Prospectus
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THE AGENCY GROUP AUSTRALIA LTD
ACN 118 913 232
PROSPECTUS
For the offer of:
(a) 100,000,000 Shares at an issue price of $0.02 per Share to raise $2,000,000
(together with one free attaching Placement Option for every one Share
subscribed for and issued, being 100,000,000 Placement Options) with the right
to accept oversubscriptions of up to a further 50,000,000 Shares at an issue price
of $0.02 per Share to raise up to a further $1,000,000 (together with one free
attaching Placement Option for every one Share subscribed for and issued,
being 50,000,000 Placement Options) (Placement Offer);
(b) 2,000,000 PAC Tranche 1 Options and 8,000,000 PAC Tranche 2 Options (PAC
Partners Offer); and
(c) up to 20,000,000 Adviser Options (Adviser Offer).
IMPORTANT NOTICE
This document is important and should be read in its entirety. If after reading this
Prospectus you have any questions about the Shares being offered under this Prospectus
or any other matter, then you should consult your stockbroker, accountant or other
professional adviser.
The Shares and Options offered by this Prospectus should be considered as speculative.
TABLE OF CONTENTS
1. CORPORATE DIRECTORY.............................................................................................. 1
2. TIMETABLE ..................................................................................................................... 2
3. IMPORTANT NOTES ....................................................................................................... 3
4. DETAILS OF THE OFFERS ................................................................................................ 4
5. PURPOSE AND EFFECT OF THE OFFERS ......................................................................... 7
6. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES ................................................. 11
7. RISK FACTORS ............................................................................................................ 21
8. ADDITIONAL INFORMATION ...................................................................................... 27
9. DIRECTORS’ CONSENT................................................................................................ 36
10. DEFINITIONS ............................................................................................................... 37
1. CORPORATE DIRECTORY
Directors Registered Office
Philip Re Suite 1, 437 Roberts Road
Non-Executive Chairman Subiaco WA 6008
Mr Paul Niardone Telephone: +61 8 9204 7955
Managing Director Facsimile: +61 8 9204 7956
John Kolenda Website:
Non-Executive Director www.ausnetrealestateservices.com.au
Email: info@ausnetrealestate.com.au
Adam Davey
Non-Executive Director Lawyers
Company Secretary Steinepreis Paganin
Lawyers and Consultants
Stuart Usher Level 4, The Read Buildings
16 Milligan Street
Share Registry* Perth WA 6000
Advanced Share Registry Lead Manager to the Placement Offer
110 Stirling Highway
Nedlands WA 6009 Patersons Securities Limited
Level 23 Exchange Tower
2 The Esplanade
Perth WA 6000
Auditors*
Bentleys
Level 3
216 St Georges Terrace
Perth WA 6000
* These entities have not been involved in the preparation of this Prospectus and have not consented to
being named in this Prospectus. Their names are included for information purposes only.
2940-13/1827811_13 1
2. TIMETABLE
Lodgement of Prospectus with the ASIC and ASX 14 December 2017
Opening Date of the Offers 14 December 2017
Closing Date of the Offers* 31 January 2018
* The Directors reserve the right to extend the Closing Date at any time after the Opening Date without
notice.
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3. IMPORTANT NOTES
This Prospectus is dated 14 December 2017 and was lodged with the ASIC on
that date. The ASIC, ASX and their respective officers take no responsibility for
the contents of this Prospectus or the merits of the investment to which this
Prospectus relates.
The expiry date of the Prospectus is 13 months after the date the Prospectus was
lodged with the ASIC. No Shares or Options will be issued on the basis of this
Prospectus after the expiry date.
The Offers are only available to those who are personally invited to accept the
relevant Offer. Applications for Shares and Options offered pursuant to this
Prospectus can only be submitted on the relevant original Application Form
which accompanies this Prospectus.
This Prospectus is a transaction specific prospectus for an offer of continuously
quoted securities (as defined in the Corporations Act) and has been prepared in
accordance with Section 713 of the Corporations Act. It does not contain the
same level of disclosure as an initial public offering prospectus. In making
representations in this Prospectus regard has been had to the fact that the
Company is a disclosing entity for the purposes of the Corporations Act and
certain matters may reasonably be expected to be known to investors and
professional advisers whom potential investors may consult.
3.1 Risk Factors
Potential investors should be aware that subscribing for Shares or Options in the
Company involves a number of risks. The key risk factors of which investors should
be aware are set out in Section 7. These risks together with other general risks
applicable to all investments in listed securities not specifically referred to, may
affect the value of the Shares in the future. Accordingly, an investment in the
Company should be considered highly speculative. Investors should consider
consulting their professional advisers before deciding whether to apply for Shares
pursuant to this Prospectus.
3.2 Overseas Investors
The distribution of this Prospectus in jurisdictions outside Australia may be
restricted by law and therefore persons into whose possession this document
comes should seek advice on and observe any such restrictions. Any failure to
comply with these restrictions constitutes a violation of those laws. This
Prospectus does not constitute an offer of Shares in any jurisdiction where, or to
any person to whom, it would be unlawful to issue in this Prospectus.
3.3 Disclaimer
No person is authorised to give any information or to make any representation in
connection with the Offer described in this Prospectus which is not contained in
this Prospectus. Any information or representations not so contained may not be
relied upon as having been authorised by the Company or any other person in
connection with the Offer. You should rely only on information in this Prospectus.
2940-13/1827811_13 3
4. DETAILS OF THE OFFERS
4.1 The Offers
Placement Offer
100,000,000 Shares at an issue price of $0.02 per Share to raise $2,000,000
(together with one free attaching Placement Option for every one Share
subscribed for and issued, being 100,000,000 Placement Options) with the right
to accept oversubscriptions of up to a further 50,000,000 Shares at an issue price
of $0.02 per Share to raise up to a further $1,000,000 (together with one free
attaching Placement Option for every one Share subscribed for and issued,
being 50,000,000 Placement Options).
The Placement Offer will only be extended to specific parties. Application Forms
will only be provided by the Company to these parties.
All of the Shares offered under this Prospectus will rank equally with Shares on
issue at the date of this Prospectus.
The Placement Options offered under this Prospectus will be issued on the terms
and conditions set out in Section 6.2(a). All Shares issued on conversion of the
Placement Options will rank equally with the Shares on issue at the date of this
Prospectus.
The Company will issue the Securities the subject of the Placement Offer on a
progressive basis. The Company will issue approximately 96,000,000 Shares and
96,000,000 Placement Options initially, with the balance of the Securities the
subject of the Placement Offer to be issued once Shareholder approval for the
issue is obtained.
PAC Partners Offer
Under this Prospectus, the Company invites PAC Partners Pty Ltd (or its nominees)
to apply for 2,000,000 PAC Tranche 1 Options and 8,000,000 PAC Tranche 2
Options.
Shareholder approval for the issue of the PAC Tranche 1 Options and PAC
Tranche 2 Options was obtained at the Company’s annual general meeting
held on 28 November 2017.
The PAC Partners Offer will only be extended to specific parties. Application
Forms will only be provided by the Company to these parties.
The PAC Tranche 1 Options and PAC Tranche 2 Options offered under this
Prospectus will be issued on the terms and conditions set out in Section 6.2(b)
and 6.2(c). All Shares issued on conversion of the PAC Tranche 1 Options and
PAC Tranche 2 Options will rank equally with the Shares on issue at the date of
this Prospectus.
Adviser Offer
Under this Prospectus, the Company invites entities identified by Patersons
Securities Limited to apply for up to 20,000,000 Adviser Options.
The Adviser Offer will only be extended to specific parties. Application Forms will
only be provided by the Company to these parties.
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The Adviser Options offered under this Prospectus will be issued on the terms and
conditions set out in Section 6.2(d). All Shares issued on conversion of the Adviser
Options will rank equally with the Shares on issue at the date of this Prospectus.
4.2 Opening and Closing Date of the Offers
The Opening Date of the Offers will be 14 December 2017 and the Closing Date
for the Offers will be 4:00pm AWST on 31 January 2018.
The Directors reserve the right to close the Offers early or extend the Closing
Date (as the case may be), should it be considered by them necessary to do so.
4.3 Minimum Subscription
The minimum subscription in respect of the Placement Offer is $1,920,000. No
Securities will be issued under the Placement Offer until the minimum subscription
has been received. If the minimum subscription is not achieved within 4 months
after the date of issue of this Prospectus, the Company will either repay the
application monies to the Applicants or issue a supplementary prospectus or
replacement prospectus and allow Applicants one month to withdraw their
Application and be repaid their application monies.
