Porter Bancorp, Inc. Raises Additional $4.25 Million in Private Placement Stock Offering

Louisville, Kentucky Private Placement - Porter Bancorp, Inc. parent company of PBI Bank, announced today that it raised an additional $4,255,000 in a private placement to an accredited institutional investor. The private placement included the sale of 370,000 shares of convertible preferred stock at a price of $11.50 per share. The proceeds of the offering will be used for working capital, general corporate purposes and for augmenting the balance sheet.

“We are pleased to complete the follow-on investment of stock by a new institutional investor in addition to the $27.0 million raised in a similar offering completed on June 30, 2010,” stated the President and CEO of Porter Bancorp, Inc. “The additional proceeds further strengthens our capital base and will provide a solid base to support our continued growth.”

Private Placement Terms

The private placement totaled $4,255,000 and included the sale of 370,000 shares of Series B Mandatory Convertible Preferred Stock at $11.50 per share. The Preferred Stock is convertible into Common Stock on a share-for-share basis. The Company also issued a warrant that is convertible into 185,000 shares of Non-Voting Common Stock at an exercise price of $11.50 per share.

The Series B Preferred Stock issued to the new investor has the same terms as the Series B Preferred Stock issued in the June 30 private placement. The preferred shares will convert into common stock only when approved by Porter shareholders, in accordance with NASDAQ Rule 5635, which requires shareholder approval when the total number of common shares sold in a private placement would exceed 20% of the Company’s outstanding common shares. J. Chester Porter, Chairman of the Board of Porter Bancorp, and Maria Bouvette, President and CEO of Porter Bancorp, the Company’s principal shareholders, have agreed to vote in favor of the conversion. The Company expects to submit the proposal for shareholder approval during the third quarter of 2010.

In addition, the Company granted the new purchaser an option to purchase an additional 64,784 shares of common stock and a warrant for 32,392 shares of its non-voting common stock, which will enable the new investor to make a total investment of $5 million. The option will not be exercisable until the Company obtains shareholder approval and will have a term of five business days.

More detailed information regarding the private placement will be included in the Company’s 8-K filing with the Securities and Exchange Commission.

The Company and its directors and officers may be deemed to be participants in the solicitation of proxies from Company shareholders in connection with (1) the proposal to issue common stock upon the conversion of Series B Preferred Stock, Series C Preferred Stock, and Non-Voting Common Stock in accordance with NASDAQ Rule 5635; and (2) the proposal to authorize the new class of Non-Voting Common Stock issuable upon the exercise of the Warrants. Information about the Company’s directors and executive officers and their ownership of Company stock is set forth in the proxy statement for the Company’s 2010 Annual Meeting of Shareholders.

Shareholders can obtain more information when the proxy statement relating to shareholder approval of the foregoing proposals becomes available. This proxy statement, and any other documents filed by the Company with the SEC, may be obtained free of charge at the SEC website at www.sec.gov. Shareholders should read the proxy statement carefully, when it becomes available, before making any voting decision because it will contain important information.

About Porter Bancorp, Inc.

Porter Bancorp, Inc., a bank holding company headquartered in Louisville, Kentucky, had $1.8 billion in assets as of June 30, 2010. Through Porter’s subsidiary PBI Bank, it operates 18 full service banking offices in Kentucky. Porter Bancorp’s common stock is traded on the Nasdaq Global Market under the symbol “PBIB.”

Forward-Looking Statements

Statements in this press release relating to Porter Bancorp’s plans, objectives, expectations or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations. Porter Bancorp’s actual results in future periods may differ materially from those currently expected due to various risks and uncertainties, including those discussed under “Risk Factors” in the Company’s Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission. The forward-looking statements in this press release are made as of the date of the release and Porter Bancorp does not assume any responsibility to update these statements. http://www.marketwatch.com/story/porter-bancorp-inc-raises-additional-425-million-in-stock-offering-2010-07-23?reflink=MW_news_stmp

About PPM.net

PPM.net is the leading U.S. entrepreneurial firm that specializes in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM.net have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

PPM.net’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM.net can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs - as well as to regional and global demands - helps our clients save needed capital and time.

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BofA Merrill Raising $300M for Oil and Gas Producer Concho Resources

Bank of America Merrill Lynch is arranging a $300 million private placement via private placement memorandum of common stock via Regulation D for Concho Resources to help finance the oil and gas producer’s acquisition of assets from privately held Marbob Energy.

Midland, Texas-based Concho is paying $1.65 billion in cash and securities via private placement for Marbob’s oil and gas properties, which are mainly located in the Permian Basin region of southeastern New Mexico. Some of Marbob’s properties are adjacent to Concho’s properties in the Permian Basin.

In the private placement, Concho is issuing 6.6 million shares of common stock priced at $45.45 each via Regulation D, reflecting a 14.7% discount to the price where Concho shares closed yesterday. The offering represents a 6.1% stake in Concho.

This is at least the second PIPE by Concho. In July 2008, the company raised $250 million in a common stock private placement offering.

Investors in the current private placement are being advised by the law firm of Vinson & Elkins. Concho didn’t immediately identify the investors.

