While ShareRoot’s main product feature is around gaining the legal rights to UGC, there is an alternative strategy that involves streaming content that the brand does not own. This cannot be done for commercial use and the images are not owned by the brand, however it is an innovative way for brands to highlight discussions amongst consumers.
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gallery streamed on any size screen.
This is a fantastic way to connect with consumers who are attending a brand’s event or on location to drive engagement and promote a specific hashtag.
6. Android App
ShareRoot’s Android app increases the engagement of its clients by giving them the ability to search and request UGC using keywords, easily track content, and manage multiple brands on one dashboard.
Features of the app include:
- Search and request UGC by
- Easily track and request posts on Instagram and Twitter and post approved UGC to social networks
- Integrated social monitoring to allow brands to continuously monitor not only their social profiles, but the social profiles of their competitors
- View requested and approved UGC and manage multiple brands in the same space.
This content can be completely moderated by the brand from within the latform to ensure that only the chosen streamed content appears
5. Experiential Galleries
ShareRoot’s Experiential Gallery execution can display a live, customi gallery streamed on any size screen.
This is a fantastic way to connect with consumers who are attending a brand’s event or on location to drive engagement and promote a specific hashtag.
ShareRoot’s Android app increases the engagement of its clients by giving them the ability to search and request UGC using keywords, easily track content, and manage multiple brands on one dashboard.
Features of the app include:
earch and request UGC by keyword;
asily track and request posts on Instagram and Twitter and post approved UGC to social networks;
ntegrated social monitoring to allow brands to continuously monitor not only their social profiles, but the social profiles of their competitors
iew requested and approved UGC and manage multiple brands in the
33 This content can be completely moderated by the brand from within the
latform to ensure that only the chosen streamed content appears
Gallery execution can display a live, customisable
This is a fantastic way to connect with consumers who are attending a brand’s event or on location to drive engagement and promote a specific hashtag.
ShareRoot’s Android app increases the engagement of its clients by giving them the ability to search and request UGC using keywords, easily track content, and
asily track and request posts on Instagram and Twitter and post approved ntegrated social monitoring to allow brands to continuously monitor not only their social profiles, but the social profiles of their competitors; and
iew requested and approved UGC and manage multiple brands in the
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ShareRoot’s Android app
7. The SaaS model
The ShareRoot Platform can be implemented, accessed and used by its consumers remotely through an internet connection, a standard web browser, and a variety of other access points including smart phones.
ShareRoot hosts and maintains its own product, thereby eliminating the need for customers to incur the time, risk, headcount and costs associated with installing and maintaining applications within their own information technology infrastructure. As a result, ShareRoot’s product requires less initial investment in third-party software, hardware, and implementation services, and has lower ongoing support costs than traditional enterprise software.
The SaaS model also allows advanced information technology infrastructure management, security, disaster recovery and other best practices to be leveraged by smaller customers that might not otherwise be able to implement such practices in their own information technology environments.
The ShareRoot Platform has been designed and developed for delivery via the SaaS model. The SaaS delivery model also enables ShareRoot to take advantage of operational efficiencies. Since updates and upgrades to its product are managed by ShareRoot on behalf of its customers, the company is able to implement improvements in a more rapid and uniform way. As a result, ShareRoot is required to support fewer old versions of its product, allowing its development resources to focus more effort on innovative new products.
8.2.4 Competitor Analysis
ShareRoot has benefited from being an early mover in the UGC space as it is currently the only platform with a streamlined process for sourcing UGC from Instagram and Twitter. There are a small number of companies that operate in
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4145-01/1407832_1 35 8.2.5 Business Model and how ShareRoot generates revenue
Following completion of the Acquisition, ShareRoot will focus on growing its business and fully commercialising the ShareRoot Platform by prioritising funds towards sales and development. ShareRoot’s initial focus will be to continue generating sales in the U.S. and begin generating sales across the world.
ShareRoot’s revenue model will consist of charging customers a monthly service fee plus an initial set up fee. ShareRoot’s current customer base ranges in size from large, multinational corporations to smaller regional and local businesses.
In addition to growing its business organically through sales and marketing, ShareRoot will consider opportunities for growth through acquisitions of competitors and complementary businesses.
