I just took a quick glance (as I imagine many investors probably have) to see what you're working with.
As far as I can tell, you're trying to raise half a million dollars on revenue of $4,800 per year with no clear plan as to how you are going to increase revenue, only a plan on how you will spend the money on wasteful things like office space. Investors tend to steer clear of investments unless:
1) The value is low enough to where they feel the risk on you is worth taking. This is usually around 5x-15x current revenue.
2) The prospect for revenue growth with the requested investment seems like a safe bet.
You are asking for nearly 100x your current annual revenue with no visible plan on how that investment is going to increase revenue.
I assume if you were to lower your offering to around $20,000 for 1/2 of your security, you would see much more investment. At 100x revenue, I can't imagine anyone feels too confident buying your IPO.
Hello.
Your message was a surprise. I see now I have failed to explain what we do and why we need that money. First of all, I would like to talk about what I am doing from a financial perspective. I am using the large dividend payments to attract investors. I'm IPOing the existing income of the company over sold shares only. We are then able to pay about 3.5% a week. Secondly, by the time we sell enough shares to drop down below 2% our income will approx. double from the new equipment, bulk orders, and increased print capacity. Our new printer (bought!) and new lamination film supplier (ordered!) has already lowered our production costs by 22%, and this will start being reflected in the dividend after next. We are in talks with a paper mill for supply of index cards which will lower our cost by another 20 to 30%. Since our capacity has expanded we have already received orders for staple bound A5 coloring books and so forth which are extremely easy to produce for us. We produce cheaper than the local print shop. We are able to do perfect binding in-house by hand until we can afford a binder. Now I'd like to talk a little about cost, because I mentioned the binder, which is a key point for us. If we can get a binder we can kill the local print shop. They are forced to charge about $1.25 for binding. With a digibinder I believe we can bind for less than 50 cents even on short runs (Then again, with the handmade bidnery I am setting up we can bind 50~60 books an hour per employee for the cost of manual labor).
You have said we are asking for too much money. This surprised me and made me realize I failed to explain what we do to you and why we need so much money. To be honest I thought it would be obvious, but in this day and age I suppose it is ironic, that people have lost touch with the paper business. Who among us remembers foolscap?
Anyways, a Sterling Digibinder is $12000, a little more from import costs. We can get a D-280 for $10,000 I believe, but I prefer the digibinder personally. For printing, we currently run m551's (from HP) and would like to get a m651 for color and then branch out to m806 models and better due to their low cpp. This is a cpp business. If we lower our cost from 1.8 cents per page to 0.9 cents per page we have just cut our materials cost in half. That's 100% extra profit, more or less. The 651 will cost us almost $3,000, the 806 probably around $7,000. Right off the bat you should see it would take us 3 to 5 years to get just an automatic binder and a 651 & 806 + standard consumables. That is primarily what the IPO is about. We have already proved we can make money, now we want to lower our costs and expand our capacity.
Next we will need space. We are going to need some office space for the equipment and materials. Setting up on the floor of a cheap office building may end up costing us $500 a month or more. Then there are the bulk orders. We currently deal with an importer for lamination pockets. I am willing to bet if I can find a manufacturer I can get them for another 20 to 30% off. Same goes for index cards. $7 a pack in the store, 25 cents direct from Pakistan. But if I buy from Pakistan, I have to buy a 20 foot container. So we need space. In return the cost savings will probably cover the office space and then some.
Once we get all set up and our stuff is here, our business will explode. This business is like a bakery. We buy flour for a nickel and sell donuts for a dollar.
And because almost everything we buy is material cost, it will eventually be sold, thus recouping the capital at profit. This isn't some kind of theory, we do in fact sell books and flashcards to various schools. I am confident that if we can sell ~50,000 shares we will be able to cut our cost down to 40-50% of what it was before we started this.
Anyways if you disagree with this, I'm forced to respect your opinion, but we are capable of paying a high yield until we have enough to buy the equipment and supplies we need. Worst case scenario I can stop selling shares for a couple of weeks or months and see if the market picks up.