There is no minimum subscription for the PAC Partners Offer or the Adviser Offer.
4.4 Not underwritten
The Offers are not underwritten.
4.5 Lead Manager
The Company has appointed Patersons Securities Limited (Lead Manager) as
lead manager to the Placement Offer. Details of the fees the Lead Manager will
receive for its services are set out in Section 8.5.
4.6 Application for Securities
Applications for Securities must be made by investors at the direction of the
Company and must be made using the relevant Application Form
accompanying this Prospectus.
Payment for the Shares must be made in full at the issue price of $0.02 per Share.
Completed Application Forms and accompanying cheques (if required) must
be mailed or delivered to the Company as follows:
Delivery by hand Delivery by post
The Agency Group Australia Ltd The Agency Group Australia Ltd
Attention: Mr Stuart Usher Attention: Mr Stuart Usher
Suite 1 Suite 1
437 Roberts Road 437 Roberts Road
Subiaco WA 6008 Subiaco WA 6008
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4.7 ASX Listing
Application for Official Quotation of the Shares offered pursuant to this
Prospectus will be made in accordance with the timetable set out at the
commencement of this Prospectus. If ASX does not grant Official Quotation of
the Shares offered pursuant to this Prospectus before the expiration of 3 months
after the date of issue of the Prospectus, (or such period as varied by the ASIC),
the Company will not issue any Shares and will repay all application monies for
the Shares within the time prescribed under the Corporations Act, without
interest.
The fact that ASX may grant Official Quotation to the Shares is not to be taken in
any way as an indication of the merits of the Company or the Shares now
offered for subscription.
4.8 Issue
The issue of Shares and Options offered under the Offers will take place as soon
as practicable after the Closing Date.
Pending the issue of the Shares and Options or payment of refunds pursuant to
this Prospectus, all application monies will be held by the Company in trust for
the Applicants in a separate bank account as required by the Corporations Act.
The Company, however, will be entitled to retain all interest that accrues on the
bank account and each Applicant waives the right to claim interest.
Holding statements for Shares and Options issued under the Offers will be mailed
in accordance with the ASX Listing Rules.
4.9 Applicants outside Australia
This Prospectus does not, and is not intended to, constitute an offer in any place
or jurisdiction, or to any person to whom, it would not be lawful to make such an
offer or to issue this Prospectus. The distribution of this Prospectus in jurisdictions
outside Australia may be restricted by law and persons who come into
possession of this Prospectus should seek advice on and observe any of these
restrictions. Any failure to comply with such restrictions may constitute a violation
of applicable securities laws.
No action has been taken to register or qualify the Shares or otherwise permit a
public offering of the Shares the subject of this Prospectus in any jurisdiction
outside Australia. Applicants who are resident in countries other than Australia
should consult their professional advisers as to whether any governmental or
other consents are required or whether any other formalities need to be
considered and followed. If you are outside Australia it is your responsibility to
obtain all necessary approvals for the issue of the Shares pursuant to this
Prospectus. The return of a completed Application Form will be taken by the
Company to constitute a representation and warranty by you that all relevant
approvals have been obtained.
4.10 Enquiries
Any questions concerning the Offers should be directed to Mr Stuart Usher,
Company Secretary on +61 8 6380 2555.
2940-13/1827811_13 6
5. PURPOSE AND EFFECT OF THE OFFERS
5.1 Purpose of the Offers
The purpose of the Placement Offer is to raise $2,000,000 (oversubscriptions of up
to a further $1,000,000 may be accepted). No funds will be raised from the issue
of the Placement Options, PAC Tranche 1 Options PAC Tranche 2 Options and
Adviser Options. (PAC Partners Offer).
The funds raised from the Placement Offer are planned to be used in
accordance with the table set out below:
Minimum Oversubscription
Item Proceeds of the Placement Offer % %
Subscription ($) ($)
1. Acquisition of wholly-owned 950,000 49.5 950,000 31.7
subsidiaries of– ServTech
Global Holdings Ltd
2. Acquisition – Rent Roll 400,000 20.8 400,000 13.3
3. East Coast Expansions 200,000 10.4 500,000 16.7
4. Expenses of the Placement 170,000 8.9 260,000 8.7
Offer1
5. Working capital2 200,000 10.4 890,000 29.6
Total 1,920,000 100 3,000,000 100
Notes:
1. Refer to Section 8.8 for further details relating to the estimated expenses of the Offers.
2. Working capital relates to payments to creditors, payments for agent on-boarding and
further roll-out growth of The Agency WA operations.
In the event the Company raises more than the minimum subscription of
$1,920,000, the additional funds raised will be first applied towards expenses of
the Placement Offer, followed by working capital. On completion of the
Placement Offer, the Board believes the Company will have sufficient working
capital to achieve these objectives.
The above table is a statement of current intentions as of the date of this
Prospectus. As with any budget, intervening events and new circumstances
have the potential to affect the manner in which the funds are ultimately
applied. The Board reserves the right to alter the way funds are applied on this
basis.
5.2 Effect of the Offers
The principal effect of the Offers will be to:
(a) increase the cash reserves by $2,740,000 (after deducting the estimated
expenses of the Offers and assuming full oversubscription of the
Placement Offer) immediately after completion of the Offers;
(b) increase the number of Shares on issue from 587,793,034 as at the date
of this Prospectus to 737,793,034 Shares following completion of the
Placement Offer (assuming full oversubscription of the Placement Offer);
and
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(c) increase the number of Options on issue from 80,742,739 as at the date
of this Prospectus to 260,742,739 Options following completion of the
Offers.
5.3 Pro-forma balance sheet
Audited June Proforma June
2017 2017
$ S
Current Assets
Cash and cash equivalents 2,202,655 3,140,000
Trade and other receivables 1,451,188 1,451,188
Current tax asset 184,115 184,115
Total Current Assets 3,837,958 4,775,303
Non Current Assets
Property, Plant and Equipment 78,595 78,595
Intangible Assets 3,201,441 3,201,441
Deferred Tax Asset - -
Total Non Current Assets 3,280,036 3,280,036
Total Assets 7,117,994 8,055,339
Current Liabilities
Trade and Other Payables 4,058,364 4,058,364
Borrowings 6,117 6,117
Provisions 276,093 276,093
Total Current Liabilities 4,340,574 4,340,574
Non Current Liabilities
Deferred tax liabilities 211,433 211,433
Provisions 127,673 127,673
Total Non Current Liabilities 339,106 339,106
Total Liabilities 4,679,680 4,679,680
Net Assets/(Liabilities) 2,438,314 3,375,659
Equity
Contributed Equity 9,706,731 12,446,731
Reserves 476,195 476,195
Accumulated Losses (7,744,612) (9,547,267)
Total Equity/(Net Deficiency) 2,438,314 3,375,659
Note: A pro-forma adjustment of $1,802,655 has been made to reflect operating cash-
outflows from the period 1 July 2017 through to the date of this Prospectus.
The audited balance sheet as at 30 June 2017and the unaudited pro-forma
balance sheet as at 30 June 2017 shown above have been prepared on the
basis of the accounting policies normally adopted by the Company and reflect
the changes to its financial position.
The pro-forma balance sheet has been prepared assuming no Options are
exercised prior to the Closing Date and including expenses of the Offers.
2940-13/1827811_13 8
The pro-forma balance sheet has been prepared to provide investors with
information on the assets and liabilities of the Company and pro-forma assets
and liabilities of the Company as noted below. The historical and pro-forma
financial information is presented in an abbreviated form, insofar as it does not
include all of the disclosures required by Australian Accounting Standards
applicable to annual financial statements.
5.4 Effect on the capital structure
The effect of the Offers on the capital structure of the Company is set out below.
Shares
Number
Shares currently on issue1,2 587,793,034
Shares offered pursuant to the Placement Offer 150,000,000
Total Shares on issue after completion of the Placement Offer3 737,793,034
Notes
1. Includes 44,563,622 Shares subject to escrow.
2. Includes 5,000,000 Shares issued on 19 May 2017.
3. Assumes full oversubscription of the Placement Offer. If the minimum subscription is raised
under the Placement Offer, total Shares on issue after completion of the Placement Offer
will be 683,793,034.
