Initial Public Offering | ACN 607 921 246

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For the issue of a minimum 17,500,000 shares at an issue price of A$0.20 each, to raise a minimum of A$3,500,000 and a maximum of 37,500,000 shares at an issue price of A$0.20 to raise a maximum of A$7,500,000

Lead Manager

APP SECURITIES PTY LIMITED

This is a replacement Prospectus dated 21 November 2016. It replaces the original Prospectus dated 14 November 2016 in relation to the offer of up to 37,500,000 shares at an issue price of $0.20 per share to raise up to $A7,500,000. This document is important and must be read in its entirety. If you do not understand its contents or are in doubt, please consult your stockbroker or a professional advisor. Investment in United Networks Limited shares offered by this Replacement Prospectus should be regarded as speculative.

IMPORTANT INFORMATION

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REPLACEMENT PROSPECTUS
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IMPORTANT INFORMATION

This Replacement Prospectus is an important document and requires your prompt attention. You should read it carefully. It is important that you consider the risk factors (see Section 8) before deciding on your course of action as these could affect UNL's (UNL or the Company) financial performance.

Securities Act or pursuant to an exemption from registration under the US Securities Act and in compliance with state securities laws. The Company is under no obligation and has no intention to register any of the Shares (including the New Shares) in the United States of America.

This Replacement Prospectus is dated 21st November 2016 and a copy of this Replacement Prospectus was lodged with ASIC on that date. No New Shares will be issued on the basis of this Replacement Prospectus later than 13 months after the date of issue of this Replacement Prospectus. New Shares offered pursuant to this Replacement Prospectus will be issued on the terms and conditions set out in this Replacement Prospectus.

Application for listing

Within 7 days after the date of this Replacement Prospectus, the Company will lodge an application with the ASX for admission of the Company to the official list of the ASX and quotation of all Shares (including New Shares issued pursuant to this Replacement Prospectus) on the ASX. Neither ASX nor ASIC take any responsibility for the contents of this Replacement Prospectus. The fact that the ASX may admit the Company to its official list is not to be taken in any way as an indication of the merits of the Company or the Shares offered under this Replacement Prospectus.

Exposure Period

The Corporations Act 2001 (Cth.) (Corporations Act) prohibits the Company from processing the Applications received until after the Exposure Period. The Exposure Period is the 7-day period from the date of this Replacement Prospectus and may be extended by ASIC by up to a further 7 days. The purpose of the Exposure Period is to enable this Replacement Prospectus to be examined by market participants. That examination may result in the identification of deficiencies in this Replacement Prospectus, in which case any Application received may need to be dealt with in accordance with Section 724 of the Corporations Act.

Foreign Jurisdictions

The Offer is being made in Australia only. This Replacement Prospectus does not constitute an offer in any place which, or to any person whom, it would not be lawful to make such an offer. The distribution of this Replacement Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Replacement Prospectus in such jurisdictions should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the New Shares or the Offer, or otherwise to permit a public offering of the New Shares, in any jurisdiction outside Australia.

Representations

No person is authorised to give any information or make any representations in connection with the Offer other than as contained in this Replacement Prospectus. Any information or representation in connection with the Offer not contained in this Replacement Prospectus is not, and may not be relied on as having been, authorised by the Company (or any of its officers).

Forward looking statements

Certain statements in this Replacement Prospectus are about the future. All forward looking statements are based on the best estimate assumptions of the Directors and 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 Replacement Prospectus are expected to take place. There are risks (both known and unknown), uncertainties, assumptions and other important factors many of which are beyond the control of the Company that could cause the actual conduct, results, performance or achievements of the Company to be materially different from the future conduct results, performance or achievements expressed or implied by such statements or that could cause the future conduct to be materially different from historical conduct. Deviations as to future conduct, results, performance and achievements are both normal and to be expected.

The Company cannot and does not give any guarantee that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Replacement Prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements. The Company does not intend to update or revise forward-looking statements, or publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Replacement Prospectus, except where required by law.

This Replacement Prospectus, including the Industry Background in Section 3 and Business Overview in Section 4, uses market data, industry forecasts and projections, some of which are based on market research prepared by third parties. There is no guarantee that any of the forecasts contained in the reports, surveys and any research of third parties which are referred to in this Replacement Prospectus will be achieved. The Company has not independently verified this information. Estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed in the Risk Factors set out in Section 8.

The Shares (including the New Shares) have not been, and will not be, registered under the US Securities Act 1933 (US Securities Act) and may not be offered or sold in the United States of America, or to, or for the account or benefit of, "US Persons" (as defined in Rule 902 under the US Securities Act) except under an available exemption from registration under the US Securities Act. The Shares (including the New Shares) may only be resold or transferred in the United States of America, or to, or for the account or benefit of, US Persons if registered under the US

REPLACEMENT PROSPECTUS

Photographs and diagrams

Photographs and diagrams used in this Replacement Prospectus are for illustration purposes only and should not be interpreted to mean that any person shown in them endorses this Replacement Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Replacement Prospectus are illustrative only and may not be drawn to scale. Unless otherwise stated, all data contained in charts, graphs and tables is based on information available at the date of this Replacement Prospectus.

Disclaimer

This Replacement Prospectus contains general information only, and does not take into account the individual investment objectives, financial situation or particular needs of any person. Nothing in this Replacement Prospectus should be construed as a recommendation by the Company or any other person concerning an investment in the Company. You should read the entire Replacement Prospectus and, in particular, in considering the prospects for the Company, you should consider the risk factors that could affect the financial performance of the Company. You should carefully consider these factors in light of your personal circumstances (including financial and taxation issues), and you should seek professional advice from a licensed financial adviser, accountant, stockbroker, lawyer or other professional adviser in relation to the Offer and the transactions contemplated in this Replacement Prospectus.

Electronic Replacement Prospectus

This Replacement Prospectus can be viewed online unitednetworks.net.au/investors. The website and its contents do not form part of this Replacement Prospectus and are not to be interpreted as part of, nor incorporated into, this Replacement Prospectus. Persons who receive the electronic version of this Replacement Prospectus should ensure that they download and read the entire Replacement Prospectus.

The Offer to which the electronic Replacement Prospectus relates is only available to persons receiving the electronic Replacement Prospectus in Australia. Persons having received a copy of this Replacement Prospectus in its electronic form may obtain a paper copy of the Replacement Prospectus (including any supplementary document and the Application Form) (free of charge) during the life of this Replacement Prospectus by contacting the Company on +61 2 9003 9573.

Glossary

Certain words and expressions used in this Replacement Prospectus are defined in the Glossary of this Replacement Prospectus.

Financial amounts

Financial amounts in this Replacement Prospectus are expressed in Australian Dollars (AUD) unless otherwise stated.

Privacy

The Company collects information about each Applicant provided on an Application for the purposes of processing the Application and, if the Application is successful, to administer the Applicant’s security holding in the Company.

By submitting an Application, each Applicant agrees that the Company may use the information provided by that Applicant on that Application for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Share Registry, the Company’s related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to ASX, ASIC and other regulatory authorities.

If an Applicant becomes a security holder of the Company, the Corporations Act requires the Company to include information about the security holder (name, address and details of the securities held) in its public register. This information must remain in the register even if that person ceases to be a security holder of the Company. Information contained in the Company's register is also used to facilitate distribution payments and corporate communications (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.

If you do not provide the information required on the Application, the Company may not be able to accept or process your Application. An Applicant has a right to gain access to the information that the Company and the Share Registry holds about that person subject to certain exemptions under law. Access requests must be made in writing to the Company.

Questions

Instructions on How to Apply are set out in Section 2.9 - 2.11 of this Replacement Prospectus and on the back of the Application Form. If you have any questions about how to apply for New Shares, please contact your Broker.

If you have any questions in relation to the Offer, please contact Advanced Share Registry on +61 2 8096 3502 during the office hours of 9am until 5pm (AEST) Monday to Friday. If you have any questions about whether to invest in the Company you should seek professional advice from your accountant, financial adviser, stockbroker, lawyer or other professional adviser before deciding whether to invest in the Company.

REPLACEMENT PROSPECTUS

KEY DATES & OFFER STATISTICS

KEY DATES

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Replacement Prospectus Date 21 November 2016
Opening Date of Offer 28 November 2016
Closing Date of Offer 13 December 2016
Allotment of New Shares (Completion of Offer) 16 December 2016
Expected dispatch of Shareholder holding statements 16 December 2016
Shares expected to commence trading on ASX 19 December 2016
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Note: All dates and times are indicative only. All times are AEDT. The Company, with the consent of the Lead Manager reserves the right to vary these dates and times without prior notice. It may close the offer early, withdraw the offer, or accept late applications. Applicants are encouraged to submit their Application forms as soon as is possible. The admission of the Company to the official list of the ASX and the commencement of quoting the Shares are subject to confirmation from the ASX.

KEY OFFER STATISTICS

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Issue Price per New Share A$0.20
Minimum Maximum
Total proceeds from the Offer $3,500,000 $7,500,000
Number of Shares held by Founders 76,416,248 76,416,248
Number of Shares held by Pre-IPO Shareholders 13,741,201 13,741,201
Number of Shares on issue as at the date of this
90,157,449 90,157,449
Replacement Prospectus
Total number of Shares under the Offer 17,500,000 37,500,000
Total number of Shares on issue after completion of the
107,657,449 127,657,449
Public Offer
Implied Market Capitalisation post IPO at Offer Price $21,531,490 $25,531,490
Number of Options on Issue 14,000,000 16,000,000
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*The Founders are escrowed for 24 months from IPO

** All options are unlisted options; Refer to clauses 5.4.1 and 10.3.14 for further details

HOW TO INVEST

Applications for New Shares can only be made by completing and lodging an Application Form contained in this Replacement Prospectus. Instructions on how to apply are set out in Section 2.9 - 2.11 of this Replacement Prospectus and on the back of the Application Form. Applications must be for at least 10,000 New Shares and in multiples of 5,000 thereafter.

REPLACEMENT PROSPECTUS

CHAIRMAN’S LETTER

21 November 2016

Dear Investor,

On behalf of the Directors of United Networks Limited (UNL or the Company), it is my pleasure to invite you to become a shareholder in UNL. UNL has developed a telecommunications business with low infrastructure capital costs, servicing a broad range of corporate and enterprise clients, customers and resellers in Australia, New Zealand, Canada and Malaysia.

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UNL’s business is comprised of 3 areas:

Voice;
Data; and
Added value services

At UNL, we are proud of the achievements we have made to date. As at the date of this Replacement Prospectus;

UNL has activated more than 180,000 global voice and data roaming services predominantly to Australian-based customers travelling overseas;
We have also begun providing global roaming services to customers outside of Australia and New Zealand through our resellers’ operations in Malaysia and Canada; and
Recently won in October 2016 The Ancillary Revenue and Merchandising Innovation of the Year Award.

As we look to the future, the directors expect the business of UNL to continue to grow, driven by:

customer acquisition;
additional white-label partners; and
new product development.

One of our key global roaming solutions is the ability to provide Enterprise Customers with access to real-time location data of End-Users. The advantages of these are many. For instance, during the Nepal earthquakes and the Paris attacks we were able to provide Global SIM Users with emergency instructions as well as offering emergency credit to contact aid services and families.

UNL is undertaking this public offer of New Shares to investors at an Issue Price of A$0.20 per New Share to raise a minimum of A$3,500,000. The Directors reserve the right to accept over-subscriptions to raise a maximum of A$7,500,000. Funds raised under the Offer will be used to provide ongoing working capital and to fund inventory, international expansion, new product development, expenses of the Offer and loan repayment as detailed in Section 1.9.

This Replacement Prospectus contains detailed information about the Company’s operations, financial performance, management team and future plans. It also outlines the risks of investing in the Company. Key risks of investing in the Company include failure to realise growth of profitability. The Company is also exposed to failure to retain key clients and the risk associated with a technology-based business operating in a regulated environment. I encourage you to read the Replacement Prospectus, and seek independent professional advice before making an investment decision.

I look forward to welcoming you as a Shareholder.

Yours Sincerely,

Anthony Ghattas

Non-Executive Chairman

REPLACEMENT PROSPECTUS

KEY DATES & OFFER STATISTICS ...................................................................5 CHAIRMAN’S LETTER ........................................................................................7 1. INVESTMENT OVERVIEW & DETAILS OF THE OFFER ....................... 10 2. DETAILS OF THE OFFER ................................................................................. 21 3. INDUSTRY BACKGROUND .......................................................................... 29 4. BUSINESS OVERVIEW .................................................................................... 34 5. BOARD, MANAGEMENT AND CORORATE GOVERANCE ................ 43 6. FINANCIAL INFORMATION ......................................................................... 50 7. INVESTIGATING ACCOUNTANTS REPORT ............................................ 57 8. RISK FACTORS ................................................................................................... 74 9. MATERIAL CONTRACTS ................................................................................ 80 10. ADDITIONAL INFORMATION ................................................................... 88 GLOSSARY .............................................................................................................94 CORPORATE DIRECTORY ................................................................................100

REPLACEMENT PROSPECTUS

1. INVESTMENT OVERVIEW & DETAILS OF THE OFFER

1.1 BUSINESS OVERVIEW

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Topic Summary More Info
The Company was incorporated in August 2015 for the purpose of consolidating
and grouping the activities undertaken by the following entities:
• United Lifestyle Group Networks Pty Ltd;
The UNL Group Section 4
• United Global SIM Limited;
• United Networks Hong Kong Limited.
• United Networks Operations Ltd; and
• United SIM Canada Ltd.
UNL’s business is comprised of 3 areas:
• Voice;
• Data; and
• Value added services
UNL’s sees its largest growth opportunities are in the Global SIM and Wi-Fi App
products. UNL, through its Customers has launched in excess of 20 brands in its
global roaming division.
What is UNL’s
Section 4
business?
UNL’s products currently include Global SIM, fixed line, mobile, VoIP and Data.
All of UNL’s products as well as UNL’s Customers and End Users are serviced by
UNL’s proprietary multi-layered technology platform known as the Global Access
Portal (GAP).
UNL’s headquarters is located in Sydney, Australia. It operates directly and via
resellers across Australia, Canada, New Zealand and Malaysia. UNL has no less
than 20 full time employees as at the date of this Replacement Prospectus.
The Offer is an Initial Public Offering of a minimum 17,500,000 shares in United
Networks Limited at A$0.20 per Share to raise a minimum of A$3,500,000 and a
maximum of 37,500,000 shares at an issue price of A$0.20 to raise a maximum of
A$7,500,000.
What is the Offer? Section 2
The Shares being offered will represent 16.26% of the total Shares on issue on
Completion or 29.38% based on the maximum Shares on issue on Completion.
For more information about the Offer and instructions on How to Apply are set
out in Section 2.
The Offer is being conducted to raise capital which is intended to fund:
• The development and deployment of UNL’s system, products and services;
Why is the Offer
• Business development and international expansion; Section 1.9
being conducted?
• Bonds with telecommunications network providers
• Part repayment of Related Party Loans;
• UNL’s working capital requirements.
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1.2 KEY FEATURES OF UNL’S BUSINESS MODEL

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Topic Summary More Info
Revenues of the voice and data solutions are generated from:
• The sale, usage, hosting and maintenance fees associated with the Global
SIM card and Enterprise Customer services;
• User credit top-up and bundle package purchases and their expiration
balances;
• Account management fees from clients; and
How does UNL • Resale of local access solutions and connectivity and commissions from
generate it’s carriers. Section 4.5
revenue?
Revenues from the value-added services are earned from:
• Pay-per-subscriber access to location-based services where partners pay for
each message and offer sent using location data. This includes emergency
assistance messages sent to travellers that are in proximity of disasters and
unexpected events; and
• Fees-per-subscriber for monitoring and access to the data analytics.
The key costs of UNL are:
• Networks termination and service charges;
What are UNL’s key
• Inventory; Section 6
costs?
• Employment and operating costs;
• Marketing costs;
• International development costs;
• UNL’s Global Access Portal (GAP) is a proprietary multi-layered technology
platform developed to service UNL’s products, Enterprise Customers and
their End-Users across both of UNL’s global and local divisions.
What is UNL’s • GAP is the key enabler for UNL’s white-label clients, integrating into one
Section 4.3
technology? platform billing, marketing, customer support and distribution.
• UNL’s Location-Based Services module enables it to deliver effective re-
al-time location-based data of End-Users to be used for multiple purposes.
• UNL’s Apps and the code and mobile API’s associated with the Apps.
How does UNL To date UNL’s operations have been funded through shareholder loans and con-
expect to fund its tributions. After listing, it is expected that UNL will have access to working capital Section 1.9
expansion? from the proceeds of the Offer.
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The financial information presented below and in this Replacement Prospectus
is intended as a summary only and should be read in conjunction with the more
detailed discussion on the Historical Financial Information in Section 6 and 7,
including management discussion and analysis and sensitivity analysis, as well as
the risk factors set out in Section 8.
Investors should read Section 6 - 7 and 10 for full details of UNL’s pro forma and
statutory results and the assumptions underlying the information.
A reconciliation between the pro forma and statutory results is set out in Section
6.
Actual Historical Results
What is UNL’s $’000 FY2016
Sections
historical financial
Total Revenue 7,558 6,7,8 and 10
performance?
Cost of sales (4,318)
Gross profit 3,240
Expenses (2,220)
EBITDA 1,020
Depreciation and amortisation
(672)
expense
Interest (73)
Income tax benefit/(expense) 62
Net Profit After Tax 337
Does UNL currently
Currently, UNL has no debt facilities outside the Related Party Loans. Standard
have any debt Section 9.7.2
guarantees provided to payment gateway providers NAB and Westpac.
facilities?
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1.3 KEY STRENGTHS

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Topic Summary More Info
• Ability to enter into and manage a relationship with Enterprise Partners;
What are UNL’s
• Ability to enable Enterprise Partners to engage directly to their customer
key competitive Section 4
base using the white-label model; and
advantages?
• Operational real-time Location-Based Services via the GAP platform.
UNL’s business • White-label partnerships with Enterprise Customers resulting in low-cost
Section 4
model acquisition of Users and speed-to-market.
• UNL currently operates in multiple jurisdictions and has the opportunity to
Large market expand into new territories through Enterprise Customers selling its global
Section 3
opportunities roaming solutions; and
• Development of global location-based value added solution
Ability to leverage
core technology • UNL’s current plans include expanding its global roaming solutions to offer
Section 4
into potential new Wi-Fi solution and embedded-SIM (E-SIM) solutions.
product areas
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REPLACEMENT PROSPECTUS

1.4 SUMMARY OF KEY RISKS

There are a number of risks associated with an investment in the Company which may affect its financial performance, financial position, cash flows, distribution, growth prospects and share price. The key risk factors identified by the Directors are discussed in detail in Section 8 and some of them are summarised below. You should read this replacement prospectus carefully and in its entirety and consult with your licensed financial adviser, accountant, lawyer or other professional adviser before deciding whether to apply for New Shares.

THE KEY RISKS INCLUDE:

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Specific Risk
Summary Section
Factors
UNL’s future revenue prospects are heavily reliant on the continued business of Key
Customers. The loss of Key Customers or some of their customers would adversely
affect the Company’s business results. Approximately 38% of UNL’s revenues were
derived from a single Key Customer and its customers for the 12 months ending
30 June 2016. Whilst this percentage is declining as new partners are joining UNL,
a loss or reduction of the business with that Key Customer would have a material
Loss of Key
adverse effect on the Company’s business. UNL is currently negotiating with this Section
Customer/s or their
Key Customer changes to the existing agreement including the calculation of certain 8.2.5
Business
customer satisfaction scores that need to be met during the 3 months ending 23
December 2016 and an extension of that period.
If these negotiations are unsuccessful and the scores remain unchanged, UNL is
unlikely to meet them and this will entitle the Key Customer to end the agreement
within 180 days of that date. See Section 8.2.5 for further details.
UNL’s growth prospects are dependent upon a number of factors, including, cus-
Growth Prospects tomer take up and execution of rollout as well as the success of investments in or Section
and Acquisitions acquisitions by UNL of complementary companies, services or products, which 8.2.1
involve various risks.
The ability to assess and identify products that appeal to UNL’s target market is
Product and Section
important and any misjudgement or changes in customer demand or target market
Services Offering 8.2.3
could adversely affect the Company.
While the telecommunication services provided by UNL as at the date of this
Replacement Prospectus do not require a special license or permit in the jurisdic-
tions they are offered, changes to the regulatory regime, legislation or government
UNL’s Regulatory policies in any jurisdiction in which UNL operates or in the nature of services or Section
Position operations of UNL in any such jurisdiction may require UNL to obtain a license or 8.2.4
permit or impose other obligations on UNL. A failure or delay in complying with such
changes or the time and costs required to comply could have an adverse impact on
UNL.
UNL relies on key supplier relationships in certain parts of its business and the loss
Supplier Section
or impairment of these relationships or changes to suppliers’ terms or ability to
Relationships 8.2.6
provide products or services could adversely impact UNL’s business.
Some of UNL new business opportunities should be viewed as speculative as they
New Revenue and Section
are based on new business models or involve non-traditional telecommunications
Market 8.2.9
companies with new revenue potential that can not be ascertained or guaranteed.
UNL has several material contracts in place, as detailed in Section 9 of this Pros-
pects. Any disagreement or dispute in relation to any material contract, a failure Section
Contractual Risks
by UNL to meet its contractual obligations or its termination for convenience or 8.2.10
non-renewal, could adversely affect UNL.
UNL relies on the experience and knowledge of its management team. UNL is also
Reliance on Key dependent on its ability to recruit and retain suitably qualified personnel. Any delay Section
Personnel or inability to replace key personnel could materially impact UNL’s business and 8.2.11
operations.
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The telecommunications industry is largely influenced by new technologies and de-
New Technology & velopments. UNL will need to continue to update, expand and diversify its product Section
Products and service offering to support new technologies and failure to do so may adversely 8.2.14
affect UNL’s prospects.
UNL’s operations may be affected by various external and internal factors, and Section
Operational Risk
whilst UNL aims to mitigate these risks there is no guarantee it will be successful. 8.2.18
UNL relies on the availability of its websites, hosting servers and the websites and
systems of various third party providers to provide services to clients and to attract
new clients. Such websites, servers and systems could be subject to data theft, dis-
ruption or denial of service (DoS) attacks and unauthorised access from hackers. Section
Hacker Attacks
Although UNL has strategies in place to minimise such attacks, these strategies may 8.2.28
not be successful. Unavailability or disruption of the systems or websites of UNL or
its service providers could lead manager to a loss of revenue whilst UNL is unable to
provide services to its customers
The telecommunications industry has constant changes in pricing and competition
Section
Competition from both existing competitors and new entries into the market, which can adverse-
8.2.15
ly affect the Company
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1.5 KEY OFFER STATISTICS*

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Issue Price per New Share A$0.20
Minimum Maximum
Total proceeds from the Offer $3,500,000 $7,500,000
Number of Shares held by Founders 76,416,248 76,416,248
Number of Shares held by Pre-IPO Shareholders 13,741,201 13,741,201
Number of Shares on issue as at the date of this Replacement Prospectus 90,157,449 90,157,449
Total number of Shares under the Offer 17,500,000 37,500,000
Total number of Shares on issue after completion of the Public Offer 107,657,449 127,657,449
Implied Market Capitalisation post IPO at Offer Price $21,531,490 $25,531,490
Number of Options on Issue 14,000,000 16,000,000
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*Assuming the Offer is fully subscribed.

