Offer of fully-paid ordinary shares in Fine Defender Pty Ltd at $1.00 per share to raise a maximum of $500,000This crowd-sourced funding (CSF) offer document relates to the Offer of fully-paid ordinary shares in Fine Defender Pty Ltd. This Offer is made under the CSF regime in Part 6D.3A of the Corporations Act 2001 (Corporations Act).
Crowd-sourced funding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of ventures is speculative and carries high risks.You may lose your entire investment, and you should be in a position to bear this risk without undue hardship.Even if the company is successful, the value of your investment and any return on the investment could be reduced if the company issues more shares.Your investment is unlikely to be liquid. This means you are unlikely to be able to sell your shares quickly or at all if you need the money or decide that this investment is not right for you.Even though you have remedies for misleading statements in the offer document or misconduct by the company, you may have difficulty recovering your money.There are rules for handling your money. However, if your money is handled inappropriately or the person operating the platform on which this offer is published becomes insolvent, you may have difficulty recovering your money.Ask questions, read all information given carefully, and seek independent financial advice before committing yourself to any investment.
Australians should be angry about fines. People with valid excuses are having their appeals knocked back by a grossly unfair system which threatens to cancel your licence or deregister your car if you dare to complain. Twenty million fines are issued each year but only 1% are withdrawn, generating a massive windfall of about $2 billion. The system is focused on revenue raising rather than justice and is putting people under significant financial stress.
We have taken on this injustice and won. In the past two years, we have been responsible for 250,000 parking fines being refunded because of the unlawful conduct of five Victorian Councils. In May 2019 we pressured Monash and Kingston Councils to refund $5 million when we discovered that, for ten years, they had unlawfully outsourced their reviews to a private company. In February 2020, Glen Eira, Port Phillip and Stonnington Councils reluctantly agreed to refund $20 million, but only after we complained to the Victorian Ombudsman who found they had acted “contrary to law”. These Councils resisted us for four years, refusing to answer our questions and the Ombudsman criticised them for failing “to ensure accountability and transparency in their decision making”.
As you can see, we will take on the authorities and fight for our clients for as long as it takes to get justice.
We believe there are many other councils and government agencies acting unlawfully and unreasonably, and we are going after them.
As well as fighting to make the fines system fair for everyone in Australia, we believe our system will work effectively overseas. We plan to expand our service to countries such as the UK, USA, Canada and New Zealand which have similar unjust systems.
Without access to justice, there is no justice. For a low fee of $25-$35, Fine Defender has proven we can provide affordable high-quality, personalised legal services to everyone using our technology. But this is just the beginning. We have a vision our tech solution can be applied to other areas of law such as consumer affairs, personal injury and property law, to significantly reduce the costs to the consumer. It is what the public wants and deserves.
We need your help to support us. We would love you to get behind us by joining Fine Defender as a shareholder. Fine Defender is committed to justice for everyone, one fine at a time. Come with us and be part of the movement for fairness and justice for everyone.
Yours sincerely,
Adam Cockayne Co-founder and CEO
GoalOur crowdfunding
campaign goal is to expand our services throughout
Australia and beyond.
ProfitRealise your investment where there is a trade sale, private equity investment, or if we list on the stock exchange.
Join Our TeamYou will become a
shareholder in Fine Defender
FundingCapital will be used for marketing, business development and software upgrades.
PerksGain access to investor rewards including free
This offer of shares is made by Fine Defender Pty Ltd ACN 603 326 969 (the Company or Fine Defender). The Company was incorporated on 11 December 2014.
Company Name Fine Defender Pty Ltd
ACN 603 326 969
Offer Type Crowd-sourced funding
Offer Date 11 June 2020
Offer Details Offer of fully-paid ordinary shares in Fine Defender Pty Ltd at $1.00 AUD per share to raise a maximum of $500,000 AUD
2.2 Description of the business2.2.1 Who are we?The Fine Defender StoryWe are a legal and technology company based in Melbourne, Australia planning to scale nationally in the next 12-18 months. We believe every unfair fine should be appealed. The fines systems are held accountable to be timely, fair and just.
