MAGFAST Investor Q&A

TRANSCRIPT

Seymour:  For anyone who's just stumbled into the room let me do the set up for you. My name is Seymour Segnit the founder, president, inventor, original inventor of MAGFAST range of products. Katie is one of our top customer service people. She's my gracious co-host of our regular broadcast called The Upgrade. And we're here today to answer your questions about the opportunity to invest in MAGFAST which opens this Thursday at 4:00 PM Eastern and 1:00 PM Pacific. Now we announced this, when was it Kate? I guess five days ago, last Thursday. And the questions have been rolling in have they not?

 

Kate: Yes, lots and lots of them.

Seymour:  Kate and our head of investment services have been going through and have basically grouped all of the questions together because the same question comes in maybe phrased in a bunch of different ways. So we've broken it down into, I don't know what it is like half a dozen, seven or eight different main questions that bring together all the questions that have been coming in. We can't answer everything here, it's simply not possible but all of the questions will be answered at the Netcapital site.

So let's just break down a little bit more context first of all the offering isn't open yet. It opens as I said on Thanksgiving at 4:00 PM Eastern. So we're in the pre-offer period at the moment where we're giving you a bunch of information so you can get a feeling for whether or not this is right for you. On Thursday at 4:00 PM the thing will open up and it will then be at Netcapital. At Netcapital there will be all of the information that is required by the SEC, the Securities and Exchange Commission, who are in charge of all of this. All of the information that they require and a bunch more because we are who we are and we want to give you a little bit more.

Some of the questions that have been coming in are too specific and big public companies wouldn't answer them, we're not doing that. We don't give away all the answers to our competitors. So, we've put together a package of information that we think is fair, that we think is appropriately transparent, that's transparent but at an appropriate level for where we are at the moment. And then you have to decide whether or not it's right for you.

And I will say this right at the beginning, if you don't find that all of your questions are answered to your satisfaction then you really shouldn't go ahead and invest. You should only do this if you feel completely comfortable. And as I said before, investing in MAGFAST isn't right for everyone, it's just as well because there's going to be room for everyone. The SEC have just a myriad of rules and I guess if you're an investment professional maybe it would be easy. We find as regular folks like you that we've come into this long list of requirements. I know that we've met them all from a legal point of view because we've had very experienced and expensive counsel checking it all out and we've also had a full accounting review. That's going to be available to you at Netcapital. But to some extent how we communicate is left a little bit more open to our own interpretation.

And I'm just going to say this one thing before we start, there's this, let's hope no one from the SEC is watching, a bonkers SEC rule which has to do with certain bits of information to do with an offering. Sometimes they're called the tombstone information but they're the key pieces of information like the pricing, how long it's open, the number of securities that are available and that kind of thing. You're not allowed to pair that information in the same communication with more general information about a company. So, we've decided to leave that information right on the Netcapital site. So we're doing the more general stuff here, that specific information will be at Netcapital. So having set that up as a framework let's jump in Kate because I know you've got a bunch of questions and you've done a boatload of work consolidating them all. So let's just jump in with the first couple of questions and see how we get on. What do you got?

 

Kate: Okay. So, we go a lot, a lot, a lot of questions and the first grouping that I have is people who were confused about setting up their account, couldn't set up their account and or they just missed the part where I showed them how to set up their account. So, just general information about how do I set up my account.

Seymour:  All right. So, there's a couple of things in here. So, just for complete clarity the investment has to be made through an SEC, Securities and Exchange Commissionm certified, authorized portal as they're called, platform. And we've chosen Netcapital for a bunch of good reasons. The main one is that they're just terrific and they've been super in helping us to put this together for you. So, it has to be done at Netcapital and what we had suggested was so that you're ready for Thursday if you choose to go ahead with this that you set up an account in advance. So there's a couple of things. If you miss that piece of it then I'm repeating it for you now. Kate, how can people get over there to set up an account? Because we've got a little… In fact, let me just pick this up quickly here because we have got, come on, face ID. We've got Investors.MAGFAST.com. Look at this. Can you guys see that on the screen?

So welcome investors and what we've got here is we've got the replay of the video that we did the other day. And it's now got, you can't really see it on here but it's now got little chapters on. If I click on there can you see it's got little chapter headings so you can jump to the bit that you want to see? So that's the full replay. If there's a bit that you missed or there's a bit you want to focus on you can do that.

Then also here, I don't know how well you can see that, there's Kate and she takes you through a little how to set up your account at Netcapital. There's no obligation when you do that, the account is free. You know what it's like when you set up an account it just takes a little bit of futzing around and you can get that out of the way now in advance so you're not wasting time if you want to go ahead on Thursday. We even here also now have got a little investor packet, a little investor package that you can download that's a PDF. I click on it, it comes up here. This is pretty nice and explains one or two of our secrets. One or two of our secrets are unveiled in that. People seem to have been really enjoying it.

 

As I say, some of the more technical information is going to be on the Netcapital site. But you can go to Investors.MAGFAST.com, Investors.MAGFAST.com and get the things that I showed you just then. And in fact, you're probably at Investors.MAGFAST.com watching this right now because that's also where we're posting this Q and A. Yeah. Anything else, Kate?

