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1 MONTO MINERALS LTD (TO BE RENAMED SHAREROOT LTD ) ACN PROSPECTUS For an offer of up to 100,000,000 Shares at an issue price of $0.05 per Share to raise up to $5,000,000 with a minimum subscription of $3,000,000 together with one (1) free attaching option (Capital Raising Option) for every two (2) Shares issued, exercisable at $0.05 per Capital Raising Option on or before 31 December 2017 (Public Offer). The Public Offer is scheduled to close at 5:00pm (WST) on 4 December 2015 unless extended or withdrawn. Applications must be received by that time to be valid. Completion of the Public Offer is conditional upon satisfaction of the Conditions, which are detailed further in Section 2.4 of the Prospectus. No Securities will be issued pursuant to this Prospectus until such time as the Conditions are satisfied. IMPORTANT INFORMATION This is an important document that should be read in its entirety. If you do not understand it you should consult your professional advisers without delay. The Securities offered by this Prospectus should be considered highly speculative.

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3 TABLE OF CONTENTS 1. CORPORATE DIRECTORY IMPORTANT NOTICE KEY DATES CHAIRMAN S LETTER INVESTMENT OVERVIEW TRANSACTION OVERVIEW DETAILS OF THE OFFERS COMPANY OVERVIEW RISK FACTORS BOARD, MANAGEMENT AND INTERESTS INVESTIGATING ACCOUNTANT S REPORT CORPORATE GOVERNANCE MATERIAL CONTRACTS ADDITIONAL INFORMATION DIRECTORS AUTHORISATION GLOSSARY i

4 1. CORPORATE DIRECTORY Director Mr Gary Steinepreis (Non-Executive Chairman)^ Mr James Allchurch (Managing Director) Mr Patrick Burke (Non-Executive Director)^ Registered Office Company Level 1, 33 Ord Street WEST PERTH WA 6005 Proposed Directors Mr Noah Abelson Mr Marc Angelone Mr James Allchurch Mr Andrew Bursill Company Secretary Mr Gary Steinepreis ASX Code: MOO Proposed ASX Code SRO Legal Advisors Steinepreis Paganin Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000 Lead Manager Foster Stockbroking Pty Ltd Level 25, 52 Martin Place SYDNEY NSW 2000 Telephone: Facsimile: admin@montominerals.com Website: ShareRoot th Street Suite 206 Berkeley California Telephone: Share Registry* Link Market Services Limited Central Park Level 4, 152 St Georges Terrace PERTH WA 6000 Telephone (Australia): Facsimile: Company Auditor* BDO Audit (WA) Pty Ltd 38 Station Street SUBIACO WA 6008 Investigating Accountant BDO Corporate Finance (WA) Pty Ltd 38 Station Street SUBIACO WA 6008 ^ Resigning upon completion of the ShareRoot Acquisition. *This entity is included for information purposes only. It has not been involved in the preparation of this Prospectus / _1 1

5 2. IMPORTANT NOTICE This Prospectus is dated 19 November 2015 and was lodged with the ASIC on that date. The ASIC and its officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates. No person is authorised to give information or to make any representation in connection with this Prospectus, which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus. It is important that you read this Prospectus in its entirety and seek professional advice where necessary. The Shares the subject of this Prospectus should be considered highly speculative. 2.1 Re-compliance Prospectus This Prospectus is a re-compliance prospectus for the purposes of satisfying Chapters 1 and 2 of the ASX Listing Rules and to satisfy the ASX requirements for re-admission to the Official List following a change in nature and scale of the Company s activities. 2.2 Investment Advice This Prospectus does not provide investment advice and has been prepared without taking account of your financial objectives, financial situation or particular needs (including financial or taxation issues). You should seek professional investment advice before subscribing for Securities under this Prospectus. 2.3 Additional Offers This Prospectus also includes: (a) (b) (c) a private offer of 140,000,000 Shares to the Vendors in consideration for the Acquisition (Consideration Offer); a private offer of up to 35,000,000 Shares to the ShareRoot Lenders upon conversion of the Post-30 June ShareRoot Converting Loan Agreements (ShareRoot Lender Offer); and a private offer of 21,000,000 Options, exercisable at $0.05 on or before 31 December 2017 (Advisor Options), to parties that have acted as advisors or consultants in consideration for introducing the Acquisition to the Company and assisting with its implementation (Advisor Offer), (together, the Secondary Offers). 2.4 Conditional Offers The Offers are conditional on: (a) (b) the passing of all of the Essential Resolutions that are being put to Shareholders at the Annual General Meeting; and ASX conditional approval to re-admit the Shares to Official Quotation / _1 2

