Quarterly Company Progress Report September 2017

Welcome to the September 2017 Quarterly Company Progress Report. This report covers details reported to shareholders on the progress that companies have made since our last update. At the end of the report there’s also an update covering the latest happenings at Snowball Effect.

The information below is provided by the companies themselves, and participation in the report is at each company's discretion. Many companies have chosen to moderate the level of financial / commercial information included below due to sensitivity, with shareholders typically receiving more fulsome detail on company progress. There are a small number of companies not included in the current report due to the timing of their shareholder reports. Updates from these companies will be added when their reports are made available to shareholders.


Veriphi is a New Zealand company that has worked to develop a highly innovative laser-based analyser to verify intravenous drugs and alert clinicians before administration to prevent medication error in hospitals. Veriphi raised over $700k through Snowball Effect in May 2016 and $240,000 in November 2016, following requests from shareholders to be able to invest more money.

Since the capital raise Veriphi has:

  • Expanded its technical development team to four full time and three part-time staff.
  • Relocated to a new larger office on Devonport Wharf.
  • Completely rebuilt its analytical hardware and software.
  • Developed a new commercial consumable including production tooling.
  • Greatly increased the sensitivity of the analyser reducing the standard deviation of results by up to 72%.
  • Commenced formal trials at Auckland City Hospital Pharmacy and another commercial site.
  • Veriphi is currently building five commercial pharmacy analysers for compliance approvals at the end of 2017.
  • The company is in ongoing discussions with the US Food and Drug administration.
  • In March 2018 Veriphi will visit the Texas Medical Center, the world’s largest medical centre in Houston, as part of a Callaghan Innovation group to explore potential partnership opportunities there.

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Zeffer is the largest independent, dedicated cider producer in New Zealand. The company raised $1.2m on Snowball Effect in March 2017.

  • We had another strong quarter with revenue and volumes ahead of last quarter and higher than our budget.
  • Our Apple Crumble cider continues to be extremely popular and is driving strong sales. Export sales are also performing well.
  • The new site and production team are now fully operational and rearing to go for the summer months ahead. We expect several months of record production coming up.
  • Our new 'home block' orchard has now been planted.
  • We are driving forward with new product development for Q3 and Q4 keg releases. Keg releases serve as a good product test before we look to new bottle releases next spring.
  • We received the gold and bronze medals at the Asia Beer Awards in Singapore for our Apple Crumble and Red Apple Cider.
  • We have won ranging through Coles Australia into their 'First Choice Liquor' stores. Three of our 4-packs have just been put on the shelf at 73 stores in NSW, VIC and QLD with a rollout to ACT, SA and WA likely.
  • We intend to launch our cellar door next spring, at which time we will have an on and off premise offering and will have created New Zealand’s first cider garden.
  • Sean Kelly has become a Zeffer shareholder and joined the board of directors. Sean brings a wealth of diverse business experience from China and East Asia and we are extremely pleased to welcome Sean to the team.

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Designer Wardrobe

Designer Wardrobe (DW) was founded in 2012 by Donielle Brooke as a New Zealand based fashion marketplace and successfully raised $1.7 million through Snowball Effect in May 2017.

  • DW made a strategic decision to invest in the core technology that has helped us grow so far, with the goal of significantly improving the customer experience for members. We have now re-built the platform across web and iOS and launched this to members on December 18th 2017.
  • The re-build also sees us expand into mens clothing, which many of our members have been asking for.
  • Our direct rental proposition launched in November and rental revenue has stepped up significantly due to this.
  • Growth in Australia continues with record sales months in August and September, indicating growing engagement on the platform.
  • Total users have now reached 113,000, up 12% from the previous quarter, with live listings up 2% and average returning members up 2% from the previous quarter.

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Squirrel Group is made up of Squirrel Mortgages, Squirrel Money, and TenanSee. It is this unique combination of (proprietary) technology working alongside a strong brand and a growing market share of mortgage brokering that puts Squirrel in the right place at the right time to lead market disruption.

  • Mortgage settlement volumes in the quarter were down 27% against the same quarter last year reflecting the extremely soft housing market.
  • Cash received via trial commissions was up 28% on the previous quarter following a similar increase in the previous quarter.
  • Loans originated through the Squirrel Money platform also grew by 28% in the quarter.
  • Year to date operating costs down 8.7% on the same period last year.
  • Final settlement of the Aspire Advisers acquisition executed in September 2017.
  • 1 million new ordinary shares issued in October 2017.

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Aeronavics designs and manufactures high quality industrial aerial robots (drones), and has been an industry innovator since 2010 with clients such as NASA, Dreamworks, and Disney. We have made some significant progress on various fronts including large overseas orders, industry partnerships, potential investment to fund overseas expansion, and achieving important accuracy milestones.

  • Secured some large overseas orders for specialised aircraft.
  • Made progress in finding industry partnerships for our development roadmap.
  • Talking with interested parties regarding potential further investment for funding our overseas expansion and R&D.
  • We have accomplished some important accuracy milestones in our survey solution and we have successfully delivered various aircraft to customers.
  • We also had 2 new engineers starting in October and will have further support from two summer interns to keep building towards our mutual goals.

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The Ubco 2x2 is the world’s first production Dual Electric Drive Bike. Designed in New Zealand, the Ubco utilises advances in electric motor design and battery technology to deliver a whisper quiet connected utility vehicle that embraces portable energy.

