Worthy Investment? No. Potential Opportunity Nonetheless? Maybe, Depending on What You Do For a Living

Modern Mill’s Facebook ad trumpets an eye-popping $84 million raised, yet the current round has pulled in about $1.1 million from 512 investors.

That eye-catching headline tells you precisely nothing about whether the deal belongs in your portfolio. A closer read of the offering exposes some awkward numbers.

The company has never made money, is saddled with debt, and its auditor has issued two ‘going concern’ warnings.

Even if the business someday turns a profit, a quirky ‘call right’ allows the company to cap an investor’s return at 3x. So the upside looks more like a kiddie slide than a roller coaster.

Need more red flags? Try ‘bonus shares’ for bigger checks and a disclosure that invested funds may be spent on things one might not normally expect.

But from the perspective of an insolvency professional, distressed asset buyer, or litigation attorney, companies like this are worth watching.

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