About PPM.net

PPM.net is the leading U.S. entrepreneurial firm that specializes in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM.net have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

PPM.net’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM.net can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs - as well as to regional and global demands - helps our clients save needed capital and time.

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Air Canada Plans $900M in New Finances

Montreal, Canada Private Placement - Air Canada announced it is getting a strong lift from the recovery in international travel and plans to raise $900 million in new finance via private placement. The market responded by pushing the shares up more than 10 per cent.

The $900 million of five-year senior secured notes raised by private placement will be used to repay $700 million of debt due 2014. This is held by GE Canada Finance Holding Co., Export Development Canada, Aeroplan Canada Inc. and ACE Aviation Holdings Inc.

The emergency private placement financing was arranged last summer when Air Canada was caught in the recession’s slipstream and faced a possible bankruptcy filing. The remainder of the new private placement finance or $200 million will be used for general corporate purposes.

The CEO said in May he believed the skies were opening up for Air Canada and the company narrowed its loss in the first quarter with rising traffic and firming fares.

The airline said Tuesday it expects second-quarter earnings before interest, tax, depreciation, amortization and aircraft rent (EBITDAR) will be $320 million to $340 million, up from $135 million a year earlier. Operating income will be $60 million to $80 million. The actual numbers will be released on August 5.

Revenue per seat mile will be up 6.6 per cent for the year, reflecting fuller planes and higher fares, and unit costs (excluding fuel) will be lower.

About PPM.net

PPM.net is the leading U.S. entrepreneurial firm that specializes in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM.net have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

PPM.net’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM.net can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs - as well as to regional and global demands - helps our clients save needed capital and time.

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Esterline Corporation Launches Private Placement of Senior Notes

Bellevue, Washington Private Placement — Esterline Corporation (www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today announced that it is commencing a private placement offering (the “Offering“) of $200 million aggregate principal amount of senior notes due 2020. Esterline intends to use the net proceeds from the Private Placement Offering to repurchase any and all of its $175 million outstanding 7 3/4% Senior Subordinated Notes due 2013 (the “2013 Notes”), pursuant to a cash tender offer and consent solicitation for the 2013 Notes also announced , and to use the balance for general corporate purposes.

The Private Placement Offering is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The notes being offered by Esterline have not been registered under the Securities Act or any state securities laws. Therefore, the notes may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements under the Securities Act and any applicable state securities laws.

About Esterline: Esterline Corporation is a leading world-wide supplier to the aerospace and defense industry specializing in three core areas: Avionics & Controls, Sensors & Systems, and Advanced Materials. Operations within the Avionics & Controls segment focus on high-technology electronics products for military and commercial aircraft and land- and sea-based military vehicles, secure communications systems, specialized medical equipment, and other industrial applications. The Sensors & Systems segment includes operations that produce high-precision temperature and pressure sensors, electrical power distribution equipment, and other related systems principally for aerospace and defense customers. Operations within the Advanced Materials segment focus on technologies including high-temperature resistant materials and components used for a wide range of military and commercial aerospace purposes and combustible ordnance and countermeasure products.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should” or “will,” or the negative of such terms, or other comparable terminology. These forward-looking statements are only predictions based on the current intent and expectations of the management of Esterline, are not guarantees of future performance or actions, and involve risks and uncertainties that are difficult to predict and may cause Esterline’s or its industry’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Esterline’s actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements due to risks detailed in Esterline’s public filings with the Securities and Exchange Commission including its most recent Annual Report on Form 10-K.

About PPM.net

PPM.net is the leading U.S. entrepreneurial firm that specializes in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM.net have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

PPM.net’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM.net can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs - as well as to regional and global demands - helps our clients save needed capital and time.

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Venture Capital Investing Up 34 Percent To $6.5 Billion In Q2

Venture capitalists and via private placement investors invested $6.5 billion in 906 deals in the second quarter of 2010, according to a MoneyTree Report from PricewaterhouseCoopers LLP and the National Venture Capital Association, based on data provided by Thomson Reuters. Quarterly investment activity increased 34 percent in terms of dollars and 22 percent in number of deals compared to the first quarter of 2010 when $4.9 billion was invested in 740 deals.

In the first half of 2010, VC investments totaled $11.4 billion in 1,646 deals, a 49 percent increase in dollars and a 23 percent increase in deals from the first half of 2009, in the mist of the recession, when $7.7 billion was invested in 1,340 deals.

The Software industry had the most deals completed in Q2 with 229 rounds, representing a jump of 43 percent from the 160 rounds completed in the first quarter. In terms of dollars invested, the Software sector was in third place, increasing 43 percent from the prior quarter to $1 billion in the second quarter of 2010.

Internet-specific companies received $879 million going into 212 deals in the second quarter, flat in terms of dollars and a 25 percent increase in deals over the first quarter of 2010 when $891 million went into 169 deals. ‘Internet-Specific’ is a discrete classification assigned to a company with a business model that is fundamentally dependent on the Internet, regardless of the company’s primary industry category.