6 Accordingly, the Offers under this Prospectus are effectively inter-conditional on the successful completion of each other part of the Acquisition. In the event that Shareholders do not approve all of the Essential Resolutions at the General Meeting, the Offers will not proceed and no Securities will be issued pursuant to this Prospectus. If this occurs, Applicants will be reimbursed their Application monies (without interest). 2.5 Expiry Date No Securities may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. 2.6 Forwarding-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 our Company, the Directors and our management. Although the Company believes that the expectations reflected in the forward looking statements included in this Prospectus are reasonable, none of the Company, its Directors, proposed Directors or officers, or any person named in this Prospectus, can give, or gives, any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Prospectus will actually occur or that the assumptions on which those statements are based will prove to be correct or exhaustive beyond the date of its making. Investors are cautioned not to place undue reliance on these forward-looking statements. Except to the extent required by law, the Company has 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. 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 9 of this Prospectus. 2.7 Privacy statement By completing and returning an Application Form, you will be providing personal information directly or indirectly the Company, the Share Registry, the Lead Manager and related bodies corporate, agents, contractors and third party service providers of the foregoing (Collecting Parties). The Collecting Parties collect, hold and will use that information to assess your Application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder / _1 3

7 By submitting an Application Form, you authorise the Company to disclose any personal information contained in your Application Form (Personal Information) to the Collecting Parties where necessary, for any purpose in connection with the Offers, including processing your acceptance of the Offers and complying with applicable law, the ASX Listing Rules, the ASX Settlement Operating Rules and any requirements imposed by any Public Authority. If you do not provide the information required in the Application Form, the Company may not be able to accept or process your acceptance of the Offers. If the Offers are successfully completed, your Personal Information may also be used from time to time and disclosed to persons inspecting the register of Shareholders, including bidders for your securities in the context of takeovers, Public Authorities, authorised securities brokers, print service providers, mail houses and the Share Registry. Any disclosure of Personal Information made for the above purposes will be on a confidential basis and in accordance with the Privacy Act 1988 (Cth) and all other legal requirements. If obliged to do so by law or any Public Authority, Personal Information collected from you will be passed on to third parties strictly in accordance with legal requirements. Once your Personal Information is no longer required, it will be destroyed or de-identified. As at the date of this Prospectus, the Company does not anticipate that Personal Information will be disclosed to any overseas recipient. Subject to certain exemptions under law, you may have access to Personal Information that the Collecting Parties hold about you and seek correction of such information. Access and correction requests, and any other queries regarding this privacy statement, must be made in writing to the Share Registry at the address set out in the Corporate Directory in Section 1 of this Prospectus. A fee may be charged for access. 2.8 Web Site Electronic Prospectus A copy of this Prospectus can be downloaded from the website of the Company at If you are accessing the electronic version of this Prospectus for the purpose of making an investment in the Company, you must be an Australian resident and must only access this Prospectus from within Australia. There is no facility for the Offers to be accepted electronically or by applying online. Securities will not be issued under the electronic version of the Prospectus. The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. You may obtain a hard copy of this Prospectus free of charge by contacting the Company. 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 / _1 4

8 2.9 Defined terms 2.10 Time Unless the contrary intention appears or the context otherwise requires, words and phrases contained in this Prospectus have the same meaning and interpretation as given in the Corporations Act and capitalised terms have the meaning given in the Glossary in Section 16 of this Prospectus. All references to time in this Prospectus are references to Australian Western Standard Time Consolidation 2.12 Risks Unless otherwise stated, all references to Securities in this Prospectus are on a post-consolidation basis. At the Company s General Meeting, the Company is seeking the approval of Shareholders to consolidate the Company s existing Securities on issue on a 1 for 45 basis. You should read this document in its entirety and, if in any doubt, consult your professional advisers before deciding whether to apply for Securities. There are risks associated with an investment in the Company and the Securities offered under this Prospectus must be regarded as a speculative investment. The Securities offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or the future value of the Securities. Refer to Section 9 of this Prospectus for details relating to risk factors Photographs and Diagrams Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person shown endorses the Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this prospectus are illustrative only and may not be drawn to scale Enquiries If you are in any doubt as to how to deal with any of the matters raised in this Prospectus, you should consult your broker or legal, financial or other professional adviser without delay. Should you have any questions about the Offers or how to accept the Offers, please call the Company Secretary, Gary Steinepreis on / _1 5

9 3. KEY DATES Indicative timetable* Lodgement of Prospectus with the ASIC 19 November 2015 Opening Date of the Offers 19 November 2015 General Meeting held to approve the Acquisition 27 November 2015 Closing Date 4 December 2015 Issue of Securities under the Offers 10 December 2015 Settlement of the Acquisition ^ 10 December 2015 Despatch of holding statements 17 December 2015 Re-compliance with Chapters 1 and 2 of the ASX Listing Rules Re-quotation of Shares (including Shares issued under the Offers) on ASX 21 December 2015 to 11 January December 2015 to 13 January 2016 The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Date or close the Offers early without prior notice. The Company also reserves the right not to proceed with any of the Offers at any time before the issue of Securities to Applicants. ^ The above stated date for the Settlement of the Acquisition is only a good faith estimate by the Directors and may have to be extended / _1 6