**The Founders are escrowed for 24 months from IPO

*** All options are unlisted options; Refer to clauses 5.4. and 10.3.14 for further details

1.6 DIRECTORS AND KEY MANAGEMENT

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Topic Summary More Info
The Board of Directors of UNL is comprised of:
• Anthony Ghattas – Non-Executive Chairman
• Charbel Nader – Independent Director
Who are the • Nicholas Ghattas – Chief Executive Officer
Directors and
Section 5
key executives The senior leadership team of UNL is comprised of:
of UNL?
• Nicholas Ghattas – Chief Executive Officer
• Michael Potts – Chief Finance Officer
• Justin Elton – Operations Manager
• Andrew Weeks – Systems Manager
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1.7 INTERESTS, BENEFITS AND RELATED PARTY TRANSACTIONS

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Topic Summary More Info
Shares
Shares held pre-
issued or Shares held on completion
completion
sold
(m) (%) (m) (m) (%) Min (%)Max
Who are
the Director
Anthony Ghattas 38.2 42.38% 0 38.2 35.49% 29.93%
Related
Shareholders
Nicholas Ghattas 38.2 42.38% 0 38.2 35.49% 29.93%
(Founders)
Section 5
and what Charbel Nader 0 0% 0 0 0% 0%
will be their
shareholdings Total 76.4 84.76% 0 90 70.98% 59.86%
at
Completion? * Held by Temont Pty Ltd, a company controlled by Anthony Ghattas, as trustee for Ghattas Family Trust
Australia.
Held by Autopilot Consulting Pty Ltd, a company controlled by Nicholas Ghattas, non beneficially as trustee
for Avenue Investments (Australia) Family Trust. 347 shares are held beneficially by Autopilot Consulting Pty
Ltd
Founding Shareholders subject to escrow
Remuneration
Director Share Options
(incl. superannuation)
What A$
significant
benefits and Anthony Ghattas 105,120 5,250,000
interests are Charbel Nader 49,275 3,500,000
payable to
Section 5.4
Directors and Nicholas Ghattas 323,025 5,250,000
other persons Total 477,420 14,000,000
connected
with UNL or
The above table does not take into account any New Shares the Directors may acquire
the Offer?
under the Offer. Directors are entitled to remuneration and fees on commercial terms.
Advisers and other service providers are entitled to fees for services as disclosed in Sec-
tion 10.3.17 including a total of up to 2,000,000 Options.
Minimum % Maximum %
What will be
the capital Founders 76,416,248 70.98% 76,416,248 59.86%
structure of
Other existing
the Company 13,741,201 12.76% 13,741,201 10.76% Section 2.5
shareholders
post quotation
of its Shares Public 17,500,000 16.25% 37,500,000 29.38%
on the ASX?
Total 107,657,449 100% 127,657,449 100%
The 76,418,248 shares held by the Founders and the 333,333 shares held by a promoter
What Share
will be subject to ASX imposed escrow arrangements for a period of 24 months from
escrow
the date of admission to the ASX. An Escrow is a restriction on the sale, disposal or Section 9.9
arrangements
encumbering of or certain other dealings in respect of the escrowed shares for the period
are in place?
of the escrow.
UNL has entered into a number of related party agreements as detailed in Section
9. These include agreements with the directors in relation to their appointment and
Related Party loan, service and occupation agreements with director related companies. UNL has
Section 9
Agreements approximately A$1.8m in related party loans of which it intends to repay an amount of
A$1.0m out of the Offer proceeds if $7,500,000 is raised, otherwise the loan will be
repaid in the ordinary course.
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REPLACEMENT PROSPECTUS

1.8 SUMMARY OF THE OFFER

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Question Response More Info
Who is
issuing the
United Networks Limited (ACN 607 921 246)
Replacement
Prospectus?
The Offer is an Initial Public Offering of a minimum 17,500,000 shares in United
Networks Limited at A$0.20 per Share that will be issued by UNL to raise up to
A$3,500,000 and a maximum of 37,500,000 shares at an issue price of A$0.20 to raise a
maximum of A$7,500,000.
What is the
The Shares being offered will represent 16.25% of the total Shares on issue on Section 2
Offer?
Completion if the minimum shares are raised 29.38% based on the maximum Shares on
issue on Completion.
For more information about the Offer and instructions on how to apply for New Shares
refer to Section 2.
The Offer comprises:
How is
• The Broker Firm Offer;
the Offer Section 2
• The Institutional Offer, which consists of an invitation to acquire New Shares made
structured?
to Institutional Investors in Australia and certain other eligible jurisdictions; and
• The General Offer
The Offer is expected to generate future opportunities for the Company by providing
it with access to capital markets, additional funds and an increased profile which can be
utilised for:
How will the
proceeds of • Development and deployment of UNL’s system, products and services; Section
the Offer be • Business development & international expansion. 1.9
used? • Bonds with Telecommunications Networks Providers
• Part repayments of Loans
• Expenses for the offer
• Working Capital
Following completion of the Offer, UNL will apply to the ASX for admission to the Official
List and Official Quotation of Shares under the code UNL.
Will the Shares
Completion of the Offer is conditional on the ASX approving this Application. If approval
be quoted on Section 2
is not given within three months after such Application is made (or any longer period
the ASX?
permitted by law), the Offer will be withdrawn and all Application Monies received will be
refunded without interest as soon as practicable in accordance with the requirements of
the Corporations Act.
The allocation of New Shares between the General Offer, Broker Firm Offer and the
Institutional Offer will be determined by the Lead Manager and UNL having regard to the
What is the Section
allocation policy outlined in Section 2.
allocation 2.9 to
policy? 2.11
With respect to the Broker Firm Offer, it will be a matter for the Brokers as to how they
allocate New Shares among their retail clients.
Is there any
brokerage,
commission No brokerage, commission or stamp duty is payable by Applicants on Acquisition of Section
or stamp duty Shares under the Offer. 2.8
payable by the
applicants?
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REPLACEMENT PROSPECTUS

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What are
the tax The tax consequences of any investment in the New Shares will depend upon any
implications of investor’s particular circumstances, particularly for non-resident Shareholders.
investing in the Applicants should obtain their own tax advice prior to deciding whether to invest.
New Shares?
When will
I receive
confirmation
It is expected that initial holding statements will be dispatched by standard post on or Section
that my
around 16 December 2016. 2.3
Application
has been
successful?
The payment of dividends by the Company, if any, subject to law, is at the complete
discretion of the Directors, and the Directors do not provide any assurance of the future
level of dividends and the level of franking of such dividends.
What is UNL’s The ability to pay dividends will depend on a number of factors, many of which are Section
dividend beyond the control of the Company. In determining whether to declare future dividends, 6.7 and
policy? the Directors will have regard to UNL’s earnings, overall financial condition, capital 10.3.13
requirements and the level of franking credits available.
It is the Board’s current intention not to declare a final dividend in respect of FY2016, in
order to retain financial flexibility.
You may apply for New Shares by completing a valid Application Form (attached to or
accompanying this Replacement Prospectus).
How can I Section
apply? 2.9.2
To the extent permissible by law, an Application by an Applicant under the Offer is irrevo-
cable.
UNL reserves the right not to proceed with the Offer at any time before the issue of New
Shares to successful Applicants.
If the Offer does not proceed, the Share Registry, your Broker or UNL will refund
Can the Offer Section
Application Monies.
be withdrawn? 2.13
No interest will be paid on any Application Monies refunded as a result of the withdrawal
of the Offer.
Call the UNL Information Line on +61 2 9003 9573 (from within Australia) between
9:00am and 5:00pm AEST time if you require assistance to complete the Application
Form, require additional copies of this Replacement Prospectus or have any questions in
Where can relation to the Offer.
I find more
information? If you are unclear in relation to any matter or are uncertain as to whether obtaining New
Shares in UNL is a suitable investment for you, you should seek professional advice from
your solicitor, stock broker, accountant or other independent and qualified professional
adviser before deciding whether or not to invest.
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REPLACEMENT PROSPECTUS

1.9 APPLICATION OF PROCEEDS

The funds raised will be applied first towards meeting the expenses of the Offer, which are expected to be approximately A$455,000 for minimum raising of $3,500,000 and A$825,000 for maximum raising of $7,500,000. The balance of the transaction expenses will be paid from the Company’s existing cash assets.

Assuming the Offer is fully subscribed, the net proceeds of the Offer are expected to be up to A$7,500,000 before expenses.

In satisfaction of the specific requirements of ASX Listing Rule 1.3.2(b) regarding the indicative future application of cash expected to be available to the Company following completion of Offer, uses of funds relating to the Offer are as follows:

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Funds raised pursuant to the Offer Minimum Maximum
Development and deployment of UNL’s system, products and services $1,000,000 $1,850,000
Business Development & International Expansion $1,200,000 $2,500,000
Bonds with Telecommunications Network Providers $500,000 $500,000
-
Part Repayment of Loans $1,000,000
Expenses of the Offer $455,000 $825,000
Working capital $345,000 $875,000
TOTAL FUNDS APPLIED $3,500,000 $7,500,000
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ULG Holdings Ltd and United Lifestyle Group have provided Loans to the Company with a balance of approximatelyA$1.8m as at the date of this Replacement Prospectus.

Note: This table assumes the Public Offer is fully subscribed. If the amount raised is lower than the maximum raising then the amount allocated to the different uses of funds specified in the table will reduce and be adjusted accordingly.

The Company’s growth strategy incorporates

Growth in existing products and channels using the white-label Enterprise Customer program
Monetisation of the analytical data
Location-Based Services
Using GAP platform to offer global partners local solutions for end users
Introduction of new technology (see Section 4.8)

UNL plans to utilise its customisable GAP platform to enable its customers to offer more telecommunications solutions including local products to the End-Users once they have returned from their travels.

UNL has identified opportunities to extend the reach of it global roaming solutions through its Customer channel by introducing new products in the following key areas.

Expand on the current business model through providing Wi-Fi Access technology
Embedded-SIM (E-SIM) solutions

The use of funds set out above represents the Company’s intentions based on the Company’s current plans and business conditions. The amounts and timing of actual expenditure may vary and will depend on various factors. The Company believes that the net proceeds of the Offer together with revenue generated by the business of UNL will enable the Company to have, following completion of the Offer, sufficient working capital to carry out its business objectives as described in this Replacement Prospectus.

REPLACEMENT PROSPECTUS

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2. DETAILS OF THE
OFFER
REPLACEMENT PROSPECTUS
20
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2. DETAILS OF THE OFFER

2.1 THE OFFER

This Replacement Prospectus relates to an Initial Public Offering of a minimum 17,500,000 shares in United Networks Limited (UNL) at A$0.20 per Share (Offer Price) to raise a minimum of A$3,500,000 and a maximum of 37,500,000 shares at an issue price of A$0.20 to raise a maximum of A$7,500,000. The total number of Shares on issue at Completion of the Offer will be 107,657,449 (Minimum) and 127,657,449 (Maximum). All Shares will, once issued, rank equally in all respects with the Shares currently on issue. A summary of the rights attaching to the Shares is set out in Section 10.3.

No New Shares will be allotted or issued until the Offer has reached its minimum subscription of $3,500,000. If the minimum subscription of the Offer has not been achieved within four months after the Replacement Prospectus Date, all Application Monies will be refunded without interest in accordance with Corporations Act.

The Offer is made on the terms, and is subject to the conditions, set out in this Replacement Prospectus.

2.2 STRUCTURE OF THE OFFER

The Offer comprises:

the Broker Firm Offer – open to Australian resident retail clients of Brokers who have received a firm allocation from their Broker; (Section 2.9)
the Institutional Offer – an invitation to bid for Shares made to Institutional Investors in Australia and in certain other eligible jurisdictions; and (Section 2.10)
the General Offer - open to investors who have a registered address in Australia. (Section 2.11)

The allocation of Shares between the Broker Firm Offer and the Institutional Offer was determined by the Lead Manager in agreement with the Company having regard to the allocation policies described above. The Company reserves the right in its absolute discretion not to issue any Shares to Applicants under the General Offer. All Applicants under the General Offer must have an eligible residential address in Australia.

A summary of the Lead Agreement, including the events which would entitle the Lead Manager to terminate the Lead Agreement, is set out in Section 9.10

2.3 IMPORTANT DATES

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Replacement Prospectus Date 21 November 2016
Opening Date of Offer 28 November 2016
Closing Date of Offer 13 December 2016
Allotment of Shares (Completion of Offer) 16 December 2016
Expected despatch of Holding Statements 16 December 2016
Shares expected to begin trading on ASX (on a normal settlement basis) 19 December 2016
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The above dates are subject to change and are indicative only. The Company (in consultation with the Lead Manager) reserves the right to vary the dates and times of the Offer, including to close the Offer early, extend the Offer or accept late Applications, without notifying any recipient of this Replacement Prospectus or any Applicants. Applicants are encouraged to submit their Applications as early as possible.

REPLACEMENT PROSPECTUS

2.4 PRO FORMA HISTORICAL CONSOLIDATED BALANCE SHEET

UNL’s pro forma balance sheet following Completion of the Offer, including details of the pro forma adjustments, is set out in Section 6.4

2.5 SHAREHOLDING STRUCTURE

Details of the ownership of Shares on Completion of the Offer are set out below:

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Shares at
New Shares Shareholding following % post -IPO % post - IPO
Existing Shareholder Replacement
Issued Completion of the Offer Minimum Maximum
Prospectus Date
Anthony Ghattas 38,208,124 - 38,208,124 35.49% 29.93%
Nicholas Ghattas 38,208,124 - 38,208,124 35.49% 29.93%
Other existing 13,741,201 - 13,741,201 12.76% 10.76%
shareholders
New Shares to be - Min 17,500,000 Min 17,500,000 16.26% 29.38%
issued under the offer Max 37,500,000 Max 37,500,000
Total 90,157,449 37,500,000 127,657,449 100.00% 100.00%
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Held by Temont Pty Ltd a company controlled by Anthony Ghattas as trustee for Ghattas Family Trust Australia

** Held by Autopilot Consulting Pty Ltd, a company controlled by Nicholas Ghattas, as trustee for Avenue Investments Australia Family Trust, 347 shares are held beneficially by Autopilot Consulting Pty Ltd

Details of the Shares that will be subject to escrow arrangements are set out in Section 9.9

2.6 CONTROL IMPLICATIONS OF THE OFFER

The Directors do not expect any single Shareholder to control UNL on Completion of the Offer (as defined in Section 50AA of the Corporations Act).

2.7 POTENTIAL EFFECT OF THE FUNDRAISING ON THE FUTURE OF THE COMPANY

The Directors believe that, on Completion of the Offer, UNL will have sufficient funds available from the cash proceeds of the Offer to fulfil the purposes of the Offer and meet UNL’s stated business objectives.

2.8 KEY TERMS AND CONDITIONS OF THE OFFER

The key terms and conditions of the Offer are summarised in the table below:

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What is the type of security being
New Shares, being fully paid ordinary Shares in the capital of UNL.
offered?
What are the rights and liabilities
A description of the Shares, including the rights and liabilities attaching to them, is
attached to the security being
set out in Section 10.3
offered?
What is the consideration
payable for each security being The Offer Price is A$0.20 per Share.
offered?
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REPLACEMENT PROSPECTUS

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The key dates, including details of the Offer Period, are set out in the Key Dates &
Offer Statistics at the front of the Replacement Prospectus in the Key Offer Dates
& Statistics.
This timetable is indicative only and may change. The Company in consultation
with the Lead Manager, reserves the right to vary both of the times and dates
without notice (including, subject to the ASX Listing Rules and the Corporations
Act, to close the Offer early, to extend the Closing Date, to accept late Applications
or bids, either generally or in particular cases, or to cancel or withdraw the Offer
What is the Offer Period? before Settlement, in each case without notifying any recipient of this Replacement
Prospectus or any Applicants).
If the Offer is cancelled or withdrawn before the allocation of Shares, then all
Application Monies will be refunded in full (without interest) as soon as possible in
accordance with the requirements of the Corporations Act. Investors are
encouraged to submit their Applications as soon as possible after the Offer opens.
No Shares will be issued on the basis of this Replacement Prospectus later than 13
months after the date of lodgement of this Replacement Prospectus.
What are the cash proceeds to be
A minimum of A$3,500,000 and a maximum of A$7,500,000.
raised?
Is the Offer underwritten? No.
The minimum Application under the Broker Firm Offer and General Offer is 10,000
Shares and in multiples of 5,000 Shares thereafter, as directed by the Applicant’s
Broker.
What is the minimum and maxi-
mum Application size under the
The Lead Manager, in consultation with UNL, reserve the right to reject any Appli-
Broker Firm Offer?
cation or to allocate a lesser number of Shares than that applied for.
There is no maximum number or value of Shares that may be applied for under the
Broker Firm Offer and General Offer.
The allocation of Shares between the Broker Firm Offer, Institutional Offer and the
General Offer will be determined by the Lead Manager and the Company having
regard to the allocation policies outlined in Section 2.9, 2.10 and 2.11. With respect
to the Broker Firm Offer, it is a matter for the Broker how they allocate firm Shares
What is the allocation policy? among their eligible retail clients.
For further information on the Broker Firm Offer, see Section 2.9. For further infor-
mation on the Institutional Offer, see Section 2.10. For further information on the
General Offer, see Section 2.11
UNL will apply to the ASX for admission to the Official List and quotation of Shares
on the ASX under the code UNL.
Completion of the Offer is conditional on the ASX approving this Application. If
Will the Shares be listed?
approval is not given within three months after such Application is made (or any
longer period permitted by law), the Offer will be withdrawn and all Application
Monies received will be refunded without interest as soon as practicable in accor-
dance with the requirements of the Corporations Act
When are the Shares expected to
Details are provided in Section 2.3
commence trading?
When will I receive confirmation
It is expected that initial holding statements will be despatched by standard post on
that my Application has been
16 December 2016
successful?
Are there any escrow
Yes. Details are provided in Section 9.9
arrangements
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REPLACEMENT PROSPECTUS

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No brokerage, commission or stamp duty is payable by Applicants on acquisition of
Is there brokerage, commission Shares under the Offer.
or stamp duty considerations? See Section 9.10 for details of various commissions, fees and expenses payable by
UNL to the Lead Manager.
Yes. It is recommended that all potential investors consult their own independent
tax advisers regarding the income tax (including capital gains tax), stamp duty and
Are there any tax consideration?
GST consequences of acquiring, owning and disposing of Shares, having regard to
their specific circumstances.
All enquiries in relation to this Replacement Prospectus should be directed to
the UNL’s Offer Information Line +61 2 8096 3502 between 9.00am and 5.00pm
AEST, Monday to Friday. All enquiries in relation to the Broker Firm Offer should be
directed to your Broker.
What should you do with any
If you require assistance to complete the Application Form, require additional
enquiries?
copies of this Replacement Prospectus, have any questions in relation to the Offer
or you are uncertain as to whether obtaining Shares in UNL is a suitable invest-
ment for you, you should seek professional advice from your stockbroker, solicitor,
accountant, taxation adviser financial adviser or other independent professional
adviser before deciding whether to invest.
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2.9 BROKER FIRM OFFER

2.9.1 Who may apply

The Broker Firm Offer is open to persons who have received a firm allocation of Shares from their Broker and who have a registered address in Australia. If you have received a firm allocation of Shares from your Broker, you will be treated as a Broker Firm Offer Applicant in respect of that allocation. You should contact your Broker to determine whether you can receive an allocation of Shares from them under the Broker Firm Offer. The Broker Firm Offer is not open to persons in the United States.

2.9.2 How to apply

If you have received an allocation of Shares from your Broker and wish to apply for those Shares under the Broker Firm Offer, you should contact your Broker for information about how to submit your Broker Firm Offer Application Form and for payment instructions.

Applicants under the Broker Firm Offer must not send their Application Forms or payment to the Share Registry. Applicants under the Broker Firm Offer should contact their Broker to request a copy of this Replacement Prospectus and Application Form. Your Broker will act as your agent and it is your Broker’s responsibility to ensure that your Application Form and Application Monies are received before 5.00pm AEST on the Closing Date or any earlier closing date as determined by your Broker.

Applications for Shares must be for a minimum of 10,000 Shares and thereafter in multiples of 5,000 Shares and payment for the Shares must be made in full at the issue price of A$0.20 per Share.

There is no maximum number or value of Shares that may be applied for under the Offer. However, UNL and the Lead Manager reserve the right to reject or scale back any Applications in the Offer. UNL may determine a person to

be eligible to participate in the Offer, and may amend or waive the Offer Application procedures or requirements, in its discretion in compliance with applicable laws.

The Offer opens at 9.00am 28 November AEST 2016 and is expected to close at 5pm 13 December AEST 2016. UNL and the Lead Manager may elect to close the Offer or extend the Offer, or accept late Applications either generally or in particular cases. The Offer may be closed at any earlier date and time, without further notice. Applicants are therefore encouraged to submit their Applications as early as possible.

If you are an investor applying under the Broker Firm Offer, you should complete and lodge your Broker Firm Offer Application Form with the Broker from whom you received your firm allocation. Broker Firm Offer Application Forms must be completed in accordance with the instructions given to you by your Broker and the instructions set out on the reverse of the Application Form.

By making an Application, you declare that you were given access to this Replacement Prospectus, together with an Application Form. The Corporations Act prohibits any person from passing an Application Form to another person unless it is attached to, or accompanied by, a hard copy of this Replacement Prospectus or the complete and unaltered electronic version of this Replacement Prospectus.

The Company, the Lead Manager and the Share Registry take no responsibility for any acts or omissions committed by your Broker in connection with your Application.

2.9.3 Payment methods

Applicants under the Broker Firm Offer must pay their Application Monies to their Broker in accordance with instructions provided to you by that Broker.

REPLACEMENT PROSPECTUS

2.9.4 Allocation policy under the Broker Firm Offer

Shares that have been allocated to Brokers for allocation to their Australian resident retail clients will be issued to the Applicants nominated by those Brokers. It will be a matter for each Broker as to how they allocate firm Shares among their retail clients, and they (and not UNL or the Lead Manager) will be responsible for ensuring that retail clients who have received a firm allocation from them receive the relevant Shares.

2.9.5 Acceptance of Applications

An Application in the Broker Firm Offer is an offer by the Applicant to UNL to apply for the amount of Shares specified in the Application Form, at the Offer Price on the terms and conditions set out in this Replacement Prospectus (including any supplementary or Replacement Prospectus) and the Application Form. To the extent permitted by law, an Application by an Applicant under the Offer is irrevocable.

An Application may be accepted in respect of the full amount, or any amount lower than that specified in the Application Form, without further notice to the Applicant. Acceptance of an Application will give rise to a binding contract on allocation of Shares to Successful Applicants.

The Lead Manager, in agreement with UNL, reserve the right to reject any Application which is not correctly completed or which is submitted by a person who they believe is ineligible to participate in the Broker Firm Offer, or to waive or correct any errors made by an Applicant in completing their Application.

2.9.6 Application Monies

Application Monies received under the Broker Firm Offer will be held in a special purpose bank account until Shares are issued or transferred to Successful Applicants. Applicants under the Broker Firm Offer whose Applications are not accepted, or who are allocated a lesser number of Shares than the amount applied for, will be mailed a refund (without interest) of all or part of their Application Monies, as applicable. No refunds pursuant solely to rounding will be provided. Interest will not be paid on any monies refunded and any interest earned on Application Monies pending the allocation or refund will be retained by UNL.

To participate in the Offer, the Application Form must be completed and received, together with the Application Monies, in accordance with the instructions on the Application Form.

2.10 INSTITUTIONAL OFFER

2.10.1 Invitations to bid

The Institutional Offer consisted of an invitation to certain Institutional Investors in Australia and a number of other eligible jurisdictions to apply for Shares. The Lead Manager separately advised Institutional Investors of the application procedures for the Institutional Offer.

2.10.2 Allocation policy under the Institutional Offer

The allocation of Shares among Applicants between the Institutional Offer and the Broker Firm Offer will be determined by the Lead Manager in agreement with UNL. The Lead Manager and UNL have absolute discretion regarding the basis of allocation of Shares among Institutional Investors.

Participants in the Institutional Offer have been advised of their allocation of Shares, if any, by the Lead Manager. The allocation policy was influenced, but not constrained, by the following factors:

number of Shares bid for by particular Applicants;
the timeliness of the bid by particular Applicants;
UNL’s desire for an informed and active trading market following Listing;
UNL’s desire to establish a wide spread of institutional Shareholders;
overall level of demand under the Broker Firm Offer and Institutional Offer;
the size and type of funds under management of particular Applicants;
the likelihood that particular Applicants will be longterm Shareholders; and
any other factors that UNL and the Lead Manager considered appropriate.

2.11 GENERAL OFFER

2.11.1 Who may apply

The General Offer (which does not include the Broker Firm Offer) is open to Applicants resident in Australia. The Company reserves the right in its absolute discretion not to issue any Shares to Applicants under the General Offer. All Applicants under the General Offer must have an eligible residential address in Australia.

2.11.2 How to apply

In order to apply for Securities under the General Offer, please complete the Application Form that is included in or accompanies this Replacement Prospectus (or a printed copy of the Application Form attached to the electronic version of the Replacement Prospectus available) or apply online at www.unitednetworks.net.au/investors. Application Forms must be completed in accordance with the accompanying instructions. Any Applicants applying online must personally complete the online Application Form and pay the Application Monies via BPAY®, EFT or cheque Application Forms completed online must not be completed by third parties, including authorised third parties (e.g. the Applicant’s Broker). If paying by BPAY® or EFT a personalised form with payment instructions will be sent to you upon receipt of the completed Application Form. For printed Applications, once completed, please lodge your Application Form and Application Monies so that it is received at the address of the Company’s Share Registry set out below by the Closing Date.

REPLACEMENT PROSPECTUS

2.11.3 Payment methods

Application Monies may be provided by cheque(s) or bank draft(s). Cheque(s) or bank draft(s) must be:

in Australian currency;
drawn on an Australian branch of a financial institution;
crossed ‘not negotiable’ and made payable to ‘United Networks Ltd’
via direct debit and BPAY with a reference number

2.11.4 Allocation policy under the General Offer

The Company reserves the right in its absolute discretion not to issue any Securities to Applicants under the General Offer and may reject any Application or allocate a lesser number of Securities than those applied for at its absolute discretion.

2.11.5 Acceptance of Applications

An Application in the General Offer is an offer by the Applicant to UNL to apply for the amount of Shares specified in the Application Form, at the Offer Price on the terms and conditions set out in this Replacement Prospectus (including any supplementary or Replacement Prospectus) and the Application Form. To the extent permitted by law, an Application by an Applicant under the Offer is irrevocable.

The Lead Manager, in agreement with UNL, reserve the right to reject any Application which is not correctly completed or which is submitted by a person who they believe is ineligible to participate in the General Offer, or to waive or correct any errors made by an Applicant in completing their Application.

2.11.6 Application Monies

All Application Monies received by the Company will be held by the Company on trust in a separate account until the Securities are issued to successful Applicants.

2.12 ESCROW ARRANGEMENTS

2.13 DISCRETION REGARDING THE OFFER

With the consent of the Lead Manager, UNL may withdraw the Offer at any time before the issue or transfer of Shares to Successful Applicants. If the Offer, or any part of it, does not proceed, all relevant Application Monies will be refunded (without interest).

UNL and the Lead Manager also reserve the right to close the Offer or any part of it early, extend the Offer or any part of it, accept late Applications or bids either generally or in particular cases, reject any Application or bid, or allocate to any Applicant or bidder fewer Shares than applied or bid for.

2.14 RESTRICTIONS ON DISTRIBUTION

No action has been taken to register or qualify this Replacement Prospectus, the Shares or the Offer or otherwise to permit a public offering of the Shares in any jurisdiction outside Australia.

This Replacement Prospectus does not constitute an offer or invitation to subscribe for Shares in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation or issue under this Replacement Prospectus.

This Replacement Prospectus may not be released or distributed in the United States or elsewhere outside Australia, unless it has attached to it the selling restrictions applicable in the jurisdictions outside Australia, and may only be distributed to persons to whom the Institutional Offer may lawfully be made in accordance with the laws of any applicable jurisdiction.

The Shares have not been, and will not be, registered under the U.S. Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, in the United States.

Each Applicant under the Institutional Offer will be required to make certain representations, warranties and covenants set out in the confirmation of allocation letter distributed to it.

