Parker MacIntyre Structures Unique State Securities Offering for Georgia Peanut Cooperative -- July 2019
When a group of South Georgia peanut buyers and growers needed $24 million in financing to build a peanut shelling plant, it turned to Bob Terry of Parker MacIntyre. Calling on his unique depth of experience in non-traditional capital raising methods, Bob was able to craft an offering customized to the unique needs of our client, Premium Peanut, LLC. In this instance, a seldom-used Georgia state-registered securities offering was recommended, resulting in a successful raise of $24 million from qualified peanut growers and buyers in the region.
Premium Peanut is a peanut farmer/buyer-owned cooperative organization that operates a peanut shelling plant and peanut crushing oil mill in Douglas, Georgia. The company came together as an entity in 2014 in an effort to provide another outlet for Georgia peanut growers to sell their peanuts and own an interest in the shelling plant.
In order to legally sell securities in the United States, all offerings must be either registered or exempt at both the federal and state governmental levels. While many growth-stage companies seek to raise capital in unregistered offerings, such “exempt” offerings can pose difficulties in that companies will be forced to jump through various hoops in order to qualify for the available exemptions from registration. Typically, this entails restricting investors to only high-net-worth status, restricting sales to only a few persons (usually less than 15), or restricting the capital raise itself to fairly small amounts (generally less than $5 million).
In working closely with the Premium Peanut team to identify the company’s needs and the characteristics of prospective investors, Bob realized an offering registered with the Georgia Commissioner of Securities allowed Premium Peanut to achieve its goal of raising a significant amount of money from persons not necessarily meeting strict high-net-worth status, while avoiding the many-times more onerous process of registering securities under federal law with the SEC. Specifically, Premium Peanut’s offering avoided federal registration by qualifying for the so-called “intra-state” federal exemption under section 3(a)(11) of the Securities Act of 1933 and SEC Rule 147. These provisions allow for a federal exemption in cases of securities sold only to residents of a single state, where the company issuing the securities is incorporated in and doing business within that same state. Because all of Premium Peanut’s investors are Georgia residents, Premium Peanut is incorporated in Georgia, and all of Premium Peanut’s employees are in Georgia, this exemption was a natural fit. Additionally, by registering the securities with the Georgia Commissioner, Premium Peanut was able to sell its securities publicly without restriction as to the net worth or income of the investor or the amount of money able to be raised.
With Parker MacIntyre’s assistance, Premium Peanut’s capital raising efforts, in turn, have been highly successful. In addition to the initial capital raise for the construction of the peanut shelling plant, a second offering in 2016 raised additional funds for the company that facilitated the construction of the oil mill, and the company recently registered a third offering allowing the ongoing sales of units to growers.
Parker MacIntyre stands ready to help your growth-stage company raise capital in an exempt or registered offering. Give us a call today for more information on our capital-formation practice group.