Our online system confirms whether your valid reasons may be enough to successfully appeal your parking, traffic, public transport or other fine. Don’t pay another lawyer a lot of money to help. We are affordable, we are legal experts and we are completely online.
People with valid excuses are having their fine appeals refused by a grossly unfair system putting them under unnecessary financial stress. You can challenge fines with us by your side for about the same as you might spend on a meal.
Key achievements to date• We’ve been appealing fines for 4 years• 250,000 fines have been withdrawn• $25 million is being refunded to motorists, thanks to Fine Defender• We fight for as long as it takes• We follow up until you see a result, for no ongoing cost.
Our core business is restoring justice by putting an end to unfair fines. Our new technology design has been developed over the last four years as an affordable online legal service for appealing unfair fines.
Milestones
JULY Began beta testing in Victoria
JUNE Began trial of paid service in Victoria
FEBRUARY Ombudsman finds 3 councils acted “contrary to law”. Councils to refund $20 million
JUNE Began trial of paid service in NSW JUNE Began automated follow-up service (unlimited letters)
MARCH Two Victorian councils admit system is illegal and pay back $5 million. Others to follow.
MAY Ombudsman announces investigation into councils
FEBRUARY Business model canvas developed
NOVEMBER Partnered with software developers
OCTOBER Media reports Fines Victoria IT system failing
2.2.2 Products/ ServicesProductsThe number one form of product marketing for us is and will always be clients seeking fairness and justice. Our challenge, which we thrive on, is providing an affordable one-stop solution based on automation of existing processes. Our service is underpinned by a technology platform consisting of the latest secure cloud technologies and seamless client experience making it easy to determine the merits of appealing unfair fines.
Free diagnosticOur free 5-minute online survey will determine if you have grounds to appeal your fine.
Based on years of expert legal research and built by a first-class development team, our system will identify your chance of success.
Online appeal serviceWe are an online appeal service, providing legal defences to people who believe that they were fined unfairly. You can appeal even if you already paid the fine!
We have proven our arguments through numerous court proceedings with a very high rate of success. If you decide to appeal, we will lodge your application form and a 30-page legal submission demanding a review. Your fine is then either withdrawn or confirmed. If your fine is confirmed, we challenge the decision until you get a fair outcome, no matter how long it takes.
We discovered that the fines system is unfair: many people with valid reasons are having their appeals knocked back. We wanted to help people fight back against this injustice by using our legal expertise and bespoke technology to appeal fines online.
We are continuously scaling the platform to enhance our service, ensuring the client experience is as seamless as possible.
How it works
Complete online Q&A
Client adds text and uploads supporting documents. Takes
5 minutes.
The customised documents are specific to the applicant, NOT a
template letter. Includes 30-page legal submission.
Key client relationships now provide an automated self-service with an element of personal professional assistance.
A simple review of our website https://au.finedefender.com shows the following Product/Service offerings available now for appeals of your fines, which are currently focused on anyone who drives a car in Victoria and New South Wales.
We are looking to expand this service Australia-wide and potentially to anyone who receives a fine, beyond just parking and speeding fines. More details of our business model thinking follow in the Market and competitors section below.
Legal services are prohibitively expensive and legal costs often outweigh the cost of a fine. We challenge fines on your behalf for a fraction of the cost of hiring a traditional lawyer.
We know the fines system is unfair. Victorian motorists will be refunded $25 million in illegal parking fines by five councils alone (see the Ombudsman’s report of 25 February 2020). We offer an affordable choice to challenge unfair fines supported by a team of specialists in this area. Fine Defender is the only real solution with an outstanding success rate to date.
Marketing StrategyWe are not just in this to make money. We are in it to restore fairness and justice to a broken system. We have a legitimate and transparent story and our work to date validates the need for action now.
Our Path to Market – Channels now include Business to Consumer (B2C) mass market and direct to clients in Victoria and NSW via our website and some low-level social media advertising, which needs to be significantly expanded.
We leverage our story wherever possible and our clients spread the word. With persistence we see things through to a natural justice conclusion. We work tirelessly to support our clients through thick and thin. We have an email list of several thousand users which is continuously growing.
