The Business– RRC Washington’s product platform, reduces the number of occupants in operating rooms and increases the chances of healthy recoveries. The product enables participants to attend remotely via telecommunications applications. Surgery centers in both Anna, TX and Stamford, CT are currently using the product, and the Company has recurring revenues from software licenses. The company has additional education installations, letters of intent and substantial interest from key opinion leaders across the United States.
Market Opportunity – With a growing focus on limiting human-to-human transmission in hospitals (a $28.4B/year problem), healthcare institutions, from small surgery centers to large hospitals, are seeking a solution to limit disease vectors in operating rooms.
Key Benefit – The VSURGIC platform, specifically designed with a zero footprint in the operating room, is secure, fully encrypted, and HIPAA compliant. It is positioned to develop customized APIs that can be utilized for machine learning, clinical trials, education, and training purposes.
Management – Founded by two members of the founding team at Globus Medical (publicly listed, market cap $6.3B*), these entrepreneurs and medical device professionals have a unique understanding of the surgical workflow. *Past performance is not a guarantee of future results.
RRC Washington, Inc., (the “Issuer”, the “Company”, or “RRC Washington”) is issuing up to $3,000,000 in Series A Convertible Preferred Stock (the “Securities”) to (i) assist in research & development (ii) marketing and sales, (iii) new site installations and (iv) pay any financing fees associated with this offering.
• Worldwide, the COVID-19 pandemic has catalyzed substantial adoption of technologies which allow users to stay remote with minimal loss in effectiveness. Healthcare in the US has seen a similar shift, but telecommunications applications such as Zoom or Slack lack the necessary functionality and security for use in an operating room.
• In operating rooms, disease vectors pose a more potent risk than in other environments and hospital operating rooms often hold between three and five visitors who are there to verbally assist the hospital staff or to observe (students, administrators, engineers, product managers, fellows.)
• Many of these individuals are watching and periodically communicating a workflow which can be achieved as well, or better, in a remote environment.
• Understanding the specific needs of surgeons and their visitors is paramount to successfully approaching this multibillion-dollar market.
• Using a network of six off-the-shelf industrial cameras and proprietary, patent-pending software, RRC Washington has developed the VSURGIC product, the ideal telecommunications platform for the unique surgical workflow.
• With a minimal footprint in a crowded operating room, and an intentional focus on ease-of-use, the product has been adopted by some of the country’s leading surgeons.
• RRC Washington, Inc. (“RRC Washington” or the “Company”) was founded in 2020 by Ryan Durgan, Andrew Lee, and Lawrence John Binder to improve the quality of healthcare by providing secure virtual access to the operating room through their innovative communications control platform, VSURGIC.
• Andrew and Lawrence were members of the founding team at Globus Medical, which is now publicly listed (NYSE: GMED) with a $6.3B market capitalization. The team has collectively been issued over 100+ patents and attended 3000+ surgeries resulting in over 10,000 hours spent in the operating room.
• The company has made substantial progress on a limited budget: with less than $500K spent, the Company has developed its minimum viable product, installed a pilot system in Dallas, TX / Plano, TX / Anna, TX, / Stamford, CT and is beginning commercial installations with key opinion leaders as part of an early adopter’s program.
• The Company received its first recurring revenues from sale of software licenses in Q3 2022.
• Dividend: 6.0% Annual Cumulative Preferred Dividend
• Amount: Up to $3,000,000 ($1MM remaining)
• Mandatory Conversion: Each Series A Share will automatically be converted into Common Stock at the then applicable conversion rate (i) in the event of the closing of an underwritten public offering or equity event in which the aggregate proceeds to the Company exceed $25,000,000 (subject to adjustments for dividends, splits, combinations and similar events) (a “Qualified Financing”) or (ii) upon the written consent of the holders of 66 2/3% of the Series A Shares.
• Optional Conversion: The Series A Shares initially convert at a 1:1 ratio to Common Shares at any time at the option of the Series A Shareholder, subject to adjustments for dividends, splits, combinations and similar events and as described below under “Anti-Dilution Provisions.”
• Proceeds from this financing will be used to:
• finance the construction and implementation of new VSURGIC installations;
• develop more robust software and additional specific use-case APIs;
• market and advertise the VSURGIC product;
• provide working capital for general and administrative use; and,
• and pay any issuance expenses associated with this Offering.
• Participation in Exit: Repayment is anticipated to be received from a mandatory conversion event, of principal and all accrued dividends, and simultaneous private acquisition or public initial public offering.
• Liquidity Risk: Early-stage companies often underestimate the cost of scaling operations and RRC Washington may need additional capital to execute on its business plans.
• Execution Risk: Selling to organizations in the healthcare industry is difficult with long sales cycles and stringent regulatory requirements, which may slow growth.
AN INVESTMENT IN THESE PREFFERED INTERESTS IS SPECULATIVE AND IS SUITABLE ONLY FOR PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT AND HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT. RETURNS CANNOT BE GUARANTEED.
