Practice Group Chair
John McIlvery

The Firm’s Public Securities Practice covers a wide-range of matters for existing public companies and underwriters, as well as private companies contemplating “going public.”

Public Securities Compliance

Clients look to us for advice on a wide-range of matters, including:

  • General compliance with federal and state securities laws.
  •  Initial and continued listings on securities exchanges.
  •  Preparation and review of filings made with the SEC and other regulatory agencies (e.g., annual and quarterly reports, current reports on Form 8-K, proxy statements, insider filings).
  • Preparation and review of press releases, investor presentations, and other public disclosures.
  • Transactions, such as initial and secondary public offerings, private investments in public equity (PIPEs), mergers and acquisitions, and going private transactions.
  • SEC reviews of registration statements, periodic reports, proxy statements, and other public filings.

Corporate Governance Counseling

The Firm’s Public Securities attorneys regularly advise clients on the responsibilities of corporations, management, boards of directors and special committees of boards of directors under federal and state securities laws, stock exchange regulations and general corporate laws.  Our attorneys are experienced in all aspects of governance counseling, including board and board committee composition, process and independence. The Firm understands the challenges facing corporate executives and directors of smaller companies, as they try to comply with new laws and regulations that are uniformly imposed on companies of all sizes.  Our Public Securities attorneys work collaboratively with accounting firms, compensation specialists, general counsel, senior management, boards of directors, board committees, and other corporate constituencies to advise on regulatory and business practice matters, including how our smaller companies can effectively deploy their more limited resources to navigate corporate America’s rapidly changing “one-size-fits-all” regulatory environment. Our Public Securities attorneys provide the following Corporate Governance services:

  • Advising clients on corporate governance and disclosure requirements of the Securities and Exchange Commission (SEC) and the relevant stock exchanges.
  • Monitoring the rule-making activities and actions of the SEC, the Financial Accounting Standards Board (FASB) and Public Company Accounting Oversight Board (PCAOB), and counseling clients on the implications of emerging securities laws and accounting and auditing standards.
  • Advising on fiduciary duties of directors and special and independent committees, including with respect to related-party transactions, executive compensation, acquisition proposals, and other transaction that might give rise to potential conflicts of interest.
  • Advising clients on SEC reviews, enforcement actions, SEC requirements for securities offerings and corporate disclosures, and Sarbanes-Oxley (SOX)-related issues.
  • Advising on stock exchange requirements, monitoring administrative proceedings related to SEC and Financial Industry Regulatory Authority (FINRA) enforcement actions, and tracking significant legislative developments and judicial decisions affecting enforcement of federal securities laws and state corporate laws.
  • Advising privately held companies pursuing public offerings and exit strategies on compliance with state corporate law, as well as SEC, SOX, and national stock exchange requirements

Alternative Public Offerings

We are a leader in alternative capital raising techniques, such as registered direct offerings, PIPEs, and reverse mergers into public “shells”, and we have been in the forefront of this rapidly developing area.  Since early 2001, the market for traditional, firmly underwritten initial public offerings of micro-cap and small-cap companies in the United States has been significantly constrained.  There are fewer and fewer underwriters interested in investing the resources to bring micro-cap and small-cap companies to market, which has cut-off what once was a viable financing source for smaller companies. In recent years, an alternative to the traditional, firmly underwritten initial public offering has emerged.  The “reverse merger” transaction, when coupled with a PIPE financing, allows smaller companies to access a large pool of capital without the need of an underwriter.  While a typical transaction still requires the assistance of a “placement agent” to assist in raising capital, if structured properly, the placement agent is not an “underwriter” under United States securities laws, and thus not subject to the liability that has driven many traditional underwriters from the market for micro-cap and small-cap initial public offerings. Our Public Securities attorneys provide the following services in connection with reverse merger transactions:

  • Assisting clients in locating an existing public reporting “shell” company, that has little or no assets or business, is current in its periodic reporting obligations with the SEC, has no or only limited liabilities that can be confirmed with some certainty in due diligence, preferably has common stock quoted on the Over-The-Counter Bulletin Board held by at least 400 shareholders of record, and does not need to first obtain stockholder approval to consummate any aspect of the transaction.
  • Introducing clients to other professionals with experience in reverse merger transactions, including owners and brokers of shell companies, accounting firms, placement agents, investors, and investor relations firms.
  • Conducting due diligence on the shell company, and restructuring the shell company to the extent necessary in advance of the transaction.
  • Structuring, negotiating and documenting the reverse merger transaction documents, including the acquisition agreement and all ancillary agreements.
  • Advising on compliance with securities laws and stock exchange rules.
  • Assisting in the preparation and filing of all reports to be filed with the SEC in connection with the reverse merger transaction, including all Section 16 forms, Forms 8-K, and Schedules 13D, 14f-1 and 14C.
  • Coordinating the responsibilities of management, opposing counsel and the other professionals involved in the process, including independent auditors, promoters and placement agents.
  • Structuring, negotiating and documenting of the PIPE financing documents, including the securities purchase agreement, registration rights agreement and all ancillary agreements, and assisting in the preparation and filing with the SEC of the resale registration statement for the shares sold in the PIPE.

SEC Fixed Fee

We offer legal services to existing publicly traded companies in connection with SEC regulatory compliance on a monthly “Fixed Fee” basis in lieu of our standard hourly fee arrangements.  Our clients can pick and choose from a suite of services that they would like us to provide for a Fixed Fee, which often includes the following:

  • Exchange Act Reports.  We review and comment on Forms 10-K, Forms 10-Q, Forms 8-K, Forms 3, 4 and 5, and Schedules 13D and 13G for approved individuals and investors.  We assist in ensuring that all such Exchange Act reports are in compliance with applicable SEC rules.
  • Annual Proxy Statements.  We prepare a Proxy Statement for the annual meeting of shareholders.
  • Routine SEC Communications.  We coordinate all routine communications with the SEC with respect to Exchange Act filings.
  • Securities Due Diligence.  We review company documents and information to enable comprehensive and accurate disclosure in Exchange Act filings.
  • Year End Obligations.  We monitor and assist in meeting year-end disclosure and annual shareholder meeting obligations.
  • D&O Questionnaires.  We prepare and distribute Directors’ and Officers’ Questionnaires to assist in complying with disclosure obligations.
  • Rule 144 Opinions.  Upon request, we prepare Rule 144 opinion letters to transfer agents in connection with Rule 144 sales.
  • Press Release and Reg. FD.  We advise with respect to company-drafted press releases, and Regulation FD compliance.
  • Board and Shareholder Meetings.  We attend and prepare minutes for Shareholder Meetings and quarterly Board Meetings.
  • Coordination with Auditors.  We coordinate with accountants as to the timing of the preparation of financial statements and related financial disclosure.

At the beginning of a Fixed Fee representation, we meet with such of the company’s key personnel as are designated to review files and agreements for purposes of orientation in order to gain a better insight into and understanding of the company and its business, define and agree upon a satisfactory client service plan, define the scope of our legal representation, and prioritize legal assignments.  This orientation process is included within the Fixed Fee arrangement, and becomes the basis for establishing the amount of the Fixed Fee monthly payment.  We assess this amount annually to make sure the Fixed Fee amount for successive years is commensurate with the services provided in the prior year.

 

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