Raisebook

Limited Allocation of High Demand IPO: B2B CyberSecurity Marketplace
WhiteHawk
WhiteHawk
ASX:WHK

Raisebook has secured an allocation of the high demand IPO for WhiteHawk Ltd.

Retail investors as well as s708 sophisticated investors are invited to review this offer.

WhiteHawk Ltd is acquiring 100% of the shares of WhiteHawk US - a company that owns and operates a B2B e-commerce cybersecurity marketplace.

Raise Amount
$4,000,000
Offer Price
$0.2000
Closes
Nov 23, 2017

Whitehawk US has developed a machine learning algorithm and artificial intelligence (AI) platform under provisional patent application known as the 'CyberPath Solution Engine' for the Whitehawk Exchange.

Ms Terry Roberts will be CEO and Executive Chair of WhiteHawk Ltd, after having spent over 35 years in the US national security and cyber intelligence community, including as a former Deputy Director US Naval Intelligence, a Department of Defence Senior Executive, and as an Executive in the commercial sector.

WhiteHawk's solution engine enables buyers to understand which of the myriad cybersecurity vendor products suit their business, sector, budget and security / finance requirements.

The development of the WhiteHawk Exchange represents a disruptive innovation to the cybersecurity market.

There is currently no online cybersecurity marketplace offering the myriad of vendors and potential customers or a machine learning, scalable online approach to matching customers to effective and affordable solutions.

The Company is poised to take advantage of the key global market trends across the B2B cybersecurity market, which is currently valued at US$147 billion.

Potential investors should consider that investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Shares pursuant to this Prospectus.

The minimum bid is $2,000, and maximum bid is $5,000. Note, we can accept bids from multiple entities using the same Raisebook account.

This offer is in high demand and Raisebook may need to close it early - bids should be in as soon as possible to have the best opportunity of being successful.

Details of the Offer

WhiteHawk Limited was incorporated 14 July 2017 in Western Australia for the purposes of acquiring WhiteHawk CEC Inc (WhiteHawk US), a company incorporated in Delaware, USA on 22 May 2014.

The Company will now acquire 100% of the shares in WhiteHawk US and proceed to list on the ASX.

The offer consists of:

  • 20 million shares at an issue price of $0.20 per share, together with one free attaching option for every four shares subscribed for (being 5 million free attaching options) exercisable at $0.25 per share to raise a minimum of $4 million,
  • With the right to accept oversubscriptions of up to a further 2.5 million shares at an issue price of $0.20 per share, together with a further 625,000 free attaching options, to raise up to a further $500,000.

WhiteHawk's B2B e-commerce cybersecurity marketplace

Via WhiteHawk's platform, purchasers can take advice on their cybersecurity needs and be matched to vendor products matching their identified needs.

These services can be bought online or via a WhiteHawk Cyber Advisor underpinning the WhiteHawk Exchange.

Based on Ms Roberts significant work on cyber risk while at Carnegie Mellon University, WhiteHawk US has developed a patent pending 'CyberPath Solution Engine' , which creates a cyber risk profile that matches companies to best practices and advanced solutions that address their top cyber based business risks based on responses to a questionnaire and identification of 'at risk' assets for individual business users.

The WhiteHawk exchange currently has access to over 200 cybersecurity vendors and has over 500 approved products and services to offer to customers.

Business Model

The company plans to generate revenue utilising the WhiteHawk Exchange via the following streams:

  • a percentage of all online and advisory service sales of vendor products and services in the WhiteHawk Exchange;
  • advisory service subscription bundles;
  • sales of cybersecurity business intelligence data sets and reporting;
  • premium service fees and royalties from out licensing the CyberPath Solution Engine for use in other industries such as healthcare, drug pairing and treatment alternatives and supply chain management, and;
  • Cyber risk and innovation consulting services to government agencies (indirectly as a subcontractor of companies that are contractors of such government agencies) and medium to large sized business customers, domestic and multi-national and other Fortune 500 companies.

WhiteHawk US currently earns revenue from lead generation agreements with cybersecurity vendors in the US market and has won advisory service contracts with a small but growing number of Government agencies, which provide a steady stream of low level revenue while the online sales business model matures.

Cybersecurity Industry Overview

The Company is poised to take advantage of the key global market trends across the B2B cybersecurity market, which is currently valued at US$147 billion.

The US market alone is valued at US$75 billion.

A 2016 PwC survey shows that 78% of Australian corporate CEOs rate cybersecurity as one of their top 3 risks.

The average cost of a cybercrime is $5.6 million and the potential is there for the breaches to destroy a company's value overnight.

In 2016, VC firms invested $3.1 billion in a record 279 cybersecurity startups.

For these reasons, the Company considers there to be a significant market for the WhiteHawk US business.

