Are product investments monitored by securities laws (vs. Company Equity)?

I own a private company. I am looking for investors to help us commercialize a product. I do not wish to offer private equity (PPM) because I am not offering equity in my company. I am looking to offer equity in the product. Therefore the investor would receive royalty proceed shares of 'all product sales'. Is this investment model regulated by US Securities laws? Is it any different than selling company shares from the governments perspective? If so, how? If not, why not?

You really cannot offer equity in a product. You can sell portions of a license; or create a subsidiary that handles the product and then offer shares in the subsidiary.

If you do offer shares, it should be regulated by the SEC; if the offering qualifies for Reg D or Section 4:2 of the '33 Act, you would only be concenred with antifraud provisions, not registration.

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