Refer to Section 9.9 for a summary of the escrow arrangements.

REPLACEMENT PROSPECTUS

2.15 ASX Listing, Registers And Holding Statements, Normal Settlement Trading

2.15.1 Application to the ASX for listing of UNL and quotation of Shares

UNL will apply for admission to the Official List of the ASX and quotation of the Shares on the ASX within seven days of the Replacement Prospectus Date. UNL’s ASX code will be UNL.

The ASX takes no responsibility for this Replacement Prospectus or the investment to which it relates. The fact that the ASX may admit UNL to the Official List is not to be taken as an indication of the merits of UNL or the Shares offered for subscription.

If UNL does not make such an Application within seven days after the date of the Replacement Prospectus, or if permission is not granted for the official quotation of Shares on the ASX within three months after the Replacement Prospectus date (or any later date permitted by law), all Application Monies received by UNL will be refunded (without interest) as soon as practicable in accordance with the requirements of the Corporations Act.

Shareholders will receive subsequent statements at the end of each month or if there has been a change to their holding on the register and as otherwise required under ASX Listing Rules and the Corporations Act. Additional statements may be requested at any other time either directly through the Shareholder’s sponsoring Broker in the case of a holding on the CHESS sub-register or through the Share Registry in the case of a holding on the issuer sponsored sub-register. The Share Registry may charge a fee for these additional statements.

2.15.3 Normal settlement trading and selling Shares on market

It is expected that trading of the Shares on the ASX on a normal settlement basis will commence on or about 19 December 2016.

It is the responsibility of each person who trades in Shares to confirm their holding before trading in Shares. If Shares are sold before receiving a holding statement, Successful Applicants do so at their own risk. The Company, the Share Registry, the Lead Manager disclaim all liability, whether in negligence or otherwise, if a Shareholder sells Shares before receiving a holding statement, even if the Shareholder obtained details of their holding through the Lead Manager or their Broker.

UNL will be required to comply with the ASX Listing Rules, subject to certain conditions (including any waivers obtained by UNL from time-to-time).

2.15.2 CHESS and issuer sponsored holdings

UNL will apply to participate in the ASX’s Clearing House Electronic Sub-Register System (CHESS) and will comply with ASX Listing Rules and ASX Settlement Operating Rules. CHESS is an electronic transfer and settlement system for transactions in securities quoted on the ASX under which transfers are affected in an electronic form.

When the Shares become approved financial products (defined in the ASX Settlement Operating Rules), holdings will be registered in one of two sub-registers, an electronic CHESS sub-register or an issuer-sponsored sub-register. For all Successful Applicants, the Shares of a Shareholder who is a participant in CHESS or a Shareholder sponsored by a participant in CHESS will be registered on the CHESS sub-register. All other Shares will be registered on the issuer-sponsored sub-register.

Following Completion, Shareholders will be sent a holding statement that sets out the number of Shares that have been allocated to them. This statement will also provide details of a Shareholder’s Holder Identification Number (HIN) for CHESS holders or, where applicable, the Security holder Reference Number (SRN) of issuer sponsored holders. Shareholders will subsequently receive statements showing any changes to their Shareholding. Certificates will not be issued.

REPLACEMENT PROSPECTUS

3. INDUSTRY BACKGROUND

Section 3 provides background information on the sectors in which UNL operates in at the time of the Offer.

3.2 MARKET DESCRIPTION

3.1 INTRODUCTION

UNL through providing white-label solutions and some direct-to-customer voice, data and value added services, operates in two main industry sectors. Its local business operates in the Australian telecommunications resale industry as a service provider and the IMR business provides roaming solutions to our Customers.

3.2.1 International Mobile Roaming Market

UNL operates in a competitive market356. There are multiple global and local products and solutions which compete with United Networks global roaming SIM and WI-FI product. Outlined below are the different solutions being offered in th e IMR market and some of the competitors of UNL.

Industry trends relevant to IMR market providers are:

Voice and data solutions include:

continued growth in mobile device penetration;
International Mobile Roaming Solutions;
Resale of local telecommunications connectivity solutions; and
Launching December 2016 the new Global Wi-Fi App solutions.
continued growth in data consumption; and
increase in international travel

The global travel industry is positioned for a period of sustained growth over the next 8 years. Forecasts project travel to grow by 5.4% per annum over the next 8 years.[1]

Value Added Services include:

IMR Market Trends are illustrated below:

Location-based emergency and messaging services;
Data analytical services; and
Location-based services.

Key industry trends driving market growth for telecommunications service providers in Australia are:

INDUSTRY TRENDS

3.2.2 International Mobile Roaming (IMR) Market Trends

Total tourism revenue rising at 4.3% per annum

Roaming prices remain a controversial issue. This has resulted in mobile users turning to alternative solutions such as global roaming SIMs, Wi-Fi hotspots and local SIM cards.

IMR Market expected growth

For global travellers, there has been a prevalence of ‘Silent Roamers’. Silent roamers are those who do not use voice and data services in part or in full while they roam. They represent a non-user segment. Recent figures indicates as much as 70% of travellers are ‘Silent Roamers’

3.2.3 Australian Telecommunications Market

Estimated IMR Market Revenue

7.8[4] Billion  [Mobile Devices]

The revenue of the Australian telecommunications market is estimated at approximately $42 billion a year. This comprises services including mobile, fixed line, broadband, Ethernet and IP telephony. Four companies dominate the Australian market share for fixed voice and data with over 85% market share and three companies maintain a market share of 90% for mobile services. The Telecommunications market continues to grow, driven by a rapid uptake of the latest mobile technology and the National Broadband Network (NBN) rollout.

Source 1 IBIS World 2 Informa 3 Informa

4 GSMA Intelligence

REPLACEMENT PROSPECTUS

Four key segments of the Australian telecommunications industry are:

AUSTRALIAN TELECOMMUNICATIONS INDUSTRY

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Network Operators

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Own the network infrastructure
Operate and provide wireless communications to other networks, service providers and resellers
Build and maintain network services
May own retail business units that directly sell network services to end users



Repackages the product from the network operators to provide white-labelled services to their resellers and partners
Aggregates demand in order to achieve a higher purchasing power
Provides billing, training, product. management, helpdesk support and customer services to support resellers and partners
May sell directly to the end users
Sell the products directly to end users



May have the ability to control the margins and costs



Are the customers who ultimately use the product
Household and consumers
SME business’ and corporate
Not for profit organisations & Government and enterprises

REPLACEMENT PROSPECTUS

Key industry trends driving market growth for telecommunications service providers in Australia are:

introduction of the NBN and its continued rollout
continued growth in data consumption, driven by technology improvements and evolving subscriber preferencesalong with continued increase of mobile penetration

3.3 COMPETITIVE LANDSCAPE

3.3.1 International Mobile Roaming (IMR) Market

UNL operates in a competitive market. There are multiple global and local products and solutions which compete with United Networks global roaming SIM and WI-FI product. Outlined below are the different solutions being offered in the IMR market and some of the competitors of UNL.

COMPETITIVE LANDSCAPE

Outbound solutions

Provided by Network Operator such as Optus, Telstra and Vodafone Australia. These network operators provide international roaming solutions for their customers.

Inbound solutions

Provided by MNO’s and MVNO’s are roaming services acquired upon landing at the destination and include prepaid travel packs such as Vodafone Italy’s Smart Passport offering.

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

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Wi-Fi Solutions

Competitors including other application providers such as Fon and Boingo. These competitors provide similar solutions to the UNL Wi-Fi App.

International Roaming SIM

Providers are those providing similar products to UNL such as ZipTel, Flexiroam, Travel SIM and Aussie SIM.

REPLACEMENT PROSPECTUS

3.3.2 Australian Telecommunications Market

The Australian mobile market share are outlined below.

AUSTRALIAN MOBILE SERVICES MARKET SHARE[5]

3.5 REGULATORY OVERVIEW

3.5.1 International Mobile Roaming (IMR) Market

The IMR regulatory environment will continue to evolve. Regulation is an ongoing activity in each jurisdiction the timing and implementation of regulation and the areas it covers will differ from jurisdiction to jurisdiction and vary over time.

3.5.2 Australian Telecommunications Market

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 Telstra
10%
18%  Optus
45%

27%

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 Vodafone

 Other operators

Source:

CIE Market & Report 2015

There is also a range of MVNO and Service Provider competitors that focus on niche markets such as:

Enterprise and Security;
Price Driven Product offering to Small Business and Residential;
VoIP; and
Small-to-Medium Business.

3.4 INDUSTRY TRENDS

The telecommunications industry continues to evolve and grow. The growth is driven by an increase of data consumption and the number of mobile devices. Mobile devices and data consumption continue to be a key in driving innovation across multiple industries.

For telecommunications companies looking to expand, a continued increase in alliances and partnerships could help provide them with a variety of requisite capabilities and increased speed-to-market. The telecommunications business model has evolved from a simple ‘pay per minute plus service fee’ model to a bundled offering with a variety of third party value add services. Many network operators now offer non-traditional services such as music and streaming subscriptions when users purchase traditional core voice and data services. These services are 3rd party services often offered by non-traditional telecommunications companies.

In Australia, there are several relevant bodies which are involved in the monitoring and regulation of the telecommunications sector which include the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC).

ACMA is an independent statutory agency responsible for regulating the telecommunications industry under the Telecommunications Act 1997.
ACCC is an independent statutory agency whose responsibilities under the Competition and Consumer Act 2010. It is responsible for the economic regulation of the communication sector.

Australia’s telecommunications industry is also regulated through codes and standards. Bodies that represent one or more sections of the industry may also develop industry codes governing the activity of MNOs, MVNOs and other industry participants and ACMA may register such codes under the Telecommunications Act and direct industry participants to comply with a registered code. An example for such code is the Telecommunication Consumer Protection Code developed by Communications Alliance, which was registered by ACMA in 2012 and is enforced by Telecommunications Compliance.

The Telecommunications Industry Ombudsman is an independent dispute resolution service for small business and residential customers who have a complaint about their telephone or internet service in Australia. ULGN and UGS are members of the Telecommunications Industry Ombudsman Limited (TIO).

REPLACEMENT PROSPECTUS

4. BUSINESS OVERVIEW

4.1 UNL SNAPSHOT

United Networks Limited (UNL) is a telecommunications provider. It is a Mobile Virtual Network Operator (MVNO) in the IMR market and service provider in the Australian telecommunications market, allowing for low infrastructure capital costs and broad-reaching access to a large global customer base through its Enterprise Customers . As a Mobile Virtual Network Operator (MVNO) and a local service provider, UNL does not own the wireless or fixed network infrastructure over which it provides services to its customers, UNL uses the Mobile Network Operators (MNO) infrastructure to provide services to its customers.

UNL’s business is comprised of 3 areas:

Voice;
Data; and
Value-added services.

UNL’s strategy is to enter into relationships with Enterprise Customers by providing white-label solutions to that customer’s user-base. UNL takes the Enterprise Customer’s core product offering and provides relevant product and service offers by bundling the global roaming product as a white-label service. UNL’s focus moving forward is on providing Value Added Services using location based services to enhance the product offerings in market and develop new products as outlined in Section 4.8.

UNL has enhanced its voice and data global roaming offering by developing a real time location-based services messaging system. The addition of location-based features gave UNL’s Key Customer the ability to offer support to their end users. For the local telecommunications market, UNL provides tailored business telecommunications solutions including fixed line, mobile, VoIP and data.

All of UNL’s products are serviced by GAP, UNL’s proprietary, multi-layered technology platform. UNL has in place supplier agreements for the provision of the Voice, Data and roaming SIM services offered by UNL to its clients as detailed in Section 9.1.

4.1.1 Value-Added and Location-Based Services

As part of the growth strategy of the business, UNL is expanding its client base internationally to help reduce its reliance on the Key Customer (which generated 38% of its revenue for FY16). To this end, UNL is in discussions with companies ranging from travel operators to insurance providers and retailers. As such, UNL anticipates that its customer profile will change as it continues to expand its product offering through the introduction of new services and solutions.

As at the date of the Replacement Prospectus, UNL has a number of Enterprise Customers including retail outlets, financial institutions, airlines and travel related organisations. No one Enterprise Customer outside of the Key Customer contributed to more than 5% total revenues for FY 2016.

To date, UNL has activated more than 180,000 global roaming paid SIM cards subscribers .

For a more detailed disclosure of the risks of UNL being reliant on its Key Customer and the steps that UNL are taking to mitigate such risks, you should read Section 8.2.5 of this Replacement Prospectus.

4.1.2 UNL Competitive Advantage

UNL’s current competition can be split by its two operating divisions. Its local telecommunications business faces direct competition from other Australian telecommunications resellers and networks operators (see Section 3.3.2). UNL’s roaming business competes with a number of Australian and international competitors who provide a similar range of roaming products.

UNL sees its competitive advantage in the following areas:

The GAP enablement platform as is outlined in Section 4.3.
Access to the existing Enterprise Customers’ EndUser data base.
Ability to enable new customers to offer low roaming cost solutions to their end users

UNL currently does not have a significant market share in the two industry segments it operates in. In the Australian telecommunications market, UNL is one of many small operators and its market share does not exceed 0.1% (see Section 3.3.2 for Australian market size). In the global roaming market, it is difficult to measure UNL’s exact market share but given the size of the market and number of devices outlined in Section 3.2.1, UNL’s market share would be small.

REPLACEMENT PROSPECTUS

UNL PRODUCTS

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
Global SIM App VoIP Mobile []
Data
Local Data
Global SIM [] App
Value Added Services

Location
Location Based Data Analytics
Based
Emergency
Services
Services
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4.2 UNL HISTORY

UNL commenced its business operations in 2009. In 2012, UNL identified the opportunity to extend the voice and data offering by introducing the global roaming product for travellers.

UNL has further developed its product offering to include a range of valued added services including location-based services.

UNL began working with travel insurance providers, to provide their corporate clients and their End-Users with substantially lower roaming costs when travelling overseas.

REPLACEMENT PROSPECTUS

An overview of the key milestones of UNL is summarised below:

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To be released in 2016/17
Planned launch of United Wi-Fi App connecting
over 57 million hotspots.
Wi-Fi Solutions, GPS and WPS tracking, Expanded
disitrbutions
Wi-Fi App
2017
Development of mobile & web API
integration
Roll-out large key customerclient retail 100,000
SIM activations
Ancillary Airline Conference Innovation
Lions Den Award Winner & Mega Event $6M+
Innovation of the Year award 2016, Wi-Fi Total sales
App
Planned launch 57 Million Hotspots, International expansion into Malaysia with
Development of Full Suite of Mobile API, airline offer
December 2016.
2016 United Global SIM launch in Canada with a
drugstore retail chain & travel agency
First use of location based services in the
Nepal earthquake
2015
$5M
Total sales
Launch of multiple white-label solutions 10,000
including large Australian supermarket SIM activations
chain & travel agency group
International expansion into NZ $1M
Total sales
2014
Key customer for Global SIM
launches to some of their partners
2013
Launch of key customer Customer
trial & website
Launch of United Global SIM trial
Optus Wholesale
Agreement
2012
United Networks signs major customers
2011
Launch as a
Telecommunications
Service Provider
2010 Launch of United Networks
Mobile Resale
2009
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4.3 UNL Technology

The Company has developed proprietary technology which allows enterprises to offer value-add bundles which include their core product and UNL’s products. This is all managed through UNL’s own custom built CRM system, the Global Access Portal (GAP) and UNL’s Apps which allows UNL to efficiently set up and bring Enterprise Customers to market.

GAP has been developed to support the products and services of UNL, integrating orders, billing, marketing, customer support and distribution into the one platform.

This provides UNL with a single-view of its Customer database, allowing UNL to target and retarget its expanding database through the automated e-mail messaging module at specific points in the customers’ purchasing experience.

REPLACEMENT PROSPECTUS

GLOBAL ACCESS PORTAL ALL OF UNL’S BUSINESS REQUIREMENTS, SUPPORTED BY 1 GAP PLATFORM

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Client Management
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Network Marketing
Integration
Support Development
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CRM
Opportunities management
Accounts management
Support ticketing
Usage and report queries
Order processing
Distribution integration
Delivery tracking
Project management
CMS
EDM portal / integration
Rates management
Relationship management
Billing and invoices
Orders portal
External marketing
App management
App integration
Complete module of Rest API and native iOS and Android API’s
Emergency alerts
Messaging portal / two-way
Advertising portal
Heat map
Commissions tracking
Billing portal
PCI compliance
Transactions and accounts
Communication channel
Promotion and campaign management
Website updates

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Inventory management
Shop management
Multicurrency integration

REPLACEMENT PROSPECTUS

4.4 PRODUCTS

4.5 REVENUE MODELS

4.4.1 Voice and Data

UNL’s prepaid Global SIM connects to over 190 countries and fits most GSM phones and tablets. The Global SIM connects to approximately 500 carriers. This allows EndUsers to access competitive roaming rates throughout their travels.

UNL bundles the Global SIM with the Enterprise Customer’s core product offering and works directly with that Customer to make relevant offers to the Customer’s database as a white-label service.

UNL has a local resale business of fixed and data rebilling of Telstra and Optus services.

4.4.2 Value-Added and Location-Based Services

UNL has enhanced its voice and data global roaming offering by developing an efficient real-time Location-Based Services messaging system that can be incorporated into the Customer’s core product offering. The location-based messaging and alert features gives the Enterprise Customers the ability to offer added value and to stay in contact with the End-Users as they travel.

The services leverage cellular, Wi-Fi and GPS data to determine the location of the End-User allowing UNL’s Enterprise Customers to:

Track its users and send relevant, location-based offers;
Broadcast messages to Users regarding emergencies;

4.5.1 Voice, Data and Value-Added services.

UNL’s revenue is broken down into two categories. The graph below outlines the contribution of each category to total revenue of UNL for FY 2015 and FY 2016.

UNL’S REVENUE CONTRIBUTION BY PRODUCT CATEGORY ($’ MILLIONS)

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7.56m
5.99m
0 1 2 3 4 5 6 7 8
2016
2015
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 Value Added Services  Voice and Data

PROPORTION OF UNL REVENUE BY CUSTOMERS PRODUCTS

Enable support team to assist travellers with issues; and
Stay in contact in the event of emergencies

The Location-Based Services allows UNL to enable the customer to make relevant and timely messages, alerts and offers.

 Global Roaming

36% 64%  Local Telecommunications Solutions

4.4.3 UNL’s Local Telecommunications Product and Services

UNL’s local products are currently offered across a multi-carrier platform, allowing UNL to offer the users a broad mix of products. This allows customers a choice of voice and data products.

The global roaming products secures revenue from multiple sources. The Customer payment terms are pre-paid by the Customer.

The global roaming products revenues are sourced from providing the following services:

Voice and Data;

Voice and data retail tolling and sim sales before travel and during travel;
Voice and data unused credit post travel;

Value added services;

White-label fees; and
Location-Based Services fees.

REPLACEMENT PROSPECTUS

GLOBAL ROAMING REVENUE MODEL

White Label Set Up

Set up fees, SIM sales and credit purchases, hosting and management fees charged to partners

Pre-Travel

SIM card sales, credit and bundle sales, subscriptions charge to end users

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During Travel

SIM usage, recharges and subscription fees to end users. Location advertising revenue and emergency services messaging to partners

Post-Travel

Expired credit and future offers to end users, subscriptions, maintenance and hosting fees to partners

4.5.2 Local Telecommunications Solutions

UNL’s local telecommunications solutions allow UNL’s customers to acquire services from multiple network operators.

The local telecommunications division’s revenues are derived from voice and data products:

4.5.3 Global Roaming Revenue

UNL, through its Global Roaming customer model, has focused on developing Enterprise Customers who have large databases of travellers. Through its Enterprise Customers, UNL operates in Australia, New Zealand, Malaysia and Canada.

Direct recurring billing based on traditional service provider model where UNL purchases wholesale access from the MNO and rebills and repackages the access to its end customers; and
Commission Revenue derived directly from recontracting services.

UNL has activated more than 180,000 SIM cards and expects that new Customer deals with global providers of travel related services and increased product maturity within existing customer channels to drive growth in the number of activated services

The below graph depicts the End-User demographics by age of users of the global roaming solution.

REPLACEMENT PROSPECTUS

FY2016 END USER DEMOGRAPHICS6

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16% 11% 20% 20% 20% 14%

Source:

UNL GAP Database of Global SIM Subscribers

4.6 GLOBAL SIM KEY FEATURES

4.6.1 Global SIM Key Features

The key features of this product are set out below:

GLOBAL SIM KEY FEATURES

The Global SIM App allows SIM users to easily manage their account, make calls, contact support, check their balance, top up their account, check rates, add day bundles or data packs, connect to the recommended networks and send free webbased SMS. The App has potential to be utilised by product resellers and partners. Through the GAP portal, resellers’ will have the capability to monitor usage patterns, push location based ads and other promotions at appropriate times for the customers’ usage.

UNL’s LBS allows for tracking of a SIM’s location when the customer travels overseas. UNL leverages this tracking to provide targeted emergency messages to travellers in conjunction with it partners. This service is beneficial in emergency and disaster situations. In 2015, UNL’s location tracking was used to contact travellers who were affected by the Nepal earthquake and other unexpected events including the November Paris attacks. UNL was able to provide these customers with emergency instructions as well as emergency credit so that customers could contact aid services and families.

REPLACEMENT PROSPECTUS

The triple punch SIM fits in all major GSM phones, tablets and wireless devices sold on the market.

Users can purchase up to 30 different local phone numbers that are linked to their Global SIM account allowing their friends and family to contact them at local rates.

Call, SMS and access data in more than 190 countries utilising approximately 500 networks

Users can forward regular phone number to the Global SIM to keep their number.

Data packs allow users to purchase a pre-allocated amount of data.

Unlimited daily usage bundle packages (calls, text and data) are currently available. Subject to acceptable use.

Link multiple SIMs under the one account. This allows the user to share credit from one pooled balance, and they only require management of the one balance.

The development of enriched Location-Based Services and the intelligence generated by them allows Customers to monetise or add-value to their core product offering through turning the big data collected into smart data.This offers:

UNL’s objective is to improve its business and competitiveness through monetising new and existing technologies. Due to the growth of mobile technologies and data consumption, UNL believes that the offering of a complete unified mobile connectivity solution will increase its current penetration rates.

New business opportunities
Enriched support and emergency services

The Company’s growth strategy incorporates

Advertising opportunities

4.7 UNL STRATEGY AND GROWTH OPPORTUNITIES

Growth in existing products and channels using the white-label Enterprise Customer program
Monetisation of the analytical data
Location-Based Services
Using GAP platform to offer global partners local solutions for end users
Introduction of new technology, see Section 4.8

UNL has identified opportunities to extend the reach of it global roaming solutions through its Customer channel by introducing new products in the following key areas.

REPLACEMENT PROSPECTUS

Expand on the current business model through providing Wi-Fi Access technology
Embedded-SIM (E-SIM) solutions

4.8 UNL NEW PRODUCTS AND PRODUCT ENHANCEMENTS

4.8.1 Wi-Fi Global Access and Calling Solutions

UNL has identified the need and trend towards a unified solution to access mobile data. There has been a growth in Wi-Fi global access technologies over the last 5 years . The ability to utilise Wi-Fi hotspots as an additional service to UNL’s current mobile services offering allows the Company to provide both bundled and stand-alone services to customers. UNL’s enhanced App will support the Company’s diverse partners and users through roaming solutions that stretch beyond voice applications.

UNL’s Global Wi-Fi product allows UNL’s roaming users to connect to over 57 million hotspots globally . The technology when integrated to the Global SIM offering ensures the user has choice of connectivity and access whether it is through one of UNL’s approximate 500 carriers or through millions of worldwide hotspots.

4.8.2 SIM-less Technology and Embedded-SIM (E-SIM)

UNL has identified the potential of e-sim technology to be added to its platform. This will benefit End-Users by giving them the ability to change providers easily (as E-SIM customers don’t have to carry multiple SIMs) and is likely to reduce UNL’s costs. One of the costs of UNL is the printing and distribution of SIM cards. One of UNL’s key strengths is the highly relevant data UNL receives when Users book the travel related activity which enables UNL to offer roaming solutions to the User well before competitors.

4.9 ENVIRONMENT, SECURITY AND REDUNDANCY

UNL’s platforms and websites are hosted in Amazon Web Services (“AWS”). UNL utilises industry leading IT security and online secure server hosting. The customer and reseller data is continuously backed up and protected. Periodic PCI compliance scanning, penetration and vulnerability testing is undertaken to ensure the quality of UNL’s security.

4.10 PRIVACY AND DATA USE

UNL takes the protection of personal information very seriously. UNL is committed to protecting its customers’ privacy and identity when handling and providing its partners with information in accordance with Australian Privacy Principles (APP) and the Privacy Act 1988.

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REPLACEMENT PROSPECTUS
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REPLACEMENT PROSPECTUS

5. BOARD, MANAGEMENT AND CORPORATE GOVERNANCE

Section 5 sets out the details of the composition of the Board and senior management, following completion of the Offer. It is the company’s intention to extend the board so there is a majority of non-executive independent directors by June 2017.

5.1 BOARD MEMBERS AND COMPANY SECRETARY

The Board of Directors of the Company is comprised of the following Directors

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ANTHONY GHATTAS

Non - Executive Chairman

Anthony Ghattas is the former CEO of ASX listed, digital and mobile content development company HWW Limited.

Anthony is the Founder and Managing Director of United Lifestyle Group which retails consumer direct wines under multiple brands in Australia, New Zealand, and United States, he has extensive experience in direct to consumer marketing in Australia and overseas.

Over the last 10 years, Anthony has seen to the growth of United Lifestyle Group across multiple continents.

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CHARBEL NADER

Independent Director

Charbel Nader is an investment banker with extensive experience in corporate finance and strategic advisory roles, including experience in mergers and acquisitions.