10 4. CHAIRMAN S LETTER Dear Investor, On behalf of the directors of Monto Minerals Ltd (to be renamed ShareRoot Ltd) (Company), I am pleased to invite you to participate in the Public Offer for an issue of Shares to raise up to $5,000,000 with a minimum of $3,000,000 (Public Offer). On 18 June 2015, the Company announced that it had entered into a heads of agreement (HOA) with ShareRoot Inc., (ShareRoot) under which the Company was granted the exclusive right to make offers to acquire 100% of the issued capital of ShareRoot. The Company paid ShareRoot an exclusivity option fee of $100,000. The HOA was subsequently varied by the parties on 11 August The terms of the HOA (as varied) are summarised in Section 14.1 of the Prospectus. On 18 September 2015, the Company paid ShareRoot $200,000 to confirm its intention to proceed with the acquisition of ShareRoot. Further, on 23 October 2015, the Company announced that it had entered into an agreement and plan of merger with ShareRoot Acquisition Corp. (a wholly owned subsidiary of the Company), ShareRoot and Noah Abelson (as the ShareRoot stockholders representative) (Merger Agreement) pursuant to which ShareRoot Acquisition Corp will be merged with and into ShareRoot resulting in ShareRoot becoming a wholly-owned subsidiary of the Company. Silicon Valley-based ShareRoot owns and operates a user-generated content marketing platform (ShareRoot Platform). The ShareRoot Platform is used by businesses to efficiently source high quality social media-derived user generated content for marketing initiatives and to raise brand awareness. Settlement of the Company s proposed acquisition of ShareRoot pursuant to the Merger Agreement is subject to various conditions described which are summarised in Section 13.2(a) of the Prospectus, including Shareholders approval of various resolutions relating to the acquisition of ShareRoot. Up to 100,000,000 Shares will be issued pursuant to the Public Offer at an issue price of $0.05 per Share, together with one (1) free attaching option in the Company exercisable at $0.05 on or before 31 December 2017 for every two (2) Shares issued. The funds raised from the Public Offer, together with the Company s and ShareRoot s existing cash reserves will be primarily used to fund sales and marketing costs and the development of the ShareRoot Platform. An investment in the Company involves a number of risks and must be considered speculative. The Public Offer represents an opportunity to participate in the development of ShareRoot. I encourage you to read the Prospectus carefully and seek professional advice if required before making an investment decision. Gary Steinepreis Chairman 19 November / _1 7

11 5. INVESTMENT OVERVIEW This section is a summary only and not intended to provide full information for investors intending to apply for Shares offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety. Item Summary Further information A. Company Who is the issuer of this Prospectus? Who is the Company? Monto Minerals Ltd (ACN ) (ASX:MOO), to be renamed (subject to Shareholder approval) ShareRoot Ltd (ASX:SRO). The Company was incorporated on 17 January 1994 and was admitted to the official list of the ASX on 7 March Since listing, the Company has primarily focused on the exploration and development of mineral assets in Queensland, Australia. For the past 12 months, the Company has been evaluating alternative corporate opportunities, both in Australia and overseas. As announced on 18 June 2015, the Company has entered into a heads of agreement with ShareRoot (which was varied on 11 August 2015) under which the Company has the exclusive right to make offers to acquire 100% of the issued capital of ShareRoot. This has now been embodied in the Merger Agreement, the terms of which are summarised in Section The Company is currently actively seeking either a strategic partner or divestment for its existing projects. Sections 6.1 and 8.1 How will the Acquisition be implemented? The Company has called the Annual General Meeting, to be held on 27 November 2015, to seek the approval of its Shareholders to the change in its focus from a mineral exploration company to a user generated content (UGC) marketing company. At the Annual General Meeting, Shareholders will consider resolutions relating to the change in the nature and scale of the Company s activities, as well as resolutions required for Settlement of the Acquisition and undertaking the Offers. The Company proposes to change its name to ShareRoot Ltd on Settlement of the Acquisition, which in the Directors and Proposed Directors opinion will be better Sections 6.5, 6.6 and / _1 8