Social Media – much like our persistence with appeals, we have become active and hands on with social media (particularly Facebook). Fine Defender has amassed thousands of supporters amongst our social media campaigns. We have a high degree of positive engagement in response to our recent digital marketing, where we connect with and update our clients and the community. With further investment we intend to boost spending across online marketing, billboards, radio and other mediums to expand our client-base and ensure every Australian knows that Fine Defender is the first choice to appeal your unfair fine.
In the future we may partner and find indirect channels through referrals and incentives to be developed. Business to Business (B2B) are yet to be explored but would support our desired push to support professional drivers, including potential development of APIs for further automation of the technology as volumes of fines being issued increase across the country.
The market in Australia
NO. OF FINES ISSUED
20M
NO. OF FINES THAT SHOULD BE
WITHDRAWN (30-40%)
6-8M
NUMBER OF FINESACTUALLY WITHDRAWN (1%)
200k
NOTE: These are annual figures with an average value of $200 per fineSource: reports of Attorney General
We have a significant media presence being featured in all forms of media over the past two years.
The Ombudsman’s report of February 2020 proves that the work undertaken by Fine Defender to make the fines system lawful and fair is working.
We are developing our digital marketing strategy and additional investment will be significantly directed into brand, marketing and media campaigns to drive greater public awareness of our technology-enabled legal services. And to expand development of data and insights for future market research for medium to long term opportunities, beyond our current main source of appeals revenue.
Regulation and PolicyWe believe Government will continue to offer limited support to those seeking to appeal fines.
We also believe Government will continue to make administrative errors while outsourcing its responsibilities to others. We will continue to conduct public campaigns to remedy this injustice. We will continue to challenge and influence other states and territories to follow suit and inject greater transparency, fairness and justice into the fines processes.
2.2.4 Business and revenue modelRevenue growthOur loyal clients have been the centre of our growth strategy and we still have a large untapped opportunity in raising awareness of Fine Defender to the broader community.
Our first horizon of research and development and market validation was successfully completed in 2017/2018. We are now entering our second horizon of preparations for scale and defences including preparing all capabilities for scale, establishing IP protection, developing team and maturing brand and market position.
Our B2C approach will help drive our revenue growth for the foreseeable future to go to market execution focused on Australia, and including expanding market awareness through branding and a range of targetted campaigns.
Domestic expansionThe organic word of mouth growth has been refined and supported by data analytics and low touch marketing to date.
The target geographies now are Australia – Victoria and NSW, followed by Queensland, ACT, WA, NT, SA, Tas in the next 12 to 18 months and potentially New Zealand in the longer-term future, and to enable other growth opportunities to emerge.
The target markets are now anyone in Victoria and NSW who drives a car. The market segments currently include the following client demographics:
• Young 16-28• Parents• Financially distressed• Wealthy • Over 50-year olds• Retirees
In the future we anticipate expanding this to anyone who receives a fine, including professional drivers.
We charge $25–$35 to lodge your appeal. This includes follow-up letters challenging unfair decisions.
We fight until we achieve a fair result and we have an 80% success rate. 250,000 fines have been withdrawn since we began four years ago.
A bespoke system designed by us prepares complex individualised appeal documents. We have an existing database of more than 2,000 defences, growing every day.
Our system can prepare unlimited legal follow-up responses. If the fine is not withdrawn within a legislated time frame, or a decision is not made, the law states it must be withdrawn.
We believe this presents a compelling opportunity for Fine Defender to capture an untapped market, where the community will become educated, aware and reasonably motivated to appeal unfair fines, now, historically and into the future.
DiversificationOur technology solution can be used to diversify our services into other practice areas of law and establish the “Defender” brand as a reliable referral service.
We are open to exploring partnerships with State and local governments to support greater fairness and transparency in the fines processes and associated technologies. We are able to share our wisdom as a catalyst for improvements with a view to finding some new investment logic that underpins further support for those most vulnerable in our community.
We are keen to explore becoming a B corporation as part of our growth strategy to help solve a global movement of people using business as a force for good. Purpose with profit.
2.2.5 Business strategyWe plan to expand the business through the marketing and development of our legal software as a service over the next twelve to eighteen months.