 

Kate: And if anyone has any specific questions on when they get into their account what do they do or if they have trouble creating their account, please contact the Netcapital customer support because they will be able to help you better than we could.

 

Seymour:  Yeah. This is what they do all day long. They have a bunch of different companies that are offering shares on there and they can facilitate using their platform. All right. I think that's probably enough on that for now. It's Hello@Netcapital.com is their customer service address. Let's jump onto the next category of questions.

 

Kate: Okay. Next category, so what's the share price? For some people this actually impacts their investment decisions so it is an important question. And some are also asking what's the minimum investment amount and what percentage, this is an example but what percentage ownership would they get for $2,000?

 

Seymour:  Well, so immediately we're bumping into some of the SECs rules here because of this stuff about information that has to be over on the Netcapital website. I'm not actually even off of the website allowed to tell you what type of security whether it's shares, whether it's debt, whether it's… I'm not even allowed to say that off the site, it's bonkers. And we're told that the rules are being changed soon but we want to be good citizens. But let me get into a couple of points that are raised by that and then the more detailed questions will be answered when you go to Netcapital.

So first of all, one of the questions there was a minimum investment amount. That's pretty easy, it's $100 for U.S. citizens, $300 outside just because in order to accept investments from elsewhere there's a bunch more cost behind the scenes in terms of processing applications and this, that, and the other. When it comes to there's a good question in there about which is predicated on the assumption that you'll be buying shares which is what proportion of the company do I get. And I want to emphasize this, this is a general point because you're going to learn about the securities at their site but it is the valuation of the company that is of critical importance rather than when people are buying stocks they want to try to buy cheap stocks, "I want to buy penny stocks."

I'm not an investment advisor but I will tell you this, if this is a company and you buy a certain percentage of it there's a value to the company. Let's say you've decided to invest $2,000 and the company just to make it easy to draw it here is worth $20,000. So this is $20,000, you are $2,000 so you're at 10%. Now those aren't the numbers for us. We think we're worth a little more than $30,000 as you'll see but you'd have 10%. Then the company goes up 10 fold in value so now instead of being worth $20,000 it's worth $200,000. Well, your slice will go up 10 fold as well. So your original two would then become worth $20 and it would still be 10%. This is a simplified example to help make the point.

 

So, the question there was really good about what percentage would I own because it doesn't matter how you got to own it. Was it 2000 shares for a dollar each? Would it make any difference to how much the increase in value was? Was it one share at $2,000. It'd be very expensive to get but you still own the same percentage of the company. It's the percentage that's the important thing. I would, again not an investment advisor but I hope that when you consider us and other companies you look at who are the people who are doing it, are they doing something amazing, this, that, and the other, and the actual price of the shares. Whilst it does psychologically influence other people I believe it should not influence you.

Anything else there? Yeah, the valuation that's important. And didn't you say you had a bunch of.. Oh, sorry. I just wanted to mention the maximum because we had asked to try and get the SEC is limiting to just over a million bucks, the amount that we're allowed to take at this time. And so, to try and fit in as many people as possible we've also said, we've asked you to honor a cap of $5,000. But you said you'd had a bunch of people getting in touch didn't you Kate with customer service saying they want to do that?

 

Kate: Yes. We've already had several people say they want to invest $5,000 so it was very exciting.

Seymour:  Fantastic. Well God bless you. And again, only if it's right for you, only if it's something that you can afford. All right, what's next?

 

Kate: Okay. Next we have a bunch of people that just wanted more information on our company in general such as where's the prospectus, what are the company financials, patents and trademarks, what's the corporate strategy. And some people saying, "I don't see MAGFAST as an option listed on Netcapital."

Seymour:  Let's jump in. My stool felt unstable for a second there. Let's jump into those those quickly. So first of all, there's going to be a bunch of more stuff on the Netcapital site. And as I said just now there's going to be a whole bunch of financials in there. There's going to be a bit more of the patents and trademarks although we're keeping, there's some stuff that we're revealing more publicly than others. You can search, it's public records, but there's some stuff that's a little more under the hood than that. There's some people saying they didn't see MAGFAST on Netcapital. Well no, we're not because we're not live on Netcapital yet. We're going live on Thursday.

What else was in there? And we have one guy David, I think it was who was saying, "I think more of this information should have been in the presentation you did the other day." Well again, I'll refer to my earlier answer which was just some of this information because of the SEC's crazy rules we're putting it on the Netcapital site. What we tried to do the other day and available on the replay, I just showed you on Investors.MAGFAST.com is to try and give you a feeling for how we think and how we think differently about the market so you can get a feeling for whether or not this is right for you.

