Convertible Prepaid Ads

The Polymath, like all startups, will require some initial capitalization.  In our case, the use of proceeds will be primarily for building circulation, however, some will be used to fund prelaunch operations. It is our intent to be immediately profitable upon launch, with investment in circulation limited to cash flow.  So there should be no need to fund losses.

We are using an innovative capitalization method that will provide significant flexibility for both The Polymath (Polymathica Publishing) and its investors.  It will involve the issuance of 1/12 page in-line ads that, at the investor's discretion, may be used at a future date, sold or converted to equity shares.  There will be no initial securities restrictions and there will be immediate liquidity.  The investor may convert to equity when local regulations allow it.

The value of a prepaid ad will be determined by circulation with an assumed value of 4USD CPM.  At our year three circulation goal of 4.2 million, their projected value will be $16,800.  

An ad can be converted to 100 shares of Polymathica Publishing.  We anticipate that at 4.2 million circulation, EPS will be about $5 and and a share value at $126 parity will require a PE of about 25:1.  

Obviously, one would expect the prepaid ad to be more stable, however, the equity would allow the investor to participate in other projects, thus, potentially enjoying even greater appreciation.  For example, we are interested in developing a companion lifestyle and leisure online magazine entitled, 'The Finely Crafted Life'.  This would not benefit holders of prepaid ads, but would benefit shareholders.

Currently our intent is to offer three phases of prepaid ad sales, each offering 2,000 ads, convertible to 200,000 shares.  The first phase is being offered at $50 per ad in blocks of 60 ads.  This projects at a value of $16,800 in three years or an annual return of 595%.  Obviously, investment at this stage is very speculative.

Upon launch, we will have circulation of 150K and a prepaid ad will likely sell for $600.  This will be our Phase Two price and we will offer another 2,000 ads at this price.  The other investment will be less speculative and consequently over 2½
years is projected to return about 279%.  

When circulation reaches 500,000 we may or may not offer a Phase Three with prepaid ads costing $2,400.  It is quite possible that it will prove to be unnecessary.  Or, conversely, we may be in a position to do an IPO.

Phase One will provide $100,000 of funding.  Use of proceeds will be as follows:

Build Subscriptions   $60,000
Fund Operations         $30,000
Sell ads                           $10,000

Phase One has 30 blocks of 60 ads left at $3,000 each.  If you are interested in purchasing one or more, please contact us at


No comments:

Post a Comment