Investments in the clean tech sector doubled in the second quarter compared to Q1 of 2010. The sector saw a 107 percent increase in dollars over the first quarter to $1.5 billion in 71 deals compared with 70 deals in the first quarter. The life sciences sector jumped 52 percent in dollars and 36 percent in deals from the prior quarter to $2.1 billion going into 234 deals. Biotechnology again received the highest level of funding, rising 59 percent in dollars and 34 percent in deal volume in the second quarter with $1.3 billion going into 139 deals. Medical device investing also increased 40 percent in both dollars and deals over the first quarter with $755 million going into 95 deals in Q2.

The Industrial/Energy industry received the second highest level of funding in the quarter with $1.3 billion going into 61 deals, representing a 95 percent increase in dollars but a 13 percent decrease in deals compared to the first quarter when $658 million went into 70 deals. In all, 11 of the 17 sectors experienced dollar increases in the second quarter, including Computers and Peripherals (48 percent increase), Consumer Products and Services (44 percent), and IT Services (28 percent). Sectors which saw decreases in dollars included Semiconductors (40 percent decrease), Financial Services (22 percent) and Telecommunications (27 percent).

Seed and early stage deals also increased in Q2 from prior quarters, rising 54 percent in dollar value to $2.3 billion. The actual number of Seed and Early stage deals increased 32 percent to 429 from the prior quarter. Seed/Early stage deals accounted for 47 percent of total deal volume in the second quarter, compared to the first quarter when it accounted for 44 percent of all deals. The average Seed deal in the second quarter was $7.1 million, up from $5.1 million in the first quarter. The average Early stage deal was $4.7 million in Q2, up from $4.4 million in the prior quarter.

Expansion stage dollars increased 48 percent in the second quarter, with $2.7 billion going into 277 deals. Overall, Expansion stage deals accounted for 31 percent of venture deals in the second quarter, down slightly from 32 percent in the first quarter of 2010. The average Expansion stage deal was $9.7 million, up from $7.6 million in the first quarter of 2010.

These numbers create an optimistic view of the venture capital sector that is not reflected in another recent National Venture Capital Association study that showed that most U.S. venture capitalists expect their market to contract. And while, fundraising is on the rise, long terms returns are hurting.

About PPM.net

PPM.net is the leading U.S. entrepreneurial firm that specializes in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM.net have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

PPM.net’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM.net can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs - as well as to regional and global demands - helps our clients save needed capital and time.

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Convenience TV Inc. Closes Private Placement

Los Angeles, California Private Placement — Convenience TV Inc. has closed a non-brokered Private-Placement of $250,000 has been successfully subscribed. A total of 1,250,000 shares were issued at $0.20 USD in a private placement.

The President and CEO of Convenience TV, said today, “We are extremely pleased with the support we have received from investors for this initial funding. These funds will be used on operations intended to expand our network footprint in the Los Angeles area.”

About Convenience TV Inc.

Convenience TV is focused on the Convenience Store Industry and provides its clients with an “in-location” TV network. The Network is designed to deliver both entertaining content and targeted advertising on a demographic basis to each retail location. In addition, the Network delivers promotional advertising tied to products within the retail location. The programming can be up-dated quickly and is tailored to meet the specific clients’ needs for increased sales, customer enjoyment and brand reinforcement.

Safe Harbor Statement

Except for historical information contained herein, the matters set forth above may be forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ from those in the forward-looking statements. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to Convenience TV or its management, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors such as the level of business and consumer spending, the amount of sales of Convenience TV’s products, the competitive environment within the industry, the ability of Convenience TV to continue to expand its operations, the level of costs incurred in connection with Convenience TV’s expansion efforts, economic conditions in the industry and the financial strength of Convenience TV’s customers and suppliers. Convenience TV does not undertake any obligation to update such forward-looking statements. Investors are also directed to consider all other risks and uncertainties.

About PPM.net

PPM.net is the leading U.S. entrepreneurial firm that specializes in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM.net have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

PPM.net’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM.net can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs - as well as to regional and global demands - helps our clients save needed capital and time.

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Oracle To Sell Two-Part Bond Deal Worth $3.25 Billion

New York (Dow Jones-Wall Street Journal)–Oracle Corp. said it would sell $3.25 billion worth of notes in a private-placement offering, the latest in a string of blockbuster bond sales that have come to dominate the investment-grade corporate debt market.

Debt issuance via the private placement has been slow of late but dominated by single issuers coming to market with multibillion-dollar, multi-tranche deals.

Time Warner priced a $3 billion, three-part deal on July 7, an issue that makes up more than a third of last week’s $8.9 billion high-grade issuance. Wal-Mart (WMT) priced $3 billion worth of bonds on June 30, making up nearly half of that week’s $6.06 billion in issuance.

Oracle’s debt issue is the largest U.S.-marketed bond sale since HSBC (HSBA.LN) sold $3.8 billion worth of notes on June 17, according to Dealogic. It’s the biggest nonfinancial deal since the NBC Universal division of General Electric Corp. (GE) sold $4 billion of bonds on April 27.

Oracle priced the private placement deal in two parts: the $1 billion, 10-year notes priced at a discount to yield 3.902%, or 0.85 percentage points over comparable Treasurys, and the 30-year, $2.25 billion piece priced at a discount to yield 5.454%, or 1.40 percentage points over comparable Treasurys.