But I just want to emphasize that investing in MAGFAST ultimately never a penny more than you can afford. And you need to understand that this is this a fun, high-risk investment. You know who we are, you know what we're like, you know we're working really, really hard to make this thing amazing, but this shouldn't be anybody's college fund. This shouldn't be anybody's retirement fund. This should just be, "You know what, I've got a little bit of spare money. I want to have some fun with it." Money that you might have taken to Vegas or if you already have enough in investment strategy and you already have a plan strategy with an investment advisor where you've got a certain amount for discretionary putting into higher risk things maybe we fit into that category. But this needs to be, oh my God I want you to feel that you can sleep well every night and that whatever happens you had some fun with some good people along the way. What else? Yeah offering goes live on Thursday and there will be more detailed information there. Everyone should review all of the information that's there. And there's plenty because the SEC makes sure there's plenty, including a review by our CPA. And I'll say a little bit more about that in just a second. Kate?

Kate: I just want to emphasize again, that we did send out on Saturday, the email with the investor packet information. Because we had a lot of people, it falls under this category, a lot of people just wanting additional information. So please make sure to read that.

 

Seymour:  Yes, Investors.MAGFAST.com, you can just scroll down and grab the download. If you grabbed it the minute it came out, some people were having, like it was quite a big file. We've managed to make it a smaller one that downloads more quickly and easily. So if you're having any trouble with it's worth downloading it.

I just want to mention there's the full financial review, and I want to make a really important distinction, which is that per general GAAP, they call it general accounting principles, we'll have accountants writing because I will have misquoted that, but it's called GAAP. But per official accounting principles, we've had lots of receipts so far from pre-orders, millions of dollars, as you've seen. They're not yet booked as revenue because we recognize revenue when we ship.

So as a result of that, the accounts don't recognize the money coming in, they only recognize the money going out, so there's losses in there. This is normal at the stage of a company, but that is something that you're going to see in there. And by the way, if you go, I don't know, I mean obviously we're making this video for people, and we've got no idea of your level of experience or sophistication in terms of investment, but certainly I'm always struck when I look at companies that are out there, like big companies, Uber, and big famous companies run losses for many, many, many, many years.

Our plan is to be running for a very, very short amount of time. But as I explained the other day during the main presentation, the normal order of play is, I gave the example of setting up a coffee shop, you take some investment, because it takes some money to get started, so what do you do? You have to put down rent, you have to outfit the interior of the coffee shop. You have to buy and supplies. You have to train staff and all this, that, and the other. And you open the doors having spent a boatload of money, and then the money starts to come in a little bit at a time.

But what crowdfunding and the internet has made possible is to swap those things around, and to actually see if customers are interested in what you're doing first of all, everybody comes along, they pre-order, they're protected as we know, protected by your credit card, affords you some protection there. The reason we know this is because the credit card companies give us a hard time, they check us out very carefully. They hold a proportion of the funds for security. But customers can kind of prove that there's demand first, and then investment can come later. So we're doing the investment piece now. All right, what's next?

Kate: Next we have questions regarding what stock exchange will MAGFAST be listed on, and can I buy shares using my brokerage account? Like E-Trade, TD, UBS, and will the shares be liquid?

 

Seymour:  All right, so I used a phrase the other day during the presentation, I said, "You can think of it as a mini IPO." And that is true. You can think of it as mini, a little, initial public offering, because this is initial, this is the first, and it is an offering to the public.

But when we've done it, we won't be a traditional public company, in the sense of on the main stock exchange. We will still be called a privately held company, with a limited number of beloved investors. And the securities will be held at Netcapital. You'll have a virtual account at Netcapital, you'll see them there. One of the reasons we chose Netcapital is because they are going to provide an exchange where the securities in the companies that they have presented can be bought and sold.

So we're going to be listed there. One day, if we do a traditional IPO in the sense that you've known and heard about and ringing the bell and all that kind of thing, at that point, yes, then it would be in E-Trade, and UBS, and you'd be trading it like normal stocks. But at this point you're going to be in this kind of exclusive club of people who hold securities in private companies.

So not through your brokerage account. The path to invest in MAGFAST this Thursday and beyond initially is going to be through Netcapital.

Kate: Okay. We got so, so, so many questions from our amazing Canadian and international supporters. They're just asking if they can participate, can Canadians participate, can folks in the UK and elsewhere participate?

 

Seymour:

So the short answer is yes. The slightly longer answer is we're not lawyers, but the legal advice is, and I quote our securities lawyer here, I've got it up on the screen, so I get the exact words right? So, "Yes, no matter where he or she lives, anyone can invest in a US crowdfunding offering, whether under Title II or Title III or Title IV," which are the names of the different types of offering, okay. "Crowdfunding laws don't distinguish US investors from non-US."

Now, that's a legal opinion from a US-based attorney. You, if you are outside the US, of course you have to fit within the laws of your country. But we believe that the general answer is yes.

And when we spoke to Netcapital about it, because we wanted to, sort of belt and brace this, they've confirmed that really what I just said, as long as your country allows you to make investments like this, you are free to choose as you wish.

 

Kate: And we got a lot of specific questions regarding Canadians trying to set up their account and having issues. So please contact Netcapital, because they will be able to help you with that. I don't know anything about inside of Netcapital accounts, and they're amazingly helpful, so please contact them if you have any specific questions.