Over this period, we intend to obtain patents for our product, further development and commence formal marketing of our product for commercial sale and licensing. We do not expect to make any income in the first full year of operation 2020/2021.
MissionWe believe every unfair fine should be appealed. The Fine systems are held accountable to be timely, fair and just.
Business ObjectivesThe Victorian Ombudsman has supported this mission. In February 2020 she reported: “The evidence of the practices employed by the councils we investigated suggests that in all three councils, the decisions were outsourced and therefore appear to be contrary to law.”
Generating profit
Fine Defender is focused on providing fairness, justice and the best service we can. This includes onboarding of new clients and means investing in platform improvement. Expansion beyond our domestic borders will require further capital.
Funds from this offer will allow Fine Defender to expand domestically. The Directors believe Fine Defender could be cashflow positive by the end of 2021 assuming brand, marketing and sales efforts are executable as estimated.
A range of alternative business models will be considered over the next 12 to 18 months to ensure the business remains sustainable and scalable into other jurisdictions and across a broader range of potential products and services.
2.2.6 Organisational structureWe believe in good governance and data driven decision-making and have therefore assembled a high calibre team of executives, advisors and supportive shareholders.
The shareholders and executives meet regularly to ensure that good governance is maintained and the executive founder and Chief Executive Officer is provided with the resources needed to keep Fine Defender on track to meet it objectives.
2.3.1 Issued capitalAs at the date of this CSF offer document, the Company has 6,800,000 Ordinary Shares which are held by existing shareholders as set out in Table 1 below.
Table 1: Issued capital of the Company before the Offer
Shareholder Share Type Shares %
Adam Cockayne Ordinary 1,734,000 25.50
Katrina Kimpton Ordinary 1,734,000 25.50
Dan Roitman Ordinary 1,110,667 16.33
Abie Gelbart Ordinary 1,110,666 16.33
Mark Sakajiou Ordinary 1,110,667 16.33
Total N/A 6,800,000 100%
2.3.2 Equity (pre- and post-offer)Table 2 sets out the issued capital of the Company following the Offer
Table 2: Issued capital of the Company following the Offer
Share Options*The Company may adopt an employee share option plan (ESOP) up to a maxiimum of 15% of the Company’s total outstanding shares on issue at any time in accordance with the terrns of the Constitution. These securities wilI be used to attract and retain key service providers and only vest upon certain service milestones being met.
2.3.3 Rights and liabilities associated with securitiesImmediately after issue and allotment, the shares offered under this Offer Dooument wiII be fully paid ordinary shares. All ordinary shares have the same voting rights (one vote for each share held) and the same rights to receive dividends. A more detailed description of the rights associated with the shares can be found in section 3.3 of this Offer Document.
2.3.4 Debt funding and other sources of fundingFine Defender has been to date funded via unsecured shareholder loans totalling $779,733 as at 31 March 2020 being the last management accounts available
Other than investor loans, there are no other loans.
It is anticipated that loans will only be repaid, as part of a satisfactory exit event such as a trade sale or IPO.
2.4.1 Our directorsAdam Cockayne – Director and CEOA lawyer with 25 years’ experience in criminal and government law, Adam is a co-founder and the CEO of Fine Defender. Adam has successfully challenged the unlawful review procedures of several councils and is committed to making the fines system fair and just. He is a strategic thinker with strong relationship-building skills.
Katrina Kimpton – DirectorKatrina is a co-Founder and assists with business development and finance. Katrina conceived the idea of an online legal service for appealing fines and worked on the early development of the business strategy and model. She has an extensive background in design and project management and works on innovative, creative projects across many disciplines.
2.4.2 Our management and advisorsDan Roitman – CTODan is the CTO of Fine Defender. Dan has 20 years’ experience in delivering complex IT solutions with experience in the manufacturing, oil and gas, and banking sectors in Australia, Asia the UK and USA. He has extensive experience in implementing ERP solutions, asset management, logistics, analytics, IoT and big data, scalable web and mobile applications, leading innovative projects and achieving high-quality outcomes.
