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
BoardBookit disclosed hitting the market to raise $400,000 via debt issuance. $50,000 has already been subscribed by one financial backer. The non-brokered placement started almost two weeks ago. An additional $350,000 in funding is to be raised until the offering draws to a close in April 2015. A prior unregistered securities offering which raised an estimated $850,000 was completed by the company.
The company designed and markets a web portal as well as an iPad application (app) to help companies create and distribute material to board members. The company targets small and medium sized companies to streamline their investor relations related tasks. The app has been designed to be secure affordable and easy to use. The annual plan starts at $1,200. The company announced a few days ago that pursuant to a strategic alliance with the Angel Capital Association (ACA), ACA is going to provide the BoardBookit iPad app and secure board of director’s portal to ACA members.
Marion Lewis (President and CEO) leads the Pittsburgh PA based company which was registered in 2013. Boardbookit disclosed having revenues on or below $1 million.
The board of directors includes Jeanette Thomas.
The company has raised an estimated total of $900,000 via private unregistered security offerings.
Status: First close
Industry: Other Technology
Amount offered: $400,000
Amount placed: $50,000
First sale: 04-03-2014
Data as of: 04-14-2014
Lab7 Systems, Inc. announced a first closed of $60,000 on its $400,000 convertible note placement. Three investors participated to the non-brokered financing. The offering’s estimated net proceeds will reach $155,000. $245,000 of the proceeds are earmarked for the payment of officers’ salaries. The company already raised $500,000 in a debt offering which successfully closed within nine months in March 2013.
Lab7 Systems’s application aims at reducing the level of hands-on data management by bioinformaticians, scientists, and IT teams who are struggling with the massive amounts of next generation DNA sequencing data that are being generated. The company developed a comprehensive big data workflow solution for providers, users and managers of next-generation sequencing services. The platform enables the management of samples, data, analyses, and meta-analyses with instantaneous job control and auditing tools. The company anticipates that its platform will reduce the burdened cost of DNA data handling by over 80%. The platform is available in beta.
The company, located in Austin TX, was founded in December 2011 by Christopher E. Mueller (CEO).