Charbel was the Founding member of Metro Media Publishing Pty Ltd

Charbel is a Director of Madman Entertainment Pty Ltd and a Director of New Talisman Gold Mines Limited (ASX: NTL).

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NICHOLAS GHATTAS

Chief Executive Officer

Nicholas Ghattas has more than 20 years of experience in telecommunications. He has experience in sourcing, developing, building and managing mobile solutions businesses. His experience includes roles such as Corporate Financial Accountant at Coopers & Lybrand (PwC) and Director of a mobile retail outlet for Three Mobile. Nicholas holds a Bachelor of Commerce degree from the University of New South Wales.

Over the last 6 years, Nicholas has built UNL into a successful domestic telecommunications business and has extended the business into the international mobile roaming market through a global roaming solution, available in Australia, Canada, Malaysia and New Zealand.

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MICHAEL POTTS

Chief Finance Officer and Company Secretary

Michael Potts is the CFO and Company Secretary of United Networks Limited. Michael has more than 30 years of experience in major firms including Deloitte, Nexia Australia, MasterPack Systems and JUA Underwriting Agency.

Michael’s expertise has seen him in roles and responsibilities ranging from consultancy to CFO. Michael holds a Bachelor’s Degree in Economics from Macquarie University and is a member of the Institute of Chartered Accountants in Australia.

REPLACEMENT PROSPECTUS

The Company has entered into a Directors agreement and a Deed of Access, Indemnity and Insurance with each of its directors, as described in the Material Contracts Section 9

5.3.2 Michael Potts – Chief Finance Officer

See Section 5.1

5.3.3 Andrew Weeks – Systems Manager

The composition of the Board committees and details of its key corporate governance polices are set out in Section 5.5.1

Each Director above has confirmed to the Company that they anticipate being able to perform their duties as a Non-Executive Director or Executive Director of the Company, as the case may be, without constraint from other commitments. The board has considered the company’s immediate requirements as it transitions to an asx-listed company and is satisfied that the composition of the board represents an appropriate range of experience, qualifications and skills.

5.2 BOARD COMPOSITION

As an ASX listed company, UNL will seek to add two appropriately qualified independent, Non-executive Directors to its Board by mid-2017

Andrew Weeks is an experienced Systems and IT Manager who has worked in system administration. Andrew’s diverse and extensive knowledge includes development, project management and monitoring high availability hardware and software platforms both in-house and in enterprise-level data centres. Andrew also holds a Diploma of Information Technology (Network Engineering).

5.3.4 Justin Elton - Operations Manager

Justin has more than 9 years of experience in the telecommunications industry, recently working for AAPT. His past roles include Sales Operations Manager - Customer Education and On-boarding. Justin has a Diploma in Information Technology (Systems Analysis).

The employment agreements between the Company and key senior managers are described in Material Contracts in Section 9.8

5.4 DIRECTORS’ INTERESTS AND REMUNERATION

5.3 SENIOR MANAGEMENT

The senior management of the Company consists of the following persons:

5.3.1 Nicholas Ghattas – Chief Executive Officer

See Section 5.1

5.4.1 Interest in Securities

The table below sets out the Directors' (or their associated entities') direct and indirect interests in the Company's Shares as at the date of this Replacement Prospectus and on Completion of the Offer:

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Shares held on Completion
Shares held as at the date of this Replacement
of the Offer
Director Prospectus and on Completion of the Offer
(number) Min(%) Max(%)
Anthony Ghattas 38,208,124 35.49% 29.93%
Nicholas Ghattas 38,208,124 35.49% 29.93%
Charbel Nader 0 0% 0%
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Held by Temont Pty Ltd a company controlled by Anthony Ghattas as trustee for Ghattas Family Trust Australia

** Held by Autopilot Consulting Pty Ltd, a company controlled by Nicholas Ghattas, as trustee for Avenue Investments (Australia) Family Trust. 347 shares are held beneficially by Autopilot Consulting Pty Ltd

Directors are not required under the Constitution to hold any Shares in the Company. The Directors (and their associates) are entitled to apply for New Shares in the Offer. The Directors reserve their rights as at the date of this Replacement Prospectus as to whether they will participate in the Offer. Nothing in this Replacement Prospectus will be taken to preclude Directors, officers, employees or advisers of the Company, from applying for New Shares on the same terms and conditions as Offered pursuant to this Replacement Prospectus.

In addition to the Shares described above, the Directors (or their associated entities) were granted on 1 July 2016 Options to purchase Shares as set out in the table below. Each Option will entitle its holder to acquire one Share after its vesting date and before its expiry date upon the payment of the Option’s applicable exercise price. The Options held by Directors as set out in the table below were all issued pursuant and subject to the terms of the UNL Employee Share Option Plan which are described in Section 10.3.14 below.

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Anthony Ghattas Charbel Nader Nicholas Ghattas
Number of Options 5,250,000 3,500,000 5,250,000
Exercise Price $0.30 $0.30 $0.30
Vesting Date Two years from Grant Date Two years from Grant Date Two years from Grant Date
Expiry Date Five years from Grant Date Five years from Grant Date Five years from Grant Date
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5.4.2 Remuneration

The table below sets out the total compensation (AUD) each Director is entitled to receive at the date of this Replacement Prospectus in relation to their duties as director and the CEO’s annual remuneration in relation to his employment with the Company:

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Director Director fees per annum Remuneration per annum
-
Anthony Ghattas $105,120
Charbel Nader $49,275 -
Nicholas Ghattas - $323,025
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The aggregate remuneration payable by the Company to all of its non-executive Directors for their services as Directors including their services on a Board committee or sub-committee and including superannuation is limited to A$500,000 per annum (in total).

Please refer to Section 9.8.1 for a summary of the Directors agreements and Section 9.8.3.1 for a summary of the CEO’s agreement.

5.4.3 Deeds Of Access, Insurance And Indemnity For Directors

The Company has entered into deeds of access, insurance and indemnity with each Director which contain rights of access to certain books and records of the Company, the right to be indemnified by the Company and the right to have a directors and officers’ insurance to be maintained by the Company. Please refer to clause 9.8.2 for further details.

5.5 MANAGEMENT INTERESTS AND REMUNERATION

The Company's CEO and other members of senior management are employed under individual contracts of employment with the Company (see clause 9.8.3). The contracts set out:

The individual's total fixed compensation, including fixed cash remuneration and the Company's superannuation contribution;

Notice and termination provisions; and
Employee entitlements including leave.
The Company makes contributions with respect to the senior executives to complying superannuation funds in accordance with relevant superannuation legislation and the individual contracts of employment.

5.5.1 Corporate Governance

The Board is committed to ensuring its policies and practices reflect good corporate governance and recognises the importance of good corporate governance for the success of the Company.

Set out below is a summary of the corporate governance framework to be adopted by the Company when it is listed on the ASX. Further information about the Company's charters, policies and procedures may be found at the Company's website at www.unitednetworks. net.au/investors. All ASX listed entities are required to disclose in their annual reports the extent of their compliance with the Corporate Governance Principles and Recommendations released by the ASX Corporate Governance Council (ASX CG Principles). Full details of the Company’s corporate governance framework will be included in the Company’s first annual report following listing on the ASX.

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Principle 1: Lay solid foundations for management and oversight

The Board is responsible for the strategic direction of the Company, while ensuring the Company is properly managed and protecting the interests of the Company and its shareholders. The Board monitors the operations, management and performance of the Company and oversees the corporate governance of the Company. In discharging this responsibility, the Board delegates to senior management, whose role is to manage the Company in accordance with the directions and policies set by the Board. The Board monitors the activities of senior management in the performance of their delegated duties.

The Board fulfils its duties and obligations in accordance with the Company’s constitution, the ASX Listing Rules and the Corporations Act.

The Board has adopted a Board Charter which sets out the role, structure and responsibilities of the Board, the chairperson and the company secretary, the guidelines for independent directors and other matters and procedures relevant to the operation of the board.

Responsibilities of the Board include the following:

Determining corporate strategies, policies and guidelines for the successful performance of the Company in the present and in the future;
Approving and monitoring major capital expenditure, capital management and acquisitions and divestitures;
Appointing and removing the Chief Executive Officer (CEO) and, where appropriate, ratifying the appointment and removal of senior management;
Monitoring the performance and conduct of the CEO and senior management, and ensuring adequate succession plans are in place; and
Reviewing, ratifying and monitoring systems of risk management and legal compliance.

The Board has delegated responsibility for the following to the CEO and senior management:

Day to day management of the Company;
Production of performance measurement reports;
Managing the compliance and risk management systems;
Management of staff including, appointment, termination, staff development and performance measurement.

Through the Nomination and Remuneration Committee, the Board evaluates the performance of Directors and the senior executives.

Principle 2: Structure the board to add value

The Company’s existing Board is comprised of 3 directors: Charbel Nader (who the Board considers is an independent director), Anthony Ghattas (non-executive chairman) and

Nicholas Ghattas (the Chief Executive Officer).

The Company believes that is it in its best interests to maintain a small and effective board, and while it does not currently have a majority of independent directors, the existing directors bring to the board a broad mix of skills, expertise, experience and qualifications that are beneficial to the Company and will assist the Board to fulfil its duties and generate value to the shareholders.

The Board will review the current make-up of the Board over the next 12 months with a view to bringing on board an additional independent director.

The Company has established a Nomination and Remuneration Committee which is responsible for reviewing and evaluating potential candidates to the Board as well as the performance and competency of acting directors. The committee’s roles and responsibilities are as set out in its charter (see further below).

All Directors are committed to bring their independent view and judgment to the Board and, in accordance with the Corporations Act, must inform the Board if they have any interest that could conflict with those of the Company.

Directors other than the Managing Director are subject to re-election by the Shareholders of the Company at Annual General Meetings. Under the Constitution, at every annual general meeting, the longest serving 1/3 of the Directors or if their number is not a multiple of 3 then the number nearest to 1/3, must retire from office and are eligible for re-election.

Principle 3: Act ethically and responsibly

The Board recognises the need for the Directors and employees to adhere to the highest standards of behaviour and business ethics. For this purpose, the Company has adopted as part of its HR policies a code of conduct, a diversity policy, a share trading policy and other policies that deal with matters of integrity and ethical standards.

Code of Conduct

The Company has adopted a Code of Conduct as part of its HR policies which sets out guiding principles and required standards of behaviour to be observed by all staff, and practices necessary to maintain confidence in the Company's integrity. The Company has also adopted other policies which cover various areas of conduct an including uses of Internet email and social media policies, Anti bullying and discrimination, conflict of interest and the protection of the Company’s intellectual property and confidential information.

Share Trading policy

The Company has established a Share Trading Policy which governs dealings in securities by directors, officers, employees and key management personnel of the Company (relevant parties).

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The Share Trading Policy sets periods during which the relevant parties are not permitted to trade in the shares of the Company, including when they are in possession of price sensitive information which is not available to the public and during prescribed periods including prior to the release of financial results to the ASX.

The Committee will meet as required to undertake its role effectively and at least twice in each financial year. Any member of the Board, the CEO, CFO, external auditor and internal auditor may attend meetings of the committee by invitation. The powers of the Committee shall be reviewed regularly to ensure they meet the Board’s needs and comply with corporate governance requirements.

Diversity Policy

The Company has adopted a diversity policy as part of its HR policies, which recognises the value (to the business, its employees and stakeholders) of attracting and retaining employees from different backgrounds with varied knowledge, abilities and experiences. The diversity policy restates the Company’s commitment to creating a working environment that is fair and flexible, inclusive and embraces and promotes a diverse workforce which is currently made up of 18 males and 9 female employees.

The Company’s diversity strategy includes setting measurable objectives for achieving diversity and monitoring progress against them as well as recruiting, remunerating and promoting employees from different backgrounds based on their knowledge, skills, experience and performance.

Principle 4: Safeguard integrity in corporate reporting

The Board has established a Risk Management and Audit Committee (RMA Committee) to assist the Board to discharge its corporate governance duties in relation to implementing and maintaining appropriate policies and procedures relating to risk management, financial reporting, external and internal control and auditing.

The RMA Committee is chaired by Charbel Nader (as independent director) and its other members are Anthony Ghattas (non-executive director) and Nicholas Ghattas (the Managing Director). While the majority of this committee does not currently consist of independent directors, the Board believes that the breadth and depth of knowledge, skills and experience of the committee members, and the provisions of the charter of this committee which governs them, effectively ensure the transparency, focus and independent judgement needed to oversee the audit, reporting and risk management functions.

The Risk Management and Audit Committee charter details the role of this committee which is to:

create a structure of review and authorisation designed to ensure the integrity of the Company’s financial reporting;
review and monitor the independence and effectiveness of the external auditors and internal controls if any; and
establish and implement policies and procedures for oversight and management of material business risks and risk management and auditing in compliance with the Australian Securities Exchange (ASX) Corporate Governance Principles and Recommendations.

The Company’s external auditor will attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report.

Before the approval of financial statements, the CEO and CFO will be required to state in writing to the Board that the Company’s financial statements present a true and fair view, in all material respects, of the Company’s financial position and operational results and that they are in accordance with relevant accounting standards.

Principle 5: Make timely and balanced disclosure

The Company has adopted a Communications and Continuous Disclosure Policy for the purpose of compliance with ASX and Corporations Act continuous disclosure requirements. The policy requires timely disclosure of information concerning the

Company that a reasonable person would expect to have a material effect on the price or value of the Company’s securities or which would materially influence the decision making of investors.

The CEO and Chairman are responsible for determining the disclosure obligations and the Company Secretary is the officer required to make recommendations on such obligations based on information to be received and reviewed by him.

Copies of all ASX announcements made after listing will be available on the ASX website (at www.asx.com.au) and the UNL’s website (at www.unitednetworks.net.au/investors).

Principle 6: Respect the rights of security holders

The Board is committed to communicating and making available to its shareholders’ information about the Company and its governance in the following ways:

The distribution of Annual Reports to Shareholders;
The distribution of half yearly review of operations to Shareholders; and
Posting of material information on the Company’s website.

In addition, Shareholders are encouraged to attend and participate in the Annual General Meeting of the Company. Copies of the Company’s half-yearly and annual reports and all ASX announcements released after listing will be available from the ASX website (at www.asx.com.au) and the UNL’s website (insert website details).

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Principle 7: Recognise and manage risk

The Board is responsible for reviewing, ratifying and monitoring the Company’s risk management and compliance framework.

For this purpose, The Board has appointed the RMA Committee which responsibilities include establishing and implementing policies and procedures for oversight and management of material business risks and risk management. The Committee’s charter outlines the committee’s function, composition, authority and responsibilities (see principle 2 above).

This Committee is to ensure that the Board reviews and is satisfied that the risk management systems developed and implemented by management are sound and effective.

Principle 8: Remunerate fairly and responsibly

The Board has established a Nomination and Remuneration Committee (NR Committee), which role is to:

Develop and implement practices for, and make recommendations in relation to, the selection, appointment, removal, induction, evaluation and continuing education of directors to ensure the board structure is appropriate to meet the Company’s needs;
Ensure the remuneration offered by Group companies is appropriately designed to balance the Company’s desire to attract and retain directors and senior executives against its interest to avoid paying excessive remuneration.

The NR Committee is chaired by Charbel Nader (as independent director) and its other members are Anthony Ghattas (non-executive chairman) and Nicholas Ghattas (the Chief executive officer). While the majority of this committee does not consist of independent directors, the Board believes that the skills, experience and expertise of the committee members governed by the committee’s charter will ensure the committee discharges its responsibilities in relation to directors’ selection, appointment, remuneration and performance evaluation in a transparent and independent manner.

The Nomination and Remuneration Committee Charter outlines the role, structure, composition and responsibilities of this committee.

The Committee will meet as required to fulfil its responsibilities and at least twice in each financial year. Any member of the Board, the CEO, CFO, external auditor and internal auditor may attend meetings of the committee by invitation. The powers of the Committee shall be reviewed regularly to ensure they meet the Board’s needs and comply with corporate governance requirements.

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6. FINANCIAL INFORMATION
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50
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6. FINANCIAL INFORMATION

6. 1 INTRODUCTION

The financial information contained in this section has been prepared by the Company on a consolidated basis, including its subsidiaries, in connection with the Offer. The financial information for the Company contained in this Section 6 and Section 7 includes:

the audited statutory historical statements of financial performance for the financial years ended 30 June 2014, 30 June 2015, 30 June 2016;
the audited statutory statements of financial position as at 30 June 2015 and 30 June 2016;
the audited statutory historical statements of cash flows for the financial years ended 30 June 2015 and 30 June 2016; (the “Historical Financial Information”);
the pro forma historical statement of financial position as at 30 June 2016;
the pro forma historical statement of cash flows for the year ended 30 June 2016; (the “Pro Forma Historical Financial Information”).

The Historical Financial Information and Pro Forma Historical Financial Information are together referred to as the “Financial Information”.

The Pro Forma Historical Financial Information has been reviewed by Rothsay Chartered Accountants (“Rothsay”) in accordance with ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or Prospective Financial Information. Investors should note the scope and limitations of this review as set out in Section 7.

The Financial Information presented in this Section 6 and Section 7 should be read in conjunction with the risk factors set out in Section 8 and other information contained in this Replacement Prospectus. Investors should note that past results are not a guarantee of future performance.

All amounts disclosed in the tables are presented in Australian dollars and, unless otherwise noted, are rounded to the nearest A$1,000.

6.2 BASIS OF PREPARATION AND PRESENTATION OF THE FINANCIAL INFORMATION

6.2.1 Overview of preparation and presentation of the Financial Information

The Directors are responsible for the preparation and presentation of the Financial Information.

The Financial Information included in this Replacement Prospectus is intended to present potential investors with information to assist them in understanding the historical financial performance and cash flows of UNL for the year ended 30 June 2015, 30 June 2016 and the financial position of UNL as at 30 June 2015, 30 June 2016.

The Financial Information has been prepared in accordance with the recognition and measurement principles prescribed in Australian Accounting Standards (AAS) issued by the Australian Accounting Standards Board (AASB), which is consistent with International Financial Reporting Standards (IFRS) and interpretations issued by the International Accounting Standards Board.

The Pro Forma Historical Financial Information has been prepared in a manner consistent with the recognition and measurement principles contained in AAS, which are consistent with IFRS, applied to the consolidated statement of financial position and the events or transactions to which the pro forma adjustments relate, as described in Section 7 of the Replacement Prospectus, as if those events or transactions had occurred as at 30 June 2016.

The Financial Information is presented in abbreviated form and does not include all the presentation, disclosures, statements and comparative information as required by AAS applicable to general purpose financial reports prepared in accordance with the Corporations Act.

The significant accounting policies of UNL relevant to the Financial Information are set out in Section 7 and are also described in Note 2 of UNL’s Financial Statements for the year ended 30 June 2016, which was signed by the Directors on 27th October 2016 Accounting policies have been consistently applied throughout the periods presented.

6.2.2 Preparation of Historical Financial Information

The Historical Financial Information for FY2015 and FY2016 for the Company has been derived from the FY2016 financial statements of the Company on which an unmodified opinion was issued.

The Pro Forma Historical Financial Information has been prepared for the purpose of inclusion in this Replacement Prospectus. Accordingly, the Pro Forma Historical Financial Information has been derived from the statement of financial position as at 30 June 2016 and adjusted for the effects of the pro forma adjustments described in Section 7 of the Replacement Prospectus, to reflect UNL’s capital structure, which will be in place following Completion of the Offer as set out in Section 7 and 2.5.

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Refer to Section 7 for a reconciliation between UNL’s historical consolidated statement of financial position and the pro forma historical consolidated statement of financial position as at 30 June 2016.

Investors should note that past results do not guarantee future performance.

6.2.3 Explanation of certain non-IFRS financial measures

The Company uses certain measures to manage and report on its business that are not recognised under the AAS. These measures are collectively referred to as non-IFRS financial measures.

Although the Directors believe that these measures provide useful information about UNL’s financial performance, they should be considered as supplements to the statement of financial performance and cash flows that have been presented in accordance with the AAS and not as a replacement for them. Because these non-IFRS financial measures are not based on AAS, they do not have standard definitions, and the way UNL calculates these measures may differ from similarly titled measures used by other companies. Readers should therefore not place undue reliance on these non-IFRS financial measures.

The principal non-IFRS financial measures used in this Replacement Prospectus are as follows:

EBITDA is earnings before interest, taxation, depreciation and amortisation;
EBIT is earnings before interest and taxation;
Gross profit is calculated as services revenue less cost of sales;
Working capital is defined by UNL as the total of trade and other receivables, prepayments less trade and other payables.

6.3 HISTORICAL AUDITED CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE

6.3.1 Table of historical consolidated statement of financial performance Table 1 summarises UNL’s historical consolidated statement of financial performance for FY2014, FY2015 and FY2016.

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Table 1
$’000 FY2014 FY2015 FY2016
SERVICES REVENUE 4,911 5,989 7,558
Cost of sales 3,333 (3,769) (4,318)
GROSS PROFIT 1,577 2,220 3,240
Marketing expenses (118) (145) (121)
Other operating expenses (1,478) (2,263) (2,772)
Finance costs (13) (1) (73)
EBITDA 12 84 1,020
Depreciation and amortisation expense (31) (272) (673)
EBIT (19) (188) 347
Interest revenue - 1 -
Profit (Loss) before tax (32) (189) 275
Income tax benefit/(expense) 346 (71) 62
NET PROFIT (LOSS) AFTER TAX 314 (261) 337
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6.4 HISTORICAL AND PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Table 2 sets out the historical consolidated statement of financial position as at 30 June 2016, pro forma adjusted to take into account the effect of the Offer proceeds and transaction costs. These adjustments reflect the impact of the change in capital structure that will take place as part of the Offer, as if it were in place as at 30 June 2016.

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Pro Forma FY 2016 Pro Forma FY 2016
Table 2 Historical FY 2016
Minimum $3.5M Raised Maximum $7.5M Raised
ASSETS $ $ $
CURRENT ASSETS
Cash and cash equivalents 509,297 3,659,297 6,259,297
Trade and other receivables
1,489,994 1,489,994 1,489,994
Refer Table 4 below
Inventories 57,450 57,450 57,450
Other assets 46,922 46,922 46,922
TOTAL CURRENT ASSETS 2,103,663 5,253,663 7,853,663
NON CURRENT ASSETS
Other financial assets 18,150 18,150 18,150
Property, plant and equipment 726,027 726,027 726,027
Deferred tax assets 549,152 549,152 549,152
Intangible assets 17,499,725 17,499,725 17,499,725
Other assets 262,094 262,094 262,094
TOTAL NON CURRENT ASSETS 19,055,148 19,055,148 19,055,148
TOTAL ASSETS 21,158,811 24,308,811 26,908,811
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 1,695,121 1,695,121 1,695,121
Borrowings 1,177,590 1,177,590 177,590
Current tax liabilities 22,924 22,924 22,924
Shortterm provisions 116,845 116,845 116,845
Other financial liabilities - - -
TOTAL CURRENT LIABILITIES 3,012,480 3,012,480 2,012,480
NON CURRENT LIABILITIES
NON CURRENT BORROWINGS 1,243,883 1,243,883 1,243,883
Deferred tax liabilities 188,897 188,897 188,897
TOTAL NON CURRENT LIABILITIES 1,432,780 1,432,780 1,432,780
TOTAL LIABILITIES 4,445,260 4,445,260 3,445,260
NET ASSETS 16,713,551 19,863,551 23,463,551
EQUITY
Issued capital 17,777,025 21,277,025 25,277,025
Share issue costs (-350,000) (-750,000)
Accumulated losses (1,063,474) (-1,063,474) (-1,063,474)
TOTAL EQUITY 16,713,551 19,863,551 23,463,551
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Explanatory Notes to the Financial Statements:

Refer to page 11 of the IAR the basis of preparation of the Pro-Forma Historical Financial Information. Pro-Forma information presented above is consistent with the financial information as presented in Section 7.

*At the time of the IAR, the Expenses of the Offer are an estimate only. Full details of the cost is broken down in Section 10.4

**Table 4 Trade and other Receivables

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Trade and other Receivables 2016 2015
$ $
Trade Receivables 508,849 611,287
Provision for impairment -20,912 -13,103
489,937 598,184
GST Receivable 199,078 59,946
Commissions Receivable 469,554 -
Other Receivables 222,779 -
Loans and other related parties 1,489,994 110,301
Total current trade and other
1,489,994 768,431
receivables
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Trade and other receivables are consistent with the UNL Audited Financial Statements for Year ending 2015 and 2016. UNL trade receivables are made up of Enterprise customers value added services and billings to its local market clients which are post paid accounts. UNL Global SIM end customers are prepaid.

6.5 HISTORICAL CONSOLIDATED CASH FLOWS

Table 4 sets out the summary historical consolidated cash flows for FY2015 and FY2016.

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Table 4: Historical consolidated cash flows FY 2015 FY 2016
CASH FLOWS FROM OPERATING ACTIVITIES: $ $
Receipts from customers 6,689,471 7,459,615
Payments to suppliers and employees -6,432,693 -7,926,315
Dividends received 1,830 -
Interest received -726 -4,481
Interest paid 3,421 1,397
Net cash (used in)/provided by operating activities 261,303 -469,784
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of intangible assets - -559,539
Purchase of property, plant and equipment -644,327 -191,697
Net cash (used in) investing activities -644,327 -751,236
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issue of shares - 2,030,250
Payments to associated entities -333,235 -628,889
Receipts from associated entities 603,744 211,995
Net cash provided by financing activities 270,509 1,613,356
Net increase/(decrease) in cash and cash equivalents held -112,515 392,336
Cash and cash equivalents at beginning of year 229,476 116,961
Cash and cash equivalents at end of financial year 116,961 509,297
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Cash Flow Comment

As reflected above, $2m in proceeds were received by the group as a result of pre-IPO funding. The group also received loans from existing shareholders.

Research & Development Claim

An R&D claim has been lodged with AusIndustry and the ATO is yet to process the R&D refund of A$0.60 million for FY2016. When the R&D refund is processed, or the ATO confirms the refund will be processed, the refund amount will be recognised as other income for financial reporting purposes.