  • UBCO Australian Distributor, Daviesway have just placed their second container order for 2018 having pretty much sold out their first container after product has been on shore for less than 2 weeks.
  • UBCO US have completed clearance of US customs (a very big step for first time entry) and have pre-sold more than half their first order with the second order placed before product on shore.
  • Largest retail fleet of 14 bikes just sold into a new store in Boulder, Colarado,
  • Second full production run is now in process at Yadea.
  • UBCO has received a government grant to assist in developing underlying documentation for Series B.
  • UBCO has cleared NZ Entry certification process and has shipped most orders for existing product and has been taking pre-orders on the next production.
  • CEO Timothy Allan spoke at the National Event ‘Safer Farms & Farm Vehicles’ for Worksafe on taking a new technology driven approach to Farm Vehicles.

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SOS is a medically formulated hydration drink mix that’s as effective as an IV drip. SOS raised over $250k through Snowball Effect in January 2016.

Highlights for the quarter ending September 2017:

  • Rolling out across Boots in the UK - 5,500 stores.
  • Rolling out across Kroger in the USA - 2,600 stores.
  • We have hit our recent forecasts and financial KPI's.
  • SOS is continuing to fund raise at a $14M USD valuation and has raised $400k USD in the past month alone.

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Punakaiki Fund is one of the most active venture capital investors in New Zealand, with investments in 20 high-growth companies. Punakaiki Fund raised over $3.2m through Snowball Effect, over three separate offers in 2015 and 2016.

Highlights for the quarter ending September 2017:

  • The Investor Net Asset Value of the fund was $29.3 million (or $20.88 per share), a material increase from the 30 June 2017 Investor Net Asset Value of $26.3 million (or $20.08 per share).
  • New investments were made in Hayload, New Zealand Artesian Water, Mobi2Go (all new shares) and Vibe Communications (existing shares) during the September quarter. After the end of the quarter, further investments were also made in Conqa, Weirdly, Vibe Communications and Linewize as well as Punakaiki’s first investment into a new Portfolio Company - Coherent Solutions.
  • New Portfolio Company, Coherent Solutions, have revenues of several million from customers around the world, specializing in test and measurement equipment and software for the highest speed laser telecommunications equipment.
  • $1.6 million was recognized as a net increase in the value of Punakaiki Fund’s investments at the end of the September 2017 quarter compared to those values set out in the June 2017 quarterly report.
  • Punakaiki Fund invested company Linewize was sold to Family Zone (ASX listed company), which Punakaiki value at $2.5 million as at the end of the quarter.
  • $1.8 million in new capital was raised in the July/August 2017 wholesale capital raise.
  • Punakaiki Fund continues to assess potential investments in new companies, along with follow up investments in its existing portfolio companies.

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Breathe Easy

Breathe Easy is developing Citramel, an inhaled medicine for the treatment of cystic fibrosis (CF) a chronic genetic illness affecting the lungs and digestive systems of approximately 75,000 people worldwide.

Highlights for the quarter ending September 2017:

  • Breathe Easy received regulatory approvals and commenced a Phase IIa trial to test Citramel on cystic fibrosis (CF) subjects in New Zealand in early 2016. The double-blind cross-over clinical trial of up to 23 subjects commenced in two sites, Christchurch and Auckland, in May 16. In early 2017, the trial was expanded to a further two sites – Hamilton and Dunedin.
  • Breathe Easy is now able to announce that the results have shown that the treatment was safe and well tolerated but did not show efficacy at the dose tested. The Breathe Easy team is presently planning additional studies and with higher doses in mind.
  • Key learnings from the trial have been taken and it is still the aim to make a therapy that is affordable and effective for CF patients in New Zealand and worldwide. To achieve this goal, Breathe Easy will exhaust every avenue possible and is intending to undertake additional studies.
  • We have the funds and resources to conduct these projects and will be able to complete them within approximately a year. The objective would be to obtain data that indicates whether there is cause to progress the development of Citramel further.

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Snowball Effect

Snowball Effect is an online investment marketplace. Our mission is to simplify investment into high growth Kiwi companies. We’ve been funded by existing shareholders and cashflow to date to support the continued growth and development of the equity capital market for early-mid stage New Zealand growth businesses.

Highlights for the quarter ending September 2017:

  • $3.4m was raised during the quarter including a private offer for a professional services firm and a private offer for a medical technology business. A total of $29 million has been raised as of the end of Sept.
  • Average investment this quarter was $20k. Overall, average investment amount to date is around $10k from 2,600 investors.
  • The wholesale investor database has grown to over 900 members. Around 300 members have completed their Investor Profile and 150 have indicated an interest in becoming a director or advisor to growth companies.  
  • In August we published our annual birthday infographic covering Snowball Effect’s growth to date. Check out the 3 year infographic.
  • A prototype of the resources, articles and discussion section of the website has launched. Check out the new resource page.
  • Our full year results (to 31 March 2017) were published (as required by our operating license) our final result included a modest profit.
  • After a quieter than forecast September,  Snowball Effect revenue fell below the budgeted range for the F18 year.
  • We are currently in the process of hiring a new developer. Further details on the role can be found via the position description
  • The company has no capital raising plans at this stage.

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