RRC Washington was founded in May 2020 to address gaps in telecommunication in the operating room with the introduction of its software-as-a-service telehealth digital access platform created specifically for the unique workflow in a surgical environment (“VSURGIC”).
The ongoing adoption of VSURGIC will improve the quality of healthcare provided by providing secure virtual access to the operating room through an innovative communications control platform.
RRC Washington is led by two former members of the founding team of Globus Medical (NYSE: GMED), a medical device company with a $6.3B market capitalization. The three founders, Ryan Durgan (Chief Commercial Officer), Andrew Lee (Chief of R&D) and Lawrence John Binder (CEO) have more than sixty years of combined experience in the industry with specific focus on sales, engineering, and operations respectively.
Operating rooms typically have between three and five visitors present during a surgery. Essential staff include surgeons, technicians, nurses, anesthesiologists, radiologists and assistants, and non-essential staff include salespeople, proctors, administration, engineers, students, product managers and clinical trial managers.
Each of these individuals is both a disease vector and an operating expense. Specific use cases include, but are not limited to:
Medical Device Companies: Medical device companies regularly sponsor flights and hotels for representatives who are required to be present in the operating room to advise on certain procedures.
Adoption of VSURGIC would both remove a disease vector from the operating room and save the medical device company money on travel. Further, it would allow the representative to receive and process more data than he or she may have in the operating room, leading to better advice and conclusions.
Universities & Teaching Organizations: Universities and vocational training organizations require access to the operating room for instructional purposes.
Provision of a remote learning environment will increase access to the best surgeons performing complicated surgeries.
Anesthesiologists: Providing an “at-a-glance” visual to patient vitals from the Anesthesia cockpit/perspective. In each of the identified applications, an efficient telecommunications platform will provide substantial benefits to users, hospitals, and related organizations, a fact recognized by JAMA in 2020.
VSURGIC is a telehealth platform created specifically for the unique workflow in a surgical environment. It provides secure virtual access (live streams and real-time data) to the operating room on a subscription basis through the use of telepresence and live data APIs.
Its specific focus on the operating room use case results in several features which allow for ease of adoption include but not limited to:
The VSURGIC product has been developed based on extensive first-hand experience in the operating room and a focus on developing a product which services the necessities of secure communications in healthcare centers without extraneous features or cost.
Its simplicity and ease-of-use position the product well for large-scale adoption by each targeted establishment:
RRC Washington initially installed its minimum viable product in a surgery center in Plano, TX where it has been used in over 50 surgeries and gathered over 50 TB of data.
While continued R&D is expected, it is not required for effective utilization of the minimum viable product.
Through the pilot installation in Plano, the Company actively refined and improved the system. The process focused on upgrading hardware as necessary and developing the full rollout package for future site installations, which has now been initiated.
With the receipt of a $1MM investment from a family office in this Series A Stock in 2022, VSURGIC was able to embark on the rollout of its Early Adopter’s Program, seeking to convince key opinion leaders (some of the best surgeons in the country) to be the first to install VSURGIC.
Five of these key opinion leaders (white labeled for confidentiality purposes) have committed to installations; three have been currently monetized and are paying annual recurring licensing fees.
There are currently thirteen installations for which either (i) commitments have been received, (ii) LOIs have been executed or (iii) verbal commitments have been received covering the United States.
Revenue has been earned by the company from three different components:
As adoption of VSURGIC grows, RRC Washington plans to introduce premium revenue sources through the deployment of specialized features:
The raw data gathered from VSURGIC feeds include every action in the operating room, creating a robust medical record of any procedure. This data set can be used in a myriad of applications based on a given customer’s need.
Real estate in operating rooms is at a premium, and the VSURGIC platform has zero footprint on the operating room but retains hardware and software platforms which are inside the operating room. As adoption increases VSURGIC will approach medical device companies, hospitals, surgeons, etc. to sell advertising space in its operating room real estate.
Over the course of the next five years, RRC Washington has a stepwise goal of a nationwide rollout as indicated below. Currently the company is about 10 months into its pilot and is strategizing a nationwide rollout strategy by approaching early adopters.
As adoption of VSURGIC grows RRC Washington plans to approach research organizations, medical device companies, hospitals and others to generate customized premium services through APIs per use case:
The healthcare industry faces mounting pressure to reduce costs while also improving patient outcomes. This incentive is driving key stakeholders – including patients, providers, payers, employers, and the government – to focus on investments into technologies that seek to improve treatment discovery and delivery methods.
Health spending accounted for 17.7% of US GDP in 2019 and it is estimated that enterprise health technology represents a roughly $640 billion industry that will reach $13 trillion by 2025, an approximately 14% compound annual growth rate (CAGR). In recent years, health technology venture capital deal activity has spiked as healthcare organizations, clinical trial providers, employers, insurance providers, and policymakers are increasingly willing to adopt technology-oriented solutions.