Ultimately, ShareRoot’s goal is to become the leading platform that brands come to in order to enhance and personalise their marketing. While ShareRoot has entered the space in a manner that allows for brands to source content and now display it, it is hoped that ShareRoot will grow into a platform that encompasses much more.
The above business model will be regularly reviewed and amended by the Board to ensure it meets the main objective of maximising Shareholder returns.
8.3 Key Dependencies of the Business Model
The key factors that the Company will depend on to meet its objectives are:
(a) there being a commercial advantage for companies in building relationships with consumers via the use of user generated content;
(b) the number of people using social media platforms being sustained or increasing; and
(c) the continued growth of the marketing technology space.
8.4 Growth Strategy
For growth, the Company intends to increase Shareholders value as per the vision outlined above, by adopting the following strategies:
(a) adopting appropriate portfolio and risk management policies to achieve operating efficiencies and maximise returns for investors;
(b) ensuring the application of appropriate funding levels with a view to providing acceptable risk-adjusted returns;
(c) prudently and actively managing its administration expenditure;
(d) continuing to target signing large clients;
(e) generating large scale partnerships and in this way expanding UGC into different marketing channels; and
(f) continuing to create unique valuable products and product features.
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8.5 Company’s existing activities
The Company has predominantly been focused on exploring its Herberton Tin Project which is located 70 kilometres south west of Cairns, Queensland. The Herberton Tin project comprises 4 granted exploration permits (mineral), 13 granted mining leases and 2 mining lease applications.
The Company is currently actively seeking either a strategic partner or divestment for its existing projects.
Subsequent to the end of the financial year, Baal Gammon Copper Pty Ltd (BG), an associate of the Company, received notification from the Queensland Department of Environment and Heritage Protection (DEHP) of the commencement of an investigation into potential breaches of the Environmental Protection Act 1994 (EPA). BG is not the operator of the Baal Gammon site which is subject to the investigation however, is the holder of the Environmental Authority. DEHP has issued a clean-up notice under the EPA in relation to the Baal Gammon site. BG and the operator have sought legal advice, appealed the decision and are currently in mediation with DEHP. The clean-up notice incorporates measures to prepare the site for the forthcoming wet season, these measures had been adopted by the operator prior to receipt of the clean-up notice and works have commenced. The Company is vigorously defending its position.
8.6 Funding
The funding for the Company for the two years following re-admission to the Official List of ASX will be met by the offer of Shares pursuant to the Public Offer under this Prospectus and by the Company’s existing cash reserves (see Section 7.4 for further details). As and when further funds are required, either for existing or future developments, the Company will consider both raising additional capital from the issue of securities and/or from debt funding.
8.7 Financial Information
(a) Historical financial information
The Investigating Accountant’s Report contained in Section 11 of this Prospectus sets out:
(i) the audited historical Statements of Profit or Loss and Other Comprehensive Income for the Company for the year ended 30 June 2015;
(ii) the audited historical Statements of Profit or Loss and Other Comprehensive Income for ShareRoot for the period from 1 July 2013 (inception) to 31 December 2013, the year ended 31 December 2014 and the six month period ended 30 June 2015;
(iii) the audited historical Statements of Financial Position of both the Company and ShareRoot as at 30 June 2015;
(iv) the pro forma historical Statement of Financial Position as at 30 June 2015 (after Settlement of the Acquisition).
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4145-01/1407832_1 37 The full financial statements for the Company for its financial year ended 30 June 2015 and half year ended 31 December 2014, which include the notes to the financial statements, can be found from the Company’s ASX announcements platform on www.asx.com.au.
(b) Forecast
The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company are inherently uncertain. Any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.
8.8 Dividend Policy
It is anticipated that, post-Settlement of the Acquisition, the Company will focus on the development of the ShareRoot Platform and ShareRoot’s business. The Company does not expect to declare any dividends during this period.
Any future determination as to the payment of dividends by the Company will be at the discretion of the Board and will depend on the availability of distributable earnings and operating results and financial condition of the Company, future capital requirements and general business and other factors considered relevant by the Board. No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.
