Preferential shareholders will be able to cash in and receive returns on their investments in Forcite, but crowdfunding equity participants will lose most of what they put in.
It was a hazard that equity crowdfunding investors in Sydney-based helmet technology company Forcite did not see coming - a weekend email with a DocuSign link asking them to accept the sale of shares to US camera giant GoPro (NASDAQ: GPRO) at a loss of approximately 87 per cent.
Based on documents shared by an anonymous Forcite shareholder with Business News Australia, Forcite was valued at $24.2 million in February 2022 with crowdsourced funding (CSF) participants buying in at around 23 cents per share.
Having received positive updates in the lead-up, including a "momentous day" in October last year as a $9 million deal was signed with the USA's largest motorcycle and accessories distributor Tucker Powersports, shareholders were blindsided by the announcement on the weekend of 13-14 January 2024.
In the DocuSign link - as minority shareholders with little say in the outcome - they were told they would receive just 2.9 cents per share for their investments.
However, it is understood that preferential shareholders will still get a return as the transaction price is not far off the 2022 valuation at more than $20 million.
After raising $5.5 million through a combination of Series A and equity crowdsourced funding (CSF) in early 2022, the Tucker Powersports update in October was accompanied by an announcement of a planned $10 million-plus raise with a $1 million component via CSF platform Equitise.
"The deal, along with our EU & UK expansion will deliver strong sales in 2023. With our Series B round soon to open, now is the time for shareholders to get in during our bridge round before Forcite is revalued at a significantly higher price," co-founder and CEO Alfred Boyadgis said in the announcement.
"Details of this opportunity for shareholders was shared in our Q3 Shareholder update. Forcite will send details of a shareholder AMA (Ask Me Anything) with me so look out for your invite."
The following month, Tucker Powersports filed for bankruptcy in the US, leaving Forcite in a vulnerable position for sales and prompting a renewed focus on its core Australian market.
Anonymous shareholders claim they were never informed by the company of this material change in circumstances.
Sources close to the deal claim staff numbers were reduced following the bankruptcy of Tucker Powersports, but it is expected that remaining staff will continue to work with the company as part of the broader GoPro group.
Business News Australia has requested comment from Forcite and Equitise.
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