Key factors driving growth in the healthcare technology industry include:
1) Technological innovation and the proliferation of mobile devices and apps, as well as the continued evolution of Internet of Things (IOT) and artificial intelligence-related technologies
2) Proactive measures taken by healthcare organizations, employers, and insurance providers to reduce the cost of care
3) Growth in clinical trial research organizations and decentralized clinical trials resulting from the COVID-19 pandemic
4) Expanded ability to track and gain access to patient data, thus creating opportunities for analytic and patient management solutions
5) Government initiatives to improve healthcare infrastructure, decrease healthcare costs, and improve patient safety and privacy
The Company’s competitors can be organized into three separate groups – operating room equipment suppliers, consumer teleconferencing, and closed end systems. Please see the table below for a summary of the competitive landscape for RRC Washington’s VSURGIC platform.
RRC Washington’s potential customers include surgery centers, hospitals, medical device companies, and data companies. There are many potential customers in this market, which creates significant growth opportunities for RRC Washington and the VSURGIC platform.
Since inception in May 2020, RRC Washington has developed its minimum viable product spending as little as possible. Prior to this Series A Offering, the Company was fully capitalized by the founders – approximately $110k having been invested in the business by its founders.
~80% of the Company’s expenses have been related to the R&D process with further expenses on the legal costs associated with setting up the business, HIPAA consulting services, marketing, web and server hosting, insurance, and other services necessary for the operations of the business.
Model Assumptions:
This model assumes forecasted increases in new room and site installations, which are available in further detail in the model located in the data room.
Cost assumptions based on management projections.
Associated risks:
Management is unable to achieve sales targets or experiences cost overages.
Scaling of early-stage companies is challenging, and there are often unforeseen costs and difficulties. Substantial cost overages or operational obstacles could result in bankruptcy and a full loss of invested capital.
The preceding financial projections reflect the Company’s best estimated forecasts and are not guaranteed to be accurate. The timing of performance is estimated post-funding. These figures are forward-looking statements and reflect the Company’s views about various future events or expectations. These figures take into account known and unknown risks, uncertainties and other factors and assumptions which may cause the Company’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by this forward-looking financial projection. Please see the note regarding forward-looking statements. A full version of this pro-forma financial model is available through carofin.com
Carofin, LLC (“Carofin”) is offering up to $3,000,000 of Convertible Preferred Stock (the “Offering”, “Securities”, “Preferred Stock” or “Series A Shares”) in RRC Washington, Inc. (“VSURGIC”, the “Company” or the “Issuer”).
Proceeds from this Offering will be used to finance (i) capital expenditures associated with the installation of VSURGIC in various locations. (ii) research & development activities, (iii) sales and marketing expenses, (iv) operating expenses of the company, and (iv) issuance expenses associated with this Offering.
RRC Washington, Inc. (the “Company”), which has developed VSURGIC, a SaaS telehealth digital access platform for operating rooms.
6.0% Convertible Preferred Stock in RRC Washington (the “Preferred Stock” or “Series A Shares”).
A minimum of $750,000 and up to $3,000,000 of Series A Stock will be issued on a contingent basis.
The pre-money valuation for this offering is $10,000,000. The implied post-money valuation is $13,000,000, with the Series A Stock representing 24.30% of the Company. Please see the Pro-Forma Capitalization Table enclosed herewith.
The Company has authorized the issuance of up to 300,000 Series A Shares. The price per Series A Share shall be $10.00, representing 24.30% of the Company’s ownership.
Following a minimum closing of $750,000, proceeds from this investment will be used to finance (i) capital expenditures associated with the installation of VSURGIC in various locations. (ii) research & development activities, (iii) sales and marketing expenses, (iv) operating expenses of the company, and (iv) issuance expenses associated with this Offering
Individuals and institutional investors who qualify as accredited investors as defined by Rule 501 of Regulation D of the US securities laws (the “Series A Shareholders”)
To generate capital gains for Shareholders.
The minimum investment amount required by a Shareholder is $50,000, although the Manager reserves the right, in its sole discretion, to accept smaller investments.
This Offering will expire at the earlier of (i) such time when $3,000,000 of Series A Stock has been issued, or (ii) upon the election of the Company to terminate the Offering.
The Series A Shares will carry an annual 6.00% cumulative dividend which shall accrue until paid in connection with a liquidation event as defined below.
In the event of any liquidation, dissolution or winding up of the Company, the Series A Shareholders shall first be paid as follows:
First, to pay 1.5 times the original purchase price plus accrued dividends plus declared and unpaid dividends on each of the Series A Shares (or, if greater, the amount that the Series A Shareholders would receive on an as-converted basis). The balance of any proceeds shall be distributed pro rata to holders of common shares.
A merger or consolidation (other than one in which Members of the Company own a majority by voting power of the outstanding shares of the surviving or acquiring entity) and a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company will be treated as a liquidation event (a “Deemed Liquidation Event”), thereby triggering payment of the liquidation preferences described above unless the majority of Series A Shareholders choose to convert into Common Stock as defined below under Optional Conversion. The Investors' entitlement to their liquidation preference shall not be abrogated or diminished in the event part of the consideration is subject to escrow in connection with a Deemed Liquidation Event.
