June 19 2015
Allegiancy continues to blaze trail for use of Reg A to raise capital, offer more investment opportunity to the public
Allegiancy pioneers use of new SEC rules to grow business, help lead revolution.
RICHMOND, Va. — Allegiancy, a Virginia commercial real estate asset manager, announced today its intent to offer up to $30 million in preferred equity securities to investors under the new Regulation A rules, once qualified by the SEC under Tier II of Regulation A.
This action will make Allegiancy one of the first companies to use the new Regulation A to capitalize its growing business.
“Our use of the JOBS Act is exactly what Congress intended. We are excited to be out front, as Reg A heralds a new era of growth and opportunity for small businesses, investors, and the U.S. economy,” said Allegiancy CEO Steve Sadler.
“Allegiancy is in perfect position to leverage the new Reg A to raise capital to accelerate our growth and success,” said Sadler. “We’re also enthusiastic that, for the first time, regular investors have the potential to gain immensely by investing in higher-growth companies like ours in the earlier stages.”
As part of the 2012 Jumpstart our Business Startups (JOBS) Act, the U.S. Securities and Exchange Commission (SEC) announced the new rules for Regulation A in March. The rules increased the amount a company can raise through a public securities offering from $5 million to $50 million in a year, and allowed non-accredited investors to invest.
“When businesses like Allegiancy raise capital, deploy it effectively to grow and hire, and then post favorable results for investors, we will have proved the full potential of the new Regulation A,” said Sadler.
A is for Allegiancy
Allegiancy has already demonstrated success in deploying capital last year from doing a smaller Regulation A raise under the old rules. With that capital, Allegiancy has already paid more than $300,000 in dividends to investors, created new jobs, and grown the company.
With the recent addition of the asset management contracts and a division of TriStone Realty Management to the Allegiancy family of companies, Allegiancy has significantly grown its assets under management. Specifically, since its first offering closed in April of 2014, Allegiancy has grown its portfolio an estimated 385 percent based on square footage under management, and an estimated 425 percent based on management fee revenue.
Allegiancy has also grown its number of employees from six prior to its first Reg A raise last year to 19 today. The company will double its physical footprint as well, when it moves into a new 7,000-square-foot headquarters next month, also in Richmond.
The additional capital raised from the new Regulation A is intended to help Allegiancy acquire more companies, secure additional asset management contracts, hire more employees, and continue to improve its proprietary technology for the benefit of property owners.
Note: Moloney Securities, a St. Louis-based broker-dealer and investment management firm with offices in Richmond, is the lead broker-dealer handling Allegiancy’s Regulation A offering.
Implications of New Reg A
“The capital raised in this offering is intended to help us grow our firm faster, but the new Reg A is about much more than Allegiancy,” said Sadler.
“The new Reg A opens doors for small businesses who previously couldn’t access the capital they needed to grow. The new Reg A helps create new jobs and opportunities. And it gives regular folks access to investments that only a handful of venture capital and private equity investors have enjoyed until now.”
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The foregoing does not constitute an offer to sell or a solicitation of an offer to buy securities, and no money or other consideration is being solicited hereby, nor will be accepted. An offer to purchase or a solicitation of an offer to buy the securities can only be made or received and accepted once an offering statement is qualified by the Securities and Exchange Commission as exempt from the registration requirements of the Securities Act of 1933 (the “Act”), as amended, pursuant to Section 3(b)(2) of the Act. Any such offer to purchase securities may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date of the offering related thereto, and any indication of interest to purchase securities involves no obligation or commitment of any kind.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Allegiancy, LLC’s (the “Company”) present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the offering circular dated January 14, 2014, and filed by the Company with the U.S. Securities and Exchange Commission on January 15, 2014. The offering circular, and any supplements or updates thereto, is available on the EDGAR system located on www.sec.gov.
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