Security Campaign Builder - Screen 8 - SEC Form D - Offering - Signatures - Preview
The Offering tab of the Form D filing requests information regarding the securities comprising the investment that will be offered to investors.
When a company offers securities for sale to investors, the company is either a Public/Reporting company such as a company that is listed on a stock exchange and is required by the SEC to file regular reports about its business activities, or the company is a private company utilizing an exemption from these requirements. To file a Form D, you must use one or more Federal Exemption(s) to conduct the sale of your securities. Your campaign on Umergence will likely utilize either Rule 506(b) or Rule 506(c ), although this may not necessarily be the case. You can learn more about Rule 506(b) and (c ) here. For more detailed information about individual Federal Exemptions, consult your legal counsel.
If you have not yet sold any securities from the offering you are creating this Form D for, select “First Sale Yet To Occur” for the First Sale field. In some cases, you may have already begun selling the offering you are creating a Form D for – in these instances, list the date when the first sale occurred here.
The Duration of Offering question is asked because some offerings may continue for extended periods of time. If your offering has a defined end date (as defined in the campaign builder for your campaign), you should select “No” when completing this question.
The Type(s) of Securities Offered must be disclosed on a Form D. If the type of security is not listed, select “Other” and briefly describe the security. Convertible notes and Future Equity securities are some examples of security types that would need to be disclosed and described under “Other.”
The Business Combination Transaction, for the purposes of offerings taking place on Umergence will almost always be answered “No.” This question will only be answered with a “yes” in cases where securities are being sold in relation to a merger or other combinatory transaction between companies where the votes of security holders of one or more participatory companies will be required.
The Minimum Investment amount is the lowest amount a potential investor must commit to before being allowed to invest. This number will depend upon the goals of the campaign and company conducting it. There are advantages and disadvantages to lower or higher minimum investment amounts, so this must be considered with your advisors in the context of your campaign. The minimum investment amount should be carefully considered because it can have a significant effect upon the marketability of the campaign depending on the demographics of the investors you are seeking.
The Offering and Sales Amount fields describe the valued amount of securities being offered and the progress towards those goals.
- The Target Amount is the minimum target that was set earlier in the campaign creation process. This is the minimum amount that would constitute a successful raise and allow funds to be withdrawn from escrow. If this amount is not reached, the funds raised will be returned to investors.
- Price per Share is the price for one individual share or unit of the offering. This number must be exact, and will sometimes need to be defined to several decimal places.
- Total Offering Amount is the maximum amount being sought in the campaign. This number does not have to be reached for the campaign to be successful or to withdraw funds from escrow, but this will be the upper limit on the amount that can be raised in the campaign.
- Total Amount Sold is the dollar amount of securities that have been sold in this specific offering at the time the Form D is being completed. If the campaign has not begun and no outside sales have occurred, this number would be 0.
- Total Remaining to be Sold is the Total Offering Amount minus the Total Amount Sold. If no securities have been sold, this number will be the same as the Total Offering Amount.
- Sometimes additional clarification may be required on these fields. In these cases where a reviewer may have questions based on the responses to these fields, describe any additional details necessary within the clarification box.
In some offerings, such as a 506(b), a number of non-accredited investors might participate in the offering. If this is the case, check the box indicating securities might be sold to non-accredited investors, and if any have already invested, a number should be listed. In all cases, if any investor has invested already (whether accredited or non-accredited), a count must be given here in the Investors section, even if the number is 0.
Any Sales Commissions & Finders’ Fee Expenses paid or estimated to be paid by the issuer in connection with the sale of securities should be listed. Commissions paid to Umergence on the sale of securities would be needed in this section. Consult the Umergence Fee Schedule here. An example of language clarifying fees to be paid to Umergence in relation to a securities campaign is:
“5% of the offering amount upon a successful fundraise, securities equal to 3% of the securities sold will be issued to Umergence LLC upon a successful fundraise and Umergence LLC will be entitled to reimbursement for out-of-pocket third party expenses it pays or incurs on behalf of the issuer in connection with the offering.”
The Use of Proceeds section should be filled out if any of the proceeds from the offering will be going towards payments for any of the individuals listed as Related Persons earlier in the Form D.
If you are offering the securities of this campaign outside of Umergence, the Jurisdictions in Which Securities are to be Offered should match that list. If you are exclusively listing your offering on Umergence, this Jurisdiction list should match the list in which Umergence is registered to offer securities. The current list that should be added is all states EXCEPT Tennessee and New Hampshire. A Umergence representative will confirm this information when reviewing a campaign.
When offering securities through Umergence, “yes” should be selected when asked if there are any sales compensations under the Sales Compensation fields of a Form D. Please use the following information for these fields:
- Recipient – Umergence LLC
- Recipient CRD Number – 284368
- (Associated) Broker or Dealer – (click None )
- (Associated) Broker or Dealer CRD Number – (click None )
- State/Country – Connecticut
- City – Plantsville
- Street Address 1 – 1006 S. Main St.
- Zip – 06479
- State(s) of solicitation – The current list that should be added is all states EXCEPT Tennessee and New Hampshire. A Umergence representative will confirm this information when reviewing the campaign.
The Signatures tab certifies that the information contained in the Form D is true and accurate. Read the disclaimer carefully and if you are authorized by the company to sign on its behalf, click “I’m an Authorized Representative”.
- Issuer – is the company itself, not you as an individual
- Signature – this is where you as a representative type your name to represent your signature
- Name of Signer – this is your name, and as this is an electronic document, it will be the same as the Signature field
- Title – your title within the organization, eg: CEO, CFO etc
This tutorial continues for the next section of the campaign builder here.