The Series A Shares initially convert at a 1:1 ratio to Common Shares at any time at the option of the Series A Shareholder, subject to adjustments for dividends, splits, combinations and similar events and as described below under “Anti-Dilution Provisions.”
Each Series A Share will automatically be converted into Common Stock at the then applicable conversion rate (i) in the event of the closing of an underwritten public offering or equity event in which the aggregate proceeds to the Company exceed $25,000,000 (subject to adjustments for dividends, splits, combinations and similar events) (a “Qualified Financing”) or (ii) upon the written consent of the holders of 66 2/3% of the Series A Shares.
Broad based weighted average anti-dilution protection against additional equity being issued or options granted at a value lower than that implied at the closing of this Offering. Options or Warrants approved by the Board of Directors for issuance to management, consultants and/or key employees shall not trigger anti-dilution adjustment. This anti-dilution protection does not apply to anticipated subsequent rounds of financing needed to grow the Company that are sold at a higher valuation than that implied at the closing of this Offering.
Series A Shareholders will have voting rights with common units on an as converted basis.
The Company will provide financial reporting, including quarterly, year-to-date and annual income, balance sheet and cash flow statements as compared to the current budget and compared to results for the comparable period for the prior year to Series A Shareholders and the Administrative Agent. An annual review will be performed within 120 days of year-end by a third-party auditor as designated by the Company. The coming year’s annual budget will be provided to each Shareholder within 30 days of each fiscal year-end for as long as they continue to be a shareholder of the Company.
The Board of Directors shall initially consist of five members (the “Directors” or “Managers”). The Series A Shareholders shall be entitled to designate one voting Director. The Board will elect an Audit Committee that will have three members including a representative of the Investors. The Board shall appoint and maintain a Compensation Committee that will have three members (one of whom shall be approved by a majority of the Investors). Compensation issues will be approved unanimously by the Compensation Committee. The Company shall pay for or reimburse reasonable out-of-pocket expenses for all Directors.
All Series A Shareholders shall have preemptive rights to purchase additional shares, up to the amount of their ownership percentage of the Company on an as-converted basis, in bona fide offerings for capital raising purposes until such time as the Series A Shares convert to Common Shares, and/or a sale or merger of the Company occurs, subject to customary exclusions, including without limitation: (i) issuances of management/employee/director/consultant incentive equity, (ii) equity issued at any time pursuant to any currently outstanding debt instruments, options or warrant agreements (ii) equity securities issuable upon exercise of any options or other equity security equivalents, (iv) equity securities issued in connection with bona fide third party financing transactions and (v) equity securities issued in connection with acquisitions and other strategic transactions.
Should any single Series A Shareholder or shareholder of any class owning five percent (5%) or more of the Company’s total equity make a private sale of its Shares (to someone other than another employee, officer or Director or then current Member of the Company, or a transfer pursuant to estate planning), then the Series A Shareholders would be entitled to participate, pro rata, in the sale (i.e., a Tag-Along Right).
If a Series A Shareholder, or common shareholder, or a group of shareholders owning more than sixty six and two thirds percent (66 2/3%) of the total Shares of all classes (“Selling Shareholders”) decide to (i) sell their Shares to an unrelated third party, (ii) sell or license all or substantially all of the Company’s assets to an unrelated third party or (iii) consummate a similar “sale of the company” transaction, and such transaction is unanimously approved by the Company’s Board, then they shall have the right (i.e., a Drag-Along Right) to require the remaining members of all classes to sell their Shares at the same price and on the same terms as offered by the third party for the Selling Members’ Shares; subject to standard exceptions and requirements.
The Series A Shares are subject to resale restrictions under applicable securities laws and are not registered for sale with the Securities and Exchange Commission.
Series A Shareholders, together as one class, will be granted the following registration rights after the Company’s IPO: (i) one demand registration for underwritten offerings, (ii) unlimited piggyback rights (including participation in the Company’s IPO, subject to underwriter approval) and (iii) rights to register Shares in unlimited S-3 "shelf" offerings provided that the aggregate amount of the proceeds of any such S-3 offering is at least $50,000,000. All of the related expenses (except underwriters' discounts and commissions) incurred by the members shall be paid by the Company. The registration rights shall be subject to standard black out rights.
Standard representations and warranties as to due organization, existence in good standing and power to conduct its business will be provided by the Company in the purchase agreement. Standard representations and warranties typical of a private offering of equity shares will be provided by each Investor, including as to status as an “accredited investor”, receipt of Private Placement Memorandum, Company’s operating agreement, and other offering documents and other materials as requested, and acknowledgement that the Offering is being made under exemption from registration requirements (Details to be found in the purchase agreement). In order to comply with the requirements of Rule 506(c), Each Investor shall be obligated to provide the Company with either: (i) third party confirmation of such Investor’s status as an “accredited investor”, or (ii) such information as reasonably requested by the Company to confirm such Investor’s status as an “accredited investor.
