Question $2$

Hi$,$

I have just received an email from Peter Brown $($below$).$ Peter is an executive

director of Generation X Ltd$,$ a company registered in England and Wales

specialising in custom mouse model generation for the treatment of human

diseases. I have just had a quick chat with him over the phone, and we agreed to

meet tomorrow afternoon.

Peter wants to raise money for the company. The money will be used to develop

a new genome editing technology. He will be working with a team of scientists.

The company intends to license such a technology to several other institutions,

not only in the UK$,$ but also overseas.

If everything goes well, the company hopes to be in a position to license the new

technology in five years$$ time.

Would you be so kind as to put together a draft note for me to use as the basis of

my responses to Peter?

Many thanks!

Muhammad

From: Peter Brown

To: Muhammad Ali

Cc: Ayesha Khan

Subject: Our expansion plans

Dear Muhammad,

It was good to speak to you earlier today. As promised, here are some brief details

about our expansion plans.

Over the last three years, I have been working with a group of scientists from

New York, Berlin, and Geneva. They are confident that, through effective

teamwork, we could potentially revolutionise the market for genome editing

technology.

The board of directors has decided that, in order to make that happen, we will

have to establish some research centres in other countries. The idea is to set up

some subsidiaries in the United States, Germany, and Switzerland.

We have already signed some memoranda of understanding with several

academic institutions, which have expressed their interest in acquiring a licence

to use our future technology as soon as it is ready.

$5$

During our last board meeting, we also considered floating the company on the

London Stock Exchange, but we concluded that we would need to obtain external

legal advice before making a decision in that regard.

Our in$-$house counsel, Ayesha Khan, who reads in copy, will be happy to send

you all the relevant documents you may require in due course. In the meantime,

the directors have prepared the following list of questions:

$($a$)$ What are the different ways in which Generation X Ltd might be able

to raise the capital it needs in order to support its international

expansion plans in the United States, Germany, and Switzerland?

$($b$)$ What is the difference between equity finance and debt finance? And

what are the advantages and disadvantages of raising equity as

opposed to debt finance?

$($c$)$ What would Generation X Ltd have to do and what document$($s$)$

would it need to prepare in order to offer its shares to the public for

the first time?

$($d$)$ In addition to the legal team, who are likely to be the key members of

an international corporate finance team? And what would they be

expected to do$?$

I look forward to discussing this with you tomorrow.

Kind regards,

Pete