Overview & Philosophy
The Firm’s Corporate and Securities Practice Group is comprised of more than 50 professionals and is one of the leading practices in the U.S. focusing on smaller public and private companies and the investment banks and capital sources that focus on this segment of the market. The Firm routinely represents public companies (presently over 80) and their officers, directors and employees in matters related to ongoing compliance with SEC regulatory requirements (i.e., Forms 10-Ks, 10-Qs and 8-Ks). We are proud to represent capital market participants driven by the entrepreneurs who are intent to grow and finance their businesses. The Firm provides legal services for companies in a variety of industries, including life sciences consumer products, social networking, information processing, telecommunications, Internet and software and real estate. Given the Firm’s level of transactional sophistication and our commitment to efficiency, the Firm can often offer “flat fee” arrangements, which we have done for 25 years as a courtesy to clients, which we feel is important to maintain strong attorney-client relationships.
The Firm distinguishes itself from many other transactional law firms on the basis of its ability to be part of the establishment of new alternative securities programs; such as, crowdfunding, registered blind pool offerings (commonly referred to as SPACs), “registered direct”, private investments in public entities (commonly referred to as “PIPEs“) and reverse mergers and alternative public offerings (“Reverse Mergers”), where the Firm’s professionals have played leadership roles within each of those industries – assisting in the creation, formation and strategies relating to those financings, as well as, working closely with the regulatory agencies, including the SEC and FINRA; and listing exchanges such as the NYSE and NASDAQ. The Firm also has many clients whose securities trade over-the-counter. Having cooperated and advised the Pink Sheets on its OTCQX marketplace, the Firm is also proud to be the first law firm ever to be approved as a Designated Advisor for Disclosure (“DAD”) and Principal American Liason (“PAL”).
Public Company Transactions
In our Securities Practice, we act as counsel to more than 80 public companies (including 20 Chinese issuers), as well as, numerous FINRA (formerly NASD) licensed underwriters and placement agents in connection with their financing activities, including private placements and public offerings of equity and debt securities. In 2018, the Firm was ranked top 10 in the U.S. for most actively involved in IPOs of all law firms. The Firm handled 26 IPOs, whose companies raised more than $5 billion. The Firm also retained it’s #1 ranking in handling PIPEs/RD Financings on behalf of placement agents. We completed 24 Registered Directs and 8 PIPEs. In our largest M&A transactions to date as a Firm, we represented Forum in the acquisition of ConvergeOne with an enterprise value of $1.3 billion. The Firm continues to be one of the most recognized firms in the U.S. for our SPAC practice (representing both issuers and underwriters). In 2010, we innovated a new SPAC structure for 57th Street General Acquisition Corp. that is now the accepted convention. Additionally, the Firm is quite active in representing Chinese operating companies interested in going public in the United States, or, have already done so previously. Over the course of the last 15 years, the Firm’s lawyers have participated in excess of:
- 225 SPAC IPOs; including,
- 135 SPAC registrations;
- 50 SPACquisitions;
- 750 Registered Directs/PIPEs; and
- 40 Reverse Mergers
We advise issuers on complying with the complex securities laws, rules and regulations that these companies must comply with, including proxy rules, other periodic reporting requirements under the Securities Exchange Act of 1934 (such Forms 10-Q, 10-K and 8-K) and other compliance matters such as Sarbanes-Oxley and other corporate governance matters, insider trading and conflicts of interest.
Law Firm Rankings
Our growth and successes led our Firm to achieve improved rankings among all U.S. law firms. In 2018 and 2017 EGS was ranked #1 in PIPEs/Registered Directs (agent’s counsel). EGS has been one of the most active IPO law firms in the U.S. for the last 5 years.
Click here to view an updated list of Offerings that the Firm has been involved with for your review.
CrowdFunding describes the collective cooperation, attention and trust by people who network and pool their money via the Internet to support efforts initiated by other people or organizations. CrowdFunding occurs for any variety of purposes, from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns, to funding a startup company, movie or small business or creating free software. Crowdfunding for the online sale of securities was signed into law on April 5, 2012 by President Obama, as part of the JOBS Act. Crowdfunding is currently legal with respect to the sale of securities and remains subject to the SEC approving applicable rules, which they are currently drafting.
Ellenoff Grossman & Schole has been heavily involved in the program since its inception. The Firm has sponsored conferences, webinars and has been invited to speak at different events on the topic. Douglas S. Ellenoff, a member of the Firm, has met with the SEC on many occasions to discuss many aspects of the proposed new law, how the industry currently operates and how both the SEC and FINRA will register and regulate funding portals and the crowdfunding activity to be conducted. Additionally, EGS is working with other securities professionals internationally to assist them with their fashioning of appropriate legislation to permit crowdfunding for securities in their jurisdictions.