Pete Dillon – MarketingPete Dillon is a marketing, brand and communications specialist with decades of experience working across leisure, lifestyle, not for profit and professional services. Pete has worked with some of Australia’s most recognised brands, developing innovative and contemporary strategies to ensure businesses and organisations occupy their rightful place in the market. With an extensive career in senior and executive management, and a thorough grasp on digital and social technologies, Pete brings experience as a working journalist with the ABC, years of public relations and communications outreach and a marketing methodology evolved with client satisfaction and success as a key driver.
Ernest Stabek – Strategic AdvisorErnest has over 20 years’ national and international experience in business management and projects. He is a professional facilitator with experience across a broad range of strategic interventions and has conducted numerous strategic reviews for clients across critical business areas. He also has general executive management and ICT management experience across a broad range of government and non-government organisations. He is the principal founding consultant of S.I.P. Management Consultants, and is a Fellow Chartered Accountant, Fellow CPA and Member of the Australian Institute of Company Directors
Jules Brooke – PR AdvisorJules is the founder and owner of Handle Your Own PR with over 20 years PR experience in her own business and more. A Public Relations Software platform that allows small business owners, entrepreneurs and start-ups to run their own PR campaign. On the platform people can build their own media list, write their media release and accompanying email and send it out to the media. Jules also hosts the Ticker TV show She’s The Boss. Jules is also a PR industry advisor at RMIT University, PR Advisor for Mamamia Lady start Up Program and PR Mentor for Business in Heels, Business Blueprint and Fortune Institute and Professional Brand Strategy/Marketing expert.
Brian Goldberg – IP AdvisorBrian has 15 years’ national and international experience in IP management and projects. He is the founder and executive Director of Trade Mark Ventures International. Brian is a professional trademark attorney, protecting the next generation of leading global brands.
Brian specialises in assisting with start-ups and new ventures, where he covers all types of trademarks so your innovation and hard work is protected.
Avrom Gelbart – Chief Financial AdvisorAvrom has been involved in technology companies for 35 years from deep technical roles to marketing, sales, operational and financial management Avrom has a B.Sc in Computer Science.
Marat Sakajiou – Business and SalesMarat has been involved involved in technology companies for the past 25 years in technical, sales director and marketing capacities. Marat has a B.Sc in Information systems.
2.5 Risks facing the businessAn investment in Fine Defender should be seen as high-risk and speculative. A description of the main risks that may impact our business is below. Investors should read this section carefully before deciding to apply for shares under the Offer. There are also other, more general risks associated with the Company (for example, risks relating to general economic conditions or the inability to quickly or easily sell your shares).
Type of risk Description of risk
Cash flow insolvency risk
The Company is not yet profitable. The Company’s operating activities involve a series of cash inflows and outflows. Although the Company seeks to manage its cash flow efficiently, there is a risk that the Company may not have sufficient cash or working capital, at times, to fund both its operations and its expansion plans. This could affect the Company’s profitability, future prospects, and its ability to meet its business objectives.
Funding risk The Company is in the process of raising funds to achieve its strategic business objectives and to cover its projected operating expenses. The Company may not raise all of the required funding and therefore not achieve all of its business objectives.
The Company may also need to raise additional funds in the future from investors or third parties. There is no assurance that the Company will be able to obtain additional rounds of funding on substantially the same terms as outlined in this Offer Document or at all. The Company’s value may be materially affected if the required additional funding is not available.
Intellectual property risk
The Company has taken measures to protect its intellectual property. However, there is a risk that the intellectual property protection measures in place are inadequate or ineffective, which could have an adverse impact on the Company’s ability to compete, control the representation of its brand, and pursue its business objectives.
Key person risk As an early stage business, the Company is susceptible to the loss of key team members as they are considered critical to the continued success of the Company. If a key team member was lost, due to illness for example, this could significantly affect the Company’s ability to continue its operations or achieve its business objectives as the case may be.
Technology risk The Company uses a number of sales, marketing and member communication technology solutions. Despite the Company’s measures to effectively manage these systems and risks, if any of these technologies were to fail without notice, it could interrupt the Company’s ability to sell or communicate with clients, which could have a direct impact on revenue and profitability.
