IPO vs APO
Founded by Robert Eide in 1984, Aegis Capital Corp. has evolved from a real estate focused business to a full service wealth management firm to meet the changing needs of clients. Offering comprehensive financial and investment services, Aegis Capital Corp. offerings include including APO venture capital and bridge services to an IPO.
Often used by smaller companies and startups that need additional investment to expand, an Initial Public Offering (IPO) is the first public sale of stock by a private company. Generally in an IPO, an underwriting firm helps to determine the correct timing of an initial offering and will also determine what price to set. An alternative public offering (APO), is an alternative to an IPO that still allows a company to go public.
An APOs key difference from an IPO is that it allows a company to go public with no public raising of capital. The capital in an APO is instead obtained through a private agreement where an investor, usually institutional in nature, purchases shares. This is called a private investment of public equity. The other component of an APO is a reverse merger, where investors acquire a majority stake of a public shell company and merge it with the private firm going public. By using this process, an APO offers a simpler and faster means to go public compared to an IPO.
Aegis Capital Corp
With an East Coast regional investment presence spanning three decades, Aegis Capital Corp. provides corporate, institutional, and retail clients with a full range of financial solutions. Aegis Capital Corp. offers comprehensive debt market services that range from project financing and refinancing to discounted payoff (DPO).
Commonly employed in resolving commercial real estate problem-debt situations, the DPO is utilized when the real property asset has significantly declined to the point where the amount available for refinancing is less than the outstanding loan. DPOs also come into play when the lender experiences outside pressure to decrease its exposure to the commercial real estate market. As it involves a loss to the lender, it is typically used as a last resort after other debt recovery avenues have failed.
When DPO situations do occur, they must be moved on quickly, which can be problematic, as conventional lenders will be reluctant to step in and help finance this type of payoff. In most situations, a semi-hard or hard money bridge loan is the only viable option for accomplishing the payoff and working toward a footing in which conventional refinancing becomes possible. It makes sense to work with a specialized financial services provider in enabling DPOs to move forward smoothly.
Aegis Capital Corp
Full-service boutique investment bank and financial advisory services firm Aegis Capital Corp. has assisted clients since 1984. Led by chairman and CEO Robert Eide, the company offers wealth management services to high-net-worth individuals and families, as well as to a variety of institutional clients. In order to better serve the needs of its clients, Aegis Capital Corp. has established its own insurance division as well.
Known as Aegis General Agency, this division offers the kind of personalized service clients typically expect from a small, neighborhood insurance provider, but with the added effectiveness and innovativeness that distinguish large corporations. This structure enables the company’s financial planners to offer a truly full-service range of products within the same general office space, while still delivering a completely independent point of view.
This kind of independence is vital in that every client is in a unique financial situation, and has distinct life goals that can only be properly addressed by a company that puts clients’ interests first. Many other competing investment banks automatically direct clients to their own preferred partner insurance companies, whether or not these companies are the best equipped to meet clients’ needs.
Aegis Capital Corp
New York City-headquartered Aegis Capital Corp. offers clients a comprehensive range of institutional and retail financial management solutions. Having enabled capital market transactions totaling more than $55 billion, Aegis Capital Corp.’s transactional experience extends to initial public offerings (IPOs) and alternative public offerings (APOs).
APOs combine a private investment of public equity (PIPE) with reverse mergers. This allows companies to avoid the often cumbersome and time-consuming IPO process.
With the APO, a shell company with no real assets or liabilities beyond PIPE financing is set up. Restricted, unregistered stock is sold to accredited private investors, with the underwriting investment bank typically arranging financing through institutional partners. Once capital is raised and due diligence conducted, 8K documentation is filed with the SEC, along with a registration statement, at which point the PIPE is released from escrow and the stock can be traded.
Properly funded, APOs offer a number of advantages over IPOs, including cost savings and fewer required public disclosures prior to closing of the deal. This enables private companies to assess viability accurately among investors before an announcement is made. PIPE investors also receive a host of benefits, including the ability to sell the stock at a significant discount to valuation on the public market. The successful APO thus serves to spark general investor interest in the newly liquid company stock and fuels subsequent growth.