While the software giant’s shelf registration offered little clue as to how Oracle would spend the money, the fund raising could indicate the company is stockpiling cash in case it wants to make a significant acquisition. Oracle has pursued an aggressive growth-through-acquisition strategy, buying big and small companies to add products and reach.

In January, Oracle closed its most recent significant transaction, a $7.4 billion purchase of Sun Microsystems. The deal marked the software company’s most significant foray into hardware and helped contribute $1.8 billion to Oracle’s fourth-quarter revenue of $9.5 billion.

Oracle last sold debt in the primary market on June 30, 2009, when it issued $4.5 billion in bonds, according to Dealogic. A part of that deal, $1.25 billion of 6.125% bonds maturing in July 2039, was the most actively traded issue on the secondary market Monday. The spread, or risk premium, widened by 0.17 percentage point, to 1.23 percentage points over comparable Treasurys, according to MarketAxess.

Fitch Ratings, which has assigned an A rating to Oracle’s notes, said the offering would be used primarily to refinance nearly $1 billion in commercial paper and to fund $2.25 billion in 5% senior notes due in January 2011.

A query to Oracle regarding the debt issue was not returned.

The deal is being run through joint bookrunners Bank of America Merrill Lynch, BNP Paribas and J.P. Morgan and is expected to price today.

About PPM.net

PPM.net is the leading U.S. entrepreneurial firm that specializes in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM.net have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

PPM.net’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM.net can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs - as well as to regional and global demands - helps our clients save needed capital and time.

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GETTING PERSONAL: Reg-D Proposal Costly For Small Companies

By Suzanne Barlyn
A DOW JONES NEWSWIRES COLUMN

NEW YORK (Dow Jones)–A proposal that would change how certain private placements are regulated could mean another hurdle for small businesses in a cash-strapped, recessionary environment.

Sen. Christopher Dodd’s draft legislation for sweeping financial reform includes a provision that would give back to state regulators the authority to oversee certain aspects of private placements, known as Reg-D offerings. States lost certain powers, such as the ability to review offerings and to prohibit bad actors from initiating Reg-D offerings, when Congress enacted the National Securities Markets Improvement Act of 1996, or NSMIA. That watershed law aimed to create uniform federal regulation of certain “covered securities” previously regulated at both the state and federal levels.

Small business advocates say that granting state regulators more authority over Reg-D offerings would mean navigating a regulatory quagmire.

Businesses that raise capital through Reg-D offerings would often be subject to the scrutiny of state regulators in multiple jurisdictions who could, for example, review and require numerous changes to their offering memoranda. Costs of raising capital would likely increase as companies fork over higher fees to lawyers and other consultants who would have to research whether the offerings are compliant with distinct state and federal requirements.

“It could put a lot of people out of business,” said Paul Azous, chief executive of PPM.net LLC, a New York-based company that writes private placement memoranda - documents for investors that include information about a company’s business plan and other details.

If implemented, the change could ultimately encourage issuers to look abroad to raise capital, says Raymond Fisher, a securities lawyer for Linklaters in New York. “It’s better to have a uniform regime,” he said.

Sen. Dodd’s Reg-D proposal is among nearly 1,200 pages of draft reforms the Senate is considering following the passage of an historic financial regulatory reform bill by the U.S. House in December.

Lawmakers are discussing the draft at a time when many small businesses are raising capital through Reg-D offerings because banks have tightened lending standards. Most businesses aim to raise relatively small amounts through the process, which could be substantially offset by more expenses.

George Brunelle, a securities lawyer in New York, recalled advising one small business that was trying to raise $1 million in the pre-NSMIA era when states had more say over Reg-D offerings. The offering memorandum had to comply with standards in four states - a process he described as “crazy hard.”

State regulators argue that their current lack of authority under NSMIA means they’re often unable to help investors who voice concerns about offerings. Fraud related to private placement is multiplying, as is use of brokers to place them. Federal regulators recently have beefed up their enforcement efforts but not nearly enough to satisfy states.

The law allows state regulators to investigate cases involving fraud and deceit, but in many instances the evidence from investors gets to them too late. By then, they say, the money raised in the offering is often long gone.

“We have to wait until the forest fire is raging and then go put it out. I can’t go put it out before,” said Joseph Borg, director of the Alabama Securities Commission. He and other state regulators can only refer most complaints to the Securities and Exchange Commission, where they languish, they say.

The SEC’s inspector general, H. David Kotz, concluded in a March 2009 report that the agency “does not generally take action” when its staff learns that issuers haven’t complied with Reg-D requirements. It also doesn’t “substantively review” the more than 20,000 filings it receives annually, he wrote.

Lawyers and consultants who advise small businesses argue that the vast majority of private placement offerings are legitimate. “The masses shouldn’t have to suffer for the minority,” says Azous of PPM.net.