Government actions The Company’s business operations could be adversely impacted by legislative changes to the fines system.
2.6 Financial informationBelow are the financial statements of the Company for the financial year ended 30 June 2019, which have been prepared in accordance with the Accounting Standards. Financial information for the 9 months ended 31 March 2020 have also been included, based on management accounts, and accordingly may be subject to change.
2.6.1 Balance SheetFine Defender Pty Ltd Statement of financial position (Balance Sheet) July 2017 to March 2020
2020 (March) 2019 2018
$ $ $
Current assets
Cash and cash equivalents 6,673 10,387 5,375
Trade and other receivables 4,957 4,508 2,525
Total current assets 11,630 14,895 7,900
Non-current assets
Software development 444,031 298,800 247,531
Intangibles 80,000 80,000 80,000
Total non-current assets 524,031 378,800 327,531
Total assets 535,661 393,695 335,431
Liabilities
Current liabilites
Trade and other payables 7,784 1,040 2,943
Borrowings 779,733 653,853 494,040
Total current liabilities 787,517 654,893 496,983
Total liabilities 787,517 654,893 496,983
Net liabilities (251,856) (261,198) (161,552)
Equity
Issued capital 10 10 10
Accumulated losses (251,866) (261,208) (161,562)
Total deficiency in equity (251,856) (261,198) (161,552)
2.6.5 Management comments on historical performance and outlookTo date, the Company has focused on the development of its online platform, deep market research and final proof of concept. Fine Defender has built customised technology, developed a successful business model and has an entry point into an untapped market for legal services. We are now in the early penetration stage of a substantially larger domestic Australian market opportunity.
Now that we are satisfied our service has a high success rate, we will ramp up our marketing strategy. Investment in branding, marketing, and platform improvements will be the key to expanding our client base and meeting their demand for fairness and justice.
Fine Defender management have identified a number of important streamlining and enabling steps, which with the investment allocated out of this raise, should help us achieve our need for more customers across a broad range of fine appeals, not just parking and traffic.
Approximately 20 million fines are issued each year in Australia which we estimate increases about 5% per annum. The gradual unwinding of COVID-19 restrictions will likely see a surge in agency collection efforts to maintain shortfalls of revenue from fines during COVID-19 lockdown.
By the end of FY2020/2021, we aim to capture 0.04% of the Australian market (7,451 fines) generating annual revenue of $236,202. We believe it is prudent to be conservative in Year 1 revenue estimates to allow for any learnings from marketing efforts and explorations of new product/service revenue streams which may emerge.
By the end of FY2021/2022, we aim to capture 0.49% of the Australian market (98,524 fines) generating annual revenue of $3.12M.
Management believes these estimates are conservative in the current economic circumstances. The financial pressures arising from the recession suggest the need for our service will continue to grow.
Comments on revenue outlook are inherently uncertain and should not be solely relied upon as they are subject to change, uncertainty and unexpected events, many of which cannot be controlled. Accordingly, actual results are likely to differ from the forecasts. No representation or assurance is or can be given that the forecasts will be achieved. Past performance is no guarantee of future performance. This revenue outlook has been prepared by the Company and has not been validated by an independent third party.
Fine Defender is offering up to 500,000 shares at an issue price of AUD $1.00 per share to raise up to $500,000.The key terms and conditions of the Offer are set out in the Table below.
To participate in the Offer, you must submit a completed application form together with the application money via the Intermediary’s platform. The Intermediary’s website provides instructions on how to apply for shares under the Offer at www.birchal.com.
The Intermediary must close the Offer early in certain circumstances. For example, if the Maximum Subscription is reached, the Offer must be closed. If the Minimum Subscription is not reached or the Offer is closed but not completed, you will be refunded your application money.
Table 4: Terms of the Offer
Term Details
Shares Fully-paid ordinary shares
Price $1.00 per share
Minimum Subscription
$150,000
Maximum Subscription
$500,000
Opening date 11 June 2020
Closing date 8 July 2020 unless closed earlier by the Intermediary
A description of the rights associated with the shares is set out in Section 3.2 below.
