We will utilize our extensive experience in the PIPE market to help you raise the capital you need to grow your business and meet your working capital demands. A creative structure, appropriate pricing and high quality investors are three key elements of a successful capital raise. We will utilize our network of credible investors coupled with our understanding of the current state of the market to work with you toward a successful transaction.

The following is a background to the PIPE market and the types of transactions that occur:

PIPEs have become the most common form of financing for small and mid market public companies raising capital. In 2002 the total size of the PIPE market was $ 16.7 billion with over 1,000 transactions completed. In 2003 this figure increased to 1349 transactions over a value of $ 1 million each, representing $18,9 billion of investment.

This growth has been driven by regulatory and structural changes in the securities industry that have made follow-on financings for Small Cap companies less viable.

The PIPE market is now very large with participants including traditional PIPE investors, mutual funds, pension funds, insurance companies, and other institutions. Participation of these firms is establishing the PIPE market as an active, legitimate, and recognized source of growth capital.

PIPEs can take form in a wide variety of transaction structures and are driven by a company’s market capitalization, balance sheet, and the liquidity of its stock. The main types of transactions are:

• Shelf registered Common Stock with or without warrants
  
• Unregistered Common Stock with warrants
  
• Convertible Preferred Stock with warrants
  
• Convertible Notes with warrants

Many companies in the Small Cap sector have limited access to traditional financing sources to fund their growth. We perform a full analysis of your financial picture, recognizing the restrictions of your balance sheet, and create a solution to fit your needs. We have long-standing relationships with national and regional banks, as well as alternative investment sources that provide debt financings for Small Cap companies.

If you have a private company experiencing significant growth, approaching critical mass and needing a vehicle to bring it to the next stages, one alternative may be to merge with a company with a public listing and minimal operations. The advantages are substantial cost savings, an accelerated timeline, and immediate access to the PIPE market where it is much easier for a Small to Mid Cap company to raise capital than through a traditional initial public offering.

Sandhurst works with leading law firms that specialize in this area to ensure a smooth transition into the public markets. We also work with you on a concurrent round of fund raising in the form of a PIPE transaction to ensure adequate capital resources necessary to achieve your goals as a public entity.

The cost of being a public company is high and growing. Compliance with Sarbanes-Oxley has increased legal and accounting fees, raised D&O premiums and forced many companies to incur costs to restructure their board to insure independence. Adding the heightened liability stemming from Section 404, which mandates that executives personally verify their companies’ financial results, many companies have determined that they may be better suited as a private entity. Sandhurst will work with you and your team to navigate a seamless process from start to finish, including addressing regulatory and legal issues and sourcing private equity sponsors to finance the transition.