Options
Number
Options currently on issue1 80,742,739
24,076,072 quoted Options exercisable at $0.15 on or before 30
April 2019
5,000,000 unquoted Options exercisable at $0.15 on or before
30 April 2019
51,666,667 unquoted Options exercisable at $0.04 on or before
19 December 2019
Options offered pursuant to the Placement Offer 150,000,000
150,000,000 unquoted Placement Options exercisable at $0.02
on or before that date which is two years from the date of issue
Options offered pursuant to the PAC Partners Offer 10,000,000
2,000,000 unquoted PAC Tranche 1 Options exercisable at
$0.04 on or before that date which is three years from the date
of issue
8,000,000 unquoted PAC Tranche 2 Options exercisable at
$0.025 on or before that date which is three years from the
date of issue
Options offered pursuant to the Adviser Offer 20,000,000
20,000,000 unquoted Adviser Options exercisable at $0.025 on
or before that date which is three years from the date of issue
Total Options on issue after completion of the Offers1 260,742,739
2940-13/1827811_13 9
Notes
1. Assumes full oversubscription of the Placement Offer. If the minimum subscription is raised
under the Placement Offer, total Options on issue after completion of the Placement
Offer will be 206,742,739.
Performance Shares
Number
Performance Shares on issue at date of Prospectus 113,333,334
Performance Shares offered pursuant to the Offer Nil
Performance Shares on issue after completion of the Offers 113,333,334
5.5 Substantial Shareholders
Based on publicly available information as at the date of this Prospectus, those
persons which (together with their associates) have a relevant interest in 5% or
more of the Shares on issue are set out below:
Shareholder Shares %
Finsure Holdings Pty Ltd 42,718,332 7.27%
2940-13/1827811_13 10
6. RIGHTS AND LIABILITIES ATTACHING TO SECURITIES
6.1 Shares
The following is a summary of the more significant rights and liabilities attaching
to Shares to be issued pursuant to this Prospectus. This summary is not exhaustive
and does not constitute a definitive statement of the rights and liabilities of
Shareholders. To obtain such a statement, persons should seek independent
legal advice.
Full details of the rights and liabilities attaching to Shares are set out in the
Company’s Constitution, a copy of which is available for inspection at the
Company’s registered office during normal business hours.
(a) General meetings and notices
Each member is entitled to receive notice of, and to attend and vote
at, general meetings of the Company and to receive all notices,
accounts and other documents required to be sent to members under
the Constitution, the Corporations Act or the Listing Rules.
(b) Voting Rights
Subject to any rights or restrictions for the time being attached to any
class or classes of shares, at a general meeting of the Company every
holder of fully paid ordinary shares present in person or by an attorney;
representative or proxy has one vote on a show of hands (unless a
member has appointed 2 proxies) and one vote per share on a poll.
A person who holds a share which is not fully paid is entitled, on a poll,
to a fraction of a vote equal to the proportion which the amount paid
bears to the total issue price of the share.
Where there are 2 or more joint holders of a share and more than one of
them is present at a meeting and tenders a vote in respect of the share,
the Company will count only the vote cast by the member whose name
appears first in the Company's register of members.
(c) Issues of further Shares
The Directors may, on behalf of the Company, issue, grant options over
unissued shares to any person on the terms, with the rights, and at the
times that the Directors decide. However, the Directors must act in
accordance with the restrictions imposed by the Constitution, Listing
Rules, the Corporations Act and any rights for the time being attached
to the shares in any special class of those shares.
(d) Variation of Rights
Unless otherwise provided by the terms of issue of a class of shares and
subject to the Corporations Act, the rights attached to the shares in any
class may be varied or cancelled only with the written consent of the
holders of at least three-quarters of the issued shares of the affected
class, or by special resolution passed at a separate meeting of the
holders of the issued shares of the affected class.
2940-13/1827811_13 11
(e) Transfer of Shares
Subject to the Constitution, the Corporations Act and Listing Rules,
Shares are freely transferable.
The Shares may be transferred by a proper transfer effected in
accordance with the ASX Settlement Operating Rules, by any other
method of transferring or dealing with Shares introduced by ASX and as
otherwise permitted by the Corporations Act or by a written instrument
of transfer in any usual form or in any other form approved by either the
Directors or ASX that is permitted by the Corporations Act.
The Directors may decline to register a transfer of Shares (other than a
proper transfer in accordance with the ASX Settlement Operating Rules)
where permitted to do so under the Listing Rule. If the Directors decline
to register a transfer, the Company must, within 5 business days after the
transfer is delivered to the Company, give the party lodging the transfer
written notice of the refusal and the reason for the refusal. The Directors
must decline to register a transfer of Shares when required by law, by
the Listing Rules or by the ASX Settlement Operating Rules.
(f) Dividends
The Directors may from time to time determine dividends to be
distributed to members according to their rights and interests. The
Directors may fix the time for distribution and the methods of distribution.
Subject to the terms of issue of shares, the Company may pay a
dividend on one class of shares to the exclusion of another class.
Each share carries the right to participate in the dividend in the same
proportion that the amount for the time being paid on the share (not
credited) bears to the total amounts paid and payable (excluding
amounts credited) in respect of such shares.
(g) Dividend reinvestment and Share plans
Subject to the requirements in the Corporations Act and the Listing
Rules, the Directors may implement and maintain dividend reinvestment
plans (under which any member may elect that dividends payable by
the Company be reinvested by way of subscription for fully paid shares
in the Company).
(h) Capitalisation of profits
Subject to the Listing Rules and any rights or restrictions attaching to any
class of shares, the Company may capitalise profits. Members are
entitled to participate in a capital distribution in the same proportions in
which they are entitled to participate in dividends.
(i) Winding-up
Subject to the rights of holders of shares with special rights in a winding-
up and the Corporations Act, if the Company is wound up all monies
and property that are to be distributed among Shareholders on a
winding-up, shall be distributed in proportion to the Shares held by them
respectively, irrespective of the amount paid-up or credited as paid-up
on the Shares.
2940-13/1827811_13 12
(j) Shareholder liability
As the Shares issued will be fully paid shares, they will not be subject to
any calls for money by the Directors and will therefore not become
liable for forfeiture.
(k) Alteration of constitution
In accordance with the Corporations Act, the Constitution can only be
amended by a special resolution passed by at least three quarters of
Shareholders present and voting at the general meeting. In addition, at
least 28 days written notice specifying the intention to propose the
resolution as a special resolution must be given.
6.2 Options
(a) Placement Options
(i) Entitlement
Each Option entitles the holder to subscribe for one Share upon
exercise of the Option.
(ii) Exercise Price
Subject to paragraph (ix), the amount payable upon exercise
of each Option will be $0.02 (Exercise Price)
(iii) Expiry Date
Each Option will expire at 5:00 pm (WST) on that date which is
two (2) years from the date of issue (Expiry Date). An Option
not exercised before the Expiry Date will automatically lapse on
the Expiry Date.
(iv) Exercise Period
The Options are exercisable at any time on and from the date
which is 30 days following completion of the Placement Offer
until the Expiry Date (Exercise Period).
(v) Notice of Exercise
The Options may be exercised during the Exercise Period by
notice in writing to the Company in the manner specified on
the Option certificate (Notice of Exercise) and payment of the
Exercise Price for each Option being exercised in Australian
currency by electronic funds transfer or other means of
payment acceptable to the Company.
(vi) Exercise Date
A Notice of Exercise is only effective on and from the later of
the date of receipt of the Notice of Exercise and the date of
receipt of the payment of the Exercise Price for each Option
being exercised in cleared funds (Exercise Date).
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(vii) Timing of issue of Shares on exercise
Within 15 Business Days after the Exercise Date, the Company
will:
(A) issue the number of Shares required under these terms
and conditions in respect of the number of Options
specified in the Notice of Exercise and for which
cleared funds have been received by the Company;
(B) if required, give ASX a notice that complies with section
708A(5)(e) of the Corporations Act, or, if the Company
is unable to issue such a notice, lodge with ASIC a
prospectus prepared in accordance with the
Corporations Act and do all such things necessary to
satisfy section 708A(11) of the Corporations Act to
ensure that an offer for sale of the Shares does not
require disclosure to investors; and
(C) if admitted to the official list of ASX at the time, apply
for official quotation on ASX of Shares issued pursuant
to the exercise of the Options.
