This disclosure statement is made as at 11 September 2019 by The Snowball Effect (Australia) Pty Ltd (ACN 631 058 029) Snowball Effect, C/- HWL Ebsworth, Level 14 Australia Square, 264-278 George Street, Sydney, NSW 2000, Australia (Snowball Effect or we).
Snowball Effect's service
Snowball Effect provides services relating to the arranging of the investment by the Investor in shares in the Company (Investment) as described in more detail in the Investor Agreement.
Fees
Snowball Effect does not currently charge you any fees for the services we provide you in accordance with our Investor Agreement which can be found at snowballeffect.com.au/legal/investor-agreement. Snowball Effect’s fees may be changed at any time. Snowball Effect will notify you in advance if it proposes to charge you fees for its services.
Interest accrued (if any) on the Subscription Price whilst held in Snowball Effect's trust account will be retained by Us as an administration fee to partially compensate the time and our costs involved with collection and managing payments.
Snowball Effect has three different fee structures for Companies. Snowball Effect typically charges Companies an upfront fee of NZD$5,000, and a success fee on any funds successfully raised (the total funds successfully raised being the Capital Amount) of:
- 7.5% of the Capital Amount, subject to a NZD$25,000 minimum fee; or
- 4% of the Capital Amount, then an additional 2% of the Capital Amount payable on each of the following three anniversaries of the Retail Offer close; or
- 3.5% of the Capital Amount, then:
- an additional 1.5% of the Capital Amount payable on each of the following three anniversaries of the Retail Offer close; and
- 2.5% of the Capital Amount in warrants (issued at the Retail Offer close) at the then current valuation of the Company, which will expire on the third anniversary of the Retail Offer close.
Snowball Effect's fees to Companies may change, or may be amended in discussions with a Company prior to a Retail Offer being made available. If a Company requests Snowball Effect to provide additional services beyond the basic fund raising services it provides to all companies, for example if Snowball Effect has required an independent report on a Company, Snowball Effect may charge that Company reasonable time based charges for such work, and for the recovery of external costs. The Company will be told the scope of any such charges prior to them being incurred, and shall have the opportunity to withdraw prior to any costs or expenses being charged.
Investment process and how an investor's money is held
The process for investing in a Company, including how any Investor's money is held, is described in the Investor Agreement.
Mandatory checks
We undertake limited background checks on each Company that makes an Offer. These checks consist of a number of preliminary checks of the Company making the Offer, its directors and senior managers (being managers of the Company that are identified to us as material to the Company's business) (Mandatory Checks). Details of the nature of these Mandatory Checks are:
Individuals
- Checks of the insolvency, SIO (a Summary Instalment Order is a formal arrangement with creditors to repay debt over time), and disqualified directors register at the Companies Office.
- General internet searches for evidence of bankruptcy or involvement with insolvent companies, and involvement in litigation or disputes (where public information is available).
- Police criminal records check if permitted by authorities, and noting that the Criminal Records (Clean Slate) Act 2004 authorises people to conceal many convictions.
Companies
- Snowball Effect’s records to ascertain whether the Company has previously raised funds through Snowball Effect, and if so, the timing and amount raised (cross-checked against our bank records to verify the timing and amount).
- The identity and character of the Company's directors and senior managers (from readily available public information).
- Companies register searches (however we do not expect to learn more than that the Company is registered and who were the directors and shareholders at the date of last filing).
- General internet searches to identify involvement in litigation or disputes (where public information is available and readily accessible).
- Search of the Insolvency Register.
Snowball Effect will, acting in its sole discretion, consider any areas of concern about the Company or the individuals apparent from the Mandatory Checks. If the Mandatory Checks outlined above disclose facts impugning the honesty of the Company or the individuals involved, then the Company’s application to raise funds through Snowball Effect will be put on hold. We will give the Company or individuals concerned the opportunity to respond to the areas of concern, and the board of directors of Snowball Effect will consider whether the supplementary information disposes of the concerns. Snowball Effect will not allow any Company to raise funds through Snowball Effect if it has material unresolved concerns about honesty arising from the Mandatory Checks.
When undertaking the Mandatory Checks, Snowball Effect will exercise the care, diligence, and skill that a prudent licensee (that's an equity crowdfunding provider) undertaking those Mandatory Checks would exercise in the same circumstances. However the Mandatory Checks will not provide guidance regarding the commercial success of any Company, and You should not rely on the Mandatory Checks as any assurance of the results of your investment.
We do not actively monitor Companies and individuals after these Mandatory Checks have been completed. However, if we become aware of information that is materially contradictory to the results of the Mandatory Checks previously undertaken, we will reconsider whether to decline to allow the Company to use Snowball Effect’s services.
We may form an adverse view at any time of the Company's prospects of raising funds through Snowball Effect and decline to proceed without an adverse judgement of the prospects of the Company's business or its people. It may be a question of timing, or reflect our view of the particular interests and appetite of our investors, or take account of relative attractiveness in relation to other offers or potential offers to our investors around that time.
At any stage, we may notify a Company that it is not suitable for raising money that it is no longer eligible to use our services.
Snowball Effect does not verify the content of the offer materials, and makes no representation in relation to the completeness or accuracy of any information contained in the offer materials.
Each Investor shall be entirely responsible for any decision he or she makes to invest, or not to invest, in any Company. Snowball Effect shall have no liability to any Investor under or in connection with their decision (whether in contract, tort including, without limitation, negligence, or under any other theory of law or cause of action howsoever arising) unless such liability arises out of the fraudulent actions of Snowball Effect or a breach by Snowball Effect of its obligations expressly provided for in the Investor Agreement.
We rely on each Company to inform Us if any material information relating to it has changed from what it has disclosed in its Offer. Companies will usually be required to update their Offer with any such information during the Offer period. However We may not be well enough informed, or have rights and procedures to ensure this will happen.
The services provided to You by Snowball Effect will not include any financial or taxation advice of any nature whatsoever.
Snowball Effect and its related parties
People associated with Snowball Effect (such as its directors, employees and people which Snowball Effect has a business relationship with) may subscribe for shares in an Offer. Any such investments will generally not be disclosed by Snowball Effect or the Company to You or any other investor. If You otherwise become aware that a person associated with Snowball Effect has invested in a Company, it is not an endorsement and You may not rely on this fact when making a decision whether or not to invest.
Requesting copies of documents
An Investor may request from Snowball Effect (for no charge) a copy of a relevant document by emailing it at [email protected]. Examples of relevant documents include the Investor Agreement, Disclosure Agreement, terms of use, privacy policy, and warning statement. Snowball Effect will provide an electronic copy to the Investor (to its Snowball member registered email address) of such information within 10 business days.
Each Investor will be able to access a summary of its investment transaction history through the Website on its membership page.
Complaints
If an Investor has any complaints or queries about the services provided by Snowball Effect, he/she should contact Snowball Effect on [email protected] or by writing to Snowball Effect at Snowball Effect, Suite 9, 1 Faraday Street, Auckland 1052, New Zealand.
Communications with, to or from Snowball Effect shall be in the English language.
