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PPM Investors
invest in a Private Placement Memorandum that offers shares
or units of your company for sale. The 504 PPM must meet the
requirements of the Securities and Exchange Commission and therefore
should be professional prepared. Special PPM firms exist who
provide funding for companies issuing PPM's that they are interested
in.
The Private Placement Offering Package was designed with
the small business securities issuer in mind. It allows small
companies to raise equity or debt capital privately without
having to file a registration statement with the Federal Securities
and Exchange Commission or any state securities agency. A
Private Placement Offering is developed in reliance upon both
federal and state exemptions from securities registration.
In some instances, audited financial statements are not required.
The Company is not required to make any state or federal filings
until after the Company receives investment through the private
placement offering. After initial private placement moneys
are received, the Company is required to comply with federal
notice filings pursuant to the Securities Act of 1933, as
amended (the "Securities Act") and to file notice
filings in each state where the private placement offering
was made from and into. This form of exemption from the registration
provisions is available to small securities issuers pursuant
to Regulation D, Rule 505 or 506, of the Securities Act. In
general, this exemption allows the Company to raise up to
five million dollars in an equity or debt offering with certain
limitations and guidelines.
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