If a notice delivered under (B) for any reason is not effective to
ensure that an offer for sale of the Shares does not require
disclosure to investors, the Company must, no later than 20
Business Days after becoming aware of such notice being
ineffective, lodge with ASIC a prospectus prepared in
accordance with the Corporations Act and do all such things
necessary to satisfy section 708A(11) of the Corporations Act to
ensure that an offer for sale of the Shares does not require
disclosure to investors.
(viii) Shares issued on exercise
Shares issued on exercise of the Options rank equally with the
then issued shares of the Company.
(ix) Reconstruction of capital
If at any time the issued capital of the Company is
reconstructed, all rights of an Optionholder are to be changed
in a manner consistent with the Corporations Act and the ASX
Listing Rules at the time of the reconstruction.
(x) Participation in new issues
There are no participation rights or entitlements inherent in the
Options and holders will not be entitled to participate in new
issues of capital offered to Shareholders during the currency of
the Options without exercising the Options.
(xi) Change in exercise price
An Option does not confer the right to a change in Exercise
Price or a change in the number of underlying securities over
which the Option can be exercised.
2940-13/1827811_13 14
(xii) Transferability
The Options are transferable subject to any restriction or escrow
arrangements imposed by ASX or under applicable Australian
securities laws.
(b) PAC Tranche 1 Options
(i) Entitlement
Each Option entitles the holder to subscribe for one Share upon
exercise of the Option.
(ii) Exercise Price
Subject to paragraph (ix), the amount payable upon exercise
of each Option will be $0.04 (Exercise Price).
(iii) Expiry Date
Each Option will expire at 5:00 pm (WST) on that date which is
three (3) years from the date of issue (Expiry Date). An Option
not exercised before the Expiry Date will automatically lapse on
the Expiry Date.
(iv) Exercise Period
The Options are exercisable at any time on or prior to the Expiry
Date (Exercise Period).
(v) Notice of Exercise
The Options may be exercised during the Exercise Period by
notice in writing to the Company in the manner specified on
the Option certificate (Notice of Exercise) and payment of the
Exercise Price for each Option being exercised in Australian
currency by electronic funds transfer or other means of
payment acceptable to the Company.
(vi) Exercise Date
A Notice of Exercise is only effective on and from the later of
the date of receipt of the Notice of Exercise and the date of
receipt of the payment of the Exercise Price for each Option
being exercised in cleared funds (Exercise Date).
(vii) Timing of issue of Shares on exercise
Within 15 Business Days after the Exercise Date, the Company
will:
(A) issue the number of Shares required under these terms
and conditions in respect of the number of Options
specified in the Notice of Exercise and for which
cleared funds have been received by the Company;
2940-13/1827811_13 15
(B) if required, give ASX a notice that complies with section
708A(5)(e) of the Corporations Act, or, if the Company
is unable to issue such a notice, lodge with ASIC a
prospectus prepared in accordance with the
Corporations Act and do all such things necessary to
satisfy section 708A(11) of the Corporations Act to
ensure that an offer for sale of the Shares does not
require disclosure to investors; and
(C) if admitted to the official list of ASX at the time, apply
for official quotation on ASX of Shares issued pursuant
to the exercise of the Options.
If a notice delivered under (B) for any reason is not effective to
ensure that an offer for sale of the Shares does not require
disclosure to investors, the Company must, no later than 20
Business Days after becoming aware of such notice being
ineffective, lodge with ASIC a prospectus prepared in
accordance with the Corporations Act and do all such things
necessary to satisfy section 708A(11) of the Corporations Act to
ensure that an offer for sale of the Shares does not require
disclosure to investors.
(viii) Shares issued on exercise
Shares issued on exercise of the Options rank equally with the
then issued shares of the Company.
(ix) Reconstruction of capital
If at any time the issued capital of the Company is
reconstructed, all rights of an Optionholder are to be changed
in a manner consistent with the Corporations Act and the ASX
Listing Rules at the time of the reconstruction.
(x) Participation in new issues
There are no participation rights or entitlements inherent in the
Options and holders will not be entitled to participate in new
issues of capital offered to Shareholders during the currency of
the Options without exercising the Options.
(xi) Change in exercise price
An Option does not confer the right to a change in Exercise
Price or a change in the number of underlying securities over
which the Option can be exercised.
(xii) Transferability
The Options are transferable subject to any restriction or escrow
arrangements imposed by ASX or under applicable Australian
securities laws.
2940-13/1827811_13 16
(c) PAC Tranche 2 Options
(i) Entitlement
Each Option entitles the holder to subscribe for one Share upon
exercise of the Option.
(ii) Exercise Price
Subject to paragraph (ix), the amount payable upon exercise
of each Option will be $0.025 (Exercise Price)
(iii) Expiry Date
Each Option will expire at 5:00 pm (WST) on that date which is
three (3) years from the date of issue (Expiry Date). An Option
not exercised before the Expiry Date will automatically lapse on
the Expiry Date.
(iv) Exercise Period
The Options are exercisable at any time on or prior to the Expiry
Date (Exercise Period).
(v) Notice of Exercise
The Options may be exercised during the Exercise Period by
notice in writing to the Company in the manner specified on
the Option certificate (Notice of Exercise) and payment of the
Exercise Price for each Option being exercised in Australian
currency by electronic funds transfer or other means of
payment acceptable to the Company.
(vi) Exercise Date
A Notice of Exercise is only effective on and from the later of
the date of receipt of the Notice of Exercise and the date of
receipt of the payment of the Exercise Price for each Option
being exercised in cleared funds (Exercise Date).
(vii) Timing of issue of Shares on exercise
Within 15 Business Days after the Exercise Date, the Company
will:
(A) issue the number of Shares required under these terms
and conditions in respect of the number of Options
specified in the Notice of Exercise and for which
cleared funds have been received by the Company;
(B) if required, give ASX a notice that complies with section
708A(5)(e) of the Corporations Act, or, if the Company
is unable to issue such a notice, lodge with ASIC a
prospectus prepared in accordance with the
Corporations Act and do all such things necessary to
satisfy section 708A(11) of the Corporations Act to
ensure that an offer for sale of the Shares does not
require disclosure to investors; and
2940-13/1827811_13 17
(C) if admitted to the official list of ASX at the time, apply
for official quotation on ASX of Shares issued pursuant
to the exercise of the Options.
If a notice delivered under (B) for any reason is not effective to
ensure that an offer for sale of the Shares does not require
disclosure to investors, the Company must, no later than 20
Business Days after becoming aware of such notice being
ineffective, lodge with ASIC a prospectus prepared in
accordance with the Corporations Act and do all such things
necessary to satisfy section 708A(11) of the Corporations Act to
ensure that an offer for sale of the Shares does not require
disclosure to investors.
(viii) Shares issued on exercise
Shares issued on exercise of the Options rank equally with the
then issued shares of the Company.
(ix) Reconstruction of capital
If at any time the issued capital of the Company is
reconstructed, all rights of an Optionholder are to be changed
in a manner consistent with the Corporations Act and the ASX
Listing Rules at the time of the reconstruction.
(x) Participation in new issues
There are no participation rights or entitlements inherent in the
Options and holders will not be entitled to participate in new
issues of capital offered to Shareholders during the currency of
the Options without exercising the Options.
(xi) Change in exercise price
An Option does not confer the right to a change in Exercise
Price or a change in the number of underlying securities over
which the Option can be exercised.
(xii) Transferability
The Options are transferable subject to any restriction or escrow
arrangements imposed by ASX or under applicable Australian
securities laws.
(d) Adviser Options
(i) Entitlement
Each Option entitles the holder to subscribe for one Share upon
exercise of the Option.
(ii) Exercise Price
Subject to paragraph (ix), the amount payable upon exercise
of each Option will be $0.025 (Exercise Price).
2940-13/1827811_13 18
(iii) Expiry Date
Each Option will expire at 5:00 pm (WST) on that date which is
three (3) years from the date of issue (Expiry Date). An Option
not exercised before the Expiry Date will automatically lapse on
the Expiry Date.
(iv) Exercise Period
The Options are exercisable at any time on or prior to the Expiry
Date (Exercise Period).
(v) Notice of Exercise
The Options may be exercised during the Exercise Period by
notice in writing to the Company in the manner specified on
the Option certificate (Notice of Exercise) and payment of the
Exercise Price for each Option being exercised in Australian
currency by electronic funds transfer or other means of
payment acceptable to the Company.
(vi) Exercise Date
A Notice of Exercise is only effective on and from the later of
the date of receipt of the Notice of Exercise and the date of
receipt of the payment of the Exercise Price for each Option
being exercised in cleared funds (Exercise Date).