The WhiteHawk Exchange has been specially developed to leverage a handful of key trends in the global cybersecurity marketplace, including:

  • An exponential growth in and daily impact of cyber theft, fraud and disruption to all business sectors
  • the magnitude and complexity of existing cybersecurity vendor options,
  • speed, convenience, scalability and overall ease of customer access of well positioned B2B e-commerce business models,
  • a scarcity of cybersecurity expertise, talent, insight and ability to effectively detect, assess, respond and prevent daily online crime, particularly for small to medium businesses where cost can be a factor, and;
  • an existing gap in the cybersecurity market servicing the needs of small and midsize businesses (SMBs) that want a clarity of insight and action to purchase and implement easy, affordable cybersecurity products and services that effectively lower their business risks to their revenue and reputation.

WhiteHawk's Target Market

While any business can come to the WhiteHawk exchange, the Company's primary target market are companies with annual revenue over $10 million and up to $2 billion, who do not have Chief Information Officers (CIO’s) or Chief Information Security Officers (CISO’s).

This midsized market typically:

  • is a relatively uptapped and underserved market
  • has little to no cybersecurity expertise (an issue faced globally over the next 10-15 years)
  • includes the regulated business sectors of health care, defence/federally focused industrial base and professional services
  • has an ever growing cybercrime, fraud, and disruption set of issues daily impacting their operations and revenue
  • has over a third of their workforce comprised of millennial & generation Y professionals who research, shop and buy almost exclusively online for their companies, and;
  • can position WhiteHawk as the essential cyber resource for B2B e-commerce sales.

Directors and Key Personnel

The Directors and key personnel of the Company on listing on the ASX will be as follows:

Terry Roberts - CEO and Executive Chair

Terry Roberts has been a U.S. national security and cyber intelligence professional for over 35 years, as a U.S. Naval Intelligence Officer, a Department of Defence Senior Executive and as a Cyber Engineering, Architecture and Analytics industry executive.

Before establishing WhiteHawk US, Ms Roberts was the TASC VP (a $1.3 Billion Defence Industrial Base Company), for Cyber Engineering and Analytics across the U Government, running all Cyber/IT, Financial and Business Analytics cross cutting, innovative, technical services.

Prior to TASC, Ms Roberts was the Executive Director of the Carnegie Mellon, Software Engineering Institute, leading the technical body of work for the entire US Interagency (over $40M portfolio), with a special focus on leveraging and transitioning commercial innovation and acquisition excellence to government programs and capabilities, and establishing the Emerging Technologies Center and Cyber Intelligence Consortium.

Before transitioning to industry in 2009, Ms Roberts was the Deputy Director of Naval Intelligence (DDNI), where she led, together with the Director of Naval Intelligence, more than 20,000 intelligence and information-warfare military and civilian professionals and managed more than $5 billion in resources, technologies, and programs globally, leading the initial approach for the merging of Naval Communications and Intelligence under the OPNAV N2/N6 and the creation of the Information Dominance Corps.

Prior to being the Navy DDNI, Ms Roberts served as the Director of Requirements and Resources for the Office of the Under Secretary of Defense for Intelligence (USDI), spearheading the creation and implementation of the Military Intelligence Program (MIP) (a $21 billion program in capabilities and personnel), in partnership with the Director of National Intelligence, the Services, the Combat Support Agencies, and the Office of the Secretary of Defense (OSD).

Ms Roberts is the Chair Emeritus of the Intelligence and National Security Alliance (INSDA) Cyber Council, a Member of the AFCEA Intelligence Commitee, on the Naval Intelligence Professioanls (NIP) BOD, a member of the USNA Cyber Education Advisory BOD and previously in 2016 a Cyber Fellow at New America (a non-partisan think tank) and an adjunct professor of Cyber Intelligence at DMGS.

Ms Roberts earned the maximum in industry bonuses and pay raises allowed from 2009-2015. Ms Roberts' personal awards include:

  • the Office of Secretary of Defense Medal for Exceptional Civilian Service
  • the Navy Senior Civilian Award of Distinction
  • the NGA Personal Medallion for Excellence
  • the Coast Guard Distinguished Public Service Award
  • the Director of Central Intelligence National Intelligence Certificate of Distinction,
  • the National Intelligence Reform Medal, and;
  • the National Intelligence Meritorious Unit Citation.

Tiffany O. Jones - Non Executive Director

Tiffany Jones is currently the CEO of Distill Networks and formerly VP of Global Strategic Partnerships and Alliance Operations at FireEye, Senior Vice President of Client Solutions & Chief Revenue Officer for iSIGHT and Mandiant.

Ms Jones is a former Deputy Chief of Staff at the White House Office of Cyber Security and Critical Infrastructure Protection, and a decorated US Coast Guard.

Philip George - Non Executive Director

Philip George has experience as a managing director and operations manager with a strong background in cyber security and IT networking. Philip has previously worked as a general manager, technical director, global IT manager, team lead and IT manager in other organisations.

For the past 12 years, Philip has primarily serviced the finance, oil and gas, start up, mining and petroleum and petrochemical industries and was recently the Operations Manager for Uber Australia.

