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Posts tagged "Private Placements Of Securities"

What is a private placement offering?

A private placement offering of securities is a non-public offering of a company's equity ownership interests. The ownership interests can consist of common stock, preferred stock, membership interests, options, warrants and convertible debentures. Typically, a company will engage in a private placement of its securities to raise operational capital before it ever seeks to "go public" by filing a registration statement with the Securities and Exchange Commission ("SEC") or otherwise engage in a reverse merger with a company that is already a publicly traded entity. The securities in a private placement are typically sold directly to investors by the officers and directors of the issuing company. The securities sold in a private placement are deemed "restricted securities" as such term is defined in SEC Rule 144 and may not be transferred for at least six months on any public market such as the New York Stock Exchange, NASDAQ or OTCQB Market. The purchasers of securities in private placements become equity owners of the issuing company and may ultimately realize profits from their investment through appreciation in the price of the security or the distribution of dividends by the issuing company.

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