In May 2015, Mary K founded the proprietary company Koala Bean Coffee Pty Ltd. Using her global connections, Mary K has been able to develop Koala Bean into a successful business that produces coffee from beans grown on sustainable farms in Papua New Guinea. The beans are imported into Australia, where they are roasted and packaged in NSW and sold wholesale to cafes around the country. As of January 2021, and despite the challenges of COVID-19, Koala Bean employs 20 staff and is generating after cost revenues of $2 million annually.

Due to the success of the business, Mary K is seeking to expand. She wants to start her own line of cafes and break into the retail market, selling her sustainable coffee beans to major upmarket retailers like David Jones. Mary K does some back of the envelope calculations and decides that she will need to raise $200 million to establish three landmark cafes around Australia: one in Sydney, one in Melbourne and one in Cairns. She also wants to use some of these funds to hire new staff; pay a marketing firm to develop retail packaging for Koala Bean; and bankroll an advertising campaign to support the launch of both the retail coffee and the flagship stores.

Mary K is nervous about trying to secure such a large sum of money through creditors and is concerned about the interest payments that would result from such a big loan. Instead, Mary K decides to seek out funding from the public, she is also excited to become the CEO of a public company, a dream she has held since childhood. In March 2021, Mary K converts Koala Bean into a public company (Koala Bean Ltd).

Following this, she approaches you for advice on raising the $200 million in capital to expand the operations of Koala Bean Ltd. Mary K is considering two options for fundraising: raising the full $200 million by offering all shares to the well-known investment firm, Profit Plus Ltd (a registered Financial Services Licensee), or offering 200 million worth of shares in an IPO on the ASX.

Advise Mary K on the following questions:

a) Are the disclosure obligations the same for both avenues of fundraising? (5 points)

b) If Mary K decides to conduct an IPO, what type of disclosure document will be required and what must the document contain? (15 points)