Cateus Investment Group

PPM Private Placement Memorandum: (Regulation D)

A non-public offering is a funding round of securities which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors. PIPE (Private Investment in Public Equity) deals are one type of private placement. SEDA (Standby Equity Distribution Agreement) is also a form of private placement. They are often a cheaper source of capital than a public offering. Although these placements are subject to the Securities Act of 1933, the securities offered do not have to be registered with the Securities and Exchange Commission if the issuance of the securities conforms to an exemption from registrations as set forth in the Securities Act of 1933 and SEC rules promulgated there under. Most private placements are offered under the Rules known as Regulation D.

Different rules under Regulation D provide stipulations for offering a Private Placement, such as required financial criteria for investors or solicitation allowances. Private placements may typically consist of offers of common stock or preferred stock or other forms of membership interests, warrants or promissory notes (including convertible promissory notes), bonds, and purchasers are often institutional investors such as banks, insurance companies or pension funds. Common exemptions from the Securities Act of 1933 allow an unlimited number of accredited investors to purchase securities in an offering. Generally, accredited investors are those with a net worth in excess of $1 million or annual income exceeding $200,000 or $300,000 combined with a spouse. Under these exemptions, no more than 35 non-accredited investors may participate in a private placement. In most cases, all investors must have sufficient financial knowledge and experience to be capable of evaluating the risks and merits of investing in a company.

Private Crowd Funding:

Crowd funding is the practice of funding a project or venture by raising monetary contributions from a large number of people. Crowd funding is a form of crowd sourcing and of alternative finance. In 2015, it was estimated that worldwide over US $34 billion was raised this way. Private Crowd funding: is where a closed network of the targeted industry related investors are privately invited to a specific business opportunity which is not limited to simple crowd funding as equity and other opportunities are made available including synergistic usage and values the investors may participate in.