The Firm is actively engaged with clients (funding portals, broker-dealers, technology solution providers, software developers, investors and entrepreneurs). In cooperation with the industry trade association, the Firm is discussing what level of regulatory review and monitoring is appropriate by the SEC and FINRA in balancing the interests of the program with investor protection. We have several attorneys that have become key players in the program. In particular, our Broker Dealer Regulatory Group, has shepherded many firms through the broker dealer membership process. They have participated on panels with the FINRA Membership Department to develop the New Membership Application Program and will be proactively working with regulators to establish guidelines for funding portals. The Firm has closely followed the legal developments since inception and is actively advising industry members on the proposed regulations. The Firm has written a CrowdFunding Alert that summarizes the key provisions and current status of the new reforms. Click here to read the alert.
The Firm represents companies at every-stage in the corporate life cycle from incubation, startup, growth, angel and venture financing, to mergr, acquisition, or IPO. In addition to working on financing transactions, we work with our clients to understand their long-term operational goals and develop strategies to realize their business plans. We advice on choice of entity, partner/shareholder agreements, corporate governance, director and officer liability, joint ventures, equity incentive programs and executive and employee compensation. We also counsel clients on financing through the sale of equity or debt in private placement and institutional/venture financing rounds, mergers and acquisitions, foreign subsidiaries, off-shore capital management and a diverse range of commercial transactions.
We remain current on the latest financing structures favored by angels, venture capitalists and private equity firms, and help to lead the evolution of this quickly developing area of law. We are familiar with a wide variety of alternative financing methods, including crowdfunding, and have had great success with finance-through-growth strategies involving early deals with critical strategic partners. Our goal is to help you adopt the best financing strategy, so that you can focus on growing your business.
We develop template agreements and processes for legal workflow and help standardize your confidentiality, assignment of invention, non-competition and other intellectual property related agreements and implement solid employee policies and other compliance documents. We lead negotiations with vendors, banks, landlords, employees, and professional services firms and work efficiently to minimize transaction time and costs. We are business-oriented and counsel industry participants on a day-to-day basis.
Social Impact Investing
Social impact investments are investments into companies, organizations, and funds with the intention to generate more than mere financial returns but also demonstrable social, community and/or environmental impact. Social impact investing occurs across asset classes, for example, private equity/venture capital, debt and fixed income. EGS has a dedicated group of professionals to assist the greater NYC Social Impact Investing community and broader Social Sector Finance industry; representing companies (for-profit, public benefit corporation, not-for-profit, B corporations and hybrids) who are making investments intended to create positive impact beyond financial return, and as such, make a positive social and/or environmental impact through their activities. We advise on a wide range of transactions, including structured finance, fund formation, contracts, banking law, securities law, foreign exchange regulations, local laws and regulations, employment law, tax law and the structuring and governance of not-for-profit organizations. If a matter requires knowledge of a local jurisdiction in which we are not present, we draw on our large network of local counsel in countries around the world.
Over many years of representing entrepreneurs, funds and investment banks in the life sciences industry, the Firm has developed an expertise in working with companies and practitioners in this sector. This includes companies working with pharmaceuticals, biologics, diagnostics and medical devices. The Firm’s long history in representing life sciences companies allows the Firm to help these clients navigate the particular hurdles they face as they seek to offer better treatment and healthcare options for patients and caregivers. The Firm has represented dozens of life science clients and has been involved in hundreds of related financings, mergers and acquisitions, licensing and development agreements and other transactions over the course of the last decade.
Our corporate and securities attorneys (in tandem with experts from the Firm’s intellectual property and other practice areas) regularly advise life sciences companies on the full “life cycle” of key matters they face, including company formation, intellectual property prosecution, acquisition and licensing, strategic alliances and joint ventures, mergers and acquisitions, private and public equity offerings, public and private debt offerings, tax matters and general commercial matters (including contract research organization agreements, manufacturing, supply and distribution agreements, and agreements with universities and foundations). To assist our clients, the Firm also regularly partners with leading legal and regulatory specialists on matters related to the Food and Drug Administration and similar domestic and overseas regulatory agencies.
Click here to read a presentation on our Life Sciences Practice.
