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A robust financial estimation presents a conservative 10:1 ROI ratio in 7–10 years – please download this IRR-Table (IRR > 40%).

Simply put, if you invest, i.e., x EUR, you will get back 10x EUR within 7–10 years after we enter the market (see also the IRR Table above).
In addition, you will get a liquidation preference (LP) of 20% p.a. in rank 1 – which is also a safety net since, after 5 years, you have gained the right to get all your money back, especially when we liquidate all the patents (worst-case scenario).

As the owner of preference shares, you have the legal right in rank 1 (before the owner of the ordinary shares can access profits) to secure a return on your investment. The value of this right will depend on how long you have held the shares since 20% will automatically accumulate over the years until profits are available for distribution.

Why is this important?

The liquidation preference provides a safety net for investors in the unlikely event of a company liquidation, so investors get their money back, before ordinary shareholders (e.g., after 5 years x 20% p.a. = 100% money-back guarantee, if profits are available, e.g. after the liquidation of all patents).

Again, this is just a safety net. Normally, the last (third) step in the waterfall model of the distribution of the profits in which all shareholders will participate will be the most important and most lucrative step => see company articles, which are also downloadable on the KCG website.

Yes. There are no lock-up periods, and everyone is free to do whatever they like. All preference shares are tradeable at arm’s length, but not publicly, as we are not a PLC.
However, KCG cannot guarantee to buy back your shares before market entry or to find a new buyer for you – but you can always find a new buyer in your business angel network, and we will always try to assist you.

There are approved methods and standards (see IVS for example) for how an expert can evaluate the most likely return on a capital investment.

One method is called benchmarking where you look at similar exits in the past (e.g. VUZIX and RECON and others, sold shares well beyond 100 million. EUR/GBP/USD.)

If a start-up has a valuation of 6M – 10M, but gets sold for 60M – 100M you can clearly see the 10x return on investment.

Since most innovative high-tech startups of this calibre sell for well beyond 100M – and since we could have 3 exit scenarios under the holding company (see next question) we are confident that a higher ROI is possible, but we prefer to be more prudent in our estimation.

We have found that most investors tend to invest in the industries they know best and in which they are allowed to invest (e.g., health tech funds will only invest in health tech, etc.).

Therefore, some local development investors have asked us if they are allowed to invest in “their subsidiary,” and our answer was yes –> together, we can create “your own subsidiary in your country”. – Please contact us to discuss details.

No! There is no need to sell shares since the profit distribution rights are already linked to this preference share class (see publicly available corporate articles). In this way, this share class feels like a bond.

You don’t have to sell your shares at an INOPTEC exit point, and no drag or tag-along clauses force minority shareholders to participate in a trade sale.

Yes, and this is an advantage of investing in a holding company structure. And the upside is 3 potential exits with an average low relative risk and positive cashflow generation.

Under one potential scenerio, an ROI of > 30 is possible, however, we have choosen a more conservative estimate for the sake of prudence.

We have done everything in our power to minimize the corporate tax burden of INOPTEC Group Ireland Ltd., which due to its location in Ireland is in a favourable position for taxation, required to pay corporate tax at a rate of 12.5%, one of the lowest corporate tax percentages in the world (even after the recent corporate tax harmonization towards 15%, which is not applicable in our case).

Furthermore, the taxable profit in Ireland will be reduced by patent licensing fees, within an intra-group intellectual property license where R&D subsidiary fees in Germany lessen the overall tax liability. Hence, liquidity/profits can accumulate under the KCG holding, from which you will get your return on investment.

Thus, we have undertaken a considerable effort to optimize shareholder value, while ensuring that we uphold the highest standards of legal, ethical and sustainable practices to protect the environment and to help those in urgent need of this vision enhancement system.