(vii) Timing of issue of Shares on exercise
Within 15 Business Days after the Exercise Date, the Company
will:
(A) issue the number of Shares required under these terms
and conditions in respect of the number of Options
specified in the Notice of Exercise and for which
cleared funds have been received by the Company;
(B) if required, give ASX a notice that complies with section
708A(5)(e) of the Corporations Act, or, if the Company
is unable to issue such a notice, lodge with ASIC a
prospectus prepared in accordance with the
Corporations Act and do all such things necessary to
satisfy section 708A(11) of the Corporations Act to
ensure that an offer for sale of the Shares does not
require disclosure to investors; and
(C) if admitted to the official list of ASX at the time, apply
for official quotation on ASX of Shares issued pursuant
to the exercise of the Options.
If a notice delivered under (B) for any reason is not effective to
ensure that an offer for sale of the Shares does not require
disclosure to investors, the Company must, no later than 20
Business Days after becoming aware of such notice being
ineffective, lodge with ASIC a prospectus prepared in
accordance with the Corporations Act and do all such things
necessary to satisfy section 708A(11) of the Corporations Act to
2940-13/1827811_13 19
ensure that an offer for sale of the Shares does not require
disclosure to investors.
(viii) Shares issued on exercise
Shares issued on exercise of the Options rank equally with the
then issued shares of the Company.
(ix) Reconstruction of capital
If at any time the issued capital of the Company is
reconstructed, all rights of an Optionholder are to be changed
in a manner consistent with the Corporations Act and the ASX
Listing Rules at the time of the reconstruction.
(x) Participation in new issues
There are no participation rights or entitlements inherent in the
Options and holders will not be entitled to participate in new
issues of capital offered to Shareholders during the currency of
the Options without exercising the Options.
(xi) Change in exercise price
An Option does not confer the right to a change in Exercise
Price or a change in the number of underlying securities over
which the Option can be exercised.
(xii) Transferability
The Options are transferable subject to any restriction or escrow
arrangements imposed by ASX or under applicable Australian
securities laws.
2940-13/1827811_13 20
7. RISK FACTORS
7.1 General
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 risk factors described below,
together with information contained elsewhere in this Prospectus and to consult
their professional advisers before deciding whether to apply for Securities
pursuant to this Prospectus.
There are specific risks which relate directly to the Company’s business. In
addition, there are other general risks, many of which are largely beyond the
control of the Company and the Directors. The risks identified in this section, or
other risk factors, may have a material impact on the financial performance of
the Company and the market price of the Securities.
The following is not intended to be an exhaustive list of the risk factors to which
the Company is exposed.
7.2 Company specific risks
(a) Reliance on key personnel
The responsibility of overseeing the day-to-day operations and the
strategic management of the Company depends substantially on their
senior management and key personnel. There can be no assurance
given that there will be no detrimental impact on the Company if one or
more of these employees cease their employment or if one or more of
the directors of the Company leaves the Board.
(b) Lenders' willingness to employ third-party distribution channels
The Company’s mortgage business and the mortgage broking industry
generally, is reliant on lenders' willingness to employ third-party
distribution channels as a means of marketing their loan products.
Depending on the relative cost of other distribution methods in the
future, lenders may also decide to decrease their reliance on (or not to
use) third-party channels, develop competing distribution channels or
reduce current upfront or trail commission terms, any of which would
have a significant adverse effect on the industry generally and on the
Company. The Company is also reliant on receiving access to
competitive products from the Finsure Lending Panel (a suite of lending
institutions in Australia) to enable brokers to attract customers in an
increasingly competitive mortgage market. There can be no assurance
that Finsure Lending Panel will continue to be able to access
competitive products.
(c) Supplier risk
The Company sources a number of products and services from
outsourced suppliers. Examples include mortgage aggregator services
through Finsure. Any material changes in trading terms and/or supply
from outsourced suppliers may impact the Company's ability to provide
the current suite of products and services to its customers at the current
pricing and gross margin on mortgage lines.
2940-13/1827811_13 21
(d) Technology risk
The Company's real estate business "The Agency" is built around
technology that gives the Company's sales representatives the ability to
work from any location with a few large regional offices for support. Any
interruption to the daily service, operation and maintenance of this
technology plus failure or delay continuing to develop new functionality
to the technology may have a material impact on the Company's
current and future revenues. The Company also relies on a number of
management information systems to enable the efficient running of the
business. Whilst standard back-up, storage and recovery procedures are
implemented, including offsite storage of back-up data, any event that
causes harm or destroys the original and back-up data may have a
material impact on the Company's ability to maintain continuous
operations for the period of time required to remedy the cause of
business interruption.
(e) Security risk
The Company relies upon the security of its management information
systems, payment systems, website and client database. Any breaches
of security including cyberattacks to the website or database that may
cause damage, loss of operation or access to customer records by
unauthorised parties could cause material impact or interruption to the
Company's continuous operation and therefore financial results.
Damage, loss or misuse of client records may cause a loss of confidence
in the Company by its clients as well as reputational damage.
(f) Customer service
Ausnet relies upon both the continuous operation of its website as well
as the ability to provide an acceptable level of customer assistance
and service via its own staff and/or outsource providers. Any event that
causes customer service to fall to inadequate or unacceptable levels
may cause reputational damage and consequently a reduction in the
Company's ability to retain existing customers and attract new
customers. Any loss of existing or new customers will impact the
Company's revenues.
(g) Infringement of Intellectual Property Rights
Should the Company be accused of infringing a third-party's intellectual
property rights or trademarks and commence legal proceedings
against the Company, the Company may incur significant costs in
defending such proceedings, regardless of the outcome. Defending
legal proceedings can often be defocusing for management and
possibly other staff, which may divert their attention from the optimal
management of the Company and results. Should a third-party obtain
injunctive or other relief, it may prevent the Company from further use of
the related intellectual property or trademark. Should such litigation be
successful, the Company may also be caused to pay damages to the
third-party and incur additional cost in the future to use or replace the
functionality of the related intellectual property or trademark.
2940-13/1827811_13 22
(h) IT systems
The Company’s ability to manage service and pay its client database is
dependent on its information technology systems (including its customer
relationship management software) and relationships with service
providers. Interruptions, failure or delay in the provision of services could
severely impact the business operations of the Company as damaging
the Company’s reputation. Any issues with Ausnet's information
technology systems may also impact on the Company's operational
capabilities and financial performance.
(i) Dependency on Licences for financial services businesses
The Company’s mortgage broking and financial services businesses are
dependent on relevant government licences and can be revoked if
certain conditions are breached. If theses licences were revoked, this
would have an adverse effect on revenue for these business units.
(j) Reliance on external software providers
The Company’s mortgage business is reliant on software provided by
Finsure to facilitate their business including its customer relationship
management software). There is a risk that a transfer to a new
aggregator, and with it new software systems, could cause some
disruption to the business.
7.3 Industry specific risks
(a) Competition risks
The Company operates in a highly competitive market. Therefore, it
faces the risk that increasing levels of competition, including
competition from business models using new technology platforms,
could result in, among other things, the Company foregoing a greater
proportion of its profit margin to retain volumes of mortgages written,
reduced upfront commissions and trail commissions and changes to the
structure of upfront commissions and trail commissions by lenders (such
as the replacement of trail commissions with up-front commissions). This
may result in reduced revenue, reduced operating margins and a loss
of market share, which may have a material adverse effect on the
Company's business, operating and financial performance and position
and future prospects.
(b) Importance of licences for the Company’s core business activities
The Company currently holds an ACL licence to engage in mortgage
broking activities, in order to conduct its business. This licence enables
the Company to engage and facilitate mortgage activities.
Compliance with the obligations of the licences is the responsibility of
the licensee. If the Company does not comply with the conditions of
their licences or meet regulatory requirements, it could be subject to
penalties, more onerous licence conditions and the imposition of
licence restrictions for the loss of that licence. If the Company is unable
to retain its licence or has restrictions imposed on this licence, it may not
be able to continue to operate its business, or aspects of its business, in
its current form. This would have a material adverse impact on the
financial performance and position of the business.