Read the Full Wall Street Journal Dow Jones Article Here

(If you cannot read the full article from the link, then bing, google or yahoo search the following words and click the link. You should then be able to read the full article: GETTING PERSONAL: Reg-D Proposal Costly For Small Companies)

(Suzanne Barlyn writes Compliance Watch, a column that focuses on compliance and regulatory issues affecting financial advisers. She can be reached by email at suzanne.barlyn@dowjones.com)

Private Placement Introduction

The term “private placement” as used in this text refers to the offer and sale of any security by a brokerage firm not involving a public offering, hence it’s a ‘private offering’. Private placement offerings are not the subject of a registration statement filed with the SEC under the 1933 Act. Private placements are done in reliance upon Sections 3(b) or 4(2) of the 1933 Act as construed or under Regulation D as promulgated by the SEC, or both. Regulation D, promulgated in 1982, sets forth certain guidelines for compliance with the Private Offering Exemption. Any registered representative who are involved in the private placement process are expected to have a working familiarity with Regulation D.

To qualify as a private placement, an offering by an issuer must meet either the requirement of Sections 3(b) or 4(2) of the 1933 Act as developed through SEC interpretation and court decisions or must follow the conditions set out under Regulation D of the 1933 Act. Persons claiming the exemption from the 1933 Act carry the burden of proving that its activities came within that exemption. PPM.net can assist with your private placement and Act compliance.

Regulation D

Overview

Regulation D is a series of six rules, Rules 501-506, establishing three transactional exemptions from the registration requirements of the 1933 Act.

Rules 501-503 set forth definitions, terms and conditions that apply generally throughout the Regulation. Specific exemptions are set out in Rules 504-506.

Rule 504 of Regulation D

Rule 504 applies to transactions in which no more than $1,000,000 of securities are sold in any consecutive twelve-month period. Rule 504 imposes no ceiling on the number of investors, permits the payment of commissions, and imposes no restrictions on the manner of offering or resale of securities. Further, Rule 504 does not prescribe specific disclosure requirements. Generally, the intent of Rule 504 is to shift the obligation of regulating very small offerings to state “Blue Sky” administrators, though the offerings continue to be subject to federal anti-fraud provisions and civil liability provisions of the Exchange Act.

Rule 505 of Regulation D

Rule 505 applies to transactions in which not more than $5,000,000 of securities is sold in any consecutive twelve-month period. Sales to thirty-five “non-accredited” investors and to an unlimited number of accredited investors are permitted. An issuer under Rule 505 may not use any general solicitation or general advertising to sell its securities.

Rule 506 of Regulation D

Rule 506 has no dollar limitation of the offering. Rule 506 is available to all issuers for offerings sold to not more than thirty-five non-accredited purchasers and an unlimited number of accredited investors. Rule 506, however, unlike 504 and 505, requires an issuer to make a subjective determination that at the time of acquisition of the investment each non-accredited purchaser meets a certain sophistication standard, either individually or in conjunction with a “Purchaser Representative.” Like Rule 505, Rule 506 prohibits any general solicitation or general advertising.

Accredited Investor

“Accredited Investor” is defined in Rule 501(a). The principal categories of accredited investors are as follows:

1) Directors, executive officers, and general partners of the issuer, including general partners of general partners in two-tier syndicating. (The term “executive officers” is more fully defined in the Regulation.)

(2) Purchasers whose net worth either individually or jointly with their spouse equals or exceeds $1 million. It is important to note that while there is no definition of “net worth” in Regulation D, there similarly is no requirement of liquidity in the calculation of net worth for this accreditation standard. Thus, a purchaser’s home, furnishings, etc. are includable in the determination of net worth.

(3) Natural person purchasers who have “income” in excess of $200,000 in each of the two most recent years and who reasonably expect an income in excess of $200,000 in current year (or $300,000, jointly with their spouse).

(4) A business entity will be treated as a single accredited investor unless it was organized for the specific purpose of acquiring the securities offered, in which case each beneficial owner of the security is counted separately.

(5) There are more requirements to be considered an Accredited Investor. Contact PPM.net for more information.
Additional Compliance Considerations Under Regulation D

The SEC has pointed out the following regarding Regulation D:

1. Regulation D does not exempt offerings from the anti-fraud and civil liability provisions of the various federal securities laws.

2. Further, Regulation D in no way relieves issuers of their obligation to furnish to investors whatever material information may be needed to make any required disclosures not misleading.

3. Similarly, notwithstanding exemption from registration at the federal level, Regulation D in no way obviates an issuer’s obligation to comply with applicable state law.

4. Regulation D is interpreted as providing “transactional” exemptions to issuers only. An investor whose purchase was exempt from registration cannot resell his or her interest without establishing an independent basis of exemption.

5. The three exemptions are not intended to be mutually exclusive, that a reliance on one exemption is not deemed to be an election to the exclusion of any other applicable exemption.

6. Finally, the exemptions of Regulation D may not be claimed with respect to any plan or scheme to evade the registration provisions of the act.

Existing state securities regulations at times impose substantially more onerous limitations on issuers than Regulation D. Issuer’s counsel must be consulted regarding the requirements of the securities law of each state in which a private placement offering is going to be sold.

Form D

Notices, on Form D, are due within fifteen days after the first sale of securities in an offering under Regulation D. It will be prepared by Issuer’s counsel. PPM.net can help your company prepare and submit the Form D.