Investors may withdraw their application during the Cooling-off Period. Further information on investor cooling-off rights can be found in Section 4 of this CSF offer document.
3.2 Use of fundsHere is a breakdown of how the company will use the capital raised.
Sales and marketing (51%)
Product and R&D (30%)
IP protection (10%)
Capital expenditures (1%)
Offer costs (8%)
The table below sets out the intended use of funds raised under this Offer based on the minimum and maximum subscription amounts.
Intended use Minimum Subscription
%
Maximum Subscription
%
Marketing $76,986 51 $256,618 51
Product development
$8,077
5
$150,125
30
IP $50,000 34 $50,000 10
Offer costs $13,300 9 $37,800 8
Capital expenditure $1,637 1 $5,457 1
Total $150,000 100 $500,000 100
The Offer is not underwritten and there is no guarantee that these funds will be raised.
The cost of the Offer includes the Intermediary’s fees under the hosting agreement between the Company and the Intermediary. These fees are up to 6% of all funds raised by the Issuer through Birchal Financial Services Ltd (Intermediary), plus $2,800 for administration and setup costs and 1% of all funds raised for contractor services.
3.3 Rights associated with the sharesImmediately after issue, the shares will be fully-paid ordinary shares. There will be no liability on the part of shareholders and the shares will rank equally with the ordinary shares currently on issue.
The rights associated with the shares are set out in the Company’s constitution which is available on the Intermediary’s platform. A summary of these rights is described below.
3.3.1 Voting rightsEach shareholder has one vote on a show of hands and, on a poll, one vote for each share held.
3.3.2 DividendsAll shareholders have a right to receive any dividends declared and paid by the Company. The directors have a discretion and may resolve to pay dividends, subject to their obligations under the Corporations Act (for example, they cannot pay dividends unless the Company’s assets are sufficiently in excess of its liabilities immediately before the dividend is declared and where it may materially prejudice the Company’s ability to pay its creditors).
3.3.3 General meetings and noticesDirectors have the power to call meetings of all shareholders or meetings of only those shareholders who hold a particular class of shares. Shareholders who hold at least 5% of the votes which may be cast at a general meeting of the Company have the power to call and hold a meeting themselves or to require the directors to call and hold a meeting.
3.3.4 Election and removal of directorsShareholders may vote to elect and remove directors at a general meeting by way of ordinary resolution (50%).
3.3.5 Winding-upIf the Company is wound up and there are any assets left over after all the Company’s debts have been paid, the surplus is distributed to holders of ordinary shares after secured and unsecured creditors of the Company.
3.4 Investor Rewards In addition to being a shareholder of the Company, a range of incentives and rewards are being offered for investors. These include:
• Free Appeals
The table below sets out the ‘investor gifts’ based on amount invested.
Investment
Reward $100 $250 $500 $1000+
2 x Free Appeals* Yes No No No
4 x Free Appeals* No Yes No No
5 x Free Appeals* No No Yes
10 x Family and Friends included Appeals#
No No No Yes
Referral/s leading to Investment5 x Free Appeals#
Yes Yes Yes Yes
*Appeals valid for 6 months from date of investment#Appeals valid for 12 months from date of investment
3.4.1 ESIC eligibilityYou may also be eligible for a tax benefit. If you invest in a qualifying early-stage innovation company (ESIC) you may be eligible for tax incentives. If you are eligible, you may be entitled to a non-refundable tax offset equal to 20% of your investment amount and a capital gains tax exemption. We believe that Fine Defender is an ESIC company, as defined under Division 360 of the Income Tax Assessment Act 1997. However, we have not obtained a tax ruling and recommend you seek your own independent advice.
3.5 What can I do with my shares?Shares in the Company are considered illiquid as they cannot easily be transferred or sold. However, there are numerous possible circumstances that may create an opportunity for shareholders to exit the business. These include, but are not limited to:
• A trade purchase of the Company• A listing on a recognised stock exchange (eg the ASX)• A private equity investment in the Company• A share buy-back by the Company
There is no guarantee that any of the exit options will eventuate.