2940-13/1827811_13 23
(c) Regulatory risks
In Australia, the mortgage broking industry is primarily regulated by ASIC
and the National Consumer Credit Protection Act 2009 (Cth) (NCCP
Act). The industry is also subject to a variety of other laws including
privacy, financial transaction reporting and money laundering. If the
Company does not meet regulatory requirements, such as various
responsible lending obligations under the NCCP Act, it may suffer
penalties or the ability to maintain its current ACL. Therefore, the
Company’s operating activities may be affected, which is likely to have
a material impact on the Company's business and financial
performance. These penalties may include (but are not limited to): fines,
compensation, and cancellation or suspension of authority to carry on
business. In addition, the regulatory framework governing the mortgage
broking industry is subject to change. This could have an impact on the
mortgage broking industry or on the Company's operations. Depending
on the nature of any such changes, they may adversely impact the
operations or future financial performance of the Company.
(d) Conduct of mortgage brokers and credit representatives
The Company’s mortgage business faces a number of risks arising from
the conduct of mortgage brokers. It is noted that under the NCCP Act,
the Company is liable to customers for any loss or damage they suffer as
a result of a mortgage broker's conduct. This applies to conduct that
relates to credit activity on which the customer could reasonably be
expected to rely and in fact relied in good faith. Where the Company is
responsible for the conduct of its credit representative, the customer has
the same remedies against the Company as it has against the credit
representative. This means that customers can take action against the
Company in respect of a mortgage broker's conduct.
7.4 General risks
(a) Interest Rates
Australian consumers and residential borrowers currently enjoy
historically low interest rates which have contributed to the growth of
the Company’s loan book. In the event interest rates significantly
increase, potential borrowers' willingness and ability to borrow may be
greatly reduced and the volume of loans settled could significantly
decrease, affecting the Company’s loan book and the associated
financial performance of the Company.
(b) Funding Risks
If the Company incurs unexpected costs or is unable to generate
sufficient operating income, further funding may be required. The
Company may require additional funding to carry out the full scope of
its plans.
The Company's ability to effectively implement its business and
operations plans in the future, to take advantage of opportunities for
acquisitions, joint ventures or other business opportunities and to meet
any unanticipated liabilities or expenses which the Company may incur
may depend in part on its ability to raise additional funds. The Company
may seek to raise further funds through equity or debt financing or other
means. Failure to obtain sufficient financing for the Company's activities
2940-13/1827811_13 24
may result in delay and indefinite postponement of the development of
key software products or sales and marketing activities. There can be no
assurance that additional finance will be available when needed or, if
available, the terms of the financing might not be favourable to the
Company and might involve substantial dilution to Shareholders.
Loan agreements and other financing rearrangements such as debt
facilities, convertible note issue and finance leases (and any related
guarantee and security) that may be entered into by the Company
may contain covenants, undertakings and other provisions which, if
breached, may entitle lenders to accelerate repayment of loans and
there is no assurance that the Company would be able to repay such
loans in the event of an acceleration. Enforcement of any security
granted by the Company or default under a finance lease could also
result in the loss of assets.
The Company is exposed to risks associated with its financial instruments
(consisting of cash, receivables, accounts payable and accrued
liabilities due to third parties from time to time). This includes the risk that
a third-party to a financial instrument fails to meet its contractual
obligations; the risk that the Company will not be able to meet its
financial obligations as they fall due; and the risk that market prices may
vary which will affect the Company's income.
(c) Economic
General economic conditions, introduction of tax reform, new
legislation, movements in interest and inflation rates and currency
exchange rates may have an adverse effect on the Company’s
business activities and potential research and development
programmes, as well as on their ability to fund those activities.
(d) Insurance risks
The Company intends to insure its operations in accordance with
industry practice. However, in certain circumstances, such insurance
may not be of a nature or level to provide adequate insurance cover.
The occurrence of an event that is not covered or fully covered by
insurance could have a material adverse effect on the business,
financial condition and results of the Company effected.
(e) Litigation risks
The Company is exposed to possible litigation risks. Further, the
Company may be involved in disputes with other parties in the future
which may result in litigation. Any such claim or dispute if proven, may
impact adversely on the Company’s operations, financial performance
and financial position. The Company is not currently engaged in any
litigation.
(f) Market conditions
Share market conditions may affect the value of the Company’s
quoted securities regardless of the Company’s operating performance.
Share market conditions are affected by many factors such as:
(i) general economic outlook;
2940-13/1827811_13 25
(ii) introduction of tax reform or other new legislation;
(iii) interest rates and inflation rates;
(iv) changes in investor sentiment toward particular market sectors;
(v) the demand for, and supply of, capital; and
(vi) terrorism or other hostilities.
The market price of securities can fall as well as rise and may be subject
to varied and unpredictable influences on the market for equities in
general and technology related stocks in particular. Neither the
Company nor the Directors warrant the future performance of the
Company or any return on an investment in the Company.
7.5 Investment speculative
The above list of risk factors ought not to be taken as exhaustive of the risks
faced by the Company or by investors in the Company. The above factors, and
others not specifically referred to above, may in the future materially affect the
financial performance of the Company and the value of the Securities offered
under this Prospectus.
Therefore, the Securities to be issued pursuant to this Prospectus carry no
guarantee with respect to the payment of dividends, returns of capital or the
market value of those Securities.
Potential investors should consider that the investment in the Company is highly
speculative and should consult their professional advisers before deciding
whether to apply for Securities pursuant to this Prospectus.
2940-13/1827811_13 26
8. ADDITIONAL INFORMATION
8.1 Litigation
As at the date of this Prospectus, the Company is not involved in any legal
proceedings and the Directors are not aware of any legal proceedings pending
or threatened against the Company.
8.2 Continuous Disclosure Obligations
The Company is a “disclosing entity” (as defined in section 111AC of the
Corporations Act) for the purposes of section 713 of the Corporations Act and,
as such, is subject to regular reporting and disclosure obligations. Specifically,
like all listed companies, the Company is required to continuously disclose any
information it has to the market which a reasonable person would expect to
have a material effect on the price or the value of the Company’s securities.
This Prospectus is a “transaction specific prospectus”. In general terms a
“transaction specific prospectus” is only required to contain information in
relation to the effect of the issue of securities on a company and the rights
attaching to the securities. It is not necessary to include general information in
relation to all of the assets and liabilities, financial position, profits and losses or
prospects of the issuing company.
This Prospectus is intended to be read in conjunction with the publicly available
information in relation to the Company which has been notified to ASX and does
not include all of the information that would be included in a prospectus for an
initial public offering of securities in an entity that is not already listed on a stock
exchange. Investors should therefore have regard to the other publicly
available information in relation to the Company before making a decision
whether or not to invest.
Having taken such precautions and having made such enquires as are
reasonable, the Company believes that it has complied with the general and
specific requirements of ASX as applicable from time to time throughout the 3
months before the issue of this Prospectus which required the Company to notify
ASX of information about specified events or matters as they arise for the
purpose of ASX making that information available to the stock market
conducted by ASX.
Information that is already in the public domain has not been reported in this
Prospectus other than that which is considered necessary to make this
Prospectus complete.
The Company, as a disclosing entity under the Corporations Act, states that:
(a) it is subject to regular reporting and disclosure obligations;
(b) copies of documents lodged with the ASIC in relation to the Company
(not being documents referred to in section 1274(2)(a) of the
Corporations Act) may be obtained from, or inspected at, the offices of
the ASIC; and
(c) it will provide a copy of each of the following documents, free of
charge, to any person on request between the date of issue of this
Prospectus and the Closing Date:
2940-13/1827811_13 27
(i) the annual financial report most recently lodged by the
Company with the ASIC;
(ii) any half-year financial report lodged by the Company with the
ASIC after the lodgement of the annual financial report referred
to in (i) and before the lodgement of this Prospectus with the
ASIC; and
(iii) any continuous disclosure documents given by the Company to
ASX in accordance with the ASX Listing Rules as referred to in
section 674(1) of the Corporations Act after the lodgement of
the annual financial report referred to in (i) and before the
lodgement of this Prospectus with the ASIC.
Copies of all documents lodged with the ASIC in relation to the Company can
be inspected at the registered office of the Company during normal office
hours.
Details of documents lodged by the Company with ASX since the date of
lodgement of the Company’s latest annual financial report and before the
lodgement of this Prospectus with the ASIC are set out in the table below.