12 Item Who is ShareRoot? B. Business Model What are the key business strategies of the Company? How will the Company generate income? What are the key dependencies of the Company s business model Summary suited to the Company s new strategic direction. Silicon Valley-based ShareRoot owns and operates a user-generated content marketing platform. ShareRoot has developed an innovative Software as a Service platform enabling businesses to efficiently source high quality social mediaderived UGC to be used in marketing initiatives and to increase brand awareness. The ShareRoot Platform is live and is currently working with over 80 brands. Upon Settlement, completion of the Offers and the re-instatement of the Company on the ASX, the Company intends to focus its business activities on the operation of the current business of ShareRoot, and the growth and development of that business. The initial focus will be to continue generating sales in the U.S. and begin generating sales across the world. The Company is currently actively seeking either a strategic partner or divestment for its existing projects. The Company will generate income through the development and distribution of the ShareRoot Platform to its customers. ShareRoot s clients are charged a monthly subscription fee (on top of initial set up fee) to have unlimited access to the platform in addition to unlimited searches and requests. As the ShareRoot Platform s capabilities expand, additional tiered pricing features will be launched. The key factors that the Company will depend on to meet its objectives are: There being a commercial advantage for companies in building relationships with consumers via the use of user generated content. The number of people using social media platforms being sustained or increasing; and the continued growth of the marketing technology space. Further information Sections 6.4 and 8.2 Sections 6.4 and 8.2 Section 8.2 Section / _1 9

13 Item Summary Further information C. Key Investment Highlights and Risks What are the key investment highlights? The Directors and Proposed Directors are of the view that an investment in the Company provides the following nonexclusive list of key highlights: Exposure to social media platforms that have an estimated 1.8 billion users and generated approximately $15 billion revenue in 2014; ShareRoot is positioned to take advantage of one of the growth areas of social media user generated content; ShareRoot s innovative Software-asa-Service platform allows businesses to easily source high quality user generated content and transfer legal ownership of content - allowing them to drive sales and increase brand awareness; ShareRoot is currently working with over 80 brands; and The proposed executive directors of the Company have extensive experience in the marketing technology space. Section 6.3 What are the key risks of an investment in the Company The business, assets and operations of the Company, including after Settlement of the Acquisitions, are subject to certain risk factors that have the potential to influence the operating and financial performance of the Company in the future. These risks can impact on the value of an investment in the Securities of the Company. The Board aims to manage these risks by carefully planning its activities and implementing risk control measures. Some of the risks are, however, highly unpredictable and the extent to which the Board can effectively manage them is limited. Based on the information available, a nonexhaustive list of the key risk factors affecting the Company are as follows: Limited operating history ShareRoot has a limited operating history which may not provide a meaningful basis for investors to evaluate the business, financial performance and prospects of ShareRoot; Section / _1 10

14 Item Summary Uncertainty of future probability ShareRoot s profitability will be impacted by factors including its ability to successfully deliver a high level of service to any future potential customers and economic conditions in the markets in which it operates. Therefore, the extent of future profits, if any, and the time required to achieve sustained profitability are uncertain; Development and commercialisation of ShareRoot ShareRoot s business model is reliant on its ability to develop and commercialise the ShareRoot Platform. If a third party develop superior technology or with a greater commercial appeal than the ShareRoot Platform, this may harm the future prospects of ShareRoot; New market entrants and technology risk new competitors in the market or technological developments providing an alternative to ShareRoot s product offerings could impact ShareRoot s market share and cause downward price pressure on UGC marketing services; Failure to Deal with Growth ShareRoot s business has the potential to grow rapidly. If that occurs and ShareRoot fails to properly manage that growth, then that failure could harm its business. Any failure to meet customer demand properly could adversely affect the business, including demand for ShareRoot s products/services, revenue collection, customer satisfaction and public perception. D. Directors and Key Management Personnel Directors It is intended that the Board will comprise the following upon Settlement: Mr Noah Abelson; Mr Marc Angelone; Mr James Allchurch; and Mr Andrew Bursill. Further information Sections 10.1 and / _1 11

15 Item Summary The profiles of each of the Existing Directors and Proposed Directors are set out in Sections 10.1 and Details of the personal interests of each of the above individuals and the existing Directors are set out in Section Further information E. Financial Information How have the Company and ShareRoot performed over the past 12 months? What is the financial outlook for the Company? F. Offers What is being offered and what is the purpose of the Public Offer? What is being offered and what are the The audited statements of financial position for the Company and ShareRoot as at 30 June 2015 are set out in the Investigating Accountant s Report in Section 11. The reviewed pro-forma statement of financial position for the Company as at 30 June 2015 (which assumes Settlement occurs) is set out in Section 11. The Public Offer is an offer of up to 100,000,000 Shares at an issue price of $0.05 per Share to raise up to $5,000,000 with a minimum subscription of $3,000,000 (together with one (1) free attaching Capital Raising Option for every two (2) Shares issued, exercisable at $0.05 per Capital Raising Option on or before 31 December 2017). The Public Offer is not underwritten. The purpose of the Public Offer is to position the Company to seek to achieve the objectives set out in Section 8 and to meet the requirements of the ASX and satisfy Chapters 1 and 2 of the ASX Listing Rules. On completion of the minimum raising of $3,000,000 under the Public Offer, the Board believes the Company will have sufficient working capital to achieve these objectives. The Company intends to apply funds raised from the Public Offer, together with its existing cash reserves and those of ShareRoot, over the first two years following reinstatement of the Company to quotation on the official list of ASX in the manner set out in the table in Section 7.5. The Public Offer is open to retail investors and sophisticated investors in Australia and New Zealand. This Prospectus also contains an offer of: 140,000,000 Shares to the Vendors; Section 11 Section 11 Sections 7.1, 7.3 and 7.4 Sections 7.2 and / _1 12