Carolina Financial Securities, LLC shall receive both a 7.0% fee for all equity capital raised as well a warrant for shares of Common Stock of the Issuer as compensation for services rendered. The amount of Common Stock shares covered by such warrant shall equal 7.0% of the number of Series A Shares purchased by Investors. The warrant shall have a ten-year life and an exercise price equal to $7,500,000 divided by the Company’s fully-diluted, as converted capitalization immediately prior to the Closing of the Financing Transaction. Additionally, the warrant will contain a net, cashless exercise feature acceptable to both CFS and the Company. The warrants will be dated on the same day as the closing of the Financing Transaction and will be considered as a part of the closing documents. The total purchase price for all the warrants shall be one hundred dollars ($100.00). CFS may share up to 50% of its fees and warrants with Carofin, LLC, an affiliated Broker-Dealer, for its assistance in the placement of the Offering. All legal fees and out of pocket expenses relating to closing the Offering will be paid by RRC Washington with CFS expenses subject to the Engagement Agreement between RRC Washington and CFS.
CFG Financial Services, LLC (“CFG FS”), an affiliate of Carofin and Carolina Financial Securities will act as administrative agent for the Series A Members, often coordinating reporting and other obligations between the Company and the Series A Members. The Company will reimburse CFG FS for its reasonable out of pocket expenses.
Deleware
AN INVESTMENT IN THE SECURITIES IS SPECULATIVE AND IS SUITABLE ONLY FOR PERSONS OF SUBSTANTIAL FINANCIAL MEANS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT AND HAVE NO NEED FOR LIQUIDITY IN THIS INVESTMENT. AN INVESTMENT IN THE SECURITIES OFFERED HEREIN SHOULD NOT BE A MAJOR PART OF YOUR INVESTMENT PORTFOLIO. YOU SHOULD REVIEW THE RISKS OF THIS INVESTMENT WITH YOUR LEGAL OR FINANCIAL ADVISORS.
THIS OFFERING INVOLVES SUBSTANTIAL RISKS. THESE RISKS INCLUDE, BY WAY OF ILLUSTRATION AND NOT LIMITATION, THE FOLLOWING: RISKS ASSOCIATED WITH THE FACT THAT THE LENDERS WILL NOT HAVE THE RIGHT TO VOTE ON OR APPROVE MOST DECISIONS REGARDING THE BUSINESS AND, AS SUCH, WILL NOT BE IN CONTROL OF THEIR INVESTMENTS IN SECURITIES OF THE COMPANY AND THE BUSINESS; AND THE OPERATION OF THE COMPANY INVOLVES TRANSACTIONS BETWEEN THE COMPANY, THE MANAGER, AND THE OWNER WHICH MAY INVOLVE CONFLICTS OF INTEREST.
THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM, AND WITH THE PRIOR CONSENT OF THE MANAGER, WHICH CONSENT MAY BE WITHHELD IN THE MANAGER’S SOLE DISCRETION. PROSPECTIVE INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
SOME OF THE INFORMATION IN THIS PRESENTATION MAY CONTAIN “FORWARD-LOOKING” STATEMENTS. YOU CAN IDENTIFY SUCH STATEMENTS BY THE USE OF FORWARD-LOOKING WORDS SUCH AS “MAY,” “ANTICIPATE,” “ESTIMATE,” “COULD,” “SHOULD,” “WOULD,” “EXPECT,” “BELIEVE,” “WILL,” “PLAN,” “INTEND,” “PROJECT,” “PREDICT,” “POTENTIAL” OR OTHER SIMILAR WORDS. THESE TYPES OF STATEMENTS DISCUSS FUTURE EXPECTATIONS OR CONTAIN PROJECTIONS OR ESTIMATES WHICH MAY OR MAY NOT HAPPEN AS PROJECTED HEREIN. WHEN CONSIDERING SUCH FORWARD-LOOKING STATEMENTS, YOU SHOULD KEEP IN MIND THE RISK FACTORS LISTED BELOW, WHICH COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN ANY FORWARD-LOOKING STATEMENT.
YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS IN CONJUNCTION WITH THE OTHER INFORMATION ABOUT THE SECURITIES BEFORE PARTICIPATING IN THIS OFFERING. THE RISKS DISCUSSED IN THIS PRESENTATION CAN ADVERSELY AFFECT THE COMPANY’S OPERATION, OPERATING RESULTS, FINANCIAL CONDITION AND PROSPECTS FOR SUCCESS. THIS COULD CAUSE THE VALUE OF THE SECURITIES OFFERED HEREIN TO DECLINE AND COULD CAUSE YOU TO LOSE PART OR ALL OF YOUR INVESTMENT. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES THE COMPANY FACES BUT DO REPRESENT THOSE RISKS AND UNCERTAINTIES KNOWN TO THE COMPANY AND THAT THE COMPANY BELIEVES ARE MATERIAL TO THE COMPANY’S FUTURE OPERATING PERFORMANCE.
The Securities being offered should be considered a speculative investment. The ability of the Company to achieve its objectives may be determined by factors beyond its control that cannot be predicted at this time. Consequently, there can be no assurance that the Company’s efforts to continue its business operations will prove to be sufficient to enable the Company to generate the funds required to make distributions. Anyone investing in the Securities should do so only if they are financially able to sustain the loss of their entire investment and should recognize that such a possibility exists.
