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Pastimes : Grinders and Gripers Coffee Shop
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To: Apex who wrote (114)6/25/1998 2:21:00 PM
From: The Osprey  Read Replies (1) of 4201
 
Too much coffee.He gets like this occassionally.I keep telling him he is eating up the profits but he says not to worry. We can do a private placement and raise some more cash for operating expenses.

PRIVATE PLACEMENT- In simple terms a private placement is a function a company goes through when they want to raise capital for whatever good reason they may have.Some companies in their infancy are always fighting short term cash flow.In most cases they have a product or asset such as a mineral right or claim that may be of value,they have the product but no means of producing it as examples.Rather than go to a bank,they find investors or venture capital that is looking for a place to invest.In exchange for this investment money they give up shares of the company as security.The deal or PP(Private Placement) can be shares alone or shares plus warrants or any combination.The PP holders or investors cannot sell immediately though. If the company has filed an(AIF) annual information they have a hold period of 120 days before they can sell. If no AIF is filed it usually is one year.
PP(Private Placements can be brokered or non-brokered) A brokered placement is usually done by a Brokerage house who are paid a commission or shares in lieu or as a non-brokered with a commission paid to the person or persons who arrange the deal.
PP are essential in the market otherwise alot of companies would not make it past the first year.

(This is a very simplified version but I hope my partner realizes we will be diluting our outstanding shares and the previous shareholders may not like it too much as it will dillute their earnings per share if their are any. He keeps drinking coffee like he does there won't be.)

OSPREY
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