Private Securities Offerings and Securities Compliance

If a private company desires to raise capital by selling equity securities, such as common stock or preferred stock, it needs to comply with applicable state and federal securities laws. We counsel issuers and investors on the availability of exemptions from registration or qualification under state and federal securities laws, including those exemptions under the Section 25102 of the California Corporations Code, Regulation D, Rules 144 and 144A and Regulation S.

We assist our clients in structuring and documenting private placements of securities and complying with the state “blue sky” and federal reporting requirements. We prepare the private placement memoranda and subscription documents, and negotiate the terms of the securities to be offered, and any investor rights that may be granted, such as rights of first refusal, co-sale rights and registration rights. For example, our attorneys have negotiated the sale of $10 million of Series B Convertible Preferred Stock by a business to business communications and computer equipment auction web portal, to venture capital investors (which included The Goldman Sachs Group). Our attorneys also drafted the private placement memorandum for one of the earliest medical groups in the Los Angeles area to offer refractive surgery services to the general public and provide training in refractive surgery to physicians.

If a company is publicly traded, it has ongoing reporting and filing obligations under the US securities laws. With the passage of the Sarbanes Oxley Act of 2002, the reporting and compliance obligations on issuers, officers and directors have become much more demanding in terms of the time and resources needed to comply with requirements of law, and potential liability for failure to comply have become more severe.

We counsel companies on the preparation of proxy statements, quarterly and annual reports and other filings with the U.S. Securities and Exchange Commission, and on compliance with insider trading and antifraud requirements of the US securities laws.

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