It is at times most interesting to compare what is disclosed via Form D to what is communicated via press release by companies. A quick analysis of what has been officially filed with the SEC also shows the errors made by information providers that compile information without reconciling the data.
Let’s take Tradeshift for example. Tradeshift is a cloud-based single, shared and open platform designed to streamline and aggregate all the tools necessary that businesses require to buy and sell. The solutions include electronic invoicing, collaborative workflow as well as financial solutions such as cash flow management or electronic payments. The company filed yesterday an amendment to its Form D filed in December 2013. The amendment shows an increase of $15 million in the amount raised via security issuance since December, the total amount raised stood at $30 million. However, between December and yesterday, the company disclosed on February 25th via press release closing a $75 million financing round.
So why is there a $45 million difference in the amount raised between the Form D and the press release? It turns out $45 million is the aggregate amount of an option agreement between the company and Scentan Ventures. As its name suggests, the agreement provides Scentan Ventures with the right but NOT the obligation to buy Tradeshift’s securities at an agreed upon price at some time in the future.
Random Research (RR) has seen a little bit of everything on the web all leading to the same conclusion: most information providers fail to relate the Form D with the press release and realize the three documents (D, D/A and press release) are all related to the same financing round, hence inflating the amount raised. It shows a lack of sophistication when analyzing Form D and its amendments as well as a poor understanding of the regulation D.
RR is curious to know what will happen when/if the option is exercised by Scentant and triggers a Form D filling. Based on certain practices we can expect to see a $30 million financing round balloon to $90 million (15+75) and show $135 million (15+75+45) raised when it is $75 (30+45).
By the way, prior financing rounds closed by the company did not lead to the filing of Form Ds. Why? Simply because the company was then located in Denmark and investors where not US-based.
Tradeshift Holdings filed $15 million in additional commitments
Change: offered +100% / raised +100% / placed 100%
In a document filed with the SEC, Tradeshift Holdings reported placing an additional $15 million worth of equity securities. The company had previously disclosed raising $15 million. So far one investor bought $30 million worth of securities. The private placement’s expected net proceeds amounts to $28.78 million which excludes $1.22 million paid in brokerage fees. The offering is structured to close in six months at the latest. It was filed under security registration exemption rule 506 for which there is no fundraising cap. This was the first offering under regulation D filed by Tradeshift Holdings.
The company is headquartered in San Francisco CA. Tradeshift Holdings kept its revenues undisclosed.
The executive team includes Christian Lanng and Peter Van Pruissen.
The board of directors includes Edward Shenderovich, Ian Swycher, Noriaki Okubo and Stephen Chandler.
Company: Tradeshift Holdings
Industry: Other Technology
Amount offered: $30 million
Amount placed: $30 million
First sale: 12-03-2013
Data as of: 05-08-2014