 

Seymour:  Yeah, they're terrific at Netcapital. And the other thing is we don't know anything about your account Netcapital as well. It's completely independent, as we don't have any visibility in there. We give you the link to go over there. We won't even know who's invested until the round closes. We get zero information at all.

 

They've told us that a lot of people have gone over and set up accounts, thousands of people have gone and set up accounts, which we're thrilled about. Thank you so much if you're one who's done that. If you haven't yet set up your Netcapital account, Investors.MAGFAST.com, there's the link there, and Katie's video.

 

But yeah, it's all completely kind of secure and compliant over there, because you're going to put in some bank information, social security, and that kind of thing. We don't get visibility into any of that.

 

Now, if you have any challenge with setting up the account, it's another reason why we suggested you do it early, get in touch with the folks at Netcapital. They're super helpful. If you're Canadian drop an email with your question to hello@netcapital.com, hello@netcapital.com, and they'll get you sorted out just in no time at all.

Kate: Okay, so we had a lot of questions regarding payment. “How do I pay? Are there any fees? How do I set up a payment credit card or bank account? Or do I use the wallet? And can you invest if your credit isn't perfect?”

Seymour:  Oh, okay. So let's just do that last one first of all. There's no credit check involved. I guess I should say, if you have terrible credit, probably this isn't something you should be doing, investing in startups with bad credit. But probably, I'm not an advisor, probably a financial advisor wouldn't suggest that. But no, credit score is not involved in any way in this.

Just going back to the questions about how do I pay? Are there any fees and setting up? And so on. So inside of Netcapital, there are several different ways to pay. The two main ones are with a US bank account, apologies to our Canadian friends, and other, UK and so on. So with a US bank account, they can do a direct hookup to the bank securely, electronically. Kate shows you how in the video, or starts to do it in the video.

And then when that's there, you can either use it at the time you're buying the securities, so as you're going through how much you want to invest? How do you want to pay? Then if you've already set up your bank account, you can use it then. I think you can add one at that time as well, although it might take a minute or two to make the connection. And what you can definitely do at that point is to use a debit or credit card.

 

There is a small debit credit card fee. It's around about 3%. That's not us. And I think, I'm not certain, but I think it's the case that the SEC requires that you pay that, so that the money that you're investing winds up being invested. It's 3%, it's the normal credit card processing everywhere else.

 

It's just that as consumers we're normally used to, when you buy something you're used to the people you're buying it from paying the fee. In this case, you have to pay it. But it's only 3%.

 

Bank account, there isn't a fee. So you can connect that up. And then there was the question I think about using the wallet. Netcapital have the idea of a wallet so that you can sort of load up your wallet in advance. And then when you're checking out, it becomes one of the options that's available.

The thing to be careful of is, well the reason that we didn't talk about the wallet so much in Kate's video when we were setting it up the other day, right Katie, was because there was a concern that sometimes it can take a few days for money to arrive in the wallet.

 

Kate: Mm-hmm (affirmative).

Seymour:  And we didn't want a situation where the money was on its way, but it wasn't there. And then it wasn't in your banking account anymore, because it was on the way to the wallet. And so we were suggesting-

 

Kate: Yeah, so don't count on that.

 

Seymour:  Yeah, set up the bank account. If you want to move some money into the wallet, that's fine. But that was kind of why we sidestepped the wallet.

 

Kate: And I just want to emphasize that you can't set up your credit or debit card ahead of time. They won't let you-

 

Seymour:  Yeah, I don't know —

Kate: … you can only do it once you're actually investing.

 

Seymour:  Yes. And I can't tell you why that is. It's something we spoke to the Netcapital guys about. They're working on it; they're creating this amazing new environment, including this exchange where it's going to be possible to exchange securities in the future. And they're making it better and better all the time.

 

And I would just say this for them. They were devastated that we crashed their server on Thursday by asking you guys to go and sign up. In fairness to them, they've never had a company that suggested people sign up in such large numbers all at once before. They have had people investing in large numbers before, and they're putting on extra server, and extra this, that, and the other for Thursday.

 

So we're hoping everything's going to go fine. I think it probably will. But if there's any kind of slow down then we're just going to have to ask you to be patient. It isn't within our direct control, I can only speak for the heart of the people who are actually doing it.

Someone else asked about PayPal. No, that isn't possible. No, it's not going to be possible. PayPal is not going to be an option as such.

 

All right. So there's the 3% if you use a card. So if you were doing $2,000, then it would be an extra 3%, whatever 3% is on top of that. There is something else that someone had noticed in all of the various bits of paperwork and so on, which is another percentage, 4.9%. That is a platform fee at Netcapital that we pay.

 

And you might say, "Well, I don't want to invest just for you to give money to Netcapital." I have to tell you, in the world of this kind of thing, raising money, it's incredibly reasonable. Companies who raise money, big famous companies, when you see them ding, ding, ding, raising… huge, huge fees get paid. So we're thrilled actually that it's as low as 4.9, but it doesn't need to be your direct concern. Just be aware that as a company, there are lots of bills to pay, and one of them is related to this raise. All right, what's next Katie?