As this security is a private transaction, there is currently no public market for the securities being offered herein. These Securities are not a publicly registered securities and will have no secondary sale liquidity.
The Company has a limited history of operations upon which an evaluation of the Company’s business and prospects can be based. No assurances can be given that the Company will ever be profitable or generate revenues sufficient to make distributions. This makes evaluating the Company’s business operations and validating its financial projections difficult. In assessing the Company’s prospects, a potential investor must consider the risks and difficulties frequently encountered by early-stage companies. These risks include the Company’s ability to: raise sufficient capital to fund operations, and other general corporate purposes; manage changing and expanding operations; establish and increase awareness of the Company’s brand and strengthen loyalty among prospective customers; implement and successfully execute the Company’s business and marketing strategies; respond effectively to competitive pressures and developments; continue to enhance the Company’s products and services; and attract, retain and motivate qualified personnel. The Company’s failure in any of these areas could adversely affect the Company’s financial condition and results of operation.
Securities may be purchased by the affiliates of the Issuer, or by other persons who will receive fees or other compensation or gain dependent upon the success of the Offering. Such purchases may be made at any time and will be counted in determining whether the required minimum level of purchases has been met for the closing of the Offering. Therefore, Investors should not expect that the sale of sufficient Securities to reach the specified minimum, or in excess of that minimum, indicates that such sales have been made to investors who have no financial or other interest in the Offering, or who otherwise are exercising independent investment discretion.
The sale of the specified minimum, while necessary to the business operations of the Issuer, is not designed as a protection to investors, or to indicate that their investment decision is shared by other unaffiliated investors. Because there may be substantial purchases by affiliates of the Issuer, or other persons who will receive fees or other compensation or gain dependent upon the success of the Offering, no individual investor should place any reliance on the sale of the specified minimum as an indication of the merits of the Offering. Each investor must make his own investment decision as to the merits of this Offering.
Any substantial decline in the demand for products sold by the Issuer may cause a decline in the market value of Issuer’s product and negatively impact the Issuer’s financial performance.
Pricing for the VSURGIC platform may vary significantly depending on market conditions. This may negatively impact the Issuer’s financial performance.
Outbreaks of disease and other events, which may be beyond the company’s control, producers who sell materials to RRC Washington, could significantly affect demand for its products, consumer perceptions of products, the availability of materials for purchase and its ability to conduct its operations.
Success for the Issuer’s business depends, in part, on the quality and safety of the Issuer’s products. If the products are found to be defective or unsafe, or if they otherwise fail to meet customer standards, relationships with customers could suffer. Further, the Issuer’s reputation could be diminished, and the Issuer could lose sales and/or become subject to liability claims, any of which could result in a material adverse effect on the business.
The Issuer’s activities are subject to international, federal, and state laws. The Issuer’s activities are expected to have a variety of regulatory oversight as development proceeds. Development of any of the Issuer’s operations will be dependent on the Issuer satisfying regulatory guidelines and, where required, being approved by governmental authorities. The Issuer intends to conduct their business activities in a compliant manner and in accordance with all applicable laws but may still be subject to accidents or other unforeseen events which may compromise its performance, and which may have adverse financial implications.
The Company competes with others in the industry. Competitors include companies that may have greater financial and other resources than the Company. Additionally, these competitors could use strategies to prevent the Company from achieving its objectives and may gain market share. This may have a material adverse impact on the financial position of the Company.
Any negative changes in economic conditions could have a material adverse effect on the Company’s business.
Due to the size of the organization, the Issuer has a significant reliance on certain key employees, particularly Ryan Durgan, Andrew Lee, and Lawrence John Binder. If the Issuer is unable to retain key employees it could jeopardize the Issuer’s ability to implement its business plan, its relationships with its customers, and its financial stability.
The Issuer expects to continue to grow its overall operations and this may strain the Issuer’s resources. Any inability to manage growth effectively would have a material adverse effect on the Issuer’s business.
The Issuer reserves the right to accept or reject any proposed investment in its sole discretion. Subject to this discretion, it intends to accept investments on a “first-come, first-served” basis, with the consequence that Investors will be allocated a portion of the total Offering, based upon the amounts they have committed, in the order in which such commitments have been accepted. The Borrower is not required to accept all commitments tendered to it. There is no assurance, therefore, that your commitment will necessarily be accepted in whole or in part by it should it raise more or less funds than are needed to make its investments.
The financial projections contained in this Offering Summary and any supplements represent the Issuer’s estimated results of operations. The financial projections have been prepared upon the basis of assumptions and estimates which may differ from actual events and/or circumstances.
The Company has not requested and will not request any tax ruling from the IRS regarding the tax consequences of the Company’s activities. Accordingly, there is no certainty as to the tax consequences of participating in the Security. The Company has not sought or obtained a legal opinion with respect to the tax treatment of the offering proceeds or issuance of the Security. Accordingly, Investors are urged to consult your own tax advisor with respect to the federal and state tax consequences arising from participation in this Offering.