Private Placement of Restricted Securities Outside Regulation D

The specific requirements to be satisfied in establishing an exemption under Section 4(2) for a private placement are not stated in that section of the Securities Act of 1933. By studying SEC interpretations and court decisions dealing with Section 4(2), the basic requirements which a private placement must meet can be determined. They are summarized below:

1. All the offerees and purchasers must have access to the same kind of information concerning the issuer which would appear in an SEC registration statement, and these persons must be able to comprehend and evaluate such information (all prospects must be given the same information and private placement memorandum offering document). It must be kept in mind that any offer to an offeree who would not qualify, as well as a sale to a purchaser who would not qualify, may destroy the private placement exemption and result in a violation of Section 5 of the 1933 Act.

2. The issuer and any parties acting for the issuer, including the broker-dealer, must take all reasonable steps to insure that the information given to the offerees and purchasers is complete and accurate. This is “due diligence.” All information passed on in the course of the private placement, either orally or by memorandum (or offering circular or private placement memorandum), is subject to the anti-fraud provisions of the federal securities laws. The fact that the offering memorandum is not reviewed by the SEC does not lower the standards for accuracy which would be applicable to any registered offering.

3. All of the offerees must have access to meaningful current information concerning the issuer. The fact than an offeree has considerable financial resources or is a lawyer, accountant or businessperson, and thus may be considered sophisticated, does not eliminate the need for appropriate information to be made available. Again, all parties should receive the same information.

4. While there is no specific limitation on the number of offerees, the greater the number of offerees, the greater the likelihood that the offering will not qualify for the exemption. In this connection, a private placement cannot be the subject of advertising, general promotional seminars or public meetings in connection with the offering. This limitation does not preclude meeting with offerees to discuss the terms of the offer or to present information concerning the issuer or the offer. After the private placement has been completed, a general announcement (such as a tombstone ad) concerning it may be made if this is desired. Email us at info@ppm.net for information on tombstone ads.

5. Purchasers in a private placement must acquire the securities for investment and not for the purpose of further distribution. If the purchaser acts in such a manner so as to participate in distribution of the securities to the public, either directly or indirectly as a link between the issuer and the public, he or she will be deemed to be an underwriter and the selling broker-dealer and other participants in the distribution, including the issuer, will be in violation of Section 5 of the 1933 Act. They must be licensed and conform to other regulatory standards, i.e. FINRA. Each of the purchasers must intend to acquire for investment at the time the securities are purchased. Whether or not investment intent was present will be determined from all the circumstances surrounding the acquisition. Such circumstances would include the financial capability of the purchaser to hold the securities for the long term and whether the purchaser signed a letter of investment intent. The amount of time the securities have been held (the holding period) is one of the factors in a hindsight determination that an investment intent existed at the time of purchase. A two-year holding period is deemed to be the bare minimum, but counsel should be sought in order to determine if this time frame can be shortened, or if it needs to be lengthened. PPM.net can help consult on this matter.

What is apparent from the aforementioned information is that current and accurate information about the offerees in a private placement transaction is absolutely essential for the making of judgments as to suitability, ability to evaluate an offering, and investment intent.

Private Placement Memorandum

To meet the requirement of Regulation D or the requirements of Section 4(2) of the 1933 Act (the private placement exemption), the issuer is almost always required to make extensive disclosures regarding the nature, character and risk factors relating to an offering. The disclosure document often is labeled “Offering Memorandum” or given a similar title, which, in the normal course, is based upon information provided to counsel to the issuer. While a properly executed private placement is exempt from the registration provisions (i.e. Section 5 of the 1933 Act) of the federal securities laws, the transaction (and the disclosures made or a lack thereof) is subject to the anti-fraud provisions. If the private placement offering memorandum is a particular private placement turns out to be materially misleading in terms of disclosures which have been made (or which should have been made), the broker-dealer and its principals may be deemed to have violated or aided or abetted violations of the anti-fraud provisions of the federal securities laws.

Supplementary or Corrective Material

During the course of private placement activities on a particular issue, or prior to the closing, it may become necessary to update or correct information supplied in the private placement memorandum as originally prepared. The corrected information must be brought to the attention of the offerees by means of a cover or transmittal letter which describes the changes or additions. Depending upon the information transmitted, reconfirmation of an investors desire to invest may be required. The files maintained with respect to a particular offering must contain a record of what has been done. Prior to closing an offering of the private placement, meaning the acceptance of investors in a transaction, a brokerage firm Principal must verify that all such amendments have been sent to all subscribing offerees and that the files are accurate and complete. All offerees should be notified of any changes.

Offeree Access to Information

In most private placement offering memorandums, it is stated that the memorandum has been prepared by counsel to the issuer (i.e., the corporation) from documents which have been provided by representatives of the issuer. Offerees are invited to meet with representatives of the issuer to make an independent investigation and verification of the matters disclosed in the offering memorandum. Courts, reviewing private placements when challenged, weigh investor access to underlying information about the transaction very heavily in the determination of whether there has been compliance with the private placement exemption. The brokerage firm’s designated Principal should obtain a commitment from the Issuer that potential purchasers and their representatives shall be given access to underlying information about the transaction if they desire to pursue such information. The fact that information is available to offerees should be specifically disclosed to the offerees at a conspicuous point in the offering documents.

Private Placement Offering Process
Offering Commencement and Termination

The commencement date of private placement offerings is fixed generally at the date of the availability of the approved private placement offering documents, such as s real estate private placement memorandum PPM, for distribution to sales personnel.