GST Claim

As result of the company restructure UNL is required to issue tax invoices for all sales from 21 November 2014. UNL has advised Customers that a Tax Adjustment Note will be issued and they have agreed to remit this GST amount. This is expected to be finalised and lodged before 31 December 2016.

6.6 Discussion and Analysis of the Historical Financial Information

UNL sources it Global Roaming Revenues from the following:

Tolling, Expiry and Subscription directly from End Users and customer billings
Management, Hosting, Service and Implementation fees from partners
SIM Card Sales to both Partners and customers

Local Telecommunications business sources its revenue from two main categories:

Recurring Charges and Tolling of Services directly billed to clients
Commissions, Management and consulting fees

6.6.3 Expenses

UNL’s expenses comprise cost of sales, operating expenses, bad and doubtful debts, and depreciation and amortisation expense. Details of the key group of expenses incurred by UNL, and the key drivers of each source of expense, are set out below. UNL’s GAP was built and continues to be maintained and developed by 3rd Party.

6.6.4 Cost of sales

6.6.1 General factors affecting the operating performance of UNL

The following section will discuss the key factors affecting UNL’s operating and financial performance in FY2014, FY 2015 and FY 2016.

It should be noted that the following discussion is intended to provide a summary only and does not detail all factors that affected UNL’s historical operating and financial performance, or everything that may affect the Company’s operations and financial performance in the future. The information in this Section should also be read in conjunction with the risk factors set out in Section 8 and other information contained in this Replacement Prospectus.

6.6.2 Revenue

UNL’s has 3 primary sources of revenue.

Voice
Data
Value-Added Services

Voice and Data Business throughout FY2014, FY2015 and FY2016 has been in the initial start-up phase with a heavy investment on acquiring and on-boarding partners. The revenues for this division have grown over the period however the focus on on-boarding of partners has moved back to execution of data since this period.

Cost of sales are primarily made up of service fee and tolling from upstream providers and the cost of the physical SIM cards and distribution and merchant fees relating to the business.

6.6.5 Operating Expenses

Operating expenses include employee related costs, rent and associated costs, insurance, legal fees, Board costs, the cost of external consultants, travel and accommodation expenses, audit and compliance costs, staff amenities, it maintenance, communications, marketing, printing and stationery, motor vehicle allowances and associated minor expenses.

As volumes of processed transactions, both on a value and numbers basis, increase over time, it can be expected that these operating expenses decline as a percentage of UNL’s revenue.

6.6.6 Bad and doubtful debts

Bad and doubtful debts arise from non-payment of accounts by the end-customers in the local telecommunications business. When expressed as percentage of overall underlying transaction value, bad and doubtful debts are 0. 06% of turnover in total for FY2014, FY 2015 and FY 2016. Processes have been put in place to improve credit control and management of overdue payments. The Global Roaming Business Unit is prepaid by the end customer as such we do not have bad debt in this division

UNL incurs expenses associated with debt collection performed by third parties on its behalf these charges have been minimal.

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6.6.7 Depreciation and amortisation expense

Depreciation and amortisation expense represents amortisation of the Intellectual Property held by the Company which was developed, as well as general depreciation of property, plant and equipment. Depreciation and amortisation expense is based on the existing useful life profile, and depreciated or amortised over the useful life in accordance with Company’s accounting policies.

6.6.7.1 Goodwill

Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of:

any non-controlling interest;
the consideration transferred; and
the acquisition date fair value of any previously held equity interest;

6.7 DIVIDEND POLICY

The payment of dividends by the Company, if any, subject to law, is at the complete discretion of the Directors, and the Directors do not provide any assurance of the future level of dividends and the level of franking of such dividends.

The ability to pay dividends will depend on a number of factors, many of which are beyond the control of the Company. In determining whether to declare future dividends, the Directors will have regard to UNL’s earnings, overall financial condition, capital requirements and the level of franking credits available.

No dividend was declared in FY2016. It is the Board’s current intention not to declare a final dividend in respect of FY2017, in order to retain financial flexibility.

over the acquisition date fair value of net identifiable assets acquired in a business combination.

The value of goodwill recognised on acquisition of each subsidiary in which the Group holds less than a 100% interest will depend on the method adopted in measuring the aforementioned non-controlling interest. The Group can elect to measure the non-controlling interest in the Acquiree either at fair value (‘full goodwill method’) or at the non-controlling interest’s proportionate share of the subsidiary’s identifiable net assets (‘proportionate interest method’). The Group determines which method to adopt for each acquisition.

6.6.8 Interest revenue

Interest revenue comprises interest earned on existing cash held. It is expected that this revenue will increase with interest earned on the balance of additional cash expected to be received following completion of the Offer.

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27 October 2016

Board of Directors United Networks Limited Suite 201 Level 2 100 William St WOOLLOOMOOLOO NSW 2011

Dear Directors,

Investigating Accountant’s Report

Rothsay Chartered Accountants (Rothsay) has been engaged by United Networks Limited (UNL or the Company) to report on the Actual Historical Financial Information and the Pro Forma Historical Financial Information of UNL for inclusion in the prospectus dated on or about November 2016 and relating to the issue of a minimum of 17,500,000 and a maximum of 37,500,000 shares in UNL at $0.20 per share (the prospectus).

Expressions and terms defined in the document have the same meaning in this report.

The nature of this report is such that it can only be issued by an entity which holds registration as a registered auditor under the Corporations Act 2001 (Cth). Rothsay holds the appropriate registration under the Corporations Act 2001 (Cth).

Historical Financial Information

This investigating accountant’s report relates to the financial information contained in the prospectus, comprised of:

the audited statutory historical statements of financial performance for the financial years ended 30 June 2014, 30 June 2015, 30 June 2016;
the audited statutory statements of financial position as at 30 June 2015 and 30 June 2016;
the audited statutory historical statements of cash flows for the financial years ended 30 June 2015 and 30 June 2016;

(collectively, the Actual Historical Financial Information);

the pro forma historical statement of financial position as at 30 June 2016;
the pro forma historical statement of cash flows for the year ended 30 June 2016;

(collectively, the Pro Forma Historical Financial Information).

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The Actual Historical Financial Information and the Pro Forma Historical Financial Information are together referred to as the Historical Financial Information.

The Historical Financial Information is presented in the prospectus in an abbreviated form, insofar as it does not include all of the presentation and disclosures required by Australian Accounting Standards and other mandatory professional reporting requirements applicable to general purpose financial statements prepared in accordance with the Corporations Act 2001 (Cth).

Scope of Review of the Actual Historical Financial Information

You have requested that Rothsay review the Actual Historical Financial Information of UNL included in the prospectus.

The Actual Historical Financial Information has been prepared in accordance with the stated basis of preparation, being the recognition and measurement principles contained in Australian Accounting Standards and the Company’s adopted accounting policies. The Actual Historical Financial Information has been extracted from the financial statements of UNL for the years ended 30 June 2014, 2015 and 2016, which were audited by Rothsay in accordance with the Australian Auditing Standards. The audit reports issued in relation to the Actual Historical Financial Information each contained an unmodified audit opinion.

Scope of Review of the Pro Forma Historical Financial Information

You have requested that Rothsay review the Pro Forma Historical Financial Information of UNL included in the prospectus.

The Pro Forma Historical Financial Information has been derived from the Actual Historical Financial Information of UNL. Pro forma adjustments were made to reflect:

capital raising of a minimum of $3,500,000 and a maximum of $7,500,000; and
capital raising costs amounting to 10% of the value of capital raised; and
repayment of $1,000,000 of related party loans and promissory notes only if $7,500,000 of capital is successfully raised.

The stated basis of preparation is the recognition and measurement principles contained in Australian Accounting Standards applied to the Actual Historical Financial Information and the events or transactions to which the pro forma adjustments relate, as described in in the notes, as if those event(s) or transaction(s) had occurred as at 30 June 2016.

Due to its nature, the Pro Forma Historical Financial Information does not represent the Company’s actual or prospective financial position, financial performance, and/or cash flows.

Directors’ responsibility

The Directors of UNL are responsible for the preparation of the Actual Historical Financial Information and the Pro Forma Historical Financial Information including the selection and determination of pro forma adjustments made to the Actual Historical Financial Information and included in the Pro Forma Historical Financial Information.

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This includes responsibility for such internal controls as the Directors determine are necessary to enable the preparation of Actual Historical Financial Information and Pro Forma Historical Financial Information that are free from material misstatement, whether due to fraud or error.

Our responsibility

Our responsibility is to express a limited assurance conclusion on the Historical Financial Information based on the procedures performed and the evidence we have obtained. We have conducted our engagement in accordance with the Standard on Assurance Engagement ASAE 3450 Assurance Engagements involving Corporate Fundraisings and/or Prospective Financial Information .

Our limited assurance procedures consist of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other procedures. Our limited assurance procedures are substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently do not enable us to obtain reasonable assurance that we would become aware of all significant matters that might be identified in an audit. Consequently, we do not express an audit opinion.

Our engagement did not involve updating or re-issuing any previously issued audit or limited assurance report on any financial information used as a source of the financial information.

Utilisation of Capital Raised

UNL intends to raise at least $3,500,000 and a maximum of $7,500,000 as part of the proposed public offering. These funds are expected to be utilised in the following manner:

Capital Raised: Less: Borrowings : Promissory Notes Borrowings: Related Party Loans Listing Costs – Paid in cash Cash available to UNL post public offering:	Minimum Raising	Maximum Raising
	$3,500,000	$7,500,000
	- - $350,000	$212,669 $787,331 $750,000
	$3,150,000	$5,750,000

UNL intends to repay $1,000,000 in loans and promissory notes outstanding to related parties immediately if the maximum capital raising amount of $7,500,000 is successfully raised.

Conclusions on the Actual Historical Financial Information and the Pro Forma Historical Financial Information

Actual Historical Financial Information

Based on our limited assurance engagement, which is not an audit, nothing has come to our attention that causes us to believe that the Actual Historical Financial Information, as described in Appendix A to this report, and comprising:

the audited statutory historical statements of financial performance for the financial years ended 30 June 2014, 30 June 2015, 30 June 2016;

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the audited statutory historical statements of financial position as at 30 June 2015 and 30 June 2016;
the audited statutory historical consolidated statements of cash flows for the financial years ended 30 June 2015 and 30 June 2016;

are not presented fairly, in all material respects, in accordance with the stated basis of preparation.

We note that the financial statements are prepared such that there is pooling of assets, liabilities, equity, revenue and expenses before consolidation in order to depict a fair view of the group rather than just of the accounting acquirer.

Pro Forma Historical Financial Information

Based on our limited assurance engagement, which is not an audit, nothing has come to our attention that causes us to believe that the Pro Forma Historical Financial information as described in Appendix A to this report, and comprising:

the pro forma historical statement of financial position as at 30 June 2016;
the pro forma historical statement of cash flows for the year ended 30 June 2016;

are not presented fairly in all material respects, in accordance with the stated basis of preparation as described in this report.

Subsequent Events

Rothsay is not aware of any subsequent events that have not been accounted for in the Historical Financial Information provided above.

Should any information come to our attention about subsequent events that have not already been accounted for, or should that treatment change, Rothsay reserves the right to withdraw the report from issue or issue an amended report for that purpose.

Restriction on Use

The purpose of the Historical Financial Information contained in this report is for the inclusion of it in the prospectus relating to the issue of shares by UNL in or around November 2016. As a result, the financial information may not be suitable for use for another purpose.

Consent

Rothsay has consented to the inclusion of this assurance report in the public document in the form and context in which it is included.

This report is issued once it is signed by Rothsay and may not be relied upon before being signed.

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Declaration of Interest

Rothsay, being the auditor of UNL and the investigating accountant does not have any interest in the outcome of this transaction other than in respect of preparing this report and participation in the due diligence procedures, for which normal professional fees will be received.

Yours faithfully,

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Michael Payne Rothsay Chartered Accountants 27 October 2016

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Appendix A

United Networks Limited

Audited Actual Historical Financial Information

Statement of Profit or Loss and Other Comprehensive Income For the Years Ended 30 June 2014, 2015 and 2016

Revenues Cost of sales Gross profit Marketing expenses Occupancy costs Administrative expenses Other expenses Finance costs Profit before income tax Income tax benefit / (expense) Profit for the year (NPAT) Other comprehensive income for the year, net of tax Total comprehensive income for the year Profit attributable to: Members of the parent entity Total comprehensive income attributable to: Members of the parent entity EBITDA Financing Costs - interest Income tax (expense) / benefit Depreciation and amortisation expense Profit / (loss) for the year	2014 $ 2015 $ 2016 $ 4,910,550 5,989,264 7,558,452 (3,333,106) (3,769,395) (4,318,006)
	1,577,444 2,219,869 3,240,446 (118,475) (145,375) (120,703) (54,151) (119,531) (11,556) (960,297) (1,684,015) (1,882,968) (463,594) (459,171) (877,743) (12,537) (1,173) (72,731)
	(31,609) (189,396) 274,745 345,925 (71,293) 62,256
	314,316 (260,689) 337,001
	- - -
	314,316 (260,689) 337,001
	314,316 (260,689) 337,001
	314,316 (260,689) 337,001
	314,316 (260,689) 337,001
	314,316 (260,689) 337,001
	11,780 83,954 1,019,643 (12,537) (1,172) (72,732) 345,925 (71,293) 62,256 (30,853) (272,178) (672,166) 314,316 (260,689) 337,001

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United Networks Limited

Audited Actual Historical Financial Information

Statement of Financial Position

As at 30 June 2015 and 2016

ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other financial assets Property, plant and equipment Deferred tax assets Intangible assets Other assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Borrowings Current tax liabilities Short-term provisions Other financial liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Borrowings Deferred tax liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Accumulated losses Total equity attributable to equity holders of the Company TOTAL EQUITY	2015 $ 2016 $ 116,961 509,297 768,431 1,489,994 75,728 57,450 7,687 46,922
	968,807 2,103,663
	30,000 18,150 75,201 726,027 402,118 549,152 1,091,755 17,499,725 - 262,094
	1,599,074 19,055,148
	2,567,881 21,158,811
	2,235,683 1,695,121 724,323 1,177,590 - 22,924 75,710 116,845 1,496 -
	3,037,212 3,012,480
	803,981 1,243,883 127,043 188,897
	931,024 1,432,780
	3,968,236 4,445,260
	(1,400,355) 16,713,551
	120 17,777,025 (1,400,475) (1,063,474)
	(1,400,355) 16,713,551
	(1,400,355) 16,713,551

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United Networks Limited

Audited Actual Historical Financial Information

Statement of Cash Flows

For the Years Ended 30 June 2015 and 2016

CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Payments to suppliers and employees Dividends received Interest received Interest paid Net cash (used in)/provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of intangible assets Purchase of property, plant and equipment Net cash (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of shares Payments to associated entities Receipts from associated entities Net cash provided by financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year Cash and cash equivalents at end of financial year	2015 $ 2016 $ 6,689,471 7,459,615 (6,432,693) (7,926,315) 1,830 - (726) (4,481) 3,421 1,397
	261,303 (469,784)
	- (559,539) (644,327) (191,697)
	(644,327) (751,236)
	- 2,030,250 (333,235) (628,889) 603,744 211,995
	270,509 1,613,356
	(112,515) 392,336 229,476 116,961
	116,961 509,297

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United Networks Limited

Pro Forma Historical Financial Information

Pro Forma Statement of Financial Position As at 30 June 2016

Note ASSETS CURRENT ASSETS Cash and cash equivalents a Trade and other receivables Inventories Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other financial assets Property, plant and equipment Deferred tax assets Intangible assets Other assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables Borrowings b Current tax liabilities Short-term provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Borrowings Deferred tax liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Share issue costs Accumulated losses TOTAL EQUITY	2016 Minimum $3.5M Raised 2016 Maximum $7.5M Raised $ $ 3,659,297 6,259,297 1,489,994 1,489,994 57,450 57,450 46,922 46,922
	5,253,663 7,853,663
	18,150 18,150 726,027 726,027 549,152 549,152 17,499,725 17,499,725 262,094 262,094
	19,055,148 19,055,148
	24,308,811 26,908,811
	1,695,121 1,695,121 1,177,590 177,590 22,924 22,924 116,845 116,845
	3,012,480 2,012,480
	1,243,883 1,243,883 188,897 188,897
	1,432,780 1,432,780
	4,445,260 3,445,260
	19,863,551 23,463,551
	21,277,025 25,277,025 (350,000) (750,000) (1,063,474) (1,063,474)
	19,863,551 23,463,551

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United Networks Limited

Pro Forma Historical Financial Information

Pro Forma Statement of Cash Flows

For the Years Ended 30 June 2015 and 2016

Note CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers Payments to suppliers and employees Interest received Interest paid Net cash (used in)/provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of intangible assets Purchase of property, plant and equipment Net cash (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issue of shares a Payments in respect of issue of shares a Payments to associated entities b Receipts from associated entities Net cash provided by financing activities Net increase/(decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year Cash and cash equivalents at end of financial year	2016 2016 $3.5M Raised $7.5M Raised 7,459,615 7,459,615 (7,926,315) (7,926,315) (4,481) (4,481) 1,397 1,397
	(469,784) (469,784)
	(559,539) (559,539) (191,697) (191,697)
	(751,236) (751,236)
	5,530,250 9,530,250 (350,000) (750,000) (628,889) (1,628,889) 211,995 211,995
	4,763,356 7,363,356
	3,542,336 6,142,336 116,961 116,961
	3,659,297 6,259,297

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Summary of Significant Accounting Policies

Basis of Preparation of the Actual Historical Financial Information

The financial statements except for cash flow information have been prepared on an accruals basis and are based on historical costs modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented have been rounded to the neared dollar.

Basis of Preparation of the Pro Forma Historical Financial Information

The Pro Forma Statement of Financial Position as at 30 June 2016 and the Pro Forma Statement of Cash Flows for the year ended 30 June 2016 are identical to the Actual Historical Financial Information except for the following adjustments:

a. Net cash after capital raising is equal to the amount as at 30 June 2016 plus $3,500,000 (or $7,500,000 as applicable) being capital raised, less $350,000 (or $750,000 respectively, being 10% of capital raised) capital raising costs, less repayment of $1,000,000 of borrowings if the maximum amount is raised.
b. Per declaration of utilisation of capital raised $1,000,000 of the capital raised will be used to pay $212,669 in outstanding promissory notes payable and $787,331 in related party loans if and only if the maximum capital raising amount of $7,500,000 is achieved.

Basis for consolidation

The consolidated financial statements include the financial position and performance of controlled entities from the date on which control is obtained until the date that control is lost.

Subsidiaries are all entities (including structured entities) over which the parent has control. Control is established when the parent is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.

Intragroup assets, liabilities, equity, income, expenses and cashflows relating to transactions between entities in the consolidated entity have been eliminated in full for the purpose of these financial statements.

Appropriate adjustments have been made to a controlled entity’s financial position, performance and cash flows where the accounting policies used by that entity were different from those adopted by the consolidated entity. All controlled entities have a June financial year end.

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Business combinations Policy

Business combinations are accounted for by applying the acquisition method which requires an acquiring entity to be identified in all cases. The acquisition date under this method is the date that the acquiring entity obtains control over the acquired entity.

The fair value of identifiable assets and liabilities acquired are recognised in the consolidated financial statements at the acquisition date.

Goodwill or a gain on bargain purchase may arise on the acquisition date, this is calculated by comparing the consideration transferred and the amount of non-controlling interest in the Acquiree with the fair value of the net identifiable assets acquired. Where consideration is greater than the net assets acquired, the excess is recorded as goodwill. Where the net assets acquired are greater than the consideration, the measurement basis of the net assets are reassessed and then a gain from bargain purchase recognised in profit or loss.

All acquisition-related costs are recognised as expenses in the periods in which the costs are incurred except for costs to issue debt or equity securities.

Any contingent consideration which forms part of the combination is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity then it is not remeasured and the settlement is accounted for within equity. Otherwise subsequent changes in the value of the contingent consideration liability are measured through profit or loss.

In December 2015, United Networks Limited ("UNL"), the legal parent and legal acquirer, completed the acquisition of United Lifestyle Group Networks Pty Limited ("ULGN"), which also completed the acquisition of United Global Sim HK Ltd (the "Acquisitions"). The Acquisitions have been accounted for as a reverse acquisition in accordance with AASB 3 Business Combinations because, as a result of the Acquisitions, the former shareholders of ULGN (the legal subsidiary and legal Acquiree) obtained accounting control of UNL (the legal parent). Accordingly, the application of the reverse acquisition guidance in AASB 3 Business Combinations by analogy results in UNL, the legal parent, being accounted for as the subsidiary, and ULGN, the legal subsidiary, being accounted for as the accounting parent.

The Acquisition did not meet the definition of a business combination in accordance with AASB 3 Business Combinations as UNL was deemed for accounting purposes not to be a business as at the time of the acquisition UNL was in the process of being formed and therefore the transaction is not a business combination within the scope of AASB 3 Business Combinations. Instead the Acquisition has been accounted for as a share-based payment transaction using the principles of AASB 2 Sharebased Payment, and in particular the guidance in AASB 2 Share-based Payment that any difference in the fair value of the shares issued by the accounting acquirer (ULGN) and the fair value of the accounting Acquiree's (UNL) identifiable net assets represents a service received by ULGN.

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The accounting for the acquisition resulted in a re-capitalisation cost recognised on acquisition of $16m, measured at the fair value of the equity instruments that would have been given by ULGN to have the same percentage holding in the new structure as the date of the transaction.

As ULGN is considered to be the parent of the Group for accounting purposes the consolidated financial statements represent the continuation of the financial statements of ULGN from its incorporation, with the exception of the capital structure, and present only the details for UNL from the date the Acquisition completed. The amount recognised as issued equity instruments in these consolidated financial statements represents the issued equity interests of UNL adjusted to reflect the equity issued by UNL on acquisition.

Revenue and other income

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is received. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The Group has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements and is also exposed to inventory and credit risks. The specific recognition criteria described below must also be met before revenue is recognised.

Sale of goods (telecommunications hardware)

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. This will usually occur on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.

Rendering of services

The Group generates revenues from after-sales service and maintenance provided as well as construction contracts for telecommunication solutions. Consideration received for those services is initially deferred, included in other liabilities and is recognised as revenue in the period when the service is performed. In recognising after-sales service and maintenance revenues, the Group considers the nature of the services and the customer's use of the related products, based on historical experience.

Contracts for telecommunication solutions

Construction contracts for telecommunication systems specify a fixed price for the development and installation of IT and telecommunication systems. When the outcome can be assessed reliably, contract revenue and associated costs are recognised by reference to the stage of completion of the contract activity at the reporting date. Revenue is measured at the fair value of consideration

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received or receivable in relation to that activity. When the Group cannot measure the outcome of a contract reliably, revenue is recognised only to the extent of contract costs that have been incurred and are recoverable. Contract costs are recognised in the period in which they are incurred. In either situation, when it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised immediately in profit or loss.

Interest and dividend income

Interest income and expenses are reported on an accrual basis using the effective interest method. Dividend income, other than those from investments in associates, are recognised at the time the right to receive payment is established.

All revenue is stated net of the amount of goods and services tax.

Property, plant and equipment

Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment.

Where the cost model is used, the asset is carried at its cost less any accumulated depreciation and any impairment losses. Costs include purchase price, other directly attributable costs and the initial estimate of the costs of dismantling and restoring the asset, where applicable.

Land and buildings

Land and buildings are measured using the revaluation model.

Plant and equipment

Plant and equipment are measured using the cost model.

Gains and losses on disposal are determined by comparing proceeds with the carrying amount. These gains or losses are recognised in profit or loss when the item is derecognised. When revalued assets are sold, amounts included in the revaluation surplus relating to the assets are transferred to retained earnings.

Property, plant and equipment, excluding freehold land, is depreciated on a reducing balance basis over the assets useful life to the Group, commencing when the asset is ready for use. The depreciation rates used for each class of depreciable asset are shown below:

Plant and Equipment – 20% - 50%
Furniture, Fixtures and Fittings – 10% - 50%
Office Equipment - 25%

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Computer Equipment - 50%
Right to use asset - Lease term

At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any revisions are accounted for prospectively as a change in estimate.

Goodwill

Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of:

any non-controlling interest;
the consideration transferred; and
the acquisition date fair value of any previously held equity interest;

over the acquisition date fair value of net identifiable assets acquired in a business combination.

The value of goodwill recognised on acquisition of each subsidiary in which the Group holds less than a 100% interest will depend on the method adopted in measuring the aforementioned noncontrolling interest. The Group can elect to measure the non-controlling interest in the Acquiree either at fair value ('full goodwill method') or at the non-controlling interest's proportionate share of the subsidiary's identifiable net assets ('proportionate interest method'). The Group determines which method to adopt for each acquisition.

Under the 'full goodwill method', the fair values of the non-controlling interests are determined using valuation techniques which make the maximum use of market information where available. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates.

New Accounting Standards and Interpretations

The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods.

The Group has elected to early adopt AASB 16 Leases which would otherwise be mandatorily effective for annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB 117 'Leases' and for lessees and eliminates the classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the statement of financial position, measured as the present value of the unavoidable future lease payments to be made over the lease term.

The exceptions relate to short-term leases of 12 months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy choice exists whereby

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either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line operating lease expense recognition has been replaced with a depreciation charge for the leased asset (included in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However, EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor accounts for leases.

As a result of the early adoption of AASB 16, the Group has also early adopted AASB 15 Revenue from Contracts with Customers. This standard was otherwise mandatorily applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard requires: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue.

For goods, the performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The Group's existing revenue recognition policy per already complies with the requirements of this Standard and therefore there is no change arising as a result of the early adoption of this Standard.

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8. RISK FACTORS

Investment in the Company carries with it various risks. These include general risks that are associated with any investment in the stock market, as well as specific risks concerning the Company which investors should be aware of.