 

Kate: I have a couple specific questions that didn't really have a category. So this one is from Michael.

Seymour:  Hey Michael.

 

Kate: He asked a couple of questions. “Number one, what is your estimated cost of sales percentage? Number two, do you have a breakdown of your pre-orders by product? And number three, how are you going to fund the manufacturing with the cash resources you disclosed?” I think he's talking about the investor packet that we sent over.

Seymour:  The packet, yeah that we sent over the weekend.

 

Kate: Mm-hmm (affirmative). And then-

Seymour:  So let's deal with… sorry, is there anything else from Michael? Because let me just answer this first of all.

 

Kate: No, that's it. I have another person, but we can do Michael.

 

Seymour:  So Michael, first of all, those are very good questions. Second of all, some of what you want, because I can tell that you're kind of more of a detailed guy, some of that stuff's going to be on the Netcapital site. But he asks what's the estimated cost of sales. There's a bunch of different ways of measuring that. We follow what we call the MER, the marketing efficiency ratio, which is another way of looking at it. When we spend a dollar, how many dollars do we bring in? The break even point for traditional like infomercial companies and so on, right? The number that they're going to like, when they do their testing, they're looking for a 1.8. We have always been higher than 1.8, but I will tell you that we're not nearly where I want us to be, all right? We've typically been between two and three over the last year or so. I want us to be at four, five and six.

Seymour:  And there are really three things that as a company we've got to do to be successful. You should look at all of the details. I was talking to my beloved Rich Warwick the other day who's just one of the best people on our team who we work with. You'll see him in the investor packet and so on. And Rich is just one of these people who's insane with a spreadsheet. He opens it up and it's in Excel and there's 43 tabs along the bottom and everything's a pivot table and everything's referring everything else. And he's just… You know this man, I think, Kate.

 

Kate: Yes.

 

Seymour:  And he's just brilliant. And so there's kind of future products that we've already thought of, imagine other future products, potential margins, potential changes in this that there, huge, huge amounts of detail. And the truth of the matter is you can get any result you want by changing the numbers that you put in here. So you can get a false sense of security from it. You can also get a kind of false of kind of doom, because if you put in super conservative pessimistic numbers here, the business doesn't look so good down there. If you put in good numbers here, it looks bloody fantastic down there.

 

Seymour:  So you can turn the dials any way you want. Let me tell you what the bottom line is on this. The three, and I tell this to the team like anytime anybody will listen, there's three things we have to do. There's a million things we have to do. Kate and the team have to continue to do fantastic customer service. It's one of the things we have to do, but the three big things that have my focus are, are you ready?

 

Kate: Yes.

 

Seymour:  All right. One, we have to get the cost of goods down to the right place. Okay, so what's the cost of goods? The cost of goods is how much does it cost to make these things? MAGFAST, as you know, is based on existing things. Magnets have been around forever, USBs being around forever, Qi wireless, so…, But no one has kind of packaged them all together quite like this. No one has demanded the same kind of quality in a package like that before. No one's quite done this before. And because it's early days, we're not able to commit to manufacturing runs of hundreds of thousands, millions of units.

 

Seymour:  Okay, we're preparing for that, for the future. I told you, we're making tools that are capable of that. All right. But we're not able to make that commitment to our manufacturing partners at this stage, right. So we're paying, making premium stuff and we're paying a premium over and above what they will cost to make in the future because the quantities, because they are newer and the quantities are smaller.

 

Seymour:  One of the reasons that a lot of companies can sell you the model from like last year or the year before for a lot less money than this year's model is because they've managed to bring the cost of last year's model down terrifically by making large numbers of them, if that makes sense. So we have to get our cost of goods, cost of goods sold, COGS, it's sometimes called, we have to bring that down. It's mission critical. There's nothing else for it. We have to do that. We're confident that we will. There's no reason why we should be paying more than anybody else, but that's one of the things that we have to do, and it's not done yet.

Seymour:  The next thing, which refers to Michael's question about the cost of sales, all right, we have to improve our MER, our marketing efficiency ratio. We have to spend less of the overall pie on advertising essentially. And we're doing a bunch of things to improve that number, but we have to improve that as well. All right?

 

Seymour:  And the third thing we have to do is to raise capital. And you're here with us now. This is the first phase. We plan to do more of that in the future. At the moment, as I told you, the SEC has put this significant limit on how much we're allowed to raise and therefore the number of people that we can take.

 

Seymour:  So we feel good about those three things, but you need to know that they are essential. And if we failed on any one of them, we'd have to do the other two pretty spectacularly to make up for it. They're normal things that companies do all the time. It isn't some like, "Yes, if we can only figure out how to perform eye surgery using lasers from the moon, we'll be fine," right? It's nothing like that. It's normal stuff, negotiating bigger contracts, negotiating down cost of goods, all right? Improving the efficiency of marketing. That means better ads.

