Mira and Alvin are two friends who have both had successful careers as directors of large proprietary companies. After several years of discussion, they enter into an agreement to

form a new company Glossy Pty Ltd. Glossy will be a PR firm that helps businesses and high net worth individuals to enhance their image and increase their reach and influence through social media and other channels.

Mira and Alvin are very excited to finally be embarking on a business endeavour together and they instruct solicitors to register Glossy Pty Ltd as soon as possible. In the meantime, Mira and Alvin use their substantial network to begin drumming up business for Glossy. More quickly than they anticipated, Mira and Alvin attract interest from a talent agency Glitter and Glam, who is keen to work with Glossy to overcome some of the image challenges that its clients have been facing lately.

On behalf of Glossy, Mira and Alvin execute a contract with Glitter and Glam - setting out the parameters of the relationship between the two entities and the costs and services to be provided. Glitter and Glam is aware that Glossy is not yet registered and so they request a clause in the contract that stipulates that if Glossy is not registered within 3 months of the

date the contract between Glitter and Glam and themselves is signed (12 January 2021), Glitter and Glam can rescind the contract.

Luckily, the solicitors work very efficiently, and Glossy is effectively registered on the 20th of February 2021. Mira and Alvin approach you at this point and inquire what steps they must take to ensure that the contract with Glitter and Glam is binding and further that there is no risk of personal liability for Mira and Alvin for the actions of Glossy.

A) Advise Mira and Alvin on both points. (20 Marks)

One year later, on 20th February 2022 Mira and Alvin meet to discuss the future of Glossy Pty Ltd. The company has been doing exceptionally well. It has contracts with numerous individuals and corporate entities and generates profits of over $10 million per quarter. Mira and Alvin are both directors and majority shareholders in Glossy and they have been thoroughly enjoying working together. They are exploring opportunities for expansion and they have decided it is time to offer Glossy to the public. While they both have a long track record of managing successful business, neither has been involved with a public company before, and they are excited to add this experience to their repertoire.

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They agree that they should raise $500 million to expand operations beyond NSW, invest in new offices and enhance their international reach. Mira and Alvin get the assistance of their solicitors to convert Glossy into a public company and then seek your advice on fundraising strategies. Mira thinks that the best option would be to offer $500 million in shares to the investment firm Expansions Ltd (a registered financial services licensee), while Alvin thinks a $500 million IPO on the ASX is a better idea.

B) Advise Mira and Alvin of the likely disclosure obligations and possible exemptions (if relevant) for each fundraising option. (10 marks)

After further discussions, Mira and Alvin agree to pursue and IPO to raise the $500 million. The discuss ways to promote investment in the IPO and agree that they should use the most ambitious profit forecast possible. They settle on $20 million a quarter, double the current profits.

C) Advise Alvin and Mira on what type of disclosure document they should prepare for the IPO, what it must contain and whether they should include the forecast of $20 million in quarterly profits. (10 marks)