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Alternative Public Offerings

We are a leader in alternative capital raising techniques, such as registered direct offerings, PIPEs, and reverse mergers into public “shells”, and we have been in the forefront of this rapidly developing area.  Since early 2001, the market for traditional, firmly underwritten initial public offerings of micro-cap and small-cap companies in the United States has been significantly constrained.  There are fewer and fewer underwriters interested in investing the resources to bring micro-cap and small-cap companies to market, which has cut-off what once was a viable financing source for smaller companies. In recent years, an alternative to the traditional, firmly underwritten initial public offering has emerged.  The “reverse merger” transaction, when coupled with a PIPE financing, allows smaller companies to access a large pool of capital without the need of an underwriter.  While a typical transaction still requires the assistance of a “placement agent” to assist in raising capital, if structured properly, the placement agent is not an “underwriter” under United States securities laws, and thus not subject to the liability that has driven many traditional underwriters from the market for micro-cap and small-cap initial public offerings. Our Public Securities attorneys provide the following services in connection with reverse merger transactions:

• Assisting clients in locating an existing public reporting “shell” company, that has little or no assets or business, is current in its periodic reporting obligations with the SEC, has no or only limited liabilities that can be confirmed with some certainty in due diligence, preferably has common stock quoted on the Over-The-Counter Bulletin Board held by at least 400 shareholders of record, and does not need to first obtain stockholder approval to consummate any aspect of the transaction.
• Introducing clients to other professionals with experience in reverse merger transactions, including owners and brokers of shell companies, accounting firms, placement agents, investors, and investor relations firms.
• Conducting due diligence on the shell company, and restructuring the shell company to the extent necessary in advance of the transaction.
• Structuring, negotiating and documenting the reverse merger transaction documents, including the acquisition agreement and all ancillary agreements.
• Advising on compliance with securities laws and stock exchange rules.
• Assisting in the preparation and filing of all reports to be filed with the SEC in connection with the reverse merger transaction, including all Section 16 forms, Forms 8-K, and Schedules 13D, 14f-1 and 14C.
• Coordinating the responsibilities of management, opposing counsel and the other professionals involved in the process, including independent auditors, promoters and placement agents.
• Structuring, negotiating and documenting of the PIPE financing documents, including the securities purchase agreement, registration rights agreement and all ancillary agreements, and assisting in the preparation and filing with the SEC of the resale registration statement for the shares sold in the PIPE.