The termination date for a private placement offering is dependent on the type of private placement offering being made. An “all or nothing” offering contains, by its terms, a fixed or defined date for the termination of the offering. A “best efforts” offering may have an indeterminate termination period meaning that the offering continues until the full number of Securities is placed and the subscribers are formally accepted by both the issuer (or a duly authorized representative) and by a Principal of the brokerage firm.

The sales objectives in a best efforts offering, of course, is that all securities will be placed with suitable investors. However, short of all securities being placed, it is required that a minimum amount of money need be raised which shall be sufficient, after the funding of all of the organizational and offering expenses, and giving consideration to the fixed contractual obligations of the issuer, without changing the nature of the investment called for by the general terms of the private placement offering. The issuer may be given the option of funding required issuer obligations by the making of loans or deferral of fees. In such a case where the issuer funds financial requirements prior to the placement of all of the securities, it is the obligation of the brokerage firm to assure itself that appropriate disclosure to all offerees (and subscribers) be made and to assure itself that the basic nature and character of the transaction called for by the terms of the offering are maintained. If it appears that they cannot be maintained, then the transaction must be rescinded and monies paid by subscribers must be refunded.

Possible Need for a Purchaser Representative

A judgment must be made as to the business “sophistication” of a purchaser. If it is determined that a particular purchaser is not sufficiently sophisticated in business matters to effectively evaluate the investment opportunity, then he or she must be assisted by a “purchaser representative,” i.e., a person possessing the requisite sophistication (chosen by the purchaser) who is able to and does assist in evaluating the investment opportunity and who is not an affiliate of the issuer, not the brokerage firm. Also, State Blue Sky laws impose additional requirements for their investors. Only customers known to registered representative personally should be sent only brokerage firm approved private placement offering materials. If there is doubt about the individual’s need for a purchaser representative, the subscriber should be required to obtain one.

No General Solicitation

1. Cold Calling is not permitted.

2. Advertisements, articles, notices or any other communication cannot be published in any newspaper, magazine, newsletter or similar media or broadcast on TV, radio or cable.

3. No seminars or meetings may be held with regard to any current offering unless each invitee is known and qualified in advance.

4. No mention of any specific offering or past performance may be made at generic seminars (i.e. seminars to discuss the general concept of such investments).
No Fee Sharing

Fees may not be split with non-registered persons such as lawyers, accountants or investment advisers. PPM.net is not a broker dealer.

Investment Intent

Purchasers of private placement securities must purchase for investment purposes and not for the purpose of resale. The typical subscription documents used in private placements contains what is called “investment letter language.” This representation should be personally verified. Consideration should be given as to whether the investment representation makes sense in view of the surrounding circumstances of the proposed purchaser.

Oral Representations

Offerees, having received private placement offering memorandum documents, frequently request oral explanations or supplements to the information presented. Great care should be taken in making oral disclosures regarding a private placement. Deviation from the printed material is prohibited. Written notes of conversations with offerees (and their representatives) should be made, dated and placed in the client’s file.

Acceptance Of Offerees As Purchasers

In all private placement offerings, the subscribers must be formally accepted by the issuer. The acceptance of subscribers is based upon a subscriber questionnaire and, possibly, the customers account information (a document signed by the client). A review of the contents of this form by a representative of the firm who is qualified to make such determinations is imperative.

Following the acceptance of the subscribers in an offering by both the issuer and the principal, the offering shall be terminated by notification to all involved sales persons or entities.

Mechanics of the Private Placement Offering Process

1. The offering documents should be numbered. Unnumbered copies should be marked “For Information Only”, “File Copy”, “Memorandum Number” and other appropriate notation.

2. A distribution control sheet should be created, and monitored. As offering documents are assigned to particular registered representatives, the number of the offering documents, together with the registered representative’s name, should be placed on the control sheet.

3. A sales control sheet will be maintained reflecting current sales.

4. Incoming checks, subscription agreements, and executed suitability documents should be logged on a daily basis or when applicable.

5. Checks should be reviewed for acceptability by the firm, recorded on the brokerage firm’s receipts blotter, and forwarded to the individual bank escrow agent, and where appropriate to the Issuer, together with the purchaser’s name, address, social security number, and number of shares/units.

6. Incoming subscription agreements should be approved by the firm, recorded on the sales blotter and forwarded to the Issuer for acceptance. A copy must be maintained for the brokerage firm files.

7. Confirmations should be sent immediately to the subscriber upon acceptance, to the registered representatives, and a file copy should be retained (e.g. a copy of the Subscription Documents.)

8. Form D will be filed, on a timely basis, by counsel to the Issuer, with the SEC and with those states that require it.

9. Care should be taken that any other forms necessary to comply with the state Blue Sky authorities will be timely filed. Counsel to the issuer or brokerage firm counsel should generally be consulted as to the required forms in the states where the securities have been sold. Generally, this is accomplished by counsel to the issuer. (Some states require no forms.)

10. A complete file containing the above-described documents for each private placement should be maintained as part of the brokerage firm’s records.
Escrow Account - Private Placements Only

The federal securities law (the Exchange Act) is very specific with respect to the required treatment of an escrow account maintained in an “all or none” or “part or none” private placement offering.