 

Seymour:  We've got an ad… Many of you know my daughter, Hudson. There's actually, Kate and I have both done ads. I've revealed before that Kate's generally performed better than mine for reasons I can't imagine. But Kate is currently being beaten up on YouTube-

 

Kate: Oh.

 

Seymour:  By my younger daughter, Hudson.

 

Kate: Oh I didn't know that. Yay.

Seymour:  Sorry, lady. Yeah. Well, it's funny, we recorded some ads with Hudson. It's just Hudson going, "Hi. My dad invented some stuff and he'd love to show you a presentation," and she's just, she's delightful, as you know. And this is the bizarre thing about online advertising, is that the same ads with Hudson, we've tried them on Facebook, not working. Yeah, you're kicking Hudson's backside on Facebook.

 

Kate: Oh. Poor thing.

Seymour:  But her ads are burning it up on YouTube right now. Next week, it could be different because it's all, as I said in the original presentation, it's like we run ads like other people trade stocks, but she's flying at the moment and we've just been watching the numbers over the last few days. It's like, "What is going on there?" So long may that last. If that lasts for… But I mean, we're going to pull out a part, and if we can unpack the formula of why they're doing so well, that's already an improvement, right, in the efficiency of our marketing, right? Because a dollar spent on those ads is bringing a bigger return, but then there's all kinds of things.

Seymour:  We do the upgrade, right? Kate and I present the upgrade kind of two or three times a month. And we did one a while back called Fun with Funnels, Fun, with Funnels. And if you go back and watch that one, we talk about the marketing process of running an ad and people come to a landing page where, most folks watching this, you probably signed up to watch our main product presentation. And each of these is a stage that can be improved, right? Because some ads do better than others. People arrive at the website and some people like that page and other people don't like it so much, or the message isn't quite right, or they don't feel safe enough, or there's all kinds of ways to improve the landing page. And then most people, but not everybody, turn up for the show, kind of the presentation.

 

Seymour:  And so there's a lot of things that we can play with along the way there. And then of course the other thing that goes on is that people, they're in here somewhere or other, and then they go Google. They go to the Google to find out more about us. And we're a young company, so there hasn't been that much about us on Google. So now we're working on PR. There's a few more articles out about us out there. Luckily, we're really nicely rated on the kind of the trust score. I think Trustpilot is 4.7. The Google reviews, many folks watching this have been kind enough to do this for us. Because everyone's got their opinion. The only opinion that ultimately matters is the quality of the products when they ship. We feel really good about that, but everyone's got their opinion about us ahead of time. And thanks to Kate and the team, we've got super ratings there.

 

Seymour:  So anyway, so lots of things that we can do and are working on to improve. We're actually engaging with a new agency like right this week to help us improve the efficiency of the marketing. So we're going to improve cost of goods, we're going to improve the marketing. And then the third thing is we've got to bring in money. That's that's why we're here. We're here now.

 

Seymour:  So look at all of the detail, but those are the three things that I'm focused on every day, and you should kind of care what the founder is focused on, what the CEO is focused on every day. Kate will tell you that I'm meddling in a lot of other things as well, but those are the three big ones.

 

Kate: I had one more specific question for, not one more question, we have a lot more questions, but in this category, Steve asked, "Is all of MAGFAST tied to Seymour's leadership? Even Apple had more than Steve Jobs. They had Steve W. and Ron."

 

Seymour:  Even back in the early days. Yes, first of all, thank you for the question, Steve. I'm not sure you've been looking. If you look in the investor packet, Investors.MAGFAST.com, I think there's 18 people shown there, and that's not everybody. We've got some newer team members who aren't on there yet, and then we've got the kind of extended MAGFAST family of our manufacturing partners overseas and so on.

 

Seymour:  So it's already much more than me, and we want to grow the value of the company. There's this funny relationship that founders have with their companies, which is they, we founders, tend to bring like something or other that made it all possible in the first place, right? And I'm proud of the contribution that I've made to MAGFAST there, but my job now is to make myself redundant. Okay?

 

Seymour:  And Kate will tell you — I'm often saying, please, I'm thrilled that Kate and now my daughter perform better in the ads because that's one less place that we need me. At the moment, I'm still probably the best spokesperson for us, but we're looking to make me… What we want is that anybody who's looking, and we didn't actually, somebody must've asked, but people ask "How do I make money out of my investment, out of being a co-owner?" And there's a couple of main ways we can… There's a question about that coming up and then we'll come to it in a second, but basically, the idea is to have me help sort of embed everything that I have to offer into the way the company works without requiring me there to be doing it, if that makes some kind of sense.

 

Seymour:  So there's a sensibility that I have been bringing to it about what is MAGFAST, what makes MAGFAST, kind of who are we? But we're working on kind of baking that into the company so as that I don't have to be there. Because the company, if you become a co-owner, will be more valuable as we do that.

 

Seymour:  All right, how many more questions have we got? Is it time for dinner yet?

Kate: We have a couple more. We're almost done. I wanted to go over some individual questions/statements from people regarding how… We covered the downside, what could happen if it is a downside, hopefully there's no downside, but what is the upside? What happens if MAGFAST does really well? And Ross says, "Will we be able to get some kind of return on the shares? I do know that I may lose everything as well."