8.9 Capital Structure
The expected capital structure of the Company following completion of the Offers and all related matters (assuming no Options are exercised, the ShareRoot Lenders are issued with the maximum number of Shares under the Post-30 June ShareRoot Converting Loan Agreements and full subscription of the Public Offer) will be as follows:
Pre Consolidation
Securities Shares1 Options Performance
Rights
Existing issued securities 1,840,231,4512 297,832,9043 - Post Consolidation
Securities on issue Post
Consolidation 40,894,0324 6,618,5095 -
Consideration Securities 140,000,000 - 120,000,0006
Public Offer 100,000,000 50,000,0006 -
ShareRoot Lender Offer
(maximum) 35,000,000 - -
Advisor Offer - 21,000,0008 -
TOTAL 315,894,032 77,618,509 120,000,000
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The expected capital structure of the Company following completion of the Offers and all related matters (assuming no Options are exercised, the ShareRoot Lenders are issued with the maximum number of Shares under the Post-30 June ShareRoot Converting Loan Agreements and minimum subscription of the Public Offer) will be as follows:
Pre Consolidation
Securities Shares1 Options Performance
Rights Existing issued securities 1,840,231,4512 297,832,9043 - Post Consolidation
Securities on issue Post
Consolidation 40,894,0324 6,618,5095 -
Consideration Securities 140,000,000 - 120,000,0006
Public Offer 60,000,000 30,000,0007 -
ShareRoot lender Offer
(maximum) 35,000,000 - -
Advisor Offer - 21,000,0008 -
TOTAL 275,894,032 57,618,509 120,000,000
Notes
1 The rights attaching to the Shares are summarised in Section 14.1 of this Prospectus.
2 Assumes no further Securities are issued prior to completion of the Acquisition, other than as set out in the table.
3 This figure comprises:
(i) 20,500,000 unquoted Options exercisable at $0.029 on or before 21 February 2016;
(ii) 2,500,000 unquoted Options exercisable at $0.024 on or before 14 April 2016;
(iii) 30,000,000 unquoted Options exercisable at $0.008 on or before 7 February 2017; and
(iv) 244,832,904 unquoted Options exercisable at $0.00111 on or before 31 December 2017.
4 The Consolidation is the indicative rate on the basis of 45:1.
5 This figure comprises:
(i) 455,556 unquoted options each exercisable at AUD$1.31 on or before 21 February 2016;
(ii) 55,556 unquoted options each exercisable at AUD$1.08 on or before 10 April 2016;
(iii) 666,667 unquoted options each exercisable at AUD$0.36 on or before 7 February 2017; and
(iv) 5,440,731 unquoted options each exercisable at AUD$0.05 on or before 31 December 2017. It is the intention to seek the quotation of these options.
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8 The Advisor Options will be exercisable at the price of AUD$0.05 on or before 31 December 2020 and subject to ASX escrow provision.
8.10 Substantial Shareholders
As at the date of this Prospectus, the following Shareholders hold 5% or more of the total number of Shares on issue (on a pre-Consolidation basis):
Shareholder Shares %
Conquest Mining Limited 300,000,000 16.3%
Oakhurst Enterprises Pty Ltd
and Gary Steinepreis 183,150,000 9.95%
On completion of the Consolidation and the Offers, the following Shareholders are expected to hold 5% or more of the total number of Shares on issue (on a post Consolidation basis):
Shareholder Shares %1 Shares held
after exercise of the
Performance Rights2
%1
Noah Abelson 49,977,464 18.64% 109,477,464 28.21%
Marc Angelone 49,977,464 18.64% 109,477,464 28.21%
Notes
1 Assuming no other Shares are issued other than those to be issued pursuant to the Offers and no Options are exercised or Performance Rights converted into Shares, the minimum subscription under the Public Offer is raised and the number of Shares to be issued to the ShareRoot Lenders upon conversion of the Post-30 June ShareRoot Converting Loans remains at 27,166,667 Shares.
2 Assuming that no other Shares are issued other than those to be issued pursuant to the Offers, all Performance Rights are converted into Shares, no Options are exercised, the minimum subscription under the Public Offer is raised and the number of Shares to be issued to the ShareRoot Lenders upon conversion of the Post-30 June ShareRoot Conversion Loan Agreements is 27,166,667 Shares.
8.11 Restricted Securities
Subject to the Company re-complying with Chapters 1 and 2 of the ASX Listing Rules and completing the Offers, certain Securities on issue (including the Vendor Securities, Shares issued under the Lender Offer and the Advisor Options) may be classified by ASX as restricted securities and will be required to be in escrow for up to 24 months from the date of Official Quotation.