Date Description of Announcement
14/12/2017 Reinstatement of Official Quotation
14/12/2017 Acquisition and Capital Raise
11/12/2017 Extension of Suspension
07/12/2017 Extension of Suspension
06/12/2017 Suspension from Official Quotation
04/12/2017 Trading Halt
28/11/2017 Results of AGM
22/11/2017 Investment in ServTech Global Holdings Ltd
22/11/2017 Investor Presentation
20/11/2017 Appendix 4C – Quarterly Cashflow and commentary
31/10/2017 Notice of Annual General Meeting
24/10/2017 Final Director’s Interest Notice
24/10/2017 Resignation of Ross Cotton as a director
02/10/2017 Corporate Governance Statement
02/10/2017 Appendix 4G
02/10/2017 Annual Report to Shareholders
ASX maintains files containing publicly available information for all listed
companies. The Company’s file is available for inspection at ASX during normal
office hours.
The announcements are also available through the Company’s website at
www.ausnetrealestateservices.com.au.
2940-13/1827811_13 28
8.3 Market price of Shares
The Company is a disclosing entity for the purposes of the Corporations Act and
its Shares are enhanced disclosure securities quoted on ASX.
The highest, lowest and last market sale prices of the Shares on ASX during the
three months immediately preceding the date of lodgement of this Prospectus
with the ASIC and the respective dates of those sales were:
Highest $0.022 4 October 2017
Lowest $0.017 18 September 2017
Last $0.019 13 December 2017
8.4 Interests of Directors
Security Holdings
Other than as set out below or elsewhere in this Prospectus, no Director nor any
firm in which such a Director is a partner, has or had within 2 years before the
lodgement of this Prospectus with the ASIC, any interest in:
(a) the formation or promotion of the Company;
(b) property acquired or proposed to be acquired by the Company in
connection with its formation or promotion or the Offer pursuant to this
Prospectus; or
(c) the Offers,
and no amounts have been paid or agreed to be paid (in cash or Shares or
otherwise) to any Director or to any firm in which any such Director is a partner or
director, either to induce him to become, or to qualify him as, a Director or
otherwise for services rendered by him or by the firm in connection with the
formation or promotion of the Company or the Offer. Directors’ relevant interests
in securities of the Company at the date of this Prospectus and remuneration
information (including amounts paid in consulting fees) for the current and last
two financial years is set out below:
Director Shares Options Performance
Shares
Philip Re 4,069,9731 Nil 11,648,3242
John Kolenda 42,718,3323 Nil 22,239,4454
Adam Davey 617,1445 142,8586 8,000,0007
Paul Niardone 10,463,2928 Nil 15,820,4329
Notes
1. Consisting of 3,944,973 held indirectly through Mr Philip Re <Re Super Fund> and 125,000
held directly by Mr Re.
2. Held indirectly through Mr Re <Re Super Fund>.
3. Held indirectly through Finsure Holdings Pty Ltd.
4. Comprising 8,000,000 held directly by Mr Kolenda and 14,239,445 held indirectly through
Finsure Holdings Pty Ltd.
2940-13/1827811_13 29
5. Comprising 609,643 Shares held indirectly by Court Securities Pty Ltd, 2500 Shares held by
A Davey <Tony Lelbowitz & Noah Davey>, 2000 Shares held by A Davey & M Davey <The
Davey Super Fund A/C>, 2,001 Shares held by A Davey <Shenton Park Investments A/C>
and 1,000 Shares held by Mr Davey’s spouse.
6. Held indirectly through Court Securities Pty Ltd and exercisable at 30 April 2019.
7. Held directly by Mr Davey.
8. Comprising 1,000 held directly by Mr Niardone, 10,461,292 held indirectly through Trindis
Pty Ltd and 1,000 held indirectly through Mr Niardone’s spouse.
9. Comprising 12,333,334 Performance Shares held directly by Mr Niardone and 3,487,098
Performance Shares held indirectly through Trindis Pty Ltd.
No Directors or any of their associates intend to participate in the Offer.
Remuneration
The remuneration of an executive Director is decided by the Board, without the
affected executive Director participating in that decision-making process. The
total maximum remuneration of non-executive Directors is initially set by the
Constitution and subsequent variation is by ordinary resolution of Shareholders in
general meeting in accordance with the Constitution, the Corporations Act and
the ASX Listing Rules, as applicable. The determination of non-executive
Directors’ remuneration within that maximum will be made by the Board having
regard to the inputs and value to the Company of the respective contributions
by each non-executive Director.
A Director may be paid fees or other amounts (i.e. non-cash performance
incentives such as Options, subject to any necessary Shareholder approval) as
the other Directors determine where a Director performs special duties or
otherwise performs services outside the scope of the ordinary duties of a
Director. In addition, Directors are also entitled to be paid reasonable travelling,
hotel and other expenses incurred by them respectively in or about the
performance of their duties as Directors.
The following table shows the annual remuneration paid to both executive and
non-executive Directors inclusive of superannuation for the past financial year
and the proposed remuneration for financial year 2018.
Director Financial year Proposed financial
ending 30 June year ending 30 June
2017 2018
Philip Re1 $51,000 $60,000
John Kolenda2 $24,000 $48,000
Adam Davey3 $24,000 $48,000
Paul Niardone4 $340,802 $328,500
Notes
1. Mr Re was appointed on 19 December 2016.
2. Mr Kolenda was appointed on 19 December 2016.
3. Mr Davey was appointed on 19 December 2016.
4. Mr Niardone was appointed on 19 December 2016.
2940-13/1827811_13 30
8.5 Lead Manager Mandate
By a mandate between Patersons Securities Limited and the Company (Lead
Manager Mandate), Patersons Securities Limited agreed to act as Lead
Manager to the Placement Offer.
Pursuant to the Lead Manager Mandate, the Company has agreed to pay the
Lead Manager:
(a) a management fee of 1.5% of the total gross amount raised from all
sources in the Placement Offer; and
(b) a selling fee of 5% of the total gross amount raised in the Placement
Offer. All fees paid to third parties will be paid from this fee.
The Company has also agreed to issue the Adviser Options pursuant to the terms
of the Lead Manager Mandate. The Adviser Options are provided for the Lead
Manager to distribute to cornerstone investors under the Placement Offer and to
other brokers who may be involved in the Placement Offer.
Patersons Securities Limited is also entitled to be reimbursed for its out of pocket
expenses directly related to the transaction. Patersons will obtain the company’s
consent prior to incurring any single expense greater than $2,000.
In the event that the Company terminates the Lead Manager Mandate, or
Patersons Securities Limited terminates the engagement for cause, Patersons
Securities Limited will be entitled to the reimbursement of any incurred or
accrued expenses up to the date of termination.
The Lead Manager Mandate also contains an indemnity, representations and
warranties from the Company to the Lead Manager that are considered
standard for an agreement of this type.
Adam Davey, a Non-Executive Director of the Company, is a Director, Wealth
Management at Patersons Securities Limited.
8.6 Interests of experts and advisers
Other than as set out below or elsewhere in this Prospectus, no:
(a) person named in this Prospectus as performing a function in a
professional, advisory or other capacity in connection with the
preparation or distribution of this Prospectus;
(b) promoter of the Company; or
(c) underwriter to the issue or a financial services licensee named in this
Prospectus as a financial services licensee involved in the issue,
holds, or has held within the 2 years preceding lodgement of this Prospectus with
the ASIC, any interest in:
(d) the formation or promotion of the Company;
(e) any property acquired or proposed to be acquired by the Company in
connection with:
(i) its formation or promotion; or
2940-13/1827811_13 31
(ii) the Offers; or
(f) the Offers,
and no amounts have been paid or agreed to be paid and no benefits have
been given or agreed to be given to any of these persons for services provided
in connection with:
(g) the formation or promotion of the Company; or
(h) the Offers.
Patersons Securities Limited will be paid a management and selling fee of
approximately $195,000 in respect of this Placement Offer (assuming full
oversubscription of the Placement Offer). The Company has also agreed to issue
the Adviser Options to Patersons Securities Limited. The Adviser Options are
provided for the Lead Manager to distribute to cornerstone investors under the
Placement Offer and to other brokers who may be involved in the Placement
Offer. During the 24 months preceding lodgement of this Prospectus with the
ASIC, Patersons Securities Limited has been paid fees totalling $384,700 by the
Company.
Steinepreis Paganin has acted as the solicitors to the Company in relation to the
Offer and associated due diligence process. The Company estimates it will pay
Steinepreis Paganin $15,000 (excluding GST and disbursements) for these
services. During the 24 months preceding lodgement of this Prospectus with the
ASIC, Steinepreis Paganin has been paid fees totalling $ $216,465.50 (excluding
GST and disbursements) by the Company.