4.1 Cooling-off rightsYou have the right to withdraw your application under this Offer and to be repaid your application money. If you wish to withdraw your application for any reason (including if you change your mind about investing in the Company), you must do so within five business days of making your application (the Cooling-off Period).
You must withdraw your application via the Intermediary’s platform as follows: by following the link and instructions on the CSF Offer page on the Intermediary’s platform.
After your withdrawal has been processed, the Intermediary will refund the application money to your nominated account as soon as practicable.
4.2 Proprietary company corporate governance obligations
4.2.1 Annual reportWhile the Company is currently a small proprietary company that is not required to prepare annual financial reports and directors’ reports, if we successfully complete this Offer, then we will be required to prepare and lodge these annual reports with ASIC (within four months of the financial year end). The Company has a 30 June year end and its financial reports must be lodged by 31 October each year.
Our financial reports are currently not required to be audited as we are a small proprietary company. This means that the Company’s financial reports will not be subject to auditor oversight and, therefore, there will be no independent assurance of the Company’s financial statements. However, the directors are still required to ensure that the financial statements give a true and fair view of the Company’s financial position and performance and that the financial statements comply with the accounting standards.
We may be required to have our financial reports audited in the future if we raise more than $3 million from CSF offers (including this current offer and any future offers) or otherwise become a large proprietary company.
4.2.2 Distribution of annual reportThe Company is not required to notify shareholders in writing of the options to receive or access the annual report. Shareholders will not be able to elect to receive a copy of the annual report by way of email or post. However, shareholders can access the annual report on the Company’s website at the following address [insert link to website] (free of charge) or can purchase the report from ASIC.
4.2.3 Related party transactionsIf we successfully complete this Offer, the rules on related party transactions in Chapter 2E of the Corporations Act will apply to the Company (for so long as we continue to have CSF shareholders). This means that the Company is required to obtain shareholder approval before giving financial benefits to related parties of the company (e.g. directors and their spouses, children or parents), subject to certain exceptions (such as reasonable remuneration provided to directors).
4.2.4 TakeoversIf we successfully complete this Offer and have more than 50 shareholders, the takeover rules in the Corporations Act will only apply to the Company in a very limited way. If someone wants to buy more than 20% of the voting shares in the Company, they will be able to do so without complying with the takeover rules. This means a person may be able to get control of the Company without making a formal takeover bid to all shareholders or without seeking shareholder approval.
Shareholders will not have the benefit of the full protections under the takeover rules, which means you may not have the right to vote on or participate in a change of control of the company. However, the general principles of ensuring shareholders have sufficient information and time to consider a change of control, and all have a reasonable and equal opportunity to participate in any benefits, will apply to the Company. In addition, the Takeovers Panel has jurisdiction to hear disputes relating to control of the Company.
4.3 Communication facility for the OfferYou can ask questions about the Offer on the communication facility available on the Intermediary’s platform. You can also use the communication facility to communicate with other investors, with the Company and with the Intermediary about this Offer.
You will be able to post comments and questions about the Offer and see the posts of other investors on the communication facility. The Company and/or the Intermediary will also be able to respond to questions and comments posted by investors.
Officers, employees or agents of the Company, and related parties or associates of the Company or the Intermediary, may participate in the facility and must clearly disclose their relationship to the Company and/or Intermediary when making posts on the facility.
Any comments made in good faith on the communication facility are not subject to the advertising restrictions in the Corporations Act.
GlossaryCompany means Fine Defender Pty Ltd ACN 603 326 969
Cooling-off Period means the period ending five business days after an application is made under this Offer, during which an investor has a right to withdraw their application and be repaid their application money
CSF means crowd-sourced funding under Part 6D.3A of the Corporations Act
Intermediary means Birchal Financial Services Pty Ltd AFSL 502618
Maximum Subscription means the amount specified in this CSF offer document as the maximum amount sought to be raised by the Offer
Minimum Subscription means the amount specified in this CSF offer document as the minimum amount sought to be raised by the Offer
Offer means an offer of fully-paid ordinary shares by the Company under this CSF offer document
Wholesale Investor means an investor who satisfies the definition of a ‘wholesale client’ under Chapter 7 of the Corporations Act 2001 (Cth).
