Understand Federal and State Securities Laws Before Raising Money

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The applicability of the federal securities laws is remarkably broad. The Securities Act of 1933 defines a “security” to include stock, bonds, notes, fractional undivided interests in oil, gas and other mineral rights, and “investment contracts.” The Supreme Court analyzed such contracts in the Howey case to mean investments in a common enterprise with an …Read more

Trademark Office Issues New Guidlines on Trademarking Cannabis Products and Services

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The U.S. Patent and Trademark Office (“PTO”) issued new guidelines on May 2, 2019, clarifying that trademarks for certain cannabis and cannabis-derived goods and services are now eligible for federal trademark protection. The PTO issued the guidelines to clarify the procedure for examining marks for these goods and services following passage of the 2018 Farm …Read more

SEC Issues Guidance for Investment Contract Analysis of Digital Assets

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On April 3, 2019, the Strategic Hub for Innovation and Financial Technology – known as “FinHub” – of the Securities and Exchange Commission (“SEC”) published a “Framework for Investment Contract Analysis of Digital Assets” (“Guideline”) to provide additional guidance to market participants in determining whether a “digital asset” meets the definition of an “investment contract”, …Read more

Federal Legislation Dealing with Cannabis Finance is on the Horizon, We Hope

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Two bills currently making their way through Congress suggest 2019 might be the year when Congress finally prevents U.S. law enforcement and regulatory agencies from enforcing federal prohibitions on marijuana in states where cannabis is legally cultivated and sold in commerce. The SAFE Act On March 28, 2019, the House Financial Services Committee voted to …Read more

How Not to Protect Your Company’s Valuable Trade Secrets

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A federal district court in Illinois recently reminded all of us of how important it is to take the necessary steps to protect the proprietary information that you consider to be a trade secret before any misappropriation occurs. If you do so after the fact you may lose your ability to enjoin the thieves from …Read more

Critical Issues in Every M&A Transaction

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Mergers and acquisitions (M&A) can be tricky transactions that frequently entail delicate negotiations between buyer and seller. The negotiations must be choreographed in minute detail to ensure the transaction closes in a timely manner and is a success for both parties. The parties will, after all, be living with one another after the deal is …Read more

Raising Money as a Public Benefit Corporation

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As a host of problems plague civilization – including the rise of authoritarian states, state sponsored electronic espionage, income inequality and climate change – people and markets are increasingly insisting that corporations generate positive social impact alongside profit. Investors have taken notice. The global impact investing market doubled from $114 billion in 2017 to $228 …Read more

Thoughts on How to Distribute Startup Equity Among Key People

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The purpose of granting equity to management, employees, consultants and advisors is to align the interests of the individuals central to the growth and success of your start-up company with the interests of investors. There are a number of ways to distribute start-up equity. The most common are stock options and restricted stock. One of …Read more

Fiduciary Duties of Directors of Biotech Companies in the Age of the Theranos Fraud

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Theranos, Inc. was a high-flying former biotech company headquartered in Silicon Valley that claimed to have developed a point-of-care blood test that would allow health care professionals to assess the risks many diseases posed to a patient based on a few drops of that patient’s blood. The company’s valuation, before delivering a single product to …Read more

The Musical Works Modernization Act is Congress’ Latest Effort to Bring Peace to the Music Business

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The Hatch-Goodlatte Musical Works Modernization Act was signed into law on October 11, 2018. The Act is Congress’ attempt to bring some semblance of peace to the various factions within the music industry. These groups have been waging legal warfare against one another since the invention of music streaming technologies and the advent of its …Read more