Security Campaign Builder - 10 - Offering Statement - The Offering


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Security Campaign Builder - 10 - Offering Statement - The Offering


The Offering tab of the Offering Statement builder describes how the investment transactions will be completed and what the funding collected will be used for.

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What is the purpose of this offering? - requests a short statement about the general purpose requiring the company to be making this campaign (ie: opening a new store, building a new facility, working capital to scale up a sales department, etc)

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How does the issuer intend to use the proceeds of this offering? – This section is meant to be a detailed financial illustration of what will be done with the proceeds if the target amount of the offering (the minimum), or the maximum amount of the offering is sold.

Offering expenses include all expenses involved in the offering of the securities itself, such as sales commissions and finders’ fees etc. The commission Umergence charges on the offering amount should be included here. If the commission is 5% of the total offering amount, this amount should be factored in as offering expenses. In addition, “Third-Party” expenses relating to investor/investment processing, escrow fees, background checks, and technology fees should be added under “Offering Expenses” as a separate line item and estimated. These fees are described in the Umergence fee schedule here.

The second level of input boxes for Net Proceeds is where the campaign proceeds after factoring offering expenses should be itemized. These items will be subtracted from the net proceeds and should be delineated until the Net Proceeds are fully utilized. Some entries may have 0’s such as when there is only enough for a particular line item when the maximum amount is raised.

These entries do not have to be exact, but potential investors may evaluate the investment based on the utility illustrated by the intended use of proceeds.

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How will the issuer complete the transaction and deliver securities to the investors? – This section relates mainly to the backend process used by Umergence and its third-party trust agent. Unless special circumstances apply, the following is a recommended entry for this field -

“Upon requesting an investment amount through the Umergence website, the investor will execute an investment contract with the issuer (the “Subscription Agreement”) using the investor’s electronic signature. The investor must transfer funds from a source that is accepted by Umergence LLC into an escrow account held with a third-party trust agent on behalf of the issuer. The investor will receive emailed confirmation of the commitment. The issuer may hold a series of closings at which it will receive the funds from the escrow agent and issue the shares to investors. All investments will be in book entry form. The investor will not receive a certificate representing his or her investment. Each investment will be recorded in the issuer’s books and records and recorded in each investors’ “financials” screen on the Umergence website. If the Issuer reaches the target offering amount prior to the deadline identified in the offering materials it may close the offering early if it provides notice about the new offering deadline at least five business days prior to such new offering deadline (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment). Investors will be notified when the issuer meets its target offering amount. Thereafter, the issuer may conduct additional closings until the offering deadline. If the sum of the investment commitments does not equal or exceed the target offering amount at the offering deadline, no securities will be sold in the offering investment commitments will be cancelled and committed funds will be returned.”

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How can an investor cancel an investment commitment? – This section discloses the cancellation procedure for investors on Umergence. It is pre-populated with text that complies with the regulatory requirements of Regulation CF (Form C) campaigns but is applicable to all campaigns on Umergence. If you are not utilizing a Regulation CF (Form C) campaign and would like to discuss customizing this field, contact a Umergence representative at support@umergence.com

This tutorial continues for the next section of the campaign builder here.