16 Item purposes of the Secondary Offers? What will the Company s capital structure look like after completion of the Offers and the Acquisition? Will I be guaranteed a minimum allocation under the Public Offer? What are the terms of the Securities offered under the Offers? Summary up to 35,000,000 Shares to the ShareRoot Lenders upon conversion of the Post-30 June ShareRoot Converting Loan Agreements; and 21,000,000 Advisor Options to parties that have acted as advisors or consultants to the Company in relation to the Acquisition. The purposes of the Secondary Offers are to remove the need for an additional disclosure document to be issued upon the sale of any Shares that are issued under the Secondary Offers. The Secondary Offers are made to the Vendors, ShareRoot Lenders and certain advisors and consultants to the Company (or their nominees). You should not complete an Application Form in relation to the Secondary Offers unless specifically directed to do so by the Company. The Company s capital structure on a post-settlement basis is set out in Section 8.9. No, the Company is not in a position to guarantee a minimum application of Shares under the Public Offer. A summary of the material rights and liabilities attaching to: the Shares offered under the Offers are set out in Section 14.2; the Capital Raising Options offered under the Public Offer are set out in Section 14.3; and the Advisor Options offered under the Advisor Offer are set out in Section Further information Section 8.9 Section 7.8 Sections Will any Securities be subject to escrow? Subject to the Company re-complying with Chapters 1 and 2 of the ASX Listing Rules and completing the Offers, certain Securities (including some of those issued under the Consideration Offer, ShareRoot Lender Offer and Advisor Offer) on issue may be classified by ASX as restricted securities and will be required to be held in escrow for up to 24 months from the date Section / _1 13

17 Item of Official Quotation. Summary During the period in which these Shares 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 will announce to ASX full details (quantity and duration) of the Securities required to be held in escrow prior to the Shares commencing trading on ASX. Further information Will Securities be quoted? What are the key dates of the Offers? What is the minimum investment size under the Public Offer? Are there any conditions to the Offers? The Company will make an application to ASX for quotation of all Shares, Capital Raising Options to be issued under the Offers and existing 31 December 2017 options. The key dates of the Offers are set out in the indicative timetable in Section 3. Applications under the Public Offer must be for a minimum of $2,000 worth of Shares (40,000 Shares and associated Options) and thereafter, in multiples of $200 worth of Shares (4,000 Shares and associated Options). The Offers are conditional on: Shareholders approving the Essential Resolutions required to implement the Acquisition at the Annual General Meeting; and ASX conditional approval to readmit the Shares to Official Quotation. If any of these Conditions are not satisfied, the Acquisitions and the Offers will not proceed. Section 7.9 Section 3 Section 7.1(b) Section 2.4 G. Use of proceeds How will the proceeds of the Public Offer be used? Together with existing cash reserves of the Company, the Public Offer proceeds will be used to: fund sales and marketing expenditure; develop the ShareRoot Platform; fund mineral exploration assets and divestment of the Company s Herberton Projects; pay the costs associated with the Acquisition; and Section / _1 14

18 Item Summary contribute to the working capital of the Company. Further information H. Additional information Is there any brokerage, commission or stamp duty payable by applicants? No brokerage, commission or duty is payable by Applicants on the acquisition of Shares under the Offers. Section 7.5 What are the tax implications of investing in Securities? Where can I find more information? Shares may be subject to Australian tax on dividends and possibly capital gains tax on a future disposal of Shares issued under this Prospectus. The tax consequences of any investment in Securities will depend upon an investor s particular circumstances. Applicants should obtain their own tax advice prior to deciding whether to subscribe for Shares offered under this Prospectus. By speaking to your sharebroker, solicitor, accountant or other independent professional adviser. By reviewing the Company s public announcements, which are accessible from ASX s website at under the ASX code MOO. By contacting the Company Secretary on By contacting the Share Registry on Section / _1 15

