News / Business
Micro-cap publicly traded companies can now raise additional capital with the Financial Architect® Private Placement Producer – Professional™ program now available for PIPEs (Private Investment in a Public Entity)
Micro-cap publicly traded companies can now raise additional capital with the Financial Architect®
For many Pink Sheet and OTCBB companies, submitting secondary common stock offerings, for substantial amounts of funding to financial institutions, such as; investment banks/broker dealers, market makers, venture capital firms, family offices, money managers, private equity groups, or commercial banks simply does not work. Why is this strategy so difficult to execute? Because most micro-cap publicly traded companies and investment banks/broker dealers find it difficult to sell additional common stock due to price instability, earnings dilution, and more importantly, potential loss of voting control for the founders.
Consider conducting a PIPE with a hybrid security. PIPE is an acronym for Private Investment in a Public Entity. In doing so, you create securities that do not dilute the current owners’ common stock or voting rights. Such securities would include; convertible or non-convertible notes or bonds and convertible preferred stock. A PIPE can be accomplished with a Regulation D (506) securities offering. The Financial Architect® - Private Placement Producer™, with its Reg. D 506 securities offering document template, is an easy, effective and inexpensive solution to produce such as offering documents for legal counsel review. By producing your own securities offering documents “In-House” the savings on your legal costs are significantly reduced.
Additional benefits of issuing hybrid securities include: (a) creating a “yield” component that addresses the income needs of today’s baby boomer investors populace; (b) common equity ownership and voting control is not diluted or lost; (c) selling these types of securities through stock brokerage firms is relatively easy, because investors are in need of income; (d) Preferred stock dividends may qualify for a 70% tax exemption to U. S. Corps- thereby attracting large strategic investors; (e) Preferred stock can be "Callable" or redeemable making this form of equity temporary – at in the issuer’s (your) option – therefore, they are least expensive form of equity; (e) Once listed, offering them directly to market makers at a discount to market price makes raising capital relatively easy, because the dividend tends to stabilize the price and (f) Whether listed or not, these types can be used as currency for acquisition purposes ~ very important!
The Financial Architect® reduces the amount of time, money and complexity necessary to previously create, produce and successfully sell securities privately in compliance with federal and state securities laws, rules and regulations.
Commonwealth Capital Advisors (CCA) is comprised of former Wall Street Investment Bankers. With the assistance of Securities Attorneys and CPAs, they invented Financial Architect®. CCA has provided conventional investment advisory services to private businesses since it was established in 1998. CCA has become “the advocate” for the entrepreneur by specializing in assisting start-up and early stage companies raise seed, development, and expansion capital through the issuance of securities.
Here is a link to a video Overview of the Financial Architect System™ : http://www.commonwealthcapital.com/main/favideo.php?username=4750
Entrepreneurs around the world are revolutionizing the way capital is raised using Financial Architect®.
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Contact: Charles Dreher
Executive Vice-President
Commonwealth Capital Advisors
(312) 540-1999
