"These small IPOS are new to me. Could anyone explain the foundation and seed capital on page 17 of prospectus. Looks like founder gets 9m shares for $900 and seed capital is 4830000 shares at 5c each. This seems excessive to me when total shares are going to be around 30m and capital raising is at 20c." -------------------------------------------
Hi mate, as you are new to small IPOs allow me to explain/confirm your queery
Yes, that is what SEED and FOunder capital is - it's discounted to public offering. This is not uncommon, even in these proportions. There's a lot you need to consider
The directors have organized the float at their own expense, spent money and time with vendors to get them over the line and provided their own assets as support to the listing.
The cost to the directors is well over 5 cents per share for all their shares and the cost of getting this issue to the marketplace is well over $500,000.00 in time and effort as well as real money that has been discounted to finalise the IPO.
Directors are not being paid until listing and are not accruing wages before listing.
Therefore, this is a very big risk that is rewarded with stock that cannot be sold for 2 years. Obviously the directors and not the public are taking the biggest risk.
Imo the gold float of the year is in the making here
VGM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