Given the significant disruptions to the public markets and corresponding adjustments to the valuations of public companies and their securities in recent years, managers and investors are increasingly exploring the possibility of taking these entities private, in “going private” transactions. We have experience representing management teams, independent 13D investors, public companies and independent/special committees. In general terms, a going private transaction is the exchange of cash for the shares of a company’s existing public shareholders so that, at the end of the transaction, the company is permitted to terminate its public company status. Forms of going private transactions include (i) mergers of the company with a newly-formed company owned by the manager/control group; (ii) tender offers by the newly-formed company; or (iii) a self-tender by the company for its own shares. A going private transaction typically is initiated by a controlling shareholder or by a group of shareholders that either constitutes a majority or at least a control position in a company. Senior management of the company often comprises such a buyout group, often making going private transactions appear to be management buyouts.
The Firm regularly advises domestic and offshore clients in connection with contractual matters, including, partnerships, strategic alliances, joint ventures, licenses, executive compensation, employment and consulting agreements, stock option plans and other routine business matters.
As the inter-relationship of the global financial markets becomes more complex, the Firm has participated in several initiatives involving both foreign public issuers also seeking listing on U.S. exchanges and markets, as well as U.S. issuers exploring foreign listings, including on the AIM Market of the London Stock Exchange, the Toronto Stock Exchange and Euronext Amsterdam.
The Firm represents U.S. and international investment advisers, private equity funds, real estate funds, hedge funds, venture capital funds, financial institutions and other pooled investment vehicles in all of their activities, including in connection with:
- formation of a range of investment vehicles, including both onshore and offshore fund structures (master-feeder, parallel vehicles, etc.), to accommodate a wide range of investors, liquidity and tax concerns, and asset classes;
- executing a range of investment strategies, including those involving trading in equities, public and private debt securities, derivatives, real estate (both single asset equity syndications and pooled funds), commercial mortgages, and RMBS and CMBS securities;
- structuring and executing investment transactions, including negotiated public investments in private equity (PIPEs) and registered direct investments in public companies, acquisitions of minority and majority stakes in public and private operating companies throughout the world, funds of funds, and originating and trading in commercial mortgages, investments in real estate and real estate joint ventures;
- negotiating investment management agreements, managed accounts, customized single investor funds, and other direct investment arrangements with clients;
- compliance with SEC, CFTC, NFA, and FINRA regulations and other applicable state and federal laws and related regulatory examinations;
- management company compensation and tax issues;
- negotiation and structuring of credit and liquidity agreements with prime brokers and other lenders; and
- serving as outside general counsel to funds, general partners and management companies.
Our investment management team has a broad range of relevant experience in the field, including sophisticated tax capability. We are cost effective enough to counsel emerging managers and smaller funds, but expert enough to counsel the largest asset managers in the world.
A reverse merger is a transaction where by a private company becomes a public company by generally merging with a public shell company. A shell company is a company that has substantially no assets, except its corporate structure. A company can become a shell company by agreeing to spin off its current assets and liabilities at the time of the merger. Upon the merger, the private company shareholders receive a substantial majority of the shares of the public company (normally 90% to 95% or perhaps more) and the control of the board of directors, resulting in the private company becoming an operating public company. Prior to the merger, the transaction does not go through a review process with the SEC. The transaction involves the private and shell company exchanging information on each other, negotiating the merger terms, and signing a share exchange agreement. At the closing, the public shell company issues a substantial majority of its shares and the board control to the shareholders of the private company.
In these transactions, private businesses merge with operationally inactive public entities, enabling the private business to become publicly-traded on its own, without the need to either identify an underwriter or go through the formal process of an IPO.
Corporate & Securities
Ellenoff Grossman & Schole LLP is regularly recognized by Chambers USA as a highly regarded law firm in the area of corporate/mergers and acquisitions. Chambers USA ranks leading firms and lawyers in an extensive range of practice areas throughout America. In particular, Chambers noted expertise in SPACs, IPOs and secondary offerings, PIPEs, venture financings and advisory work. In 2018, the Firm was ranked #1 in the U.S. for most actively involved in IPOs of all law firms. The Firm handled 26 IPOs, whose companies raised more than $5 billion. The Firm also retained its #1 ranking in handling PIPEs/RD Financings on behalf of placement agents. The Firm also handled numerous M&A transactions, including three worth more than $1 billion each.
Law Firm Rankings Our growth and successes led our Firm to achieve improved rankings among all U.S. law firms.View our SPACS Transactions View our SPACS Resource Center
in PIPEs/Registered Directs (agent's counsel)
in the U.S. for most actively involved in IPOs of all law firms in 2017
SPAC Law Firm in the U.S. for SPAC IPOs and SPAC Acquisitions
raised through 13 IPOs in 2018
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