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Our Company just raised another round of funding (5MM). I took a peak at the SEC filing and it was confusing. See below:

Total Offering Amount $18,500,000 USD Total Amount Sold $9,777,138 USD Total Remaining to be Sold $8,722,862 USD

Clarification of Response (if Necessary): Warrants with an aggregate exercise price of approximately $4,933 were issued in connection with the financing; such amount is not included in the above figure.

What does this mean?

Note: I intentionally omitted the link to the actual filing itself.

[Edit] Here's pretty much the rest of the filing in XML format

<offeringData>
    <issuerSize>
        <revenueRange>Decline to Disclose</revenueRange>
    </issuerSize>
    <federalExemptionsExclusions>
        <item>06</item>
    </federalExemptionsExclusions>
    <typeOfFiling>
        <newOrAmendment>
            <isAmendment>false</isAmendment>
        </newOrAmendment>
        <dateOfFirstSale>
            <value>2012-08-10</value>
        </dateOfFirstSale>
    </typeOfFiling>
    <durationOfOffering>
        <moreThanOneYear>false</moreThanOneYear>
    </durationOfOffering>
    <typesOfSecuritiesOffered>
        <isEquityType>true</isEquityType>
        <isOptionToAcquireType>true</isOptionToAcquireType>
    </typesOfSecuritiesOffered>
    <businessCombinationTransaction>
        <isBusinessCombinationTransaction>false</isBusinessCombinationTransaction>
        <clarificationOfResponse></clarificationOfResponse>
    </businessCombinationTransaction>
    <minimumInvestmentAccepted>0</minimumInvestmentAccepted>
    <salesCompensationList></salesCompensationList>
    <offeringSalesAmounts>
        <totalOfferingAmount>18500000</totalOfferingAmount>
        <totalAmountSold>9777138</totalAmountSold>
        <totalRemaining>8722862</totalRemaining>
        <clarificationOfResponse>Warrants with an aggregate exercise price of approximately $4,933 were issued in connection with the financing; such amount is not included in the above figure.</clarificationOfResponse>
    </offeringSalesAmounts>
    <investors>
        <hasNonAccreditedInvestors>false</hasNonAccreditedInvestors>
        <totalNumberAlreadyInvested>4</totalNumberAlreadyInvested>
    </investors>
    <salesCommissionsFindersFees>
        <salesCommissions>
            <dollarAmount>0</dollarAmount>
        </salesCommissions>
        <findersFees>
            <dollarAmount>0</dollarAmount>
        </findersFees>
        <clarificationOfResponse></clarificationOfResponse>
    </salesCommissionsFindersFees>
    <useOfProceeds>
        <grossProceedsUsed>
            <dollarAmount>0</dollarAmount>
        </grossProceedsUsed>
        <clarificationOfResponse></clarificationOfResponse>
    </useOfProceeds>
</offeringData>

[Edit #2] This is the previous filing (2010), a bit more revealing. Convertible Debt?

 <offeringData>
    <issuerSize>
        <revenueRange>Decline to Disclose</revenueRange>
    </issuerSize>
    <federalExemptionsExclusions>
        <item>06</item>
    </federalExemptionsExclusions>
    <typeOfFiling>
        <newOrAmendment>
            <isAmendment>false</isAmendment>
        </newOrAmendment>
        <dateOfFirstSale>
            <value>2010-09-01</value>
        </dateOfFirstSale>
    </typeOfFiling>
    <durationOfOffering>
        <moreThanOneYear>false</moreThanOneYear>
    </durationOfOffering>
    <typesOfSecuritiesOffered>
        <isOptionToAcquireType>true</isOptionToAcquireType>
        <isOtherType>true</isOtherType>
        <descriptionOfOtherType>convertible debt</descriptionOfOtherType>
    </typesOfSecuritiesOffered>
    <businessCombinationTransaction>
        <isBusinessCombinationTransaction>false</isBusinessCombinationTransaction>
        <clarificationOfResponse></clarificationOfResponse>
    </businessCombinationTransaction>
    <minimumInvestmentAccepted>0</minimumInvestmentAccepted>
    <salesCompensationList></salesCompensationList>
    <offeringSalesAmounts>
        <totalOfferingAmount>9210635</totalOfferingAmount>
        <totalAmountSold>4210635</totalAmountSold>
        <totalRemaining>5000000</totalRemaining>
        <clarificationOfResponse>In addition, warrants for purchase of capital stock valued at $1,842,127.</clarificationOfResponse>
    </offeringSalesAmounts>
    <investors>
        <hasNonAccreditedInvestors>false</hasNonAccreditedInvestors>
        <totalNumberAlreadyInvested>1</totalNumberAlreadyInvested>
    </investors>
    <salesCommissionsFindersFees>
        <salesCommissions>
            <dollarAmount>0</dollarAmount>
        </salesCommissions>
        <findersFees>
            <dollarAmount>0</dollarAmount>
        </findersFees>
        <clarificationOfResponse></clarificationOfResponse>
    </salesCommissionsFindersFees>
    <useOfProceeds>
        <grossProceedsUsed>
            <dollarAmount>0</dollarAmount>
        </grossProceedsUsed>
        <clarificationOfResponse></clarificationOfResponse>
    </useOfProceeds>
</offeringData>
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1 Answer

up vote 2 down vote accepted

It means that the Company authorized the sale of $18.5M in securities (not clear what securities), and has so far sold $9.78M.

As part of the offering, the Company sold warrants to buy its stock. A warrant is like an option -- it gives you the right to buy the stock at a set exercise price at a later time. In this case, if you add up the total exercise prices of all the warrants, it's equal to $4,933. They didn't include that in the $18.5M number because they only get it when somebody exercises the warrant.

I presume that you're looking at a Form D filing. As the offering proceeds, the company may update the filing to increase those amounts.

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How could someone read this and deduce that they raised 5MM in capital? – user19426 Aug 27 '12 at 20:32
1  
You'd need more information that what you've given. If htey sold $9.78M in securities and only have $5M in capital, then it sounds like they paid off $4.78M in debt with part of the proceeds. There is a Section in the Form D called "Use of Proceeds" that says a bit about what they do with the money. Note that the Form D is not intended to provide a lot of information to the public -- it's a private, not a public, offering. – Chris Fulmer Aug 27 '12 at 21:11
Checked, use of Proceeds is $0 USD – user19426 Aug 27 '12 at 21:28
1  
So, the Form D isn't really where I'd look for transparency. Chris Rea has a good point -- shareholders have certain information rights. As to your question about 'convertible debt,' think of it like this: your company has a potential investor, but the potential investor isn't sure about exactly what terms. So, he says "How about if I just lend you the money, and then when you get your next investor, we use whatever you owe me then to invest on the same terms that he/she gets." That's probably where the missing $4.78M goes. – Chris Fulmer Aug 28 '12 at 14:42
1  
It means that, at one point, they thought that they might sell up to $18M. We don't know whether they still intend to or not. Also, by law, Form D has to be filed within 15 days of the first sale. It could be that they're still selling,but had to file Form D before they were done. – Chris Fulmer Aug 28 '12 at 17:49
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