The following is a summary of some of the foreseeable risks associated with investment in the Company. The summary is non-exhaustive and refers only to risks identified as at the Replacement Prospectus date. While some of the risks may be mitigated by the Company, others are outside the control of the Company and cannot be mitigated. The actual occurrence of the risks could have a material adverse effect on the Company and its business, financial position and performance and prospects. This may cause the market price of the shares to decline, and may result in the loss of all or part of your investment.

Before making any decision to invest in the Company, you should carefully consider the risks associated with such investment as set out below and in this Replacement Prospectus, and assess whether the investment is suitable to you based on your individual circumstances including financial and taxation position and investment objectives. You should also seek your own independent professional legal, accounting and tax advice before making a decision to invest in the Company.

8.1 GENERAL RISK FACTORS

8.1.1 General Equity Market Risks

There can be no certainty that following listing, an active market in the Shares will develop. In addition, Shares may trade on the ASX at a premium or discount to the Issue Price. The price at which Shares trade on ASX may be affected by a number of factors, including the financial and operating performance of the Company and external factors over which the Company and its Directors have no control.

These external factors include actual, expected and perceived general economic conditions, changes in government policy or regulation, significant events such as natural disasters or acts of terrorism, investor attitudes, changes in taxation, movements in interest rates, and general conditions in the markets in which the Company will operate.

In addition, investors should consider the historical volatility of Australian and overseas share markets.

8.1.2 Economic Conditions

The performance of UNL is likely to be affected by changes in economic conditions. Profitability of the business may be affected by some of the matters listed below, which the Directors make no forecast in regards to:

i. the future demand for UNL’s products and services;
ii. general financial issues which may affect policies, exchange rates, inflation and interest rates;
iii. deterioration in economic conditions, possibly leading to reductions in business spending and other potential revenues which could be expected to have a corresponding adverse impact on UNL’s operating and financial performance;
iv. the strength of the equity and share markets in Australia and throughout the world;
v. financial failure or default by any entity with which UNL is or may become involved in a contractual relationship; and
vi. industrial disputes in Australia and overseas.

8.1.3 Geo-political Factors

UNL may be affected by the impact that geo-political factors have on the world or Australian economy or on financial markets and investments generally or specifically. This may include international wars, terrorist type activities and governmental responses to such activities.

UNL’s customers are located throughout the world. UNL is planning to expand its international sales and supply networks, and as a result, its increased international presence will expose it to certain risks, including in relation to:

its ability to comply with telecommunication, employment and other regulatory requirements;

difficulties in establishing and enforcing its intellectual property rights;
language and cultural barriers;
difficulties in staffing and management;
seasonal reductions in business activities in the countries where its international customers are located; and
difficulty in accounts receivable collection.

8.1.4 Investor return and dividends

Investors are strongly advised to regard an investment in the Company as a long-term proposition and note that, as with any equity investment, substantial fluctuations in the value of their investment may occur. The Company cannot guarantee its future earnings and cannot provide a guaranteed level of return to investors.

Payment of future dividends will depend on matters such as the future profitability and financial position of the Company, the Company having sufficient franking credits in the future and the other risk factors set out in this section. There can be no guarantee that the Company will achieve profitability in the future and be able to pay any dividend.

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8.1.5 Changes to Legislation and Government Policies

Telecommunications is a regulated industry in Australia and other jurisdictions and is subject to change. UNL may be affected by changes to government policies and legislation, including those relating to telecommunication. In Australia, UNL may be impacted by changes to the Telecommunications Act and related regulations and codes, the Privacy Act and ACMA Telecommunications regulations.

Also, UNL’s competitive advantage in a particular territory can be adversely impacted by any regulatory changes.

operates or in the nature of services or operations of UNL in any such jurisdiction may require UNL to obtain a license or permit or impose other obligations on UNL. A failure or delay in complying with such changes or the time and costs required to comply could have an adverse impact on UNL.

8.2.5 Loss of Key Customer or their business

A substantial portion of UNL’s revenues is generated from its Key Customer (38% in FY16). The loss of this Key Customer or the loss of business from this Key Customer would adversely impact UNL’s business and financial results.

8.2 SPECIFIC RISK FACTORS

8.2.1 Growth Prospects and Acquisitions

UNL’s growth prospects are dependent upon a number of factors, including customer take up and successful execution of expansion plans. If UNL fails to execute any expansion plans, its financial performance is likely to be negatively affected.

As part of its expansion strategy, the Company may make acquisitions of or significant investments in, complementary companies, services, technologies and/or products. Any such future transactions are accompanied by the risks commonly encountered in making acquisitions of companies, products and technologies, such as integrating cultures and systems of operation, relocation of operations, short-term strain on working capital requirements, achieving the sales and margins anticipated and retaining key staff and customer and supplier relationships.

8.2.2 Reputation

The success of UNL’s business depends on the maintenance of good client relationships and its reputation for providing high quality products and services. If UNL does not meet customers’ expectations, is involved in litigation or claims relating to its product performance or customer service or is subject to negative media coverage, UNL’s reputation could be significantly damaged.

8.2.3 Products and Services offering

Any misjudgements by UNL of its target market or customer demand or changes in customer preferences could result in reduced sales, increased inventory and/ or lower gross margins. In addition to this, any existing or future products or services offered by UNL may experience performance problems rendering them difficult or impossible to sell, or subject to product recall which could have a material adverse impact on the Company’s financial performance.

8.2.4 UNL’s regulatory position

While the telecommunication services provided by UNL as at the date of this Replacement Prospectus do not require a special license or permit in the jurisdictions they are offered, changes to the regulatory regime, legislation or government policies in any jurisdiction in which UNL

Also, the growth of UNL’s international roaming business is linked to the conversion of paying customers generated from the Key Customer provided by its partners and white-label customers and the inclusion of SIM cards in their core products. Any reduction in the rate of converting customers or the number of SIM cards included in the products of partners and white-label customers, or a reduction in the scope of business conducted by UNL’s partners or white-label customers could adversely affect UNL’s business and financial performance.

The MSA as summarised in Section 9.2 Covermore Agreement contains a number of provisions which UNL and Covermore are required to meet. If those requirements are not met then either party has a right to terminate the agreement by giving notice under the relevant terms of the agreement. Pursuant to the agreement the parties will review performance in the first quarter after the end of the 2016 calendar year.

As it has done in the past UNL has proactively engaged with Covermore to propose a number of changes to the arrangements, including simplification of the commercial arrangements, broadening of the product offering, potentially utilising alternative carrier networks, and changes to processes to address currently unsatisfactory Customer Satisfaction Index (CSI) score requirements, particularly in relation to customers who fail to receive the United SIM. Covermore has agreed to give in good faith consideration to the proposals made by UNL prior to the formal contractual review date and to this end the parties have signed a memorandum of understanding (MoU) on 18 November 2016 to enter into negotiations for a revised agreement.

If the negotiations are successful, the present agreement will be amended to restructure and simplify some of the commercial arrangements, and address the changes in processes required to improve CSI performance and extend the measurement period for CSI to allow the impact of the changes to be measured.

If negotiations fail then on 1 December 2016 the MoU will automatically come to an end and the existing agreement will continue, including the parties rights to terminate in the event of unsatisfactory performance. Covermore will be entitled to terminate the agreement if the CSI scores

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specified in it for the fourth quarter of the first year of the agreement are not met. As the current CSI scores are unlikely to be met at the expiry of that period (23 December 2016) unless the agreement is amended, this will give rise to a termination right to Covermore on that date. If Covermore elects to exercise its termination right it will be able to do so by providing 90 days written notice to UNL (but not later than 180 days after the date of the right arising).

implemented. In some instances, alternative arrangements may not be available or may be less financially advantageous than the current arrangements. Also, any change in the trading terms of suppliers from whom UNL sources products or services, the suppliers’ inability to provide them at all or as agreed, delivery delays or quality issues could have an adverse impact on UNL’s business.

8.2.7 Supplier regulatory compliance

The reason the CSI scores as currently calculated are unlikely to be met by UNL is that their calculation takes into account SIM cards that have not been activated for various reasons, which have a negative impact on the scores. Such un-activated cards account for over 40% of the SIM cards distributed for Covermore, whereas the majority of the users who activate and use the SIM cards have a positive experience. The key focus moving forward is to increase the activation rate so that the CSI scores will more accurately reflect positive user experience, and in addition to change the calculation method of the CSI scores so as the focus is based on actual user experience (of activated cards).

If Covermore elects to terminate the current agreement, then in the absence of any new agreement being reached termination will have a material impact on the financial performance of the business in the short term and performance for the financial year ending 30 June 2017.

The Company is confident that any adverse impact will not be enduring as Covermore and its Commercial partners contribution to revenue continues to decline as a percentage of total revenue there also continues to be significant interest in the company’s products from channels similar to Covermore which the company presently is not able to exploit as a result of its exclusivity arrangements with Covermore.

If the exclusivity constraint is lifted (by termination of the Covermore agreement) the Company anticipates it will be able to replace the lost revenue via alternative channel partners.

8.2.6 Supplier relationships

UNL relies on various key supplier relationships in certain parts of its business. The loss or impairment of any of these relationships could have a materially adverse effect on UNL’s results of operations, financial condition and prospects, at least until alternative arrangements can be

Some fixed, mobile and data services provided to UNL by its wholesale suppliers must meet certain regulatory requirements. A failure or delay by any UNL wholesale supplier to meet such regulatory requirements could affect UNL’s regulatory compliance.

8.2.8 Delivery risk

UNL is exposed to the risk of significant delays or cancellations in the delivery of products without any practical recourse being available to UNL to recover lost earnings. Any such delay or cancellation would have an adverse impact on UNL’s earnings and profits.

8.2.9 New Revenue and Market

Some of UNL’s new business opportunities should be viewed as speculative as they are based on new business models or involve non-traditional telecommunications companies and new revenue potential that cannot be ascertained or guaranteed. There is a risk associated with setting up new operations or partnering with new companies which if unsuccessful or difficult or costly to implement or maintain can adversely affect UNL’s operations and revenue and profits.

8.2.10 Contract risks

UNL has several Material Contracts in place, as detailed in Section 9 of this Replacement Prospectus.

Any disagreement or dispute in relation to any material contract a failure by UNL to meet its contractual could disrupt UNL’s business and have an adverse impact on UNL’s operations and performance generally. It is not possible for UNL to predict or protect itself against all such risks.

Also, some of UNL’s material contracts contain termination for convenience clauses and there is a risk that the contracting parties may not renew current contractual arrangements when they expire. Any termination of contracts or failure to renew may materially impact UNL’s financial performance. Furthermore, some material contracts are governed by laws of different jurisdictions. Should UNL be required to enforce or commence legal proceedings regarding such a material contract, the procedure and outcome in courts in overseas jurisdictions may be different than in Australia.

8.2.11 Reliance on key personnel

UNL relies on the experience and knowledge of its

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management team. UNL is also dependent on its ability to recruit and retain suitably qualified personnel. The loss of key personnel which UNL is unable to replace with suitable staff or within reasonable time could have a materially adverse effect on UNL’s business and its operations.

8.2.12 Funding needs

Whilst UNL believes that it will have sufficient funds after the completion of the Offer to meet all of its growth and capital requirements for the near term, UNL may seek to exploit opportunities that will require it to raise additional capital from equity or debt sources. There can be no assurance that UNL will be able to raise such capital on favourable terms or at all. If UNL is unable to obtain such additional capital, it may be required to reduce the scope of its anticipated activities, which could adversely affect its business, financial condition and operating results. If additional funds are raised by issuing equity securities, this may result in dilution of some or all of the existing Shareholders of the Company.

8.2.13 Intellectual Property

UNL’s business relies on its technology and know-how. There can be no assurance that competitors of UNL or other parties will not seek to imitate or develop such technology and know-how that competes with UNL’s. Also, there is a risk that other companies or individuals may claim to have an interest in or challenge UNL’s intellectual property or trade secrets, which may adversely affect UNL’s earnings.

8.2.14 New Technology and Products

The telecommunications industry is largely influenced by new technologies and developments. With new emerging technologies and products entering the market, UNL will need to continue to diversify and expand its product and services offering and global roaming technology to support the evolving technologies and new products. This may require the development of new products or product enhancements, which could increase UNL’s research and development costs.

preferences. The telecommunications industry has constant changes in pricing and competition from both existing competitors and new entries into the market. UNL’s financial performance or operating margins could be adversely affected if the actions of competitors or potential competitors become more effective, or if new competitors enter the market and UNL is unable to counter these actions.

8.2.16 Currency Movements

As UNL is buying and selling services in multiple countries and currencies, currency movements may unfavourably affect UNL’s financial results.

8.2.17 Third Party Risk

UNL’s operations require the involvement of a number of third parties, including suppliers, contractors, software developers and clients.

Default or contractual non-compliance on the part of such third parties may have a material impact on the operations and performance of UNL. It is not possible for UNL to predict or protect itself against all such risks.

8.2.18 Operational Risk

UNL’s operations may be affected by various external and internal factors including failures in internal controls and financial fraud. While UNL aims to mitigate these risks through separation of duties and quality checks where possible, there is no guarantee these will be successful.

8.2.19 Risk of Shareholder Dilution

While the Company is subject to constraints of the ASX Listing rules regarding the percentage of its capital that is issued within a 12-month period, Shareholders may be diluted as a result of such issues of Shares and fundraising. This may occur if the Company in the future elects to issue Shares or engage in fundraisings and/or fund or raise proceeds for acquisitions that the Company may decide to make.

8.2.20 Taxation changes

Failure to update products and services as necessary to meet new technological advancements may result in the decline in product sales and adversely affect UNL’s business prospects.

8.2.15 Competition

The markets in which UNL operates in are highly competitive and there can be no assurances that the competitive environment will not change adversely due to actions of competitors or changes in customer

There is potential for future changes to tax laws and the way in which these are interpreted. Any changes to the current rates of taxes imposed on UNL in any jurisdiction in which it operates, is likely to affect returns to Shareholders. Each prospective Shareholder is encouraged to seek professional advice regarding any investments in the Company.

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8.2.21 Force Majeure Risk

Force majeure is a term generally used to refer to an event beyond the control of a party, including acts of God, fire, flood, earthquakes, war and strikes. UNL does not have insurance for all force majeure risks, some of which are, in any event, uninsurable. To the extent that any such risks occur, there may be an adverse effect on the operations and profitability of UNL.

8.2.22 Listed Company Requirements

As a listed company UNL will be subject to increased regulation and reporting requirements. Compliance with these rules and regulations will increase legal, accounting and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on systems and resources.

8.2.23 Fraud or Theft

UNL is exposed to risks of fraud and theft in relation to its operations. UNL aims to mitigate such risks through internal controls and reporting procedures and external auditing by independent providers. Nevertheless, fraud and theft could have an adverse impact on UNL’s operations if it led to potential regulatory sanction and/or loss of key clients.

8.2.24 Litigation Risk

Given UNL’s range of activities, the number of territories in which it operates and the number of customers and suppliers it contracts with, UNL may from time to time be the subject of complaints, litigation, inquiries or audits initiated by customers, employees, suppliers, landlords, government agencies, regulators or other third parties. Such matters, even if successfully resolved without direct adverse financial effect, could have an adverse effect on UNL’s reputation and divert its financial and management resources from more beneficial uses. If UNL was found to be liable under any such claims, this could have a material adverse effect on UNL’s business, reputation and future financial performance.

8.2.25 Liquidity Risk

On completion of the Offer, and assuming the Offer is fully subscribed, the existing shareholders of the Company will hold between 59.86% (in the event of minimum raising) and 70.98% (in the event of maximum raising) of the total issued Share capital of the Company (assuming existing Shareholders do not participate in the Offer). Under Chapter 9 of the ASX Listing Rules, a number of the Shares held by existing Shareholders will be subject to escrow periods which may cause a liquidity risk, as some of these shares may not be traded for up to a period of 24 months.

Furthermore, there is no guarantee that there will be an ongoing liquid market for Shares. If illiquidity arises, there is a real risk that Shareholders will be unable to realise their investment in the Company.

8.2.26 Related Party Transactions

UNL has entered into some related party transactions, including loan, service and occupation license agreements with related party companies (See Section 9 Material Contracts for further details).

There is a risk that the interests of a related party may influence the decision-making of Directors to the detriment of the interests of members of the entity as a whole when an entity is considering whether to enter into a transaction with a related party.

All related party transactions are on an arm’s length basis and are at terms no less favourable then what would be available to UNL externally.

8.2.27 Insurance risk

While UNL endeavours to mitigate some business risks by procuring relevant insurance cover with where economically practicable and available, there remains the risk that the policy provisions and exclusions may render a particular claim outside the scope of the insurance cover, or that an insurer fails, leading to unforeseen costs. UNL contracts with reputable insurers but does not independently verify their creditworthiness.

8.2.28 Hacker Attacks

UNL relies on the availability of its websites, hosting servers and the websites and systems of various third party providers to provide services to clients and to attract new clients. Such websites, servers and systems could be subject to data theft, disruption or denial of service (DoS) attacks and unauthorised access from hackers. Although UNL has strategies in place to minimise such attacks, these strategies may not be successful. Unavailability or disruption of the systems or websites of UNL or its service providers could lead to a loss of revenue whilst UNL is unable to provide services to its customers.

8.2.29 Limited Operating History

UNL was incorporated in 2015 and therefore does not have a financial and operating history as a group. There is a risk that UNL will not achieve its operational objectives or UNL’s internal budgets. For this reason UNL is not including forecasts in the Replacement Prospectus.

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9. MATERIAL CONTRACTS
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9. MATERIAL CONTRACTS

The Directors consider that there are a number of contracts that are material to UNL or are otherwise relevant to an investor’s decision as to whether or not to apply for Shares. Below are summaries of these contracts, which do not purport to be complete and are qualified by the terms of the actual contracts.

9.1 SUPPLIER AGREEMENTS

The Group has entered into agreements with the following key suppliers, which contain terms that are typical for such agreements unless otherwise specified:

United Lifestyle Group Networks Pty Ltd (ACN 139 763 830) (ULGN) has entered into a Telecommunication Reseller Agreement with a supplier of voice carriage services on 26 September 2013 for an initial term of 2 years and continues indefinitely thereafter until terminated. The agreement can be terminated by either party by giving to the other party at least 30 days’ written notice.
ULGN has entered into a Master Supply Agreement (MSA) with a supplier of network, DSL and related services on 16 October 2015. The MSA runs for an initial term of one or two years (depending on the type of service) and continues indefinitely thereafter until terminated. After the initial term, either party may terminate the agreement by giving 90 days’ notice to the other party (although some services may be terminated by the supplier on 30 days’ written notice).
ULGN has entered into a Wholesale Services Agreement with a supplier of multiline, EWAN and related services on 16 October 2015. Each Service Schedule has an initial term of 3 years continues indefinitely thereafter until terminated. Either party may terminate by giving 30 days’ notice after the expiry of the initial term.
United Networks Operations Limited (Hong Kong company # 2297494) (UNO) has entered into a SIM and Airtime Wholesale Agreement dated 16 December 2015 with a UK supplier of SIM cards and related services including support. This contract constitutes this supplier as the largest supplier to the Group, approximately A$1.5 million annually. This agreement replaced a previous agreement between that supplier and United Global SIM Limited (Hong Kong company # 1810796) (UGS) dated on or about 12 October 2012 for the provision of similar services.
The agreement is for an initial term of 3 years which shall renew for further periods of 2 years unless terminated by the parties. Each party may terminate by giving 12 months’ prior written notice. For the duration of the agreement and for as long as its purposes are being met (to generate revenues to the parties, maximise the sale of the supplier’s

products and services and preserve and expand UNO’s customer base), the supplier agreed not to contact or supply services to UNO’s customers, agents or resellers, with the exception of UNO or UGS customers agents or resellers to whom services have ceased or materially reduced (a reduction of more than 30% the invoiced services in any 3 months period compared to the same 3 months period in the preceding year).

In addition, the Company is in discussions with a major carrier regarding the supply of a local sim solution to be provided to the Company’s Enterprise partners on terms to be agreed,

9.2 COVER-MORE AGREEMENT

On 23 December 2015, UGS entered into a Master Services Agreement (MSA) with Cover-More Insurance Services Pty Ltd (ABN 05 003 114 145) (CVO) for the provision of customised pre-paid SIM cards (SIMs) and other services to its customers and corporate clients in Australia, New Zealand and any territory to be agreed by the parties (Territory). All interfaces, websites and communications will be branded as being CVO.
The MSA commenced on 23 December 2015 and continues for an initial period of 4 years. It may be renewed for further 2 years by the parties’ written consent (and will automatically renew for an additional 12 months if no renewal notice is given and renewal negotiations are not finalised). The MSA was accompanied by a principal statement of work dated 23 December 2015 (PSOW) relating to the provision of the SIMs which must remain in place for the duration of the MSA (other SOW if any will terminate when the PSOW terminates).
Under the MSA, CVO must pay fees to UGS comprised of monthly services fees (calculated based on SIMs credit and data packs bought by customers), time and materials (T&M) rates for work and services to CVO (with specific director rates for Nicholas Ghattas services) and all costs directly incurred by UGS for and on behalf of CVO (including for SIM cards and their activation, website hosting, switch and tolling).
UGS must first offer to CVO any new product or solution developed by it that can replace or work in conjunction with the SIMs, and CVO must give UGS the right of first refusal to supply any traveller related telephony and data solutions product or service it wishes to offer.
The MSA appoints UGS as the exclusive supplier of SIMs to the CVO group and its clients and CVO may not be involved in any activity competing with the SIMs during the term (but can acquire solutions other than SIMs or in/out source website hosting and maintenance services). UGS is subject to exclusivity

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restraints during the term (Restraints) prohibiting it from providing any travel insurance SIM bundled product (Bundled Product) in the Territory (except to customers in contact with UGS outside the Territory up to a certain threshold), and from contacting CVO customers or (without first advising CVO) corporate clients (to whom CVO will have the right of first refusal to offer a UGS unbundled product).

The MSA may be terminated by either party giving to the other 12 months’ notice in writing without cause, or with 90 days’ notice due to a change of control or material breach of the other party. CVO may terminate with 90 days’ notice if UGS fails to meet Customer Satisfaction index scores or service levels for 3 consecutive months (the termination right will lapse after 180 days), and may also terminate a SOW other than the PSOW on 30 days’ notice. UGS may terminate by 90 days’ notice if CVO fails to meet a minimum target of annual paid SIM activations, and immediately if CVO fails to make an undisputed payment within 30 days of its due date. Upon termination of the MSA for any reason, the Restraints will cease immediately (except if the termination is by CVO in which case UGS must not contact CVO’s customers and clients for 6 months after termination). Also, the parties will agree on a disengagement plan for the provision of transition of services by UGS on T&M rates for no more than 90 days.
Each party retains its background IP (which for UGS includes all rights in the GAP) and licenses it to the other party for the term and purpose of the MSA. The rights in new IP developed under the MSA will be as agreed in the applicable SOW. CVO does not acquire rights in the SIMs other than a license to sell or distribute them. Customers data of CVO and its corporate clients is owned by them.
The MSA includes the commercial clauses usual in a transaction of this nature including mutual confidentiality, indemnity and limitation of liability.
The revenues earned from this contract constitute 38% of the total revenues of the Group for FY2016 although this percentage is expected to reduce over time, as the client base of the Group increases.

9.3 SOFTWARE DEVELOPMENT AGREEMENT

United Networks Hong Kong Limited (Hong Kong company # 2283333) (UNH) has entered into a software agreement dated 17 December 2015 with a UK developer for the provision of software development, support and maintenance services to UNH, in consideration for a monthly retainer fee for the maintenance services and an hourly fee for other
services (with a minimum of 150 hours per month to be reviewed every three months).
The agreement commenced on 1 December 2015 and continues until terminated at will with 3 months prior written notice (or with cause).The agreement imposes on the developer non solicitation and noncompetition obligations during its term and after its termination, including not to sell, license or offer the GAP system, its modules or source codes to any customer, partner or reseller of UNH at any time, or to any business competing with UNH or providing telecommunications or SIM services during the term.
All IP developed by the developer in connection with the agreement or at UNH’s request is the sole and exclusive property of UNH except for IP of the developer which existed prior to the commencement of services or was developed not in connection with any services to UNH, as specified in a schedule to the agreement.
As part of the new agreement, the developer executed a deed of assignment dated 16 December 2015 assigning to UGS its worldwide rights, title and interest in all IP provided or developed by the developer for or at the request or UGS prior to the date of the deed, including the GAP system and its modules but excluding specified background IP owned by the developer. This IP was developed under a previous agreement between the developer and UGS for the provision of website, software and database development maintenance and support services which commenced on 1 October 2012.

9.4 ACQUISITION AGREEMENTS

The following acquisition agreements have been entered into by the Group companies below prior to the IPO (all containing standard terms for such type of transactions, except that no warranties and indemnities are included given the inter group nature of the transactions):

ULGN has acquired all issued shares of UGS from Autopilot Consulting Pty Ltd (ACN 136 984 186), a company controlled by Nicholas Ghattas (APC) and ULG Holdings Ltd (foreign company ABN 41 606 136 789), a company controlled by Anthony Ghattas (ULGH) pursuant to a share sale agreement effective 4 December 2015, in consideration for the issue by ULGN of 16,000,000 fully paid ordinary shares to APC and ULGH in equal shares.
The Company has acquired all issued shares of ULGN from APC and ULGH pursuant to a share sale agreement effective 7 December 2015, in consideration for the issue of 76,621,328 fully paid ordinary shares in the Company to ULGH and APC in equal shares.