The rules applicable to “all or none” or “part or none” offerings relating to the maintenance of an escrow account for a given offering are Rules 10b-9 and 15c2-4 of the Securities Exchange Act of 1934. Rule 10b-9 requires, in general, that in an “all or none” or “part or none” offering (as opposed to a “best efforts” offering) monies paid for the purchase of securities must be returned to the investors if the specified number/dollar amount of securities is not sold within a specified time. In other words, the “all or none” or “part or none” offering requires specification of the number of securities and the time of the selling period.

Both terms must be adhered to.

Rule 15c2-4 requires, in general, that the monies received from investors be deposited into a separate segregated bank account (Independent Bank as Escrow Agent) and held for the investors’ benefit until the “all or none” or “part or none” terms have been complied with. If the terms of the offering are met, the money is to be transmitted to the issuer. If not, the monies are to be returned to subscribers.
The specific procedures to be followed in the handling of escrow accounts for “all or none” or “part or none” transactions are as follows:

1. When an “all or none” or “part or none” private placement offering is commenced, an escrow agreement shall be created. This document should be executed by the brokerage firm and the bank. The brokerage firm is required to keep a copy of all escrow agreements on file to demonstrate compliance with Rule 15c2-4.

2. An escrow account should be opened by the bank. The escrow account is governed by the escrow agreement. The account typically requires signatures of representatives of both the brokerage firm and the Issuer before any checks can be issued from the account.

3. Incoming monies should be deposited immediately into the escrow account, along with the purchaser’s name, address, social security number and number of shares/units.

4. Upon the completion of the “all or none” or “part or none” terms of the agreement or upon the expiration of the specified time period, the escrow agent verifies that the terms of the escrow agreement have been or have not been met by the designated date and that the funds should be released from escrow.

5. The issuer then transmits written confirmation stating that a determination has been made that the conditions of the escrow have or have not been complied with and request a release of the funds.

6. Upon receipt of the written confirmation described above, the funds are transmitted to the proper entity or persons.

7. The documentation created by these procedures is then retained in a segregated file for audit or regulatory review.

8. In a “best efforts” offering, the brokerage firm is contractually bound to use its “best efforts” to place the securities with suitable investors. The brokerage firm will follow the procedures as outlined above regarding private placement of subscriber’s funds in an independent bank escrow account.

About PPM.net

PPM.net is the leading U.S. entrepreneurial firm that specializes in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM.net have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, the New York private placement (PPM) leaders.

PPM.net’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM.net can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs - as well as to regional and global demands - helps our clients save needed capital and time.

We are leaders in:

• New York Private Placement PPM
• Real Estate Private Placement PPM
• Technology Private Placement
• Debt Private Placement PPM
• Equity Private Placement PPM
• Technology Private Placement Memorandum Writing PPM
• New York Private Placement Memorandum Writing PPM
• Real Estate Private Placement Memorandum Writing PPM
• Debt Private Placement Memorandum Writing PPM
• Equity Private Placement Memorandum Writing PPM

The following information, including all information on this website – www.PPM.net - is not legal advice, and is intended solely for information and educational purposes. If you are contemplating a private placement, or any legal transaction, you should consult a consultant or an attorney who can provide you with the advice that you need, for your specific circumstances. PPM.net is not a law firm nor a substitute for a law firm. Securities law, and corporate finance, is not the area for novices to play. Incorrect documentation can have serious ramifications for all involved parties.

For more information on private placements and the writing of a private placement memorandum (PPM), please Contact PPM.net.

There are two major reasons why any start-up or expanding company should have a business plan. The first is that a business plan is an entry-level requirement for a number of different methods of asking for capital, whether seed or growth. This applies when asking through a grant, SBA loan, the bank, angel investors or venture capitalists.

The second reason is that a business plan is regarded as road map to success. It forces the entrepreneur to think of all aspects of the business before execution. In order to write a business plan, the entrepreneur will define the company, research the market, assign tasks for the execution plan, and calculate the costs the company will incur and revenues the company will generate. By having this all down on paper, the management team can assess if the business will be profitable before they begin incurring costs. This can save individuals  needed capital as many underestimate the cost of starting a business before  undertaking such thorough research.

A business plan can act as a guideline for how the company will be built or a new product will be introduced. Business plans should be updated on a regular basis to include the newest information with regards to the market and progress with the execution plan.

About Us

PPM.net is the leading U.S. entrepreneurial firms that specialize in writing private placement memorandums (PPM) and linking investors with entrepreneurs.

Since 1999, the founders of PPM.net have provided professional business writing services, such as a PPM or business plan, to more than 2,000 businesses worldwide. Our company is considered to be the most cost effective, efficient consultants for private placement memorandum development in the United States. We are Wall Street’s, and by extension, New York’s private placement leaders.

PPM.net’s main service is the creation of private placement memorandum regulation d (Reg. d) documents. However, we offer much more. In case the entrepreneur needs additional services, such as a business plan, website, or additional legal work, PPM.net can create one pricing package for all required documentation or service. Because we simultaneously work with many companies both in and out of the U.S., the ability to adapt to the individual needs - as well as to regional and global demands - helps our clients save needed capital and time.