19 6. TRANSACTION OVERVIEW 6.1 The Company The Company was incorporated on 17 January 1994 and was admitted to the official list of the ASX on 7 March Since listing, the Company has primarily focused on the exploration and development of mineral assets in Queensland, Australia. Further information can be found on the Company s website, For the past 12 months, the Company has been evaluating alternative corporate opportunities, both in Australia and overseas. 6.2 The Acquisition As announced on 18 June 2015, the Company has entered into a heads of agreement with ShareRoot (which was varied on 11 August 2015) (HOA) under which the Company has the exclusive right to make offers to acquire 100% of the issued capital of ShareRoot via a plan of merger (Acquisition). The Company paid ShareRoot an exclusivity option fee of $100,000. On 18 September 2015, the Company paid a $200,000 fee to ShareRoot to confirm its intention to proceed with the Acquisition. A summary of the material terms of the HOA is set out in Section 13.1, and this has now been embodied in a Merger Agreement, which the Company entered into on 23 October The material terms of the Merger Agreement are summarised in Section Upon successful Settlement of the Acquisition, the Company will focus on developing the ShareRoot Platform. The Board is of the opinion that the opportunity presented under the Acquisition represents an opportunity that is in the best interest of current Shareholders of the Company. 6.3 Key investment highlights The Existing Directors and Proposed Directors are of the view that key highlights of an investment in the Company include: (a) exposure to social media platforms that have an estimated 1.8 billion users and generated approximately $15 billion revenue in 2014; (b) (c) (d) (e) ShareRoot is positioned to take advantage of one of the growth areas of social media user generated content; ShareRoot s innovative Software-as-a-Service platform allows businesses to easily source high quality user generated content and transfer legal ownership of content - allowing them to drive sales and increase brand awareness; ShareRoot is currently working with over 80 brands; and the proposed executive directors of the Company have extensive experience in the marketing technology space. 6.4 Business Summary Silicon Valley-based ShareRoot owns and operates a user-generated content (UGC) marketing platform. ShareRoot has developed an innovative Software as a Service (SaaS) platform enabling businesses to efficiently source high quality social media-derived UGC to be used in marketing initiatives and to increase / _1 16

20 brand awareness (ShareRoot Platform). The ShareRoot Platform is live and is currently working with over 80 brands. Upon successful completion of the Acquisition, completion of the Offers and the re-instatement of the Company on the ASX, the Company intends to focus its business activities on the operation of the ShareRoot Platform, and the growth and development of that business. Please refer to Section 8 for a more detailed summary of ShareRoot and the Company s proposed business following Settlement of the Acquisition. 6.5 Suspension and Re-admission to ASX As the Company is currently a mineral exploration company, the Acquisition, if successfully completed, will represent a significant change in the nature and scale of the Company s operations to a technology company focused on developing ShareRoot s UGC sourcing technology. ASX has indicated that this change in the nature and scale of the Company s activities will require: (a) (b) the approval of Shareholders; and the Company to re-comply with the admission requirements set out in Chapters 1 and 2 of the ASX Listing Rules. In accordance with ASX guidelines, it will be necessary for the Company to apply for a trading halt in its Shares from the beginning of trading on the date of the General Meeting. If Shareholder approval to the change in nature and scale of the Company s activities as a result of the Acquisition is obtained, then subject to the passing of each other Essential Resolution (see Section 6.6 below for further details), the Company will be required to apply for voluntary suspension of the Shares with effect from the close of the General Meeting. In such circumstances, the Shares will not be reinstated to Official Quotation until the Company has re-complied with Chapters 1 and 2 of the ASX Listing Rules and is re-admitted by ASX to the Official List. Some of the key requirements of Chapters 1 and 2 of the Listing Rules are: (a) (b) (c) the Company must satisfy the shareholder spread requirements relating to the minimum number of Shareholders and the minimum value of the shareholdings of those Shareholders; the Company must satisfy the assets test as set out in ASX Listing Rule 1.3; and the issue price of Shares must be at least 20 cents and the exercise price of Options must be at least 20 cents (20 Cent Requirements). On 2 October 2015, ASX granted the Company a waiver from the 20 Cent Requirements to enable the Company to issue Shares under the Offers at no less than $0.05 per Share and for all Options issued or to be issued having an exercise price of not less than $0.05, after completion of the Consolidation. ASX also granted the Company a waiver to issue Performance Rights with a nil issue price. This waiver is subject to Shareholders approving the Company undertaking the Offers at no less than $ / _1 17

