Essentials of Corporate and Capital Formation

DAVID H. FATER is the founder and CEO of ALDA & Associates International, Inc., a business and financial consulting company specializing in providing assistance to companies related to financing, strategic planning, restructurings, mergers and acquisitions, and operations. In addition, he is the Chairman, President, and CEO of Vicor Technologies, Inc., a public medical diagnostics company, where he is responsible for overseeing the planning, direction, finance and management of the company including research and development, clinical trial activities, and business and product development.

• Preface. About the Web Site.Acknowledgments.1 Corporate Structure.Proprietorships.Partnerships.Limited Partnerships.Limited Liability Companies.Operating Agreement.Management.Corporations.Summary.2 Initial Capital Formation.Debt.Other Forms of Straight Debt.Convertible Debt.Mezzanine or Hybrid Debt.Equity.Common Stock.Preferred Stock.Convertible Preferred Stock.Mandatory Redeemable Preferred Stock.Dilution.Summary.3 Finding the Capital.Are There Really Angels in Heaven?Venture Capital.Private Placements.Summary.4 Pitfalls.Regulation 506 D: Areas of Opportunity and Uncertainty.Subscription Documents.Investor Count.Risk Factors.Offering Documents.Form D.Placement Agents and Finders.Romanian Raise.Summary.5 Public Markets: Are They Right For You?What It Means to Become a Public Company.Benefits and Opportunities.Drawbacks.Decision to Go Public.Advance Planning.Summary.6 Entering the Public Markets Conventionally.Formal Process: Underwriting.Who Gets Involved?Underwriting the Offering.Selecting the Underwriters.Beauty Contest.Working with the Underwriters.Registration Process.Due Diligence.Filing and the SEC.Completing the Offering.Expenses.Summary.7 The Public Markets—Other Issues.Reverse Merger (Shell Game).Transaction Process.Benefits.Taint.Pump and Dump.Taking Appropriate Precautions.Making the Shares Trade.Operating a Public Company.Summary.8 Exit Strategies.What Is an Exit Strategy?Role of Management.Entrepreneur versus Executive.Determination of Goals and Direction of the Company.Evolution of Executive Concerns.Development of the Strategic Plan.Why Is Strategic Planning Important?Real Exit.Process.Historical Financial Statements.Quality of Earnings.Meeting with the Auditors.Forecasts and Projections.Structuring the Deal.Allocating Purchase Price.Financial Covenants.Debt Repayment Schedule.Reporting Requirements.Management and Administration.Transaction (Closing).Summary.9 Success In the Real World.Formation Process.Capital Raising.Capital Sources.Going Public.Summary.About the Author.Index.