The two general types of Reg D securities sales are:
(1) Equity, and
(2) Debt. These can also be combined into a Convertible hybrid of the two (see #3 below).
An equity offering is where the company sells partial (or a majority) ownership in the company. The ownership, or equity, is transferred to investors via a security; for example, stock shares, partnership interests, or membership units. Equity offerings are preferred by early stage companies because there is typically no structured repayment schedule; the investors receive a return when the company profits and those profits are then dispersed; however, the payment terms vary depending on how the investment is structured.
A debt offering is where the company raises debt financing by selling promissory notes to investors with a set annual rate of return, and a maturity date for when the investors will reap a ‘Return On Investment,’ or ROI. A debt offering is much like a business loan, but, instead of a bank providing the financing, a single investor (or group of investors) lends capital directly to the company. These debt instruments can also be referred to as debentures.
A convertible offering is a combination of the aforementioned types; for example, a ‘debt’ offering that allows the lender/investor to ‘convert’ his/her debt note into shares of ‘equity,’ which then satisfies the debt obligation in-part, or in-full, depending on how the deal is structured.
* Preferred Business Structure: The Reg D exemptions can be used by domestic as well as foreign corporations. While the rules can be used by any corporation type the preferred structure is a “C” Corporation or Limited Liability Corporation “LLC.”
William Rosellini is the President of CytoImmune Therapeutics, Inc, a clinical stage biotechnology company. Previously, William Rosellini was the CEO of Perimeter Medical, Inc. (TSX:V “PINK”) where he oversaw 2 510K clearances, an RTO and $30M in capital raised. Prior to that William Rosellini was the CEO Nexeon Medsystems, Inc., (“OTC:QB, NXNN”)a medicaldevice manufacturing company that went public in 2017. Before that William Rosellini founded, raised $16M across A/B rounds and led Lexington Technology Group, LLC, a database company commercializing an electronic health record database solution to an exit (“DSS” NYSE). Before that William Rosellini founded Sarif Biomedical LLC, a stereotactic cancer microsurgery with IP spun-out of Medtronic and led company to an exit with Marathon Patent Group, Inc. (“MARA” NSDQ). William Rosellini subsequently served on the Marathon board of directors and chaired the Audit committee. William Rosellini completed 2 acquisitions to form Telemend Medical, Inc. a clinical engineering services company and led that company to an exit in 2016. William Rosellini was also CEO at Microtransponder, an implantable neurostimulation developer with solutions for stroke rehabilitation. William Rosellini is a former minor league pitcher with the Diamondbacks of the Arizona League, holds a JD, MBA, MS of Accounting, MS of Computational Biology, MS of Neuroscience and MS of Regulatory Science.