There is a possibility that the IRS will audit the Company’s income tax returns. If the Company’s income tax returns are audited, your return might also be audited.
No assurance can be given that the current Congress or any future Congress will not enact federal income tax legislation that could adversely affect the tax consequences of participating in the Offering.
Potential investors should not rely exclusively on one aspect of the security structure when making an investment decision on whether or not to participate in this Offering.
In addition to the above risks, businesses are often subject to risks not foreseen or fully appreciated by management. Prospective investors reviewing this Offering Summary should keep in mind other possible risks that could be important to the success of their investment in the Securities.
Important Disclosures
These securities have not been registered with the Securities and Exchange Commission (the “SEC” or the “Commission”), or with any state securities commission or any other regulatory authority. The securities are being offered in reliance upon an exemption from the registration requirement of federal and state securities laws and cannot be resold unless the securities are subsequently registered under such laws or unless an exemption from registration is available. Neither the SEC nor any other agency has passed on, recommended or endorsed the merits of this offering (this “Offering”) or the accuracy or adequacy of these confidential offering documents (the “Offering Package”). Any representation to the contrary is unlawful.
These securities are offered through Carofin, LLC, Member of FINRA/SIPC. Carolina Financial Securities is an affiliate of Carofin and both Broker-Dealers are affiliates of Carolina Financial Group, LLC. Documents have been prepared by Carolina Financial Securities and have been reviewed and approved by the management of the Company. The information contained herein has not been independently verified and is dependent on information provided by the Company to Carolina Financial Securities, LLC.
Our firms seek to present vital capital with meaningful investment opportunities through the fundamental analysis of the businesses we seek to finance. Such analysis is usually conducted through a First Principles approach.
When we provide you with a recommendation, we have to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the recommendations we provide you. Here are some examples to help you understand what this means:
Proprietary Products: Our firms will often present investments that are only available through them, which may result in a higher placement fee. The Firms will receive the placement fee regardless of your investment performing as expected.
Administrative Agent Services: CFG Financial Services, LLC, an affiliate of our firms, will act as Administrative agent for the securities while they are outstanding. Given that our firms have an interest in providing recurring services to the Issuer, while the administrative agent looks after the interests of investors, there may be a conflict of interest between the firms and its affiliates.
Our firms offer brokerage services to accredited investors, exclusively through the sale of private placements. the offerings we bring to market are carefully selected, and any recommendation you may receive from us will be limited to these offerings. Therefore, we may be unable to adequately compare the risks and benefits of the offerings we bring to offerings presented by other financial professionals. While our firms will often present new investments and discuss such investment’s risks and benefits with you, the ultimate authority to make such investment rests solely with you.
Our firms do not hold any investor cash or securities, and securities offered by us often have no easily assessable market value, so our firms will not monitor the market value of your investment on an ongoing basis. The investments we present often require a minimum investment of $5,000 for equity offerings and $10,000 for debt offerings.
Fees and costs may reduce any amount of money you make on your investments over time. Our firms are mostly compensated through placement fees, which are payable by the issuer, meaning that the firms will be compensated by receiving a percentage of the funds raised in an offering, regardless of the investment performing as expected. Such placement fee is usually between 3% and 7% (please find the specific Placement Fee for this offering in the “Placement Agent Fees” section of the “Security Terms”. Given that different investments have different placement fees, we may often have a conflict of interest when presenting these investments to you. The Firms’ bankers are often compensated by receiving a percentage of the placement fee, and may have their own conflict of interest when presenting you with offerings they structure.
The information contained herein is for informational purposes only and is not intended for further distribution. The information does not constitute a complete description of any investment or investment performance. This document is in no way a solicitation nor is it an offer to sell securities nor is it advice or recommendation regarding any investment. The information is not directed to any person who is not believed to qualify under the definition of an Accredited Investor under the rules of Regulation D of the 1933 Securities and Exchange Act. No security listed in this document or otherwise offered through Carolina Financial Securities, LLC or Carofin, LLC may be purchased without prior receipt of a complete Private Placement Memorandum or other official offer to sell.
Due diligence materials related to this Borrower and the Offering are available to you through Carolina Financial Securities’ affiliated marketplace, Carofin. If you have not received your login information to access Carofin.com, please contact your company representative to have access granted.
The Company will not offer, sell or issue any Securities in any jurisdiction where it is unlawful to do so or where laws, rules, regulations or orders would require the Company, in its sole discretion, to incur costs, obligations or time delays disproportionate to the net proceeds the Company will realize from such offers, sales or issuances. Neither this Offering Package nor any subscription agreement shall constitute an offer to sell or a solicitation of an offer to purchase any Securities in any jurisdiction in which such transactions would be unlawful.