21 It is expected that the conduct of the Offers pursuant to this Prospectus and the implementation of a 1 for 45 Consolidation of all Shares and Options immediately after the General Meeting will enable the Company to satisfy the above requirements. Applicants should be aware that ASX will not re-admit or admit any Shares to Official Quotation until the Company re-complies with Chapters 1 and 2 of the Listing Rules and is re-admitted by ASX to the Official List. In the event that the Company does not receive conditional approval for re-admission to the Official List, the Company will not proceed with the Offers and will repay all Application monies received by it in connection with this Prospectus (without interest). If Shareholder approval to the Essential Resolutions is not obtained, the trading halt will end after the results of the General Meeting have been announced to the market and the Company will apply for trading in its Shares to recommence. 6.6 Shareholder Approval of Essential Resolutions At the Annual General Meeting, the Company will seek the approval of Shareholders to a number of resolutions required to implement the Acquisition. It is a condition to completion of the Offers under this Prospectus, as well as the Acquisition, that each of the following resolutions is approved by Shareholders at the Annual General Meeting: (a) (b) (c) (d) (e) (f) (g) (h) (i) the significant change in the nature or scale of the Company s activities to become a technology company, for which Shareholder approval is required under ASX Listing Rule ; the Consolidation of all existing Securities; approval for the issue to the Vendors (or their nominees) at Settlement of 140,000,000 Shares in proportion to their holdings in ShareRoot immediately prior to the Acquisition and 120,000,000 Performance Rights to the Performance Right Holders and acquisition by the Vendors of voting power in the Company that is otherwise prohibited by the Corporations Act; election of Noah Abelson and Marc Angelone as directors of the Company; the issue of 21,000,000 Advisor Options under the Advisor Offer; the issue of up to 35,000,000 Shares to the ShareRoot Lenders upon conversion of the Post-30 June ShareRoot Converting Loans; the issue of up to 100,000,000 Shares together with one (1) free attaching Capital Raising Option for every two (2) Shares issued under the Public Offer; the adoption of the Share Plan and Option Plan; and the change of name of the Company to ShareRoot Ltd, (each an Essential Resolution) / _1 18

22 If any of the Essential Resolutions are not approved by Shareholders the Acquisition (including the Offers under this Prospectus) will not be completed. 6.7 Change of Name It is proposed that, subject to Shareholder approval being obtained, the Company will commence the change of name to ShareRoot Ltd on Settlement of the Acquisition, which in the Company s opinion will be better suited to the Company s new strategic direction. The change in name will be effected once ASIC alters the Company s registration details. An overview of the Company s business following Settlement of the Acquisition is set out in Section / _1 19

23 7. DETAILS OF THE OFFERS 7.1 Public Offer The Company is inviting applications under the Public Offer for up to 100,000,000 Shares at an issue price of $0.05 per Share, together with one (1) free attaching Capital Raising Option for every two (2) Shares issued under the Public Offer, exercisable at $0.05 per Capital Raising Option on or before 31 December 2017, to raise up to $5,000,000, with a minimum subscription of $3,000,000. All Shares issued under this Prospectus will be fully paid and will rank equally with all other Shares that are currently on issue. A summary of the material rights and liabilities attaching to the Shares is set out in Section Capital Raising Options offered under this Prospectus will be issued on the terms and conditions set out in Section All of the Shares issued upon the future exercise of the Capital Raising Options offered under this Prospectus will rank equally with the Shares on issue at the date of this Prospectus. Please refer to Section 14.2 for further information regarding the rights and liabilities attaching to the Shares. The Company is seeking Shareholder approval at the Annual General Meeting for a consolidation of its existing Securities on a 1 for 45 basis (Consolidation). Assuming that approval is given, all Securities issued pursuant to the Public Offer will be issued on a post-consolidation basis. (a) Minimum subscription The Public Offer is subject to a minimum subscription of 60,000,000 Shares to raise at least $3,000,000 (Minimum Subscription). If the Minimum Subscription has not been raised within 4 months after the date of this Prospectus, the Company will not issue any Securities and will repay all Application monies for the Shares applied for under the Public Offer within the timeframe prescribed under the Corporations Act, without interest. The Public Offer is not underwritten. (b) Minimum application amount Applications under the Public Offer must be for a minimum of $2,000 worth of Shares (40,000 Shares with 20,000 free attaching Capital Raising Options) and thereafter, in multiples of $200 worth of Shares (4,000 Shares and 2,000 free attaching Capital Raising Options). (c) Eligible participants To participate in the Public Offer, you must be a resident of Australia or New Zealand. See Section 7.11 for further details. (d) Quotation and trading Application for quotation of all Shares issued under the Public Offer will be made to ASX no later than 7 days after the date of this Prospectus. See Section 7.9 for further details. The Company may also apply for quotation of the Capital Raising Options at this time / _1 20