 

Seymour:  I'm sorry, I just want to be… Hang on a second. He's asking about shares. You're going to have to go to Netcapital to find out what type of security is being offered.

 

Kate: That's why I said "shares". Like-

 

Seymour:  Just saying.

 

Kate: Yeah. "I do know that I may lose everything," hopefully not, "but looking on the brighter side that MAGFESTS starts to make money, Seymour never answered anything about returns, et cetera." David says, "I know this is not like stock trading, but are we then owners in the sense that we profit share when this, our company, really takes off globally?" And then Debra says, "If there are no shares and the company stays private and the valuation goes way up, how would I potentially cash out on some of the growth?" And then we have Paul who said, "Will there be a dividend paid?" And then Michelle says, "I know that I could use this couple hundred dollars of MAGFAST money to pay for bills, however, if I'm able to invest into your company and it does as incredible as I know it will, it could change my life."

Seymour:  Okay, Michelle, thank you. I love you. No, okay? You got to pay your bills. Really. Seriously. This has to be… The minimum investment is a hundred bucks, but only if it's a spare hundred bucks. Please, please, please, this is risky. It's risky. It's exciting. You know me, I've dedicated the best part of a decade now to this charging thing and to MAGFAST for the last four years. I'm really excited about what's possible. I mean, you could see me tingling when I was talking just about what's been happening the last few days with the kind of ad performance.

 

Seymour:  But it would be completely inappropriate to suggest that anybody… We shouldn't do this without being really, really thoughtful about it. And it needs to be something where, Michelle, please, all right? It needs to be something where you've done, and from there on out, there's no regrets, right? From there on out, there's no regrets.

 

Seymour:  So there were a whole bunch of questions in there about it. Will it be dividends? Look, this isn't kind of a public company, which is where most people have heard about dividends. Because we're private, privately held companies in general, or certainly very often, they'll be taking money and reinvesting it into the company because we're going for growth at the moment. All right — rather than to be throwing off cash. Generally again, not a stock investment securities expert, but typically younger companies are aiming to grow. All the companies are aiming to grow if they can, but it's harder when they're older, but to be throwing off money, which would come in the form of dividends. So how would you make money? Well, there's this Netcapital exchange that is coming live quite soon, I think. So it will be possible to exchange. So if someone will buy your securities at a high price, then you can get something there. The two most common… Actually people often go, "What's your exit now? How do you think you might exit?"

 

Seymour:  And there's really only two, which is an IPO. That's a full going public. A full IPO ringing the bell, stock exchange, NASDAQ or whatever exchange you wind up going on, but you become a full public company. And at that point, folks who already own the company, get the chance to sell some shares, but statistically an acquisition is much more likely. So what's an acquisition? It's when another company looks at you and says, "Wow, that's really cool what they're doing. We could try and copy it, but maybe we should just write a check and buy them. And then it becomes part of our portfolio." I mean, there's just so many examples of that. It's kind of where would you even begin? But we've certainly seen that, for instance, in the charger market, Mofi. Most folks have heard of Mophie.

Seymour:  A lot of folks have heard of Mofi. Mofi was acquired by another company a few years ago. I don't know the exact number. I think it was something between 100 and $200 million. And that'd be nice, wouldn't it? And now it's part of the portfolio of accessories that this other company called Zag, I think has. So, acquisition is more likely. And both of these become strong possibilities for us, I think, if we do the three things successfully. Do the three things I was talking about earlier. Get cost of goods under control, improve return on advertising and bring an investment. And there's one thing I forgot to say earlier about improving the cost of customer acquisition is sometimes called or the return on marketing, is we've hardly done anything yet.

 

Seymour:  I was mentioning kind of Facebook and YouTube earlier on, but there have loads and loads of other places to do this. And as I mentioned in the big presentation the other day, Kate, you remember, like our entire market at the moment is beautiful, crazy people like you who will pre-order something that isn't shipping for a while. Most people wouldn't do that. There's a slide in the long presentation, if you saw it. Where I said, "Look, here's you guys." People who will pre-order something based on this. And let's see how big this planet is. Well, here it is. And here's all the people who could care less about the dream and something that's shipping in the future. They need a charger right now. And that's the main market.

 

Seymour:  Most charges are purchased by people who need a damn charger right away. Very few are purchased by people who see a vision of the future. So our marketing is therefore naturally inefficient at the moment, because we're going after a group of really amazing special folks who are kind of hard to find from a marketing point of view. So to my two main exits, most likely would be an IPO. That's where it becomes an actual public company, much more likely to being acquired by another company. All right.

 

Kate: Okay. We only have two questions left. This one I can answer. Can you walk us through the exact steps for Thursday? Yes, I can. We will be posting another video, like I did the other day when I showed you how to set up your account. We'll be posting one tomorrow at Investors.MAGFAST.com.

