Glossary 2017-11-22T17:03:05+00:00

Glossary

Member Interest

“Member Interest” means the entire ownership interest of a Member in the Company at any particular time, including the right of such Member to any and all benefits (including, without limitation, Net Profits and Net Losses) to which a Member may be entitled pursuant to this Agreement and under the LLC Act, together with all obligations of such Member to comply with the terms and provisions of this Agreement and the LLC Act. For purposes hereof, if any provision requires the affirmative vote or Consent of a specified percentage of Member Interests, such percentage shall be determined by reference to the aggregate percentages of Members casting such affirmative vote calculated at the applicable date.

 

Follow-on Public Offer

A follow-on public offer (FPO) is an issuing of shares to investors by a public company that is already listed on an exchange. An FPO is essentially a stock issue of supplementary shares made by a company that is already publicly listed and has gone through the IPO process.

 

Registered Direct Offering

A Registered Direct offering is a negotiated sale by an issuer to one or more investors of securities that have been registered pursuant to an effective shelf registration statement on Form S-3 under Rule 415 of the Securities Act of 1933, as amended. Rule 415 permits an issuer to register a specific dollar or share amount of securities without specifying the amount of any particular class or type of security or the timing or method of the offering. The issuer may then sell any or all of the registered securities directly to investors at a later date or dates of its choosing. Unlike a typical firm commitment underwritten offering, a Registered Direct offering is structured as a “best efforts” offering. Accordingly, it involves a “placement agent” as opposed to an “underwriter” who places the securities directly with investors, rather than directly purchasing the securities itself and then reselling them to investors. However, similar to an underwritten offering, the issuer in a Registered Direct offering sells registered securities that generally have no restrictions on resale. Registered Direct offerings typically are for common stock, although issuers may sell other types of securities (e.g., convertible notes or warrants), and often do in combination with each other.

 

CMPO/Overnight Offering

A confidentially marketed public offering (“CMPO”) is a hybrid structure between a Registered Direct and a traditional public follow-on. After registering shares on an S-3 shelf registration, transactions are typically marketed confidentially to institutional investors, then announced publicly and “flipped” to a public offering. Deals are announced after the close of US market trading, and the public selling process concludes prior to the market opening the following morning.

 

Private Investment in Public Equity (PIPE)

The form of equity financing in which a private investment company purchases a certain amount of stock in a publicly-traded company at a discount from its market value. Publicly-traded companies commit to PIPE in order to raise equity without going through expense and regulatory issues involved in making a secondary offering. This form of financing is popular especially with small and medium-sized publicly-traded companies, as they often lack the resources to raise capital using other methods.