger. Which is the way to go? There is no simple answer, [...]
Read More >>Tip of the Week: Building a Shareholder Base
By David Feldman at 13 October, 2010, 10:43 am
I write from the Amtrak train heading to Washington for meetings at the SEC. Gives me a few minutes to catch up with you guys! I also want to thank all those who sent good wishes on my transition to Richardson & Patel, which has been going great. Now on to our tip of the [...]
Read More >>Tip of the Week: What's Customary? Nothing!
By David Feldman at 11 September, 2010, 8:49 am
Often in reverse mergers we are asked what is customary with respect to valuation, indemnification, personal guaranties, representations and warranties and the like. The answer, unfortunately, is that every deal is different. Every investment banking firm is different. Every shell promoter is different. In 25 years of practicing law, where in, say private equity or [...]
Read More >>Tip of the Week: Reporting or Not?
By David Feldman at 19 August, 2010, 7:01 am
It is surprisingly common for a shell company (or other public acquisition vehicle) to have the wrong impression about whether or not it is obligated to file periodic reports with the SEC under the Securities Exchange Act of 1934. This is something that should never be taken for granted and checked carefully in each transaction. [...]
Read More >>Tip of the Week: Reverse Merger Deal Structures
By David Feldman at 14 June, 2010, 6:51 am
Occasionally I like to move higher in the atmosphere and review some reverse merger basics. In a reverse merger, a private company takes over a public shell company and instantly becomes public, and the public shell survives the transaction with the owners of the private company typically controlling what was the shell and which now [...]
Read More >>Tip of the Week: Raising Money Great Reason to Go Public – If it's Available
By David Feldman at 3 May, 2010, 6:15 am
Probably the single most common reason that companies consider going public, whether through IPO, reverse merger, self-filing or other method, is the greater access to capital, typically at more favorable valuations, than might be the case if the company remained private. In real estate the most important values are location, location, location. In going public [...]
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