Seymour:  Right. You'll just screen capture and show the whole process. It's a pretty easy flow, actually. Especially if you've already set up your Netcapital account in advance. I'm just going to remind you that there's Investors.MAGFAST.com. So everything's at Investors.MAGFAST.com. You'll probably on Investors.MAGFAST.com right now if you're watching this video, but if you haven't set up your Netcapital account, click on this set up now button or click on that set up at Netcapital. And if you're not set up at Netcapital, you could still invest on the day. It'll just be a little slower going through. One other thing I just wanted to point out is that we're not doing another broadcast on Thursday. The idea is that we're doing this in advance and Thursday, we just opened the doors. You'll have access to the additional information. That's kind of the full set of information that the SEC has.

 

Seymour:  And you'll go in there. Kate, we'll make a little video showing you how to do the investing. It's extremely simple. Like if you do anything online, you're going to be fine checking out. You're going to go up, click on a button saying, "Invest." And just flow through, answer any questions that you haven't already answered by setting up your account. Thanksgiving Day, 4:00 PM Eastern, 1:00 PM Pacific is when the doors open, but you need to take the time that you need to make sure that you feel completely comfortable with the information that you find when you get that. Okay?

 

Kate: Okay. Last one is, "How do I avoid missing out?" D says, "How long will the window be open to invest?" And Leona and Linda say they can't invest on Thanksgiving Day, so what should they do? And then Peter says, "Will I be able to actually have my investment registered and completed despite the extremely high interest from the number of potential investors who will all be vying for their chance to invest?"

 

Seymour:  Well, thank you. There's a presupposition in those questions, which is that there's going to be a lot of demand. Look, we don't know. A lot of folks have registered to get accounts. We don't know what will happen on the day. And I do counsel you to take the time, to make the right decision, whatever that means for you. We're working on allowing more investment in the future, but that isn't certain yet. So we're only certain about this. Someone said, "What's the window? And how long will it be open?" Nominally the window is open for 21 days, I believe. I can't remember the exact date, but it's until it fills up. And we've got absolutely no idea at all. It might take 21 days. Out of this, it's a little bit more than a million. Out of this million, after 21 days, maybe we've only got half a million. Maybe we get the whole thing fills up in five minutes. We just got absolutely no idea at all.

Seymour:  Like if you're watching this now, God bless you for even taking an interest in it. We're incredibly flattered by that. We're doing our best. It's the first time we've done this. So my apologies, if we've missed a beat with you, if there's something that you were expecting us to tell you, that we haven't. We're trying to do this to a well cost standard, but as I say, it's the first time that we've done it. And I'll repeat again, not a penny more than you can afford. We hope to get a nice return on investment for the folks who choose to do this, but there's just absolutely no way to guarantee it. Right, Kate?

 

Kate: Right.

Seymour:  Yeah? No one should be under any illusions about it at all? I'm really proud of the work we're doing. I genuinely believe it's the best work of my life. Those of you who've known me for a while, know that I've done a bunch of things kind of in the past. But I sort of feel like that all of them kind of came to go. Like many folks know that I was a DJ in England, a little longer ago than I care to admit. 30 years ago. Something like that on the radio, but I learned a lot about presentation and information and about there's this strange thing on the radio where it's just kind of like you and a microphone and maybe the weather report or something.

 

Seymour:  And you can either be a very dull experience for people or you can make the weather, "Oh, it's going to be beautiful tomorrow. "You can sort of make something of it. And I think some of the skills that I learnt in there have been helpful in sharing how excited we are about MAGFAST. And then I was in Silicon Valley for a while and learned a little bit about how some businesses work. So none of this would have been possible without all of those experiences. And if you're able to join us as an investor, that'd be great. If not, we still do the upgrades. We still try to share a lot about what we're doing with as many people as possible. And whether or not you choose to join us this Thursday, whether or not you choose to invest in MAGFAST, we're really grateful to have you on the journey with us. Aren't we Kate?

 

Kate: Yes. Very. And I just want to remind everyone that we will be posting a full Q&A on our website as well. So if we didn't answer your question, we will.

Seymour:  Yeah. Full Q&A will be… I'll tell you what? Everything will be from Thursday at 4:00 PM Eastern 1:00 PM Pacific, will be at the Netcapital site. Until then Investors.MAGFAST.com is where we're accumulating the recordings of various bits and pieces that we have done. So we've put all the materials there and then there'll be extra materials when we open the doors at 4:00 PM Eastern on Thursday. So that's it. There's no more… Kate, you're going to recall the little, how to invest video. So we'll get that up on the Investors.MAGFAST.com tomorrow. And then there will just be some kind of email reminders and so on. We'll send you emails on Thanksgiving Day, probably in the morning. Maybe give you a kind of… I don't know. We'll send you a one hour warning.

Seymour:  I'll that you what? I'll commit to sending you a one hour warning. One hour before it opens up. And I'll send you one just as it's opening up. If it's for you, we'd love to have you, if it isn't, that's just fine. Thank you for even listening to us for a second. We're very grateful. Thank you. All right. Bless you. Hope to see you on the other side on Thursday.

Kate: Bye!