Josh Schaeffer, PhD
Managing Director, Valuation & HR Advisory Services
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Complex securities have gained renewed attention in today’s tumultuous economic environment. In the scramble to raise cash, many companies are looking to instruments like convertible debt, convertible preferred stock, and warrants as an alternative to capital markets. Complex securities can also be an attractive performance incentive and negotiation tool.
However, these innovative instruments are tricky to value. The slightest complexity can lead to accounting surprises and unexpected earnings volatility. Whether your organization is an emerging growth company or simply looking to save on interest expense, our library of articles and on-demand webcasts can help you navigate the unique landscape of complex securities. Don’t see what you need here? Please contact us directly—we’re happy to help.
Converts in a Crisis: Understanding the Role of Convertible Securities in a Volatile Economy
In this webcast, we focus on different types of convertible securities and discuss their increased effectiveness in times of economic turmoil.
Josh Schaeffer, PhD and Gavin Hagfors · 6/23/2020
COVID-19 and Startups: The Case for Convertible Bridge Notes
For startups that need cash, convertible bridge notes—which allow investors to invest today to get into future rounds at a discount—can be a good alternative to traditional funding sources.
Josh Schaeffer, PhD and Gavin Hagfors · 6/1/2020
In a Crisis, Convertible Bonds Can Be an Attractive Way to Raise Cash
Convertible bonds are debt instruments that promise a specific cash flow stream. In today’s economy, they offer a unique value proposition. Here’s why.
Josh Schaeffer, PhD · 5/15/2020
The Two-Minute Guide to Current Expected Credit Losses
In this blog post, we review key features of the CECL standard and take a look at what companies will need to do to be ready.
Josh Schaeffer, PhD · 11/10/2019
Convertible Bridge Notes: An Introduction to Their Uses, Accounting, and Valuation Considerations
What can an emerging growth company do to raise funding now, before the next financing round? Convertible bridge notes are a creative option.
Gavin Hagfors and Josh Schaeffer, PhD · 7/22/2019
Tranched Preferred: Uses and Valuation Considerations
Get to know this simple but effective early-stage financing technique, including how it affects the valuation of the underlying shares.
Josh Schaeffer, PhD · 6/18/2019
The Appraisal Foundation Has Issued Its Final Guidance on Valuation of Contingent Consideration
The guidance calls for a more formal valuation methodology based firmly on option theory, using the market for real options.
Josh Schaeffer, PhD · 2/22/2019
The Use and Valuation of Contingent Consideration (Earnouts) Under the New Appraisal Guidance
How should contingent consideration, also known as earnouts, be valued? The Appraisal Foundation has developed some guidelines.
Josh Schaeffer, PhD · 8/28/2018
Diluted EPS for Convertible Debt Securities: A Primer
Convertible securities can be an attractive source of capital for mature and early-stage companies alike. But their dilutive impact is a potentially complicated issue. In this issue brief, we take a closer look at that impact and introduce the “if-converted method” as an elegant way to determine the dilutive impact of convertibles.
Josh Schaeffer, PhD · 6/28/2018
Understanding the Dilutive Impact of Warrants
If your company is thinking about issuing warrants, or already has some outstanding, the impact of dilution is something you’ll need to know about.
Josh Schaeffer, PhD · 2/28/2018
The End of Liability Accounting for Down Rounds
Does your company have outstanding financial instruments with down round protection features? FASB may have saved you a lot of work.
Josh Schaeffer, PhD · 2/8/2018
FASB 2016-01: Understanding the Removal of Credit-Specific Value Movement
The portion of value change due to changes in credit risk is now classified in other comprehensive income (OCI). Here’s how this standard affects reporting.
Josh Schaeffer, PhD · 6/27/2017
What You Need to Know: Contingent Consideration (Earnouts) Valuation
In this on-demand webcast, we discuss the valuation of earnouts—an important tool for getting M&A deals across the finish line.
Josh Schaeffer, PhD and Nathan O’Connor · 5/18/2017
Exposure Draft on the Valuation of Contingent Consideration (Earnouts): Our Comments
On February 28, 2017, the Appraisal Foundation released an exposure draft on the valuation of contingent consideration. These are our comments.
Josh Schaeffer, PhD · 4/4/2017
The Curious Case of Marketability Discounts on Profits Interests
Why do profits interests receive a valuation discount for lack of marketability while stock options don’t? In this blog post, we take a look at this interesting valuation quirk.
Josh Schaeffer, PhD · 1/11/2017
Your Piece of the Pie: Understanding the Valuation Impact of Multiple Share Classes
Why do companies end up with multiple classes of equity, and what are the valuation implications of such share classes? This Issue Brief reveals why multiple share classes exist and explains how their different features can make valuing these assets a challenge.
Josh Schaeffer, PhD · 6/5/2016
Understanding Today’s Low Interest Rate Environment: A Q&A With Equity Methods and Chatham Financial
In this discussion, industry experts from Chatham Financial and Equity Methods provide insight on how different areas of fair value and derivatives accounting are being impacted by the current period of low interest rates.
Josh Schaeffer, PhD with Amol Dharghalkar, Dan Gentzel, CPA and Mike Scullard, PhD of Chatham Financial · 3/1/2016
A Crash Course on Earnouts
Earnouts are important to many M&A deals because they connect the consideration paid to the future performance of the acquired company. Learn what they are, how they work, and how their valuation implications affect upfront and ongoing accounting.
Josh Schaeffer, PhD · 1/29/2016
What Is a Stock Warrant?
Stock warrants are an attractive vehicle for sales incentives, corporate control transactions, and lending transactions. But watch out: Determining fair value can be tricky.
Josh Schaeffer, PhD · 1/15/2016
Anti-Dilution Provisions in a Warrant Offering
Warrants are outside financing instruments that require special modeling outside of Black-Scholes and give rise to other accounting implications.
Josh Schaeffer, PhD · 8/31/2015
Design Features that Drive the Fair Value of a Convertible Security
Convertible debt combines features of debt and equity. Find out why companies issue it and how the terms you choose can dramatically affect the instrument’s valuation.
Josh Schaeffer, PhD · 8/30/2015
Creative Financing Using Convertible Securities And Warrants
Convertible securities are tools which combine features of debt and equity financing. But they’re tricky to value and can lead to complicated accounting treatment. In this on-demand webinar, we explain ways to manage the risks and benefits of these complex securities.
Josh Schaeffer, PhD · 7/23/2015
A Crash Course in Convertible Securities
An instrument with key features of both non-convertible debt and stock options or warrants can be attractive to investors and issuers alike. But the benefits can also be drawbacks.
Josh Schaeffer, PhD · 5/30/2015
