In a “perfect” tech filing like Coherix, Inc., the Use of Proceeds table is designed to be highly transparent to satisfy both the SEC and Michigan’s “merit” regulators.
For their $15M raise (Tier 2), they broke the budget down into four strategic buckets. If you are doing a Tier 1 (up to $20M), your table should follow this exact logic to avoid common “comment letters.”
The Coherix “Use of Proceeds” Model
Based on their qualified 253G2 filing, here is how a top-tier Michigan tech company allocates a $15M budget:
| Expenditure Category | Estimated Amount | % of Net Proceeds |
|---|---|---|
| Sales & Marketing | $6,000,000 | 40% |
| Research & Development | $4,500,000 | 30% |
| Debt Reduction | $3,000,000 | 20% |
| Working Capital | $1,500,000 | 10% |
| Total Net Proceeds | $15,000,000 | 100% |
3 “Pro” Lessons from the Coherix Table
1. The “Specific Goal” for R&D
A “perfect” tech filing doesn’t just say “R&D.” In the text below the table, Coherix specified exactly what they were building (e.g., “accelerating the development of our next-generation 3D sensor modules for the electronics industry”).
- Your Action: If you are a Michigan tech company, specify which software version or hardware prototype this money will finish.
2. Handling Debt Reduction
Many founders try to hide that they are using investor money to pay off old credit cards or loans. Coherix was transparent about it.
- Why this matters for Michigan: Michigan regulators (LARA) hate when a raise is just a “bailout” for the founders. If you show that only 20% goes to debt and 70% goes to growth (S&M + R&D), they are much more likely to qualify your Tier 1.
3. The “Sales & Marketing” Focus
Notice that the largest chunk (40%) went to Sales. This signals to the SEC that the technology is ready and the company is now scaling revenue.
- The “Trap”: If you put 80% into R&D, the SEC may issue a comment letter asking if you even have a viable product yet.
How to Find This Document Yourself (Live Demo)
To see the full text and the lawyer-drafted footnotes that accompany this table:
- Go to the SEC Coherix Page.
- Look for the document dated February 11, 2019 (Form 253G2).
- Scroll to Page 18 (or search “Item 6. Use of Proceeds to Issuer”).
Comparison: Your $20M Tier 1
If you are doing a $20M Tier 1, your table will look similar, but you must add a column for “Offering Expenses.” In Tier 1, since you don’t have a CPA audit, your legal and state “Blue Sky” fees will be your biggest upfront cost. You should explicitly list these so Michigan regulators see you have budgeted for their compliance fees.
Would you like me to help you draft the specific “Footnotes” for a Use of Proceeds table that explain how you will use the money for a Michigan-based workforce?