8.7 Consents
Chapter 6D of the Corporations Act imposes a liability regime on the Company
(as the offeror of the Securities), the Directors, the persons named in the
Prospectus with their consent as proposed directors, any underwriters, persons
named in the Prospectus with their consent having made a statement in the
Prospectus and persons involved in a contravention in relation to the Prospectus,
with regard to misleading and deceptive statements made in the Prospectus,
Although the Company bears primary responsibility for the Prospectus, the other
parties involved in the preparation of the Prospectus can also be responsible for
certain statements made in it.
Each of the parties referred to in this Section:
(a) have not authorised or caused the issue of the Prospectus and does not
make, or purport to make, any statement in this Prospectus other than
those referred to in this section;
(b) in light of the above, only to the maximum extent permitted by law,
expressly disclaim and take no responsibility for any part of this
Prospectus other than a reference to its name and a statement
included in this Prospectus with the consent of that party as specified in
this Section.
Patersons Securities Limited has given its written consent to being named as
Lead Manager to the Placement Offer in this Prospectus. Patersons Securities
Limited has not withdrawn its consent prior to the lodgement of this Prospectus
with the ASIC.
2940-13/1827811_13 32
Steinepreis Paganin has given its written consent to being named as the solicitors
to the Company in this Prospectus. Steinepreis Paganin has not withdrawn its
consent prior to the lodgement of this Prospectus with the ASIC.
8.8 Estimated Expenses of Offers
The expenses of the Offers are estimated to be approximately
$260,000(excluding GST) assuming full oversubscription of the Placement Offer
and are expected to be applied towards the items set out in the table below:
$
ASIC fees 2,400
ASX fees 35,000
Lead Manager fees 195,000
Legal fees 15,000
Printing and distribution 7,500
Miscellaneous 5,100
Total 260,000
8.9 Electronic Prospectus
If you have received this Prospectus as an electronic Prospectus, please ensure
that you have received the entire Prospectus accompanied by the Application
Form. If you have not, please phone the Company on +61 8 6141 3500 and the
Company will send you, for free, either a hard copy or a further electronic copy
of the Prospectus, or both. Alternatively, you may obtain a copy of this
Prospectus from the Company’s website at
www.ausnetrealestateservices.com.au.
The Company reserves the right not to accept an Application Form from a
person if it has reason to believe that when that person was given access to the
electronic Application Form, it was not provided together with the electronic
Prospectus and any relevant supplementary or replacement prospectus or any
of those documents were incomplete or altered.
8.10 Clearing House Electronic Sub-Register System (“CHESS”) and Issuer Sponsorship
The Company will not be issuing share certificates. The Company is a participant
in CHESS, for those investors who have, or wish to have, a sponsoring stockbroker.
Investors who do not wish to participate through CHESS will be issuer sponsored
by the Company. Because the sub-registers are electronic, ownership of
securities can be transferred without having to rely upon paper documentation.
Electronic registers mean that the Company will not be issuing certificates to
investors. Instead, investors will be provided with a statement (similar to a bank
account statement) that sets out the number of Shares issued to them under this
Prospectus. The notice will also advise holders of their Holder Identification
Number or Security Holder Reference Number and explain, for future reference,
the sale and purchase procedures under CHESS and issuer sponsorship.
Further monthly statements will be provided to holders if there have been any
changes in their security holding in the Company during the preceding month.
8.11 Financial forecasts
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
2940-13/1827811_13 33
on the basis that the operations of the Company are inherently uncertain.
Accordingly, 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.
8.12 Forward-looking statements
This Prospectus contains forward-looking statements which are identified by
words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or
‘intends’ and other similar words that involve risks and uncertainties.
These statements are based on an assessment of present economic and
operating conditions, and on a number of assumptions regarding future events
and actions that, as at the date of this Prospectus, are expected to take place.
Such forward-looking statements are not guarantees of future performance and
involve known and unknown risks, uncertainties, assumptions and other
important factors, many of which are beyond the control of the Company, the
Directors and management.
The Company cannot and do not give any assurance that the results,
performance or achievements expressed or implied by the forward-looking
statements contained in this prospectus will actually occur and investors are
cautioned not to place undue reliance on these forward-looking statements.
The Company have no intention to update or revise forward-looking statements,
or to publish prospective financial information in the future, regardless of
whether new information, future events or any other factors affect the
information contained in this Prospectus, except where required by law.
These forward looking statements are subject to various risk factors that could
cause our actual results to differ materially from the results expressed or
anticipated in these statements. These risk factors are set out in Section 7 of this
Prospectus.
8.13 Privacy Act
If you complete an application for Shares, you will be providing personal
information to the Company (directly or by the Company’s share registry). The
Company collects, holds and will use that information to assess your application,
service your needs as a holder of equity securities in the Company, facilitate
distribution payments and corporate communications to you as a Shareholder
and carry out administration.
The information may also be used from time to time and disclosed to persons
inspecting the register, bidders for your securities in the context of takeovers,
regulatory bodies, including the Australian Taxation Office, authorised securities
brokers, print service providers, mail houses and the Company’s share registry.
You can access, correct and update the personal information that we hold
about you. Please contact the Company or its share registry if you wish to do so
at the relevant contact numbers set out in this Prospectus.
Collection, maintenance and disclosure of certain personal information is
governed by legislation including the Privacy Act 1988 (Cth) (as amended), the
Corporations Act and certain rules such as the ASX Settlement Operating Rules.
You should note that if you do not provide the information required on the
2940-13/1827811_13 34
application for Shares, the Company may not be able to accept or process your
application.
2940-13/1827811_13 35
9. DIRECTORS’ CONSENT
This Prospectus is issued by the Company and its issue has been authorised by a
resolution of the Directors.
In accordance with section 720 of the Corporations Act, each Director has
consented in writing to the lodgement of this Prospectus with the ASIC.
_______________________________________
Paul Niardone
Managing Director
For and on behalf of
THE AGENCY GROUP AUSTRALIA LTD
2940-13/1827811_13 36
10. DEFINITIONS
Adviser Offer means the offer of the Adviser Options as referred to in Section 4.1.
Adviser Option means an Option with the terms and conditions set out in Section
6.2(d).
Applicant means an investor that applies for Shares or Options under the Offers
using an Application Form pursuant to this Prospectus.
Application Form means an Application Form either attached to or
accompanying this Prospectus.
ASIC means the Australian Securities and Investments Commission.
ASX means ASX Limited (ACN 008 624 691) or the financial market operated by it
as the context requires.
ASX Listing Rules means the Listing Rules of the ASX.
ASX Settlement Operating Rules means the settlement rules of the securities
clearing house which operates CHESS.
AWST means Australian Western Standard Time as observed in Perth, Western
Australia.
Board means the board of Directors unless the context indicates otherwise.
Business Day means Monday to Friday inclusive, except New Year’s Day, Good
Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX
declares is not a business day.
Closing Date means closing date for receipt of an Application Form as set out in
Section 2 (unless extended or closed early).
Company means The Agency Group Australia Ltd (ACN 118 913 232).
Constitution means the constitution of the Company as at the date of this
Prospectus.
Corporations Act means the Corporations Act 2001 (Cth).
Directors means directors of the Company at the date of this Prospectus.
Dollar or “$” means Australian dollars.
Offers means the Placement Offer, PAC Partners Offer and the Adviser Offer.
Official Quotation means official quotation on ASX.
Opening Date means the opening date for receipt of an Application Form under
this Prospectus as set out in Section 2.
Option means an option to acquire a Share.
Optionholder means the holder of an Option.
PAC Partners Offer means the offer of the PAC Tranche 1 Options and PAC
Tranche 2 Options as referred to in Section 4.1.
2940-13/1827811_13 37
PAC Tranche 1 Option means an Option with the terms and conditions set out in
Section 6.2(b).
PAC Tranche 2 Option means an Option with the terms and conditions set out in
Section 6.2(c).
Placement Offer means the offer of Shares and Placement Options as referred to
in Section 4.1.
Placement Option means an Option with the terms and conditions set out in
Section 6.2(a).
Prospectus means this Prospectus dated 14 December 2017.
Section means a section of this Prospectus.
Securities means Shares and/or Options offered pursuant to the Offers.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means the holder of a Share.
Share Registry means Advanced Share Registry Services.
2940-13/1827811_13 38