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9.5 IP ASSIGNMENT, LICENSE AND DISTRIBUTION AGREEMENTS

9.5.1 Deeds of IP Assignment

On 4 December 2015 a Deed of Assignment was entered into between APC, ULGH, Temont, United Lifestyle Group Pty Ltd (ACN 116 370 202)( a company controlled by Anthony Ghattas) (ULG) , Anthony Ghattas and Nicholas Ghattas (as Assignors) and ULGN under which the Assignors assigned to ULGN all their IP, contractual and other rights, interests and assets relating to the telecommunication business carried on by ULGN and its relevant body corporates under the United brand (Network Business Assets), and ULGN has assigned to ULGH all its rights, interests and assets other than the Network Business Assets.

The assigned Network Business Assets exclude any “United” name and logo owned by ULGH, ULG and any of their related or associated companies or nominees, which ULGN was granted a non-exclusive, non-transferable perpetual royalty free worldwide license to use for the purpose of the Network Business and the Global SIM business.

ULGN has subsequently assigned to UNH all the Network Business Assets under a Deed of Assignment entered into between them on 2 February 2016. Under a similar Deed of Assignment dated 2 February 2016 UGS was assigned to UNH all its rights, interests and assets relating to the telecommunication and Global SIM business carried on by UGS and its relevant body corporates under the United brand.

As a result of the IP assignments described above, UNH holds all the Group’s Network Business Assets.

9.5.2 IP Licence Agreement

On 3 February 2016 UNH entered into a License Agreement with UNO under which UNH granted UNO a worldwide non-exclusive non-transferable royalty free right to use and sublicense UNH’s IP, software (owned or licensed including GAP) and other materials (UNH IP) for the purpose of sale, distribution and commercialisation of global SIMs, configuration of the software for customers and internal business use.

The initial term of 3 years shall automatically renew for an additional 12 months unless a 3 months’ prior written termination notice is given prior to the expiry of the relevant period or there is a change of control of the licensee which entitles UNH to immediately terminate. UNH has step in rights in the event of breach and may provide customisation and implementation services to UNO’s customers on a project basis, and all rights in any development or modification of UNH’s IP materials vest in UNH.

9.5.3 Distribution Licence Agreements

UNO has entered into Distribution License Agreements with each of ULGN, UGS and USC on 4 February 2016 under which UNO granted each of them a non-exclusive

non-transferable sub license to sell and supply products incorporating IP owned or licensed to UNO in their respective territories (being Australia and New Zealand and any other place as the parties may determine for ULGN, Canada or any other place as the parties may determine for USC and the entire world for UGS).

The agreements are for an initial term of 5 years (which the parties may extend for an additional 5 years) and can be terminated by either party giving 90 days’ written notice or an immediate notice if the parties cease to be members of the United Networks Group. The rights in licensee developments or modifications vest with UNO and UNO may license its IP to other parties in the territory. The licensees must continue to provide support/warranty services for 24 months after the delivery of SIMs to it.

The license fees payable to UNO are a monthly baseline license fee (0.15 of the FOB cost of the products delivered to the licensee that month) and they may be adjusted as needed to remain at arm’s length.

9.6 SERVICE AGREEMENTS

The following Group companies have entered into Services Agreements with the parties listed below engaging them to provide certain services on behalf of the contracting Group company, including provision of employees, consultants and advice and administering and managing certain aspects of the business.

These agreements are materially similar in terms and continue for at least 12 months until terminated by 2 months’ prior written notice:

An agreement dated 5 February 2016 between the Company and ULGH, a company controlled by Anthony Ghattas; the fee payable under it will be determined based on the cost of services utilised and agreed from time to time
An agreement dated 2 February 2016 between UGS and Wine First New Zealand (New Zealand company 109-508-454), a company controlled by Anthony Ghattas, with a fee of $1,000 charged monthly in advance.

9.6.1 Occupation License Agreements

Each Group company listed below has entered into an Occupation License Agreement (as licensee) with the lessee of the offices it occupies (as licensor), granting that Group company a personal non exclusive non-transferable right to occupy and use these offices.

These Occupation License Agreements are materially similar in terms except for the commencing and terminating dates and the license fees payable. Each licensee agreed to comply with the obligations imposed on the licensor as the lessee under the head lease, which is incorporated into the agreement. The licensee must comply with any make good obligations under the head

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lease but the licensor may require cash payment in lieu of such obligations.

The license terminates if the head lease terminates and the licensor may also terminate it if the licensee breaches any term of the license agreement or the head lease. The licensee must pay the licensor a security bond of 6 months rent which will be dealt with by the lessor mutatis mutandis as in the head lease.

An agreement dated 7 January 2015 between ULGN and United Galleries Pty Ltd (ACN 106 862 793) (UGAL), a company controlled by Anthony Ghattas, to occupy the premises leased by UGAL at Level 2, 100 William Street East Sydney, from 7 January 2015 until 6 January 2020 (or 6 January 2025 if the head lease is renewed) in consideration for a license fee of A$127,009 per annum;
An agreement dated 31 March 2016 between USC and Wine First International Enterprises (formerly United Networks Canada BC 0953930) (WFI), a company controlled by Anthony Ghattas, to occupy the premises leased by WFI at Suite 513 World Trade Centre Vancouver British Columbia Canada from 31 March 2016 until 30 March 2017 in consideration for a license fee of CAD 1,387 per month.

In addition, the Group utilises offices at Level 4, 130 Khyber Pass Road Grafton Auckland New Zealand pursuant to an informal arrangement with the lessee, United Cellars New Zealand Pty Limited (a company controlled by Anthony Ghattas); that lease commenced on 10 September 2015 and will expire on 9 September 2018;

9.7 FINANCIAL AGREEMENTS

9.7.1 NAB General Security Agreement

On2 June 2015 ULGN has signed NAB’s General Security Agreement (GSA) granting NAB a registered security interest over all present and after acquired property of ULGN as security to ULGN’s e-commerce Merchant Account with NAB (in addition to personal guarantees provided by Nicholas and Anthony Ghattas). The GSA includes standard terms for this type of agreement, and it requires NAB’s consent to, amongst other things, any significant change of the business conducted by ULGN, the provision or satisfaction of financial accommodation to/of a related entity of ULGN, capital reduction and dealing with the collateral (including sale, disposal or license). The GSA also requires ULGN to inform NAB of changes of ULGN’s name or directors, a transfer of the majority of ULGN’s shares. NAB has provided its written consent to the transfer of ULGN shares to the Company prior to the IPO and the repayment of related party loans made by ULG and ULGH.

9.7.2 Facility Deed

On 12 May 2016 an amended and restated Facility Deed was entered into between the Company and ULG, ULGH, ULGN and UGS (Facility Deed). The Facility Deed:

Restates the terms of previous loan facilities made available by ULG to ULGN and ULGH to ULGN and UGS respectively, which ceased on the date of the Facility Deed, and
Sets out the terms of a new facility (New Facility) made available from the date of the Facility Deed by ULG and ULGH (as Financier) to the Company, ULGN and UGS as the case may be (as Borrower).

The interest specified under the Facility Deed is to be comprised of BBSY base rate plus 3% per annum to accrue on a monthly basis, however it was varied by the parties to be 7.5% per annum for the financial year 2016.

The Borrower must pay the Financier all outstanding amounts on the date the Financier notifies the Borrower in writing that all amounts are due and payable, and may voluntarily repay outstanding amounts earlier.

The Facility Deed includes warranties, undertakings and events of default typical to such facilities (and an event of default includes a change of control in the Borrower).

The parties to the Facility Deed have also entered into a General Security Agreement on or about the date of the Facility Deed (GSA) to secure the repayment of all amounts lent by the Financier to the Borrower under the Facility Deed.

The GSA contains terms typical for such agreements and the Borrower has granted the Financier a registered security interest pursuant to it (registered on the PPSR on 26 May 2016). As at 30 June 2016 will, the total loan amount outstanding under the Facility Deed is A$1,803,982 million.

REPLACEMENT PROSPECTUS

9.8 DIRECTORS & KEY EMPLOYEES’ AGREEMENTS

The Company has entered into the following agreements with each of its directors:

9.8.1 Director Agreements

The Company has entered into Directors Agreements with its Directors, with effect from 1 September 2015, which contain standard terms and conditions for such agreements (including basic confidentiality and nonconflict provisions), do not require a minimum resignation notice, and are subject to the laws of NSW and the jurisdiction of the courts of Victoria. The agreements entitle the directors to the following annual fee plus superannuation, and to options as may be determined by the Company at its sole discretion:

An agreement with Anthony Ghattas entitling him to an annual fee of A$96,000 + superannuation (acknowledging his continuing services to ULGH);
An agreement with Charbel Nader entitling him to an annual fee of A$48,000 + superannuation (acknowledging his continuing services to ULGH and to other companies that are not in competition with the Company or it related entities); and
An agreement Nicholas Ghattas which currently does not specify a director fee but states that the board may from time to time agree on a fee under the agreement.

According to the resolution of the Company’s members dated 2 November 2015, the maximum aggregate amount the Company may pay its directors in any financial year (other than the Managing or a salaried director) is A$500,000.

9.8.2 Deeds of Access, Insurance and Indemnity

The Company has entered into Deeds of Access, Insurance and Indemnity dated 28 August 2015 with its Directors, which contain standard terms and conditions for such agreements and give the Directors:

the right to access company records and confidential information during a period of 7 years after the director’s appointment ceases or the duration of any legal proceedings commenced during such period, whichever the longer (Coverage Period), for purposes referable to the director’s office with the company;
the right to be indemnified by the Company against any liability incurred as a director which is not otherwise indemnified to the maximum extent permitted by law; and

9.8.3 Key Employees’ Agreements

9.8.3.1 Employment agreement with Nicholas Ghattas

The Company has entered into an employment agreement commencing 1 November 2015 with Nicholas Ghattas under which the Company engaged Nicholas Ghattas as CEO in consideration for a total annual remuneration of A$295,000 + superannuation (to be reviewed annually), performance bonus to be determined by the Board, statutory superannuation and reimbursement of phone, internet, car, parking and work related expenses (which require prior approval if exceed A$500 per month). The agreement may be terminated by the Company giving a 12 months notice and Nicholas Ghattas giving the greater of 4 weeks and the notice required under the Fair Work Act. The contract contains standard terms and conditions for an agreement of this nature including confidentiality, IP and restraint clauses which prohibit Nicholas Ghattas from competing with the Company’s business or soliciting customers, suppliers, brokers, agents or employees of the Company (conditional on the Company paying Nicholas Ghattas his base salary during the restraint periods, which are between 2-6 months).

9.8.3.2 Employment agreement with other senior managers

The Company has entered into employment agreements with its senior managers Michael Potts (CFO) and Andrew Weeks (Systems Manager) which contain standard terms and conditions for an agreement of this nature and can be terminated by either party giving notice in accordance with any applicable industrial award or the Fair Work Act. These agreements include the following dates and remuneration:

The agreement with Michael Potts is dated 3 September 2015 and entitles him to a total annual remuneration of A$176,800 plus statutory superannuation.
The agreement with Andrew Weeks is dated 12 November 2014 and entitles him to a total annual remuneration of A$140,000 including statutory superannuation.

9.9 ESCROW AGREEMENTS

The following shareholders will be subject to restriction agreements in relation to their shares in-line with the ASX Listing Rules. The table below sets out the periods during which such persons will be restricted from dealing in their Shares:

directors and officers’ insurance for the Coverage Period.

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Percentage Of Percentage Of
Escrowed Period Issued Shares Issued Shares
No. Shares
(From Date Of Restricted Following Restricted Following
Name Subject To
Quotation Of Shares Completion Of The Completion Of The
Escrow
On The Asx) Offer At The Offer At The
Minimum Maximum
Temont Pty Ltd 1 24 months 38,208,124 35.49% 29.93%
Autopilot Consulting
Pty Ltd 2 24 months 38,208,124 35.49% 29.93%
D.J Fairfull Pty Ltd 3 24 months 333,333 0.31% 0.26%
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1 Held by Temont Pty Ltd a company controlled by Anthony Ghattas ATF for Ghattas Family Trust Australia.

2 Held by Autopilot Consulting Pty Ltd, a company controlled by Nicholas Ghattas ATF Avenue Investments (Australia) Family Trust. 347 shares are held beneficially by Autopilot Consulting Pty Ltd.

3 Held by D.J Fairfull Pty Ltd (ACN 105 959 868) ATF Fairfull Family Super Fund; Fairfull Pty Ltd is controlled by David Fairfull who acted for HC in relation to the IPO.

The restriction agreements are in the form of Appendix 9A of the Listing Rules.

In addition, all Shareholders who are employees, officers or Directors of the Company, and certain others, will be restricted from dealing in Shares in accordance with the Company’s Securities Trading Policy.

9.10 LEAD AGREEMENT

The Company has appointed APP Securities Pty Ltd (ABN 45 112 871 842, AFSL 307706) (APP) as exclusive Lead Manager and Equity Capital Markets Advisor in relation to the proposed initial public offer of its shares (IPO), pursuant to a letter of appointment dated 18 October 2016 (Mandate).

APP’s role under the Mandate includes the following (Tasks):
Advising the Company on the appropriate strategy, structure, pricing and timing of the IPO on terms acceptable to investors;
Advising on the content and structure of any disclosure documents and any other market announcements or required documentation and timetable;
Assisting with and participating in due diligence in a non-reporting capacity (unless otherwise agreed with the Company;
Advising on market sentiment and impact of the Issue;
Co-ordinating the marketing roadshow for the Issue including assistance in the preparation of roadshow presentations;
Presenting and marketing to potential investors including, but not limited to, investor presentations, presentations to equity analysts and institutional roadshows;
Allocation of the Issue Securities; and

Undertaking administrative aspects of the IPO including, but not limited to, the receipt of application proceeds in respect of the Issue Securities, dealing arrangements and the payment of expenses.

The Mandate does not constitute an underwriting agreement which will be subject to a separate letter.

In consideration for its services the Company agreed to pay APP the following fees:

A pre-IPO monthly retainer of $5,000 (plus GST) for 2 months following signing the Mandate to be rebatable against the IPO capital raising fee, with alternate arrangements to be agreed if the issue is not completed within the 2 months.
A capital raising fee of 6% (plus GST) of the amount of new capital raised as a result of APP’s services up to the date of termination, payable within 7 days after successful listing (with all underwriting and selling fees to third parties to be met by APP from this fee).
Following IPO completion and subject to raising more than $5,000,000, APP will be issued with unlisted options equivalent to up to 5% of the number of securities issued under the IPO up to a maximum of 1,000,000 options, at a strike price of 50% premium to the capital raising issue price; these options may be exercisable on or before 30 November 2021 but not before a 3 years’ term.
A post listing monthly retainer fee of $5,000 for a period of 6 months from the date of listing for after-market strategy and support services including market feedback and managing investor roadshows.
In addition, the Company will reimburse APP for all reasonable out of pocket expenses incurred as part of the Mandate to be invoiced monthly and payable within 14 days of the invoice date, with expenses

REPLACEMENT PROSPECTUS

greater than $500 to require the Company’s prior approval.

In consideration for a successful raising under the Mandate, the Company will offer APP the first right to be appointed for any capital raising within 12 months of the listing date on reasonable terms to be agreed in good faith by the parties.

The Company agreed to make available to APP all information and materials relating to the company or its business and to provide to APP timely access to the Company’s directors, officers, employees, auditors, advisors and consultants as APP may reasonably require in performing its Tasks. APP will be entitled to rely on and will not be required to verify any information provided to it by the Company or lodged by the Company with the applicable authorities.

APP’s appointment under the Mandate is for a period of 3 consecutive calendar months from the date of the Mandate letter (Term) unless terminated earlier. The Company may terminate it by written notice to APP upon the occurrence of a material default by APP that is not remedied within 5 business days of APP receiving a written notice requesting it do so or immediately by paying APP the balance of any monthly retainer fees payable for the Mandate period in lieu of notice.

If the Company terminates the Mandate without due cause during the Term and during the period of 6 months after such termination the Company or any related body corporates of the Company or any person, related entity or associate controlled by them or by any Company shareholder (Relevant Person), in reliance on the assets of the Company the subject of the Mandate:

undertakes any capital raising involving the issue or sale of capital in any Relevant Person for a sum in excess of $1 million;
attempts to effect or completes the sale of 50% or more (in value) of the assets of a Relevant Person (other than to a Related Body Corporate of a Relevant Person or for a genuine reconstruction or reorganisation);
promotes, is involved in, defends or resists, whether or not voluntarily, a takeover bid, merger, composition or scheme of arrangement, that will involve a change in control of the Company, then the Company will pay APP immediately upon demand, a fee equivalent to whichever is the greater of a sum of $90,000 (plus GST) or 50% of the fees (using the rates described in the Mandate letter) that APP would have earned for a $3 million Capital Raising. A Capital Raising is defined to exclude an issue, allotment or transfer of equity, capital or debt to existing members or associates or related body corporates of the Company’s shareholders at the date of the Mandate.

During the Term, the Company undertook not to offer sell or market or otherwise dispose or announce the sale of any of its securities as part of a capital raising without the prior written consent of APP, which shall not be unreasonably withheld, except the offer or issue of securities as consideration for the acquisition of assets or projects.

The Mandate includes an obligation of the Company to indemnify APP and its officers employees agents and lead managers (Indemnified) against any liability, damages, claims and loss (except due to APP’s conduct) directly or indirectly arising from, and all costs and expenses (including reasonable legal costs and expenses) in connection with the issue of or any conduct in connection with the issue of any marketing document and materials, or the proposed allotment or issue of securities by the Company in the course of any capital raising or that is misleading or deceptive, or any conduct (other by APP) that contravenes Part 7.11 or Chapter 6D of the Corporations Act or any securities law.

APP will have no liability in connection with the Mandate except liability that is finally judicially determined to have directly resulted from APP, its agents, officers or related body corporates own action or inaction. APP will have no responsibility or liability if the capital raising does not proceed or for any loss suffered by the Company unless caused directly by the negligence, fraud, wilful misconduct or intentional breach of APP, its agents or officers. APP will also not be liable for any claims arising from advice or information given by APP based on information that is misleading, inaccurate or incomplete. Any amount recovered form APP will be reduced by the extent of any contribution of the Company to the loss.

The provisions relating to reimbursement of approved expenses (if any), APP’s indemnification and payments will remain operative notwithstanding termination. The Mandate includes standard warranties and representations and confidentiality, IP and conflict of interest clauses.

9.11 RELATED PARTY AGREEMENTS

The agreements referred to in Section 9.5, 9.6 and 9.7.2 above are related party transactions given that they were entered into between the Company or one of its subsidiaries and one of the Directors or a company controlled by a Director (as the case may be). As these agreements relate to the Directors’ reimbursement or insurance or were entered into at arms’ length (as the case may be), they did not require members’ approval under Part 2E.1 of Act.

REPLACEMENT PROSPECTUS

10. ADDITIONAL INFORMATION

10.1 INCORPORATION

The Company was incorporated on 28 August 2015 in Victoria as a public company limited by shares under the name “Lifestyle Global Networks Ltd.” It has changed its name to “United Networks Ltd” on 14th September 2015.

10.2 CORPORATE STRUCTURE

The UNL Group is comprised of the Company and the following companies, who are wholly subsidiaries of the Company (unless otherwise indicated):

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Company Incorporated In Incorporation Date Focus
United Lifestyle
Telecommunication solutions in
1 Group Networks Pty NSW, Australia 1 October 2009
Australia
Ltd (ULGN)
United Global SIM
2 Hong Kong 11 October 2012 Global SIM cards sales and distribution
Limited(UGS)
United Networks
3 Hong Kong 8 September 2015 IP holding
Hong Kong Ltd (UNH)
United Networks
4 Hong Kong 19 Octobe 2015 License and distribution
Operations Ltd (UNO)
United SIM Canada British Columbia,
5 23 June 2014 Global SIM cards sales and distribution
Ltd (USC) Canada
*----- End of picture text -----**

*wholly owned subsidiary of United Lifestyle Group Networks

10.3 CONSTITUTION AND RIGHTS ATTACHING TO SHARES

10.3.1 Introduction

The business of the Company is managed by or under the direction of the Directors. The Directors may exercise all powers of the Company that are not by the Corporations Act, the ASX Listing Rules or the Constitution required to be exercised by the Company in general meeting.

The rights and liabilities attaching to the Shares arise from the Constitution, the Corporations Act, the Listing Rules and general law.

Below is a summary of the material rights, liabilities and obligations attaching to the Shares and of other key provisions of the Constitution. This summary assumes that the Company is admitted to the official list of ASX, and it is not exhaustive nor does it constitute a definitive statement of the rights and liabilities of Shareholders.

in regard to dividend, voting, return of capital or otherwise, redeemable or bonus shares or shares which have any combination of characteristics described above. The Directors may also grant options over unissued shares.

10.3.3 Variation of class rights

Rights attached to Shares in a class may, unless their terms of issue state otherwise and subject to the Corporations Act, be varied by an agreement between the Company and any person purporting to contract on behalf of that class provided such agreement is ratified in writing by the holder of at least three fourths of the number of issued shares of the class or is confirmed by a resolution passed at a separate general meeting of the holders of shares of that class.

10.3.4 Unmarketable parcels

Subject to the Listing Rules, the Company is entitled to sell securities of a minority member on the conditions set out in the Constitution.

10.3.2 Issue of Shares

Subject to the Corporations Act, the ASX Listing Rules and any special rights conferred on the holders of any Shares or class of Shares, the Directors may issue, allot or grant shares or options over Shares in the Company on such terms as they see fit. This allows the Directors to, among other things, issue and allot shares with any preferred, deferred or other rights or restrictions whether

10.3.5 Transfer of Shares

Except where required or permitted by law, the ASX Listing Rules, the ASX Settlement Operating Rules or the Constitution, there is no restriction on the transfer of shares. Where the securities are quoted on ASX, the Directors may in their absolute discretion refuse to register any transfer subject to a holding lock, in any

REPLACEMENT PROSPECTUS

circumstances permitted by the ASX Listing Rules, or where the transfer is in breach of the ASX Listing Rules or a restriction agreement.

10.3.6 Share buy-backs

The Company may, in accordance with the Listing Rules and the Corporations Act, buy-back its own shares.

from meetings of Directors or committees of Directors, general meetings of the Company, and in connection with the Company’s business. Subject to the Corporations Act, any Director called upon to perform extra services or undertake any executive or other work for the Company beyond his or her general duties may be paid special additional remuneration as determined by the Directors.

10.3.7 Meetings of Shareholders

Except as permitted by law, a general meeting, to be called the annual general meeting, must be held at least once in every calendar year, and must be held in accordance with the Corporations Act and the ASX Listing Rules. Written notice of a meeting of the Company’s members must be given to each member entitled to vote at the meeting.

10.3.8 Voting at meetings of members

Subject to any rights or restrictions attached to any class of shares, at a meeting of members, on a show of hands, each member has one vote and on a poll each member has one vote for each fully paid share held. In the case of equality of votes, the chairperson of the meeting has a casting vote except where he is also a member.

10.3.9 Appointment of Directors

The number of the Directors (excluding alternate Directors) will be as determined by the board and not less than three. Directors are elected at annual general meetings of the Company. At each annual general meeting of the Company, one third of the longest serving Directors, or the number nearest to but not exceeding one third, must retire from office and are eligible for re-election. A Director may not hold office for a continuous period in excess of three years or past the third annual general meeting following the Director’s appointment, whichever is the longer, without submitting for re-election.

The Directors may at any time appoint a person qualified to be a Director, either to fill a casual vacancy or as an addition to the existing Directors, but such additional Director holds office only until the termination of the next annual general meeting of the Company.

10.3.10 Remuneration of Directors

The Company will determine by resolution the total remuneration to be paid to the Directors, and the Directors will determine how the total remuneration is divided among them. The remuneration of a Director must not include a commission on, or a percentage of, profits or revenue. The aggregate Directors’ Fees currently determined by the Company must not exceed A$500,000. Presently, the aggregate Directors’ Fees agreed to be paid by the Company is A$154,395 see Section 5.4 for further details.

Directors will also be eligible to participate in the Employee Share Plan (see Section 10.3.14 for further details).

10.3.11 Alternate Directors

Any Director may appoint any person to act as an alternate Director in place of the appointing Director for a meeting or for a specified period. An alternate Director is not to be taken into account in determining the number of Directors under the Constitution.

10.3.12 Meetings of Directors

The Directors may meet together for the dispatch of business and adjourn and otherwise regulate their meetings as they see fit. A resolution of the Directors must be passed by a majority of the votes cast by Directors present and voting on the resolution. The chair has a casting vote in the event of an equality of votes of directors, except where only 2 directors form a quorum and are present or only 2 are competent to vote.

The Directors must keep minute books in accordance with the Corporations Act and in which they record proceedings and resolutions of meetings of the Company’s members, proceedings and resolutions of Directors’ meetings (including meetings of a committee of Directors), resolutions passed by members without a meeting, and resolutions passed by Directors without a meeting.

10.3.13 Dividends

The Directors may by resolution determine a dividend is payable, declare a dividend, fix the amount time and method of payment and subject to the Listing Rules fix a record date in respect of the dividend. Subject to the Corporations Act the Directors may also procure that the Company pay its members such interim dividend as permitted under the Act.

The Directors currently intend to give priority to maximising the development and growth of the Company and any resultant development, production and generation of new opportunities, rather than distributing these funds as dividends. Once the Company is able to generate a substantial and sustainable level of cash flow after commitments, the Directors intend to review this policy and possibly initiate a revised dividend policy.

The Directors can give no assurance as to the amount, timing, franking or payment of any future dividends by the Company. The capacity to pay dividends will depend on a number of factors including future earnings, capital expenditure requirements and the financial position of the Company.

The Directors may be paid all travelling and other expenses properly incurred by them in attending and returning

REPLACEMENT PROSPECTUS

10.3.14 Employee Incentive Plan

The Company has adopted an Employee Share Option Plan (ESP or Plan), under which Directors and employees may be allocated Options as a means of:

attracting, motivating and retaining eligible employees
delivering rewards to eligible employees for individual and Company performance
allowing eligible employees, the opportunity to become Shareholders
aligning the interests of eligible employees with those of Shareholders

The ESP allows for the Board to invite an eligible employee to participate in a grant of Awards under the terms of the Plan. Awards include options to subscribe for ordinary shares (Options) or Rights to subscribe for ordinary shares at no consideration (Rights).

