Terry Woltman, Mike Snyder and Eddy Travia of Ignite Finance are running an accounting-based shell game with their Havelock IPO for Bitcoin ATM Fund IPO (BTM). Draw your own conclusions from this info in their prospectus:
1. Ignite Financing pays itself first with 25% of the gross. After that, dividends are calculated for shareholders. Ignite Financing gets paid even if there's ZERO dividends for investors. Ignite has its own, separate revenue scheme with NO financial stake in the value of the equipment, NO skin in the game. Investors bear the risk, and Ignite gets first-in-line on gross returns, while investors get scraps, if there are any.
2. The BTM fund offers a stake in the lease inventory only, NOT in the lease operations, which is a separate entity. Lease inventory only depreciates in value, so investors are holding inventory of ATM machines that will only lose value over time. This is good for Ignite, because they won't bear the cost of the inventory losing value. They just offload this to investors. Their balance sheets look great because they dump these costs on investors and get Bitcoin in return. BTM has no reinvestment provisions, so when inventory is liquidated after leases are done, the fund value WILL go to zero. Any dividend profit investors MIGHT get would be erased because of the fund value gradually going to zero.
Reference:
http://ignitefinancing.com/BTM_prospectus.pdfNote 1, page 4.
Management and Administrative Fees Policy
Ignite Financing receives 25% of all collected gross revenue on leases directly from BTM Fund assets for management and administration of the BTM Fund and associated assets
Note 2, page 7.
Special NOTE regarding reinvestment: The fund maintains no reinvestment provisions. As asset leases are completed, and used (off lease) equipment liquidated, the assets (leasable inventory) of the fund will eventually reach 0, at which point the fund will be closed as completed, and any remaining fund capital paid out in a special ”end-of-life” dividend disbursement and all obligations of the Fund and Fund Manager will be considered completed.
