Use of Proceeds In Form S-1 Registration Statements

Form S-1 Registration Statement - Securities Lawyer 101

Companies going public have several options in how to structure their transaction when registering securities with the Securities and Exchange Commission (“SEC”).  They can seek to raise capital using the registration or they can simply register shares on behalf of existing shareholders.  If the issuer seeks to raise capital using the registration statement expansive disclosures are required of the use of proceeds.

Item 504 or Regulation S-K establishes the requirements for disclosure of Form S-1 proceeds in the registration statement.

The issuer must disclose its intended use based upon different percentages of the amounts of money raised.  The use of proceeds section describes how the funds raised in a securities offering will be spent.

Form S-1 registration statements that do not register capital shares for an issuer to sell such as a resale or selling shareholder registration statement do not contain a use of proceeds.   If an issuer plans to raise capital then the information is required.

When an issuer conducts a securities offering on a best efforts basis, the SEC requires the information be presented for different percentages such as  25%, 50%, 75% and 100%.  The SEC requires that the issuer provide a detailed explanation about the intended use of offering proceeds in this section. For example, if a company intended to buy inventory, it would have provide a footnote that included the cost of the facility and what would occur if it did not raise enough money to purchase all inventory planned.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
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