Under the ESP, Rights or Options can be granted to selected eligible employees, at no cost unless otherwise determined by the Directors. Eligible employees may include:

a. an employee of the Company or any Subsidiary of the Company;
b. a director or secretary of the Company or any Subsidiary of the Company (subject to members’ approval at a general meeting if any as required under the Corporations Act and Listing Rules);
c. a contractor, consultant, agent, advisor or other person retained, engaged or nominated by the Company or any Subsidiary of the Company.

In selecting Eligible Employees who may be invited to apply for Options or Rights, the Board may have regard to:

the position in the Company Group held or to be held by the Eligible Employee;
the Eligible Employee’s length of service with the Company Group;
the contribution made by the Eligible Employee to the Company Group;
the potential contribution to be made by the Eligible Employee to the Company Group; and
any other matters which the Board considers relevant.

Whether or not all the ESP Options or Rights vest will depend on the exercise conditions being achieved. Such conditions will be determined by the Board at the time of offer of the ESP Option or Rights and may include performance hurdles.

Rights lapse;

because of the employee having resigned from the Company, the employee will have up to 3 months to exercise any vested Options before the Options or Rights lapse; and
for any other reason, the Options or Rights will lapse on the date of cessation of employment or office, unless the Board determines otherwise.

If the Option or Right has not lapsed as described above, it will lapse on the latest time at which the Option or Right may be exercised, as specified by the Board, which must not exceed seven years from the date of the grant of the Option or Right.

Subject to the Listing Rules, if the Company makes any new issue of securities or alterations to its capital by way of a rights issue, bonus issue or other distribution of capital, reduction of capital or reconstruction of capital then the Board may make adjustments to the rights attaching to the Options or Rights (including, without limitation, to the number of Shares which may be acquired on exercise of the Options or Rights and the Exercise Price of an Option) on any basis it sees fit in its absolute discretion, provided however that the Board must apply the formula stated in Listing Rule 6.22.2 in varying the Exercise Price of an Option following a pro rata issue (other than a bonus issue) to Shareholders.

As at the Replacement Prospectus Date, the Company has on issue a total of 14,000,000 options granted under the plan to the directors as described in section 5.4.1. Additional 2,000,000 options will be issued to the following consultants subject to the following terms:

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APP Securities HC Nominee
5% of the New
Number of Shares to be
1,000,000
Options issued in the IPO
up to 1,000,000
The date the The date the
Company Company
receives IPO receives IPO
Grant Date
proceeds proceeds
in excess of in excess of
$5,000,000 $5,000,000
50% premium to 50% premium to
Exercise Price
IPO Issue Price IPO Issue Price
Three years from Two years from
Vesting Date
Grant Date Grant Date
Five years from Five years from
Expiry Date
Grant Date Grant Date
----- End of picture text -----*

*Realm Group Pty Ltd (ABN 77 107 554 389)

Where an Eligible Employee ceases to be employed with the Company after the Options have vested:

because of death, total and permanent disablement or retirement, the employee will have up to 6 months to exercise any vested Options before the Options or

REPLACEMENT PROSPECTUS

10.3.15 Litigation

To the knowledge of Directors, there is no litigation threatened against the Company and no litigation threatened by the Company. The Directors are not presently aware of any circumstances likely to give rise to any of the above.

10.3.16 Funding arrangements

UNL has closed a pre-IPO funding round of A$2.03 Million in December 2015. The funds were raised from professional investors for working capital purposes at a price of A$0.16 per Share.

to the Company in relation to the Offer. For this work, and all work associated with the Offer, Hall Chadwick is to receive fees amounting to approximately A$50,000 including GST but excluding disbursements together with the Options described in Section 10.3.14 above.

10.3.18 Consents

Each of the parties named in the table below (Consenting Parties) has consented to being named in this Replacement Prospectus in the form and context in which it is named and has not withdrawn such consent prior to the lodgement of this Replacement Prospectus with the ASX:

10.3.17 Interests of named persons

Other than as set out below or elsewhere in this Replacement Prospectus, none of the following (Prescribed Persons) holds as at the time of lodgement of this Replacement Prospectus with ASIC, or has held in the two years before lodgement of this Replacement Prospectus with ASIC, an interest in the formation or promotion of the Company, the Offer or any property acquired or proposed to be acquired by the Company in connection with its formation, promotion or the Offer:

person named in this Replacement Prospectus who has performed a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Replacement Prospectus;

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Capacity in relation to the
Consenting party
Company
Australian legal adviser Sekel Oshry
Rothsay Chartered
Auditor
Accountants
Rothsay Chartered
Investigating Accountant
Accountants
Share registry Advance Registry
Lead Manager of Public
APP Securities Pty Limited
Offer
Corporate advisory Hall Chadwick
----- End of picture text -----

a promoter of the Company;

In addition, except as set out below or elsewhere in this Replacement Prospectus, no benefit of any kind, (whether in cash, Shares or otherwise) have been paid or given agreed to be paid or given to a director or proposed director or company or firm with which he is associated to induce him to become or qualify as a director or to a Prescribed Person for services rendered by that person in connection with the formation or promotion of the Company, or the Offer:

Rothsay Chartered Accountants has prepared the Investigating Accountant’s Report in Section 7 of this Replacement Prospectus and undertaken financial due diligence services in relation to the Offer and is to receive fees amounting to approximately A$65,000 including GST but excluding disbursements.
Sekel Oshry has acted as the Australian legal advisers to the Company for the purposes of the Offer. For this work, and all work associated with the offer, is to receive fees amounting to approximately A$60,000 including GST but excluding disbursements.
APP Securities Pty Limited has acted as the Lead Manager for the Public Offer. For this and its corporate advisory work, APP Securities is to receive fees amounting to approximately A$210,000 including GST but excluding disbursements, based on minimum raising. The Lead Manager is also to receive Options as described in Section 10.3.14 above.

Each of the Consenting Parties states that it has not authorised or caused the issue of this Replacement Prospectus, does not make any offer of Shares, and to the maximum extent permitted by law except for references to that Consenting Party in this Replacement Prospectus in the form and content in which they are included, or a report included in this Replacement Prospectus with its consent:

is not taken to have made, or purported to have made, any representation or warranty in relation to the Company either express or implied or any statement in this Replacement Prospectus or on which a statement made in the Replacement Prospectus is based; and
expressly disclaims all liabilities in respect of, makes no representation regarding and takes no responsibility for any statements included in or omitted from this Replacement Prospectus.

10.4 EXPENSES OF THE OFFER

All expenses connected with the Offer are being borne by the Company.

Based on the Offer being fully subscribed, the estimated costs of the Offer, which have been paid or are payable by the Company, are expected to be 10% of the funds raised between $455,000 at the minimum capital raising and $825,000 at the maximum capital raising.

Hall Chadwick has acted as corporate adviser

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Expenses of the Offer Minimum ($) Maximum ($)
Listing Fees 60,000 85,000
Printing and Misc 10,000 10,000
Legal 60,000 165,000
Accounting 65,000 65,000
Lead manager 210,000 450,000
corporate adviser 50,000 50,000
Total Expenses of the Offer 455,000 825,000
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10.5 AUTHORISATION BY DIRECTORS

Each Director has authorised the issue of this Replacement Prospectus, has consented to the lodgement of this Replacement Prospectus with the ASIC and has not withdrawn that consent.

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Anthony Ghattas Nicholas Ghattas Charbel Nader Non-Executive Chairman Chief Executive Officer Non- Executive Director Date: 2 1 November 2016 Date: 2 1 November 2016 Date: 2 1 November 2016

REPLACEMENT PROSPECTUS

GLOSSARY

$, A$

Australian Dollar

AAS

Australian Accounting Standards.

Application Form

The application form attached to or accompanying this Replacement Prospectus for investors to apply for Shares under the Offers.

Big Data Analytics

The process of examining a large data set to obtain information that can be used for business intelligence

Board or Board of Directors

AASB

Australian Accounting Standards Board.

Acceptance

The percentage of customers that ordered a SIM after being made a offer by our partners from the EDM by a direct online link or over the phone order

ACCC

Australian Competition and Consumer Commission

Application Amount or Monies

Money received by a company during an IPO when the applicant applies to buy new shares.

Apps

A self-contained program or piece of software designed to fulfil a particular purpose; an application, especially as downloaded by a user to a mobile device.

ASIC

Australian Securities and Investments Commission

The board of directors of the Company

Broker

A Lead Manager, Co-Manager, an affiliate of any one of them, or any other ASX participating organisation selected by the Lead Manager and United Networks Limited to act as a broker for the Offer

Broker Firm Offer

The Offer of Shares under this Replacement Prospectus to Australian Retail Broker

ACMA

Australian Communications and Media Authority

Activation

Refers to the registering and loading of funds onto a Global SIM card via the online customer portal.

APC

Autopilot Consulting Pty Limited (ABN 87 136 984 186) as trustee for Avenue Investments Family Trust

API

Application Protocol Interface

APP Securities or Lead Manager APP Securities Pty Limited (ABN 45 112 871 842)

Applicant

A person who submits a valid Application Form and required Application Amount pursuant to this Replacement Prospectus

Application

An application for New Shares under the Offer.

ASX

ASX Limited (ACN 008 624 691) or the stock exchange which it operates, as the context requires.

Autopilot Consulting or APC

Autopilot Consulting Pty Ltd (ACN 136 984 186)

Avenue Investments Australia

Avenue Investments Australia Family Trust (ABN 13 402 363 010)

Average Credit Added

Average Credited loaded to the SIM card in both Credit Add and Data Bundles this is also termed as the Average Revenue Per User (ARPU)

Average Revenue Per User (ARPU) Also referred to as Average credit added

API

Application Protocol Interface

BBSY base rate Bank Bill Swap Bid Rate

APP Securities or Lead Manager

APP Securities Pty Limited (ABN 45 112 871 842)

Chairman’s List Offer

The Chairman’s List Offer is open to selected investors in Australia who the Company has invited to participate in the Chairman’s List.

CHESS

ASX’s Clearing House Electronic Sub-Register System. It facilitates the clearing and settlement of trades in financial products including shares, warrants, stapled securities, company issued options and units in trusts, and provides an electronic sub-register for shares in listed companies.

CMS

Content Management System

Closing Date

5.00pm (AEST) on 13 December 2016

The Company

United Networks Limited (ACN 607 921 246).

Completion

The completion of the Offer, being the date upon which Shares are issued or transferred to Successful Applicants in accordance with the terms of the Offer.

REPLACEMENT PROSPECTUS

Consenting Party

The parties referred to in Section 10.3.18

Constitution or Company Constitution

The company constitution specifies the rules governing the relationship between and activities of the Company, its Directors and Shareholders.

Corporations Act

The Corporations Act 2001 (Cth.)

ESP

The Employee Share Plan or Employee Share Option Plan described in 10.3.14

Exercise Price

The price per share at which the owner of a traded option is entitled to buy or sell the underlying Share.

Existing Shareholders

The Shareholders of the Company as at the date of this Replacement Prospectus

GAP

Global Access Portal, which is UNL’s proprietary cloud-based multi layered Customer Relationship Management (CRM) platform servicing UNL’s products, partners and their end customers, described in detail in Section 4.3

General Offer

The details of the General Offer and the allocation policy under it are described in Section 2.11

Ghattas Family Trust

CVO

Cover-More Insurance Services Pty Ltd (ABN 95 003 114 145)

CRM

Expiry Date

The date on which this Replacement Prospectus expires, being the date which is 13 months after the date of the Original Replacement Prospectus.

Ghattas Family Trust Australia (ABN 38 687 647 255)

Group

The Company and its subsidiaries

Customer Relationship Management

Customer

A Customer or partner of UNL which UNL directly sell products to.

Directors

Anthony Ghattas, Nicholas Ghattas and Charbel Nader

EBIT

Earnings before interest and tax

EBITDA

Earnings before interest, tax, depreciation and amortisation

EDM

Electronic Direct Marketing

Embedded SIM (E-SIM)

Is SIM-less technology where SIM is embedded into the device and no longer a removable card

End User

A user of the products. These are both direct customers from UNL and UNL’s Customers’ customer.

Enterprise Customer or Partner

A customer offering UNL’s solution to its customers as white label solutions or otherwise.

Exposure Period

The Exposure Period gives the market and ASIC an opportunity to consider the information in the disclosure document before the issuer can accept applications for subscription or purchase of the securities or the financial product. ASIC may extend the 7-day exposure period to a maximum of 14 days in these circumstances.

Fair Work Act

Fair Work Act 2009 (CTH) as amended from time to time.

Financial Information

Historical Financial Information and any other Financial Information disclosed in this document.

Financier

ULG and ULGH

FOB

Free on Board

Founders or Director Related Shareholders APC and Temont

FY

Financial Year

GSA

General Security Agreement

GSMA

Refers to the GSM Association www. gsma.com

GST

Has the meaning given to that term in A New Tax System (Goods and Services Tax) Act 1999 (Cth) and includes goods and services tax.

Hall Chadwick or HC

HC Management Pty Ltd (ABN 16 169 916 885)

HIN

Holder Identification Number

Historical Financial Information Statutory Historical Financial Information and Pro Forma Historical Financial Information.

IAR

Investigating Accountants Report

IFRS

International Financial Reporting Standards

IMR

International Mobile Roaming

Escrow Arrangement

The arrangement described in Section 9.9 during which the escrowed shareholders will have a portion of their shareholdings in escrow.

Institutional Offer

The details of the Institutional Offer and the allocation policy under it are described in Section 2.10

REPLACEMENT PROSPECTUS

Investigating Accountant

Rothsay Chartered Accountants (ABN 59 087 479 410)

IP

Intellectual Property or Intellectual Properties

IPO

Initial Public Offering

Issue Price

The subscription price per New Share under the Offer (i.e. $0.20 per New Share).

MVNO

Mobile Virtual Network Operator which purchases wholesale services from MNOs and does not operate mobile network infrastructure. A MVNO inserts its own brand and addresses a particular market segment. MVNOs are generally free to set their own tariffs and distribute SIMs under their brand through their own distribution channels. They also provide their own customer service.

NBN

National Broadband Network

Opening Date

28 November 2016

Options

Options to acquire Shares

Over the Top(OTT) /Over the Air (OTA)

Over the Top and Over the Air refers to the transmission of information wirelessly to devices. OTT/OTA content can refer to streaming video, VoIP, messaging applications and more.

PCI Compliance

Key Customer

Refers to Cover-More Insurance Group and its partner companies.

Lead Agreement

Details of the Lead Agreement is set out in Section 9.10

Lead Manager

APP Securities Pty Ltd or APP Securities

Network Business Assets

IP, contractual and other rights, interests and assets relating to the telecommunication business carried on by ULGN and its relevant body corporates under the United brand

Network Operator

Is the owner and provider of mobile network services

The Payment Card Industry Data Security Standard (PCI DSS) is a proprietary information security standard for organisations that handle branded credit cards from the major card schemes including Visa, MasterCard, American Express. Being PCI compliant is a means of building customers’ trust and protecting business against damaging leaks of confidential customer information.

New Shares

Location-based Services

Location-based services (LBS) are services that locate knowledge about where a service user, typically someone with a mobile information device, is located.

Listing Rules The ASX Listing Rules

MNO

Mobile Network Operator which holds licenses to use radio frequency spectrum and owns or operates wireless communications networks, including towers, base stations and switching centres. They are the dominant type of mobile service provider and typically offer lock-in contracts with subsidised handsets.

MSA

Master Services Agreement

Refers to the Shares of UNL on Issue as part of this Offer

NR Committee

Nomination and Remuneration Committee.

Offer or Public Offer

The offer of up to minimum of $3,500,000 to a maximum of $7,500,000.00 New Shares to members of the public, under this Replacement Prospectus, subject to and on the Terms of the Offer.

Offer Period

The period whereby applicants can register their interest in participating in the offer.

Offer Price $0.20 per Share.

PPSR

Personal Property Securities Register

Pre-IPO

Pre-IPO placement is when a portion of an initial public offering (IPO) is placed with private investors right before the IPO is scheduled.

Prescribed Person

States and authorised person.

Privacy Act

Privacy Act 1988 (Cth.)

Pro Forma Historical Balance Sheet

Pro forma consolidated historical balance sheet as at 30 June 2016

Pro Forma Historical Cash Flows

Pro forma consolidated historical cash flow statements for FY 14/15 and FY 15/16

Offers

Number of Global SIM EDM offers made to eligible partner and direct customers

Official List of ASX The official list of ASX listed companies.

Pro Forma Historical Financial Information

Pro Forma Historical Results, Pro Forma Historical Cash Flows and Pro Forma Historical Balance Sheet.

REPLACEMENT PROSPECTUS

Pro Forma Historical Results

Pro forma consolidated historical income statements for FY 13/14, FY 14/15 and FY 15/16

Proceeds

Money obtained from Offer

Replacement Prospectus

This document dated 21 November 2016 and any replacement or supplementary prospectus in relation to this document.

Replacement Prospectus Date 21 November 2016

Silent Roamer

Silent Roamers are those that generally exercise caution (for fear of bill shock and excess charges), or do not use voice and data services at all while roaming, and represent a nonuser segment

SIM

Subscriber Identity Module cards that contain a smart chip with memory that allows for data storage and software applications in mobile devices

SME

Small-to-Medium sized Enterprises

Terms of the Offer

The terms and conditions set out in this Replacement Prospectus, including any modifications made by the Company

TIO

Telecommunications Industry Ombudsman

UGS

United Global SIM Limited (Hong Kong company ARBN 610 038 509)

United Cellars

United Cellars Australia Pty Ltd (ACN 111 797 623)

PSOW

Principal Statement of Work

Public Offer

The Institutional Offer, the Broker Firm Offer and the General Offer

Related Party Loans

The loans advanced to the Company by related parties as described in Section 9.7.2

Retail SIM Store Sales

Refers to the number of SIMs that were sold to retail and online merchants during a certain period.

RMA Committee

Risk Management and Audit Committee consisting of Charbel Nader, Anthony Ghattas and Nicholas Ghattas

Rothsay Accounting

Rothsay Accounting Services Pty Ltd

Sekel Oshry

Sekel Oshry Lawyers (ABN 85 139 760 857)

Share Registry

Advanced Share Registry Limited (ABN 14 127 175 946)

Shareholder

The registered holder of a Share.

Fully paid ordinary shares in the capital of the Company

SOW Statement of Work

SRN

Security Holder Reference Number

Statutory Historical Balance Sheet

Statutory consolidated historical balance sheet as at 30 June 2016

Statutory Historical Cash Flows

Statutory consolidated historical net free cash flow before financing, tax and dividends for FY 14/15 and FY 15/16

Statutory Historical Financial Information

Statutory Historical Results, Statutory Historical Cash Flows and Statutory Historical Balance Sheet

Statutory Historical Results

Statutory consolidated historical income statements for FY 13/14, FY 14/15 and FY 15/16

Subscribers

The number of active SIMs in the market rather than individual users.

TCP Code

Telecommunications Consumer Protection Code

Telecommunications Act

Telecommunications Act 1997

Temont

Temont Pty Ltd (ACN 113 724 324) as trustee for Ghattas Family Trust Australia

United Galleries

United Galleries Pty Ltd (ACN 106 862 793)

United Lifestyle Group (ULG)

United Lifestyle Group Pty Ltd (ACN 116 370 202)

ULGH

ULG Holdings Ltd (foreign company ABN 41 606 136 789)

ULGN

United Lifestyle Group Networks Pty Ltd (ACN 139 763 830)

UNH

United Networks Hong Kong Limited (Hong Kong Company #2283333)

UNL, United Networks Limited/ United

The Company or the Group as the context requires

UNO

United Networks Operations Limited (Hong Kong company ABN 48 610 395 358)

VoIP

Voice over IP is a methodology and group of technologies for the delivery of voice communications and multimedia sessions over Internet Protocol (IP) networks

Wi-Fi Hotspot

A Wi-Fi Hotspot is a physical location where people may connect to the Internet via a Wi-Fi connection

REPLACEMENT PROSPECTUS

Wine First

Wine First Pty Ltd (ACN 116 972 313)

Wine First International

Wine First International Enterprises Ltd (Company 0953930)

Wine First Pty Limited New Zealand

Wine First Pty Limited New Zealand (Company 3913479)

White-label Partners

The Enterprise and Key Customers that UNL brands SIM cards for

White-labelling

Refers to the partner full-branding and co-branding of Global SIM products

Working Capital

Working capital is defined by UNL as the total of trade and other receivables, pre-payments less trade and other payables.

REPLACEMENT PROSPECTUS

CORPORATE DIRECTORY REPLACEMENT PROSPECTUS

CORPORATE DIRECTORY

DIRECTORS

Anthony Ghattas – Non Executive Chairman Nicholas Ghattas – Chief Executive Officer Charbel Nader – Non Executive Director

COMPANY SECRETARY

Michael Potts – Chief Finance Officer

REGISTERED OFFICE

Level 2, 100 William St Woolloomooloo NSW 2011 Tel: +61 2 9003 9573 Fax: + 61 2 8078 4561

WEBSITE

www.unitednetworks.net.au

SHARE REGISTRY

Advanced Share Registry 110 Stirling Hwy Nedlands WA 6009 PO Box 1156 Nedlands WA 6909

Tel: +61 8 9389 8033 Fax: +61 8 9262 3723

INVESTIGATING ACCOUNTANT

Rothsay Chartered Accountants Level 1/12 O'Connell St Sydney NSW 2000 T: +61 2 8815 5400 F: + 61 2 8815 5401

SOLICITORS

Sekel Oshry Lawyers Level 8 - Currency House 23 Hunter Street Sydney NSW 2000 T: +61 2 9191 5400 F: +61 2 9191 5499

LEAD MANAGER

APP Securities Pty Ltd Level 41, 259 George Street Sydney NSW 2000 T: +61 8 9226 0215 F: +61 8 9226 0066

FINANCIAL ADVISOR

HC Management Pty Ltd Level 40, 2 Park Street Sydney NSW 2000 T: + 61 2 9263 2600 F: + 61 2 9263 2800

AUDITORS

Rothsay Chartered Accountants Level 1/12 O'Connell St Sydney NSW 2000 T: +61 2 8815 5400 F: + 61 2 8815 5401

REPLACEMENT PROSPECTUS

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REPLACEMENT PROSPECTUS
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AI assistant

HUBIFY LIMITED — Capital/Financing Update 2017

65049_rns_2017-01-10_30d08285-0593-485e-aab7-30a414e96d91.pdf

Lead Manager

APP SECURITIES PTY LIMITED

IMPORTANT INFORMATION

Application for listing

Exposure Period

Foreign Jurisdictions

Representations

Forward looking statements

Photographs and diagrams

Disclaimer

Electronic Replacement Prospectus

Glossary

Financial amounts

Privacy

Questions

KEY DATES & OFFER STATISTICS

KEY DATES

KEY OFFER STATISTICS

HOW TO INVEST

CHAIRMAN’S LETTER

CONTENTS

1. INVESTMENT OVERVIEW & DETAILS OF THE OFFER

1.1 BUSINESS OVERVIEW

1.2 KEY FEATURES OF UNL’S BUSINESS MODEL

1.3 KEY STRENGTHS

1.4 SUMMARY OF KEY RISKS

THE KEY RISKS INCLUDE:

1.5 KEY OFFER STATISTICS*

1.6 DIRECTORS AND KEY MANAGEMENT

1.7 INTERESTS, BENEFITS AND RELATED PARTY TRANSACTIONS

1.8 SUMMARY OF THE OFFER

1.9 APPLICATION OF PROCEEDS

2. DETAILS OF THE OFFER

2.1 THE OFFER

2.2 STRUCTURE OF THE OFFER

2.3 IMPORTANT DATES

2.4 PRO FORMA HISTORICAL CONSOLIDATED BALANCE SHEET

2.5 SHAREHOLDING STRUCTURE

2.6 CONTROL IMPLICATIONS OF THE OFFER

2.7 POTENTIAL EFFECT OF THE FUNDRAISING ON THE FUTURE OF THE COMPANY

2.8 KEY TERMS AND CONDITIONS OF THE OFFER

2.9 BROKER FIRM OFFER

2.9.1 Who may apply

2.9.2 How to apply

2.9.3 Payment methods

2.9.4 Allocation policy under the Broker Firm Offer

2.9.5 Acceptance of Applications

2.9.6 Application Monies

2.10 INSTITUTIONAL OFFER

2.10.1 Invitations to bid

2.10.2 Allocation policy under the Institutional Offer

2.11 GENERAL OFFER

2.11.1 Who may apply

2.11.2 How to apply

2.11.3 Payment methods

2.11.4 Allocation policy under the General Offer

2.11.5 Acceptance of Applications

2.11.6 Application Monies

2.12 ESCROW ARRANGEMENTS

2.13 DISCRETION REGARDING THE OFFER

2.14 RESTRICTIONS ON DISTRIBUTION

2.15 ASX Listing, Registers And Holding Statements, Normal Settlement Trading

2.15.1 Application to the ASX for listing of UNL and quotation of Shares

2.15.3 Normal settlement trading and selling Shares on market

2.15.2 CHESS and issuer sponsored holdings

3. INDUSTRY BACKGROUND

3.2 MARKET DESCRIPTION

3.1 INTRODUCTION

3.2.1 International Mobile Roaming Market

INDUSTRY TRENDS

3.2.2 International Mobile Roaming (IMR) Market Trends

IMR Market expected growth

3.2.3 Australian Telecommunications Market

Estimated IMR Market Revenue

AUSTRALIAN TELECOMMUNICATIONS INDUSTRY



3.3 COMPETITIVE LANDSCAPE

HUBIFY LIMITED Capital/Financing Update 2017