For more details on the Board and Key Personnel - click here.

Use of Funds

The Company's proposed objectives on completion of the offer are:

  • complete the acquisition;
  • advance the targeted global branding and commercialisation of the WhiteHawk Exchange thereby growing the revenue base;
  • undertake further research, development, testing and launching of improved algorithms and architecture to expand the scope and customer usability and buying effectiveness of the WhiteHawk Exchange;
  • grow revenue streams by daily expanding channel partnerships with new vendors, products, services and content;
  • implement a pragmatic and effective growth strategy to develop and target optimal cybersecurity markets around the world;
  • hire and retain business technical and product development directors who can continuously evolve and improve the Company's set of customer focussed offerings, and;
  • provide working capital for the Company.

Investment Highlights

Key highlights of WhiteHawk are:

  • Establishment of the first cybersecurity B2B e-commerce platform and globally accessible portfolio of integrated offerings
  • Patent pending decision support system based on artificial intelligence and machine learning analytics and adaptive reasoning
  • Global marketing strategy to effectively target SMB's and provide online access to effective cybersecurity risk profiles, advisory services, non-technical business content all via its online WhiteHawk Exchange
  • Consideration to be paid by the Company for WhiteHawk US is primarily performance based aligning the interests of the Vendors with Shareholders
  • Highly credible and experienced management team to progress commercialisation of the WhiteHawk Exchange

Capital Structure

The capital structure of the Company following completion of the Offer is summarised below:

Shares

Minimum Subscription Maximum Subscription
Shares currently on issue as at the date of this Prospectus 7,165,000 7,165,000
Shares to be issued upon the conversion of Convertible Loans in WhiteHawk US³ 31,400,000 31,400,000
Shares to be issued under the Acquisition² 8,437,500 8,437,500
Shares issued pursuant to the Offer 20,000,000 22,500,000
Issue of Shares pursuant to the Cleansing Offer 1,000 1,000
Total Shares on issue after completion of the Offer 67,003,500 69,503,500

Notes:

  1. The rights attaching to the Shares are summarised in Section 14.2 of the Prospectus

  2. Please refer to Section 13.1 of the Prospectus for a summary of the terms of the Exchange Agreement and refer to the note Additional Consideration Shares' below.

  3. Please refer to Section 13.4 of the Prospectus for the terms of the Convertible Loans.

Additional Consideration Shares

In addition to the Shares to be issued to the Vendors under the Exchange Agreement (refer to Section 13.1 of the Prospectus for a summary of the Exchange Agreement), the Company is bound to issue up to 72 million additional shares (Conditional Shares) upon the achievement of specified milestones by the WhiteHawk US business.

This would increase the number of shares on issue by up to 72 million shares. The relevant milestones are summarised in Section 13.1 of the Prospectus.

Options

Minimum Subscription Maximum Subscription
Options on issue as at the date of this Prospectus¹ 10,000,000 10,000,000
Options offered pursuant to the Offer² 5,000,000 5,625,000
Options issued on conversion of Convertible Loans in WhiteHawk US² 3,500,000 3,500,000
Total Options on issue after completion of the Offer 18,500,000 19,125,000

Notes:

  1. These options are exercisable at $0.20 each and expire on or before the date being 5 years from the date of Official Quotation.

  2. These options are exercisable at $0.25 expiring on or before the date being 2 years from the date of Official Quotation.

Performance Rights

Minimum Subscription Maximum Subscription
Performance Rights on issue as at the date of this Prospectus Nil Nil
Performance Rights to be issued to Corporate Advisor¹ 13,000,000 13,000,000
Performance Rights to be issued to employees² 10,000,000 10,000,000
Performance Rights to be issued to Directors³ 4,000,000 4,000,000
Total Performance Rights on issue after completion of the Offer 27,000,000 27,000,000
  1. Pursuant to the Viaticus Mandate, the Company will be issuing 13,000,000 Performance Rights to the Corporate Advisor for work in securing the transaction. The milestones of these Performance Rights will be the same as the milestones under the Additional Consideration Shares. The terms of these Performance Rights are otherwise set out in Section 14.5. Viaticus may allocate these Performance Rights to other parties and therefore may not hold all 13,000,000 of these Performance Rights.

  2. Post listing, the Company proposes to issue up to 10,000,000 Performance Rights under the Performance Rights Plan to existing WhiteHawk US employees (not Directors) as an incentive to continue the ongoing development and growth of the business. The terms of these Performance Rights will be finalised after the date of listing and will ensure the alignment of the interests of the relevant employees with Shareholders.

  3. Refer to Section 14.6 above in relation to the milestones relevant to the Performance Rights being issued to Directors.

Indicative Timetable

Closing Date of Offer 5 December 2017
Completion of Acquisition 11 December 2017
Issue of Securities under the Offer 11 December 2017
Despatch of Holding Statements 11 December 2017
Expected date for quotation on ASX 15 December 2017
This deal closed on November 23, 2017