24 7.2 Secondary Offers No Shares or Capital Raising Options issued pursuant to the Public Offer will be subject to any escrow requirement by the ASX. (a) Consideration Offer This Prospectus also includes an offer of Shares to be issued to the Vendors (or their nominees) pursuant to the Merger Agreement for the acquisition by the Company of the entire issued capital of ShareRoot. The material terms and conditions of the HOA and the Merger Agreement are summarised at Sections 13.1 and 13.2 of this Prospectus. As such, this Prospectus includes a separate offer of the Shares to the Vendors. The terms of the Shares offered under the Consideration Offer are summarised in Section Application for quotation of the Shares issued under the Consideration Offer will be made to ASX no later than 7 days after the date of this Prospectus. See Section 7.9 for further details. Only the Vendors (or their nominees) may accept the Consideration Offer. An Application Form in relation to the Consideration Offer will be issued to the Vendors together with a copy of this Prospectus. The Shares issued under the Consideration Offer may be subject to escrow under the ASX Listing Rules. Please refer to Section 8.11 for a summary of the likely escrow position. (b) ShareRoot Lender Offer ShareRoot is party to the Post-30 June ShareRoot Converting Loan Agreements (the terms of which are summarised in Section 13.3). The terms of the Post-30 June ShareRoot Converting Loan Agreements provide for Shares to be issued to the ShareRoot Lenders at Settlement of the Acquisition, to satisfy ShareRoot s and the Company s obligations under the ShareRoot Post-30 June Converting Loan Agreements. As such, this Prospectus includes a separate offer of such number of Shares as is required for the Company and ShareRoot to be fully and finally released from all obligations under the Post-30 June ShareRoot Converting Loan Agreements (being up to 35,000,000 Shares). Only the ShareRoot Lenders (or their nominees) may accept the ShareRoot Lender Offer. An Application Form in relation to the ShareRoot Lender Offer will be issued to the ShareRoot Lenders together with a copy of this Prospectus. The terms of the Shares offered under the ShareRoot Lender Offer are summarised in Section Application for quotation of the Shares issued under the ShareRoot Lender Offer will be made to ASX no later than 7 days after the date of this Prospectus. See Section 7.9 for further details. The Shares issued under the ShareRoot Lender Offer may be subject to escrow under the ASX Listing Rules. Please refer to Section 8.11 for a summary of the likely escrow position / _1 21

25 (c) Advisor Offer The Company has agreed to issue the Advisor Options to certain parties that have acted as advisors or consultants to the Company (Advisors) in consideration for introducing the Acquisition to the Company and assisting with its implementation. As such, this Prospectus includes a separate offer of the Advisor Options to the Advisors, the terms of which are summarised in Section Purpose of the Offers Only the Advisors (or their nominee) may accept the Advisor Offer. An Application Form in relation to the Advisor Offer will be issued to the Advisors together with a copy of this Prospectus. The Advisor Options will be subject to escrow under the ASX Listing Rules. Please refer to Section 8.11 for a summary of the likely escrow position. The primary purpose of the Offers is to: (a) (b) (c) assist the Company to meet the re-admission requirements of ASX under Chapters 1 and 2 of the ASX Listing Rules (see Section 6.5 for further details); to provide the Company with additional funding for development of the ShareRoot Platform and sales and marketing and to provide the Company with further working capital; and remove the need for an additional disclosure document to be issued upon the sale of any Securities (including Shares issued upon conversion of the Capital Raising Options) that are to be issued under the Public Offer by retail investors or the sale of any Securities issued under (or issued upon conversion of Advisor Options) the Secondary Offers. The Company intends on applying the funds raised under the Public Offer along with its current cash reserves, and those of ShareRoot in the manner detailed in Section Use of Funds The Company intends to apply funds raised from the Public Offer, together with existing cash reserves and those of ShareRoot post-acquisition, in the next two years following re-admission to the Official List of the ASX (for the purpose of satisfying ASX s requirements for re-listing following a significant change to the nature and scale of the Company s activities) as follows: Minimum Subscription under Public Offer ($3,000,000) Percentage of Funds Full Subscription under Public Offer ($5,000,000) Percentage of Funds Audited cash balance of Monto and ShareRoot at 30 June 2015 and events post-30 $1,285,085 - $1,285, / _1 22

26 June Working capital spent from 1 July Funds raised from the Public Offer ($750,000) - ($750,000) - $3,000,000 - $5,000,000 - Expenses associated with the Acquisition 2 ($593,813) - ($718,813) - TOTAL $2,941,272 $4,816,272 Sales and marketing Development of the ShareRoot Platform Allocated to mineral exploration assets and divestment $718, % $1,197, % $1,691, % $2,644, % $200, % $200, % Working capital 3 $331, % $774, % TOTAL $2,941, % $4,816, % Notes: 1 Refer to the Investigating Accountant s Report set out in Section 11 of this Prospectus for further details. 2 Refer to Section of this Prospectus for further details. 3 Working capital includes the general costs associated with the management and operation of the business including administration expenses, salaries, directors fees, rent and other associated costs. In the event the Company raises more than the minimum subscription of $3,000,000 but less than the full subscription of $5,000,000, the additional funds raised will be first applied towards the expenses of the Public Offer first and then equally towards marketing, product development, business development and contract services. The above table is a statement of current intentions as of the date of lodgement of this Prospectus with the ASIC. As with any budget, intervening events and new circumstances have the potential to affect the ultimate way funds will be applied. The Board reserves the right to alter the way funds are applied on this basis. Actual expenditure may differ significantly from the above estimates due to a change in market conditions, the development of new opportunities and other factors (including the risk factors outlined in Section 9. The Board believes that the funds raised from the Public Offer, combined with existing funds will provide the Company with sufficient working capital at anticipated expenditure levels to achieve its objectives set out in this Prospectus / _1 23