THIS OFFERING PACKAGE MAY CONTAIN MARKET AND INDUSTRY DATA THAT HAS BEEN OBTAINED FROM INDEPENDENT INDUSTRY SOURCES AND PUBLICATIONS, AS WELL AS FROM RESEARCH AND THIRD-PARTY AND GOVERNMENTAL REPORTS AND PUBLICATIONS PREPARED FOR OTHER PURPOSES. ALTHOUGH IT IS BELIEVED THAT THESE SOURCES ARE RELIABLE, THE DATA OBTAINED FROM THESE SOURCES HAS NOT BEEN INDEPENDENTLY VERIFIED AND THE ACCURACY OR COMPLETENESS OF THE DATA CANNOT BE ASSURED. FORECASTS OR FORWARD-LOOKING DATA OBTAINED FROM THESE SOURCES ARE SUBJECT TO THE SAME QUALIFICATIONS AND ADDITIONAL UNCERTAINTIES REGARDING THE OTHER FORWARD-LOOKING STATEMENTS IN THIS OFFERING PACKAGE.
Private placements are high risk and illiquid investments. As with other investments, you can lose some or all of your investment. Nothing in this document should be interpreted to state or imply that past results indicate future performance, nor should it be interpreted that FINRA, the SEC or any other securities regulator approves of any of these securities. Additionally, there are no warranties expressed or implied as to accuracy, completeness, or results obtained from any information provided in this document. Investing in private securities transactions bears risk, in part due to the following factors: there is no secondary market for the securities; there is credit risk; where there is collateral as security for the investment, its value may be imped if it is sold. Please see the Private Placement Memorandum (PPM), and the complete list of contents of this Offering Package for a more detailed explanation of the securities Summary of Terms, Investor Suitability Standards, Confidentiality, Securities Matters and Risk Factors.
Caution Regarding Forward-Looking Statements
Certain statements in this Summary Offering Material may be “Forward-looking” in that they do not discuss historical facts but instead note future expectations, projections, intentions, or other items relating to the future. We caution you to be aware of the speculative nature of forward-looking statements as these statements are not guarantees of performance or results.
Forward-looking statements, which are generally prefaced by the words “may,” “anticipate,” “estimate,” “could,” “should,” “would,” “expect,” “believe,” “will,” “plan,” “project,” “intend,” and similar terms, are subject to known and unknown risks, uncertainties and other facts that may cause our actual results or performance to differ materially from those contemplated by the forward-looking statements.
Although these forward-looking statements reflect our good faith belief based on current expectations, estimates and projections about, among other things, the industry and the markets in which we operate, they are not guarantees of future performance. Whether actual results will conform to our expectations and predictions is subject to several known and unknown risks and uncertainties, including risks and uncertainties discussed in this Summary Offering Material.
Consequently, all the forward-looking statements made in this Summary Offering Material are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us or our business or operations. Risks, uncertainties, and factors that could cause actual results to differ materially from those projected are discussed in the “Risk Factors” section of this Summary Offering Material. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Considering these risks, uncertainties, and assumptions, the forward-looking events discussed in the Summary Offering Material might not occur.
SECURITIES MATTERS State Securities Laws:
The Company will not offer, sell or issue any securities in any jurisdiction where it is unlawful to do so or where laws, rules, regulations or orders would require the Company, in its sole discretion, to incur costs, obligations or time delays disproportionate to the net proceeds the Company will realize from such offers, sales or issuances. Neither this Offering Package nor any subscription agreement shall constitute an offer to sell or a solicitation of an offer to purchase any securities in any jurisdiction in which such transactions would be unlawful.
PRIVATE PLACEMENTS ARE HIGH RISK AND ILLIQUID INVESTMENTS. AS WITH OTHER INVESTMENTS, YOU CAN LOSE SOME OR ALL OF YOUR INVESTMENT.
Securities offered through Carofin, LLC. Carofin, LLC and Carolina Financial Securities, LLC are affiliated Broker-Dealers, Members of FINRA/SIPC, and subsidiaries of Carolina Financial Group, LLC. For more information on the services we offer and details associated with such services, please see our Customer Relationship Summary.
This site is published for residents of the United States only. Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all services referenced on this site are available in every state and through every advisor listed. For additional information, please contact Craig Gilmore at 828.393.0088 x 520 and/or [email protected]
The information contained herein is for informational purposes only and is not intended for further distribution. The information does not constitute a complete description of any investment or investment performance. This webpage is in no way a solicitation nor is it an offer to sell securities nor is it advice or recommendation regarding any investment. The information is not directed to any person who is not believed to qualify under the definition of an Accredited Investor under the rules of Regulation D of the 1933 Securities and Exchange Act. No security listed on this webpage or otherwise offered through Carofin, LLC may be purchased without prior receipt of a complete Private Placement Memorandum or other official offers of sale.
Carolina Financial Securities and Carofin only offer one type of alternative investment, those sold as private placements. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance nor should it be interpreted that FINRA, the SEC or any other securities regulator approves of any of these securities. Additionally, there are no warranties expressed or implied as to accuracy, completeness, or results obtained from any information provided on this website. Investing in private securities transactions bears risk, in part due to the following factors: there is no secondary market for the securities; there is credit risk; where there is collateral as security for the investment, its value may be impaired if it is sold.
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