The "Use of Proceeds" clause specifies how the funds obtained from a financial transaction or investment, such as a loan or securities offering, must be utilized by the recipient. This clause ensures that the proceeds align with the agreed-upon objectives and can include restrictions or requirements to prevent misuse of the funds.
Use of Proceeds:The proceeds received by a Series from its respective Offering will be applied in the following order of priority upon the Closing: i) Brokerage Fee: A fee payable to the Broker equal to 1.00% of the gross proceeds of each Offering, as compensation for brokerage services, except in the case of Series #65FM1, Series #88PT1, Series #72FG1, Series #82AB1, Series #99FG1, Series #91GS1, Series #91DP1, Series #12MM1, Series #87FF1, Series #03PG1, Series #90ME1, Series #61MG1, Series #94LD1 and Series#82AV1, where the Brokerage Fee is 0.75% of gross proceeds less any proceeds from Interests purchased by the Manager, its affiliates or the Asset Sellers; ii) Acquisition Cost of the Underlying Asset: Actual cost of the Underlying Asset paid to the Asset Seller (which may have occurred prior to the Closing).
Use of Proceeds, PSE&G intends to allocate the net proceeds from the sale of the Secured Medium-Term Notes (or an amount equal thereto) and the concurrent offering of $ million % Secured Medium-Term Notes, Series P, due March 15, 2033, after payment of the offering expenses and the Agents’ discounts and commissions, to finance and/or refinance, in whole or in part, one or more new or existing Eligible Projects. Eligible Projects include investments or expenditures that meet the Eligible Projects categories below, for which PSE&G made disbursements within one year prior to the issuance date of the Secured Medium-Term Notes or expects to make disbursements through the maturity of the Secured Medium-Term Notes. PSE&G expects to disburse an amount equal to the net proceeds from the sale of the Secured Medium-Term Notes within three years of the issuance date of the Secured Medium-Term Notes.
We have made multiple changes to response to this comment. For example, we have amended the purchase and sale agreement to be at a price of $45,250 as a minimum purchase payment to ensure other expenses are adequately handled. The Use of Proceeds section has been modified to read as follows: The Manager will accept a down payment of $45,250, and will begin to divest from the asset. In other words, the Manager will continue to own, in joint tenancy with the Series, the asset until such time that a.) the full $114,000 is raised at which time title will completely be relinquished to the Series or b.) the Offering is closed in 365 days at which time the title still will be relinquished to Series, but the Manager will receive any unsold shares. By way of example only, if the Manager receives a total of $57,000 from the Series, the Manager will continue to be entitled to half of the asset until such time that title is relinquished and, in exchange, the Manager will receive 912 shares in the Series. It is expected that the Series and Manager will have multiple closings to effect the change in title.
“Use of Proceeds” refers to a detailed explanation or statement provided by a company or entity about how the funds raised from a particular financial activity, such as a debt issuance or an equity offering, will be utilized. This section is often included in financial documents like prospectuses, offering memorandums, and disclosures associated with securities offerings. Its primary purpose is to inform investors about how their capital will be employed, helping them assess the potential risks and benefits of their investment.
You should use a “Use of Proceeds” section whenever you are involved in activities that require raising capital, such as:
Including a “Use of Proceeds” statement is crucial as it enhances transparency and helps build trust with potential investors by outlining specific goals and projects the capital will support.
Writing a “Use of Proceeds” section involves the following steps:
Example:
The proceeds from this offering will be used primarily for the development of new product lines (40%), expansion of current manufacturing facilities (30%), and the repayment of outstanding debt (30%). Should the net proceeds be insufficient, we may seek additional funding through alternative financial means.
“Use of Proceeds” provisions are commonly found in the following types of contracts and documents:
Inclusion of a “Use of Proceeds” section aligns with best practices in financial reporting and is often a regulatory requirement for public offerings.
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