During the period Advisor Options and Shares issued to the ShareRoot Lenders in which these Securities are prohibited from being transferred, trading in Shares may be less liquid which may impact on the ability of a Shareholder to dispose of his or her Shares in a timely manner.
The Company is seeking a waiver in respect of the Shares issued to Vendors and the Shares issued to the ShareRoot Lenders on the basis that the recipients of those Securities paid cash for those Securities. Subject to this waiver, all or a
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proportion of the Securities returned to above may be restricted from trading for a period of up to 24 months after the date of re-instatement of the Company to the Official List.
The Company will announce to the ASX full details (quantity and duration) of the Securities required to be held in escrow prior to the Company’s listed securities being reinstated to trading on ASX (which reinstatement is subject to ASX’s discretion and approval).
8.12 Top 20 Shareholders
The Company will announce to the ASX details of its top 20 Shareholders following completion of the Offers and prior to the Shares re-commencing trading on ASX.
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4145-01/1407832_1 41 9. RISK FACTORS
9.1 Introduction
The Securities offered under this Prospectus are considered highly speculative.
An investment in the Company is not risk free and the Directors strongly recommend potential investors to consider the key risk factors detailed in the Investment Overview in Section 5 of the Prospectus as well as the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Securities and to consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.
This Section 9 identifies circumstances that the Directors regard as the major risks associated with an investment in the Company and which may have a material adverse impact on the financial performance of the Company, the market price of the Shares and value of the Options if they were to arise.
There are risks associated with the contemplated Acquisition, specifically in relation to the success of the Company which may adversely impact the value of an investment in the securities of the Company (Sections 9.2(a) and 9.2(b)).
In addition, there are other general investment risks, many of which are largely beyond the control of the Company and its Directors (Section 9.2(d)).
The Board aims, and will aim, to manage these risks by carefully planning the Company’s activities and implementing risk control measures. However, some of the risks identified below are highly unpredictable and the Company is limited to the extent to which they can effectively manage them.
The following risk factors are not intended to be an exhaustive list of the risk factors to which the Company is exposed. In addition, this Section 9 has been prepared without taking into account offerees’ individual financial objectives, financial situation and particular needs. Offerees should seek professional investment advice if they have any queries in relation to making an investment in the Company.
9.2 Specific additional risks associated with the Acquisition
(a) Risks relating to the Change in Nature and Scale of Activities (i) Re-Quotation of Shares on ASX
The Acquisition constitutes a significant change in the nature and scale of the Company’s activities and the Company needs to re-comply with Chapters 1 and 2 of the ASX Listing Rules as if it were seeking admission to the official list of ASX.
There is a risk that the Company may not be able to meet the requirements of the ASX for re-quotation of its Shares on the ASX. Should this occur, the Shares will not be able to be traded on the ASX until such time as those requirements can be met, if at all. Shareholders may be prevented from trading their Shares should the Company be suspended until such time as it does re-comply with the ASX Listing Rules.
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(ii) Dilution Risk
The Company currently has 1,840,231,451 Shares on issue (on a pre-Consolidation basis). On completion of the Acquisition, the Company proposes to issue the maximum number of Shares to the Vendors and Performance Rights to the Performance Right Holders under the Acquisition, Shares to the ShareRoot Lenders, Advisor Options to the Advisors and Shares (and associated Capital Raising Options) to raise a minimum of $3,000,000 and a maximum of $5,000,000 as part of the Capital Raising.
On issue of the Consideration Securities under the Acquisition, 27,166,667 Shares to the ShareRoot Lenders and the minimum subscription of the Shares under the Capital Raising (assuming no exercise of Options, or conversion of Performance Rights), the existing Shareholders will retain approximately 15.25% of the issued capital of the Company, with the Vendors and ShareRoot Lenders holding 62.36% and the investors under the
On issue of the Consideration Securities under the Acquisition, 27,166,667 Shares to the ShareRoot Lenders and the minimum subscription of the Shares under the Capital Raising (assuming no exercise of Options, or conversion of Performance Rights), the existing Shareholders will retain approximately 15.25% of the issued capital of the Company, with the Vendors and ShareRoot Lenders holding 62.36% and the investors under the