Additional fundraise?

In his latest update to investors, Austin mentions that further fund raising is required.

The business is still burning 300k/month

How does this work given there is now a DAO?

Do existing investors get to have a say regarding the nature of the fundraise?

I.e are all of the options which do not dilute existing investors being considered?

For example further CHO token sales, sales from the CRPT treasury, etc.

Hi Viresh,

I also read this part of the Q2 update

It mentions:
“ This could take the form of further token sales, which has already been extremely popular, and we have a pent-up demand for further tokens, and or equity. Either way, existing shareholders will be given the first opportunity to participate.”

As the market price of CHO now stands at 1$, even with a big discount a new round of sales will raise capital easily. As this capital will be used to attract new customers, it seems a good investment.

And maybe they can sell some extra CHO and buy back CRPT from the market and :fire: it!

Thanks for the comment David.

Do we believe the 1 dollar CHO price is sustainable?

I believe the main reason CHO is at 1 dollar is because there is very limited supply at the moment (a very tiny proportion of the available supply was put up for sales). Also most of those tokens are locked in for a fair bit of time.

Once the lock-in period goes away, there will be a big downside risk as people take profits.

More importantly, we need to know what the fundraising is being used for? (Future expansion i think)

For me, I was expecting the first fundraise to help with the app and customer service.

These are still dire based on my experience / experience of others from what I read on the seedrs page and telegram group.

If we can’t sort the basics after so many years (crypterium has been around for over 4 years now), it will be hard to attract new customers when customers at the moment can’t even do their KYC without encountering a lot of issues / top up without any issues / app crashes most of the time with the current level of customers / app crashes when market is volatile.

We need to learn how to walk first, before attempting to run.

With a high cash burn, does offering 15 percent return on USDC make sense?

The investor update mentions prudent risk management - how does offering high return when there is a massive cash burn happening / high operational risk with current customer service levels make much sense in terms of prudent risk management scores?

It will be good to get those answers before any future fundraise / token sales.

Having measurable KPIs around those with target dates would help I think.

Hopefully the management can provide those answers before any future fundraise

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Agree, CHO will only maintain its value or grow more than the market if there is an influx of new customers.

I fully agree with your ‘walk first, run later’ remark and hope some of these bugs are eliminated with the transition to Fireblocks -af which I also read nothing in Q2update-.

I am quite concerned about the status of the app and the customer service.

At the moment, the compliance levels are pretty poor too - crypterium have had interactions with ICO and FCA here in the UK because of non-compliance with the UK regulation.

In the US, there is a higher litigation risk - the regulation is a lot more stringent / the regulator is a lot more likely to issue fines as well.

This does worry me a lot esp as they are already not getting things right at the moment - you are just setting yourself for disaster by going to the US when the product is not robust, compliance is currently inexistant, customer service is amateurish. Customer service keeps sending wrong emails (like wrong email was sent to CRPT holders telling them they were not eligible for CHO tokens when they were), deadlines never being met, rules not followed, no complaint mechanism even though the T&Cs state so, zero compliance towards accessing your own data (despite EU GDPR regulation / T&Cs), etc, etc

To me, looks like we are just throw good money for nothing without being ready.

Investors were meant to be invited to an AGM. Never happened.

No-one can question the management / sack the management at the moment. The owners can’t see how much the management are paying themselves / what bonuses they are awarding themselves when there is a cashdrain. The owners can’t see the variable remuneration plan in place, etc…

There is a lot of serious governance, compliance and transparency issues.

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I think a combination of equity and token raise would make sense. It would be helpful to have a revaluation on Seedrs less prone to fluctuations as the CHO tokens. The shareholding dilution argument is a bit of a red herring as the company does not (and will not for a long time) pay dividends. On the other hand over supply of CHO will have a negative impact in valuation.

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Re a capital raise (at hopefully a much higher price), another benefit to stop the noise on the Seedrs forum!

Re a capital raise (at hopefully a much higher price), another benefit would be to stop the noise on the Seedrs forum!

We can raise that at the AGM next month

Doubt the management will pay any notice of the conversation happening here and / or seedrs

The replies under the name of Austin Kimm on the seedrs page are from the admin people

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@viresh89 Are you on the board?

No, but a shareholder. This is an invite or should be an invite for shareholders to ask questions to the board?

Fair enough. Just asking because eligible investors had the perks of being on the board. Did you see my post re a Corporate Matters Category proposal?