Section 4(2) of the Securities Act of 1933 exempts from the registration requirements of that Act "transactions by an issuer not involving any public offering.” This is the so-called "private offering" provision in the Securities Act. The securities involved in transactions effected pursuant to this exemption are referred to as restricted securities because they cannot be resold to the public without prior registration. They are also sometimes referred to as "investment letter securities" because of the practice frequently followed by the seller in such a transaction, in order to substantiate the claim that the transaction does not involve a public offering, of requiring that the buyer furnish an investment letter representing that the purchase is for investment and not for resale to the general public. The private offering exemption of Section 4(2) of the Securities Act is available only where the offerees do not need the protections afforded by the registration procedure.
The Wisconsin Investment Letter for a Private Sale of Securities is a legal document that outlines the terms and conditions associated with the private sale of securities in the state of Wisconsin. This letter serves as a crucial tool for both the issuing company and the potential investor, as it provides detailed information about the investment opportunity and establishes a clear understanding between the parties involved. Key elements that are typically included in the Wisconsin Investment Letter for a Private Sale of Securities are: 1. Background information: This section provides an overview of the issuing company, including its name, legal status, and principal place of business. It also highlights the purpose of the investment and the nature of the securities being offered. 2. Offering terms: The letter outlines the specific terms of the private sale, such as the type and class of securities being offered, the total number of securities available for purchase, and the offering price per security. This section may also touch upon any special rights or privileges associated with the securities. 3. Risk factors: In order to provide full disclosure, the letter includes a comprehensive list of risk factors associated with the investment. These may include market risks, financial risks, regulatory risks, and any other factors that may impact the potential return on investment. 4. Financial statements: The issuing company is typically required to provide audited financial statements as part of the Wisconsin Investment Letter. These statements help potential investors evaluate the financial health and performance of the company, allowing them to make informed investment decisions. 5. Use of proceeds: This section outlines how the funds raised from the private sale of securities will be utilized by the issuing company. It may detail specific projects, expansion plans, research and development initiatives, or debt repayment that the funds will be allocated towards. 6. Subscription procedure: The letter provides instructions on how potential investors can subscribe to the securities being offered. This may include details on subscription forms, payment methods, and the deadline for submitting investment commitments. Two notable types of Wisconsin Investment Letters for a Private Sale of Securities are: 1. Preferred Stock Investment Letter: This type of investment letter pertains specifically to the private sale of preferred stock. Preferred stockholders have certain advantages over common stockholders, such as priority in receiving dividends and asset distribution in case of liquidation. 2. Convertible Debt Investment Letter: In instances where the investment being offered is in the form of convertible debt, this type of investment letter is utilized. Convertible debt allows investors to convert their debt into equity at a predetermined conversion ratio or trigger event. In summary, the Wisconsin Investment Letter for a Private Sale of Securities is a crucial legal document that provides detailed information to potential investors regarding a private sale of securities. It outlines the terms and conditions of the investment, discloses associated risk factors, and guides investors through the subscription process. The preferred stock investment letter and convertible debt investment letter are two variations of the Wisconsin Investment Letter, catering to specific types of securities being offered.The Wisconsin Investment Letter for a Private Sale of Securities is a legal document that outlines the terms and conditions associated with the private sale of securities in the state of Wisconsin. This letter serves as a crucial tool for both the issuing company and the potential investor, as it provides detailed information about the investment opportunity and establishes a clear understanding between the parties involved. Key elements that are typically included in the Wisconsin Investment Letter for a Private Sale of Securities are: 1. Background information: This section provides an overview of the issuing company, including its name, legal status, and principal place of business. It also highlights the purpose of the investment and the nature of the securities being offered. 2. Offering terms: The letter outlines the specific terms of the private sale, such as the type and class of securities being offered, the total number of securities available for purchase, and the offering price per security. This section may also touch upon any special rights or privileges associated with the securities. 3. Risk factors: In order to provide full disclosure, the letter includes a comprehensive list of risk factors associated with the investment. These may include market risks, financial risks, regulatory risks, and any other factors that may impact the potential return on investment. 4. Financial statements: The issuing company is typically required to provide audited financial statements as part of the Wisconsin Investment Letter. These statements help potential investors evaluate the financial health and performance of the company, allowing them to make informed investment decisions. 5. Use of proceeds: This section outlines how the funds raised from the private sale of securities will be utilized by the issuing company. It may detail specific projects, expansion plans, research and development initiatives, or debt repayment that the funds will be allocated towards. 6. Subscription procedure: The letter provides instructions on how potential investors can subscribe to the securities being offered. This may include details on subscription forms, payment methods, and the deadline for submitting investment commitments. Two notable types of Wisconsin Investment Letters for a Private Sale of Securities are: 1. Preferred Stock Investment Letter: This type of investment letter pertains specifically to the private sale of preferred stock. Preferred stockholders have certain advantages over common stockholders, such as priority in receiving dividends and asset distribution in case of liquidation. 2. Convertible Debt Investment Letter: In instances where the investment being offered is in the form of convertible debt, this type of investment letter is utilized. Convertible debt allows investors to convert their debt into equity at a predetermined conversion ratio or trigger event. In summary, the Wisconsin Investment Letter for a Private Sale of Securities is a crucial legal document that provides detailed information to potential investors regarding a private sale of securities. It outlines the terms and conditions of the investment, discloses associated risk factors, and guides investors through the subscription process. The preferred stock investment letter and convertible debt investment letter are two variations of the Wisconsin Investment Letter, catering to specific types of securities being offered.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
