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Use of Proceeds
This section applies to companies attempting to raise money. If the company intends to raise money, indicate this information on the statement and present to the SEC in a table showing how the company intends to spend its offering proceeds. If the company is preparing a Selling Stockholder Registration Statement, this section is not applicable. Item 504 or Regulation S-K establishes disclosure requirements for the intended use and percentage of raised money. If a company makes its offering on a best efforts basis, the SEC advises it to pick preferred benchmarks for allocation of the money. For example, the company would indicate that it preferred 25% of money raised to be used to reach its research and development benchmark. The SEC requires detailed explanations about the intended use of offering proceeds. For example, if a company intended to buy equipment, it would need to include in a footnote the cost and type of each piece of equipment to be purchased, as well as the order of purchases if not enough money is raised to make all purchases. |
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