1. When did EM1 become aware of the Miggster Offer?
On 1March 2021 the EM1 Board was informed of the promotional strategies proposed by the CEO ofEM1 that in order to meet the objective of creating a MIGGSTER community of significantly largescale, Crowd1 would, on behalf of EM1, be offering MIGGSTER subscriptions as part of promotionaloffers including offering bulk volumes of discounted MIGGSTER subscriptions. On 2 March 2021,Crowd1 agreed to launch the first of the promotions. On 3 March 2021, EM1 flagged in itsannouncement titled ‘Emerge operated MIGGSTER platform achieves 150,000 subscribers and is setfor growth’ that its objective was to build a large MIGGSTER userbase and this would be achieved“through a myriad of promotional strategies”.
2. Did EM1 approve the changed subscription fees paid by Crowd1 under the Miggster Offer? If so, please provide a copy of any correspondence (not for release to market).
There has been no change in subscription fees disclosed in the EM1 ASX Market Announcement dated22 January 2021. Standard sales of subscription that are not on promotion remain at the feesdisclosed on the 22 January 2021 and subscriptions continue to be sold on this basis.
3. Please provide a breakdown comparing the total number of paid Miggster subscriptions to the free subscriptions provided under the Miggster Offer.
All MIGGSTER subscriptions sold by EM1 are paid MIGGSTER subscriptions because, in each case, EM1has received a payment for the subscriptions
4. How many paid subscriptions have been received since Crowd1 launched the Miggster Offer (not including those paid for by Crowd1)?
861 MIGGSTER subscriptions have been sold on EM1’s behalf under the standard agreement sincethe launch of the MIGGSTER Offer.
5. What price does Crowd1 pay per subscription to EM1 to provide the Miggster Offer to its customers? Are these subscriptions monthly, bi-annually or annually charged?
All promotional subscriptions under the MIGGSTER Offer are 12-month subscriptions. EM1 receivesthe following amounts under the MIGGSTER Offer:• EUR 2.00 (± AUD $3.10) per subscription up to 1,000,000 subscriptions• EUR 0.25 (± AUD $0.39) per subscription for subscriptions in excess of 1,000,000 subscriptions• EUR 500,000 (± AUD $780,000) in prize contribution revenue over 12 months, paid quarterly• Reimbursement of server costs to support these discounted promotional subscriptions
6. How much, per subscription, does EM1 remit back to Crowd1, either in the form of ‘marketing commission cost’ and/or revenue sharing arrangements if the subscription originated from the Miggster Offer?
EM1 does not remit any amounts to Crowd1 or Influence Crowd Technologies S.L (ICT) in the form of‘marketing commission cost’ and/or revenue sharing arrangements if the subscription revenues resultfrom subscriptions sold under the MIGGSTER Offer.
7. Does EM1 anticipate a material difference to EM1’s financial results due to the different pricing under the Miggster Offer?
No, EM1 does not anticipate a material difference to EM1’s financial results due to the bulkdiscounted promotional pricing offered to Crowd1 i.e. the MIGGSTER Offer.
8. If the answer to question 7 is: (a) “yes”, please explain why EM1 has not disclosed this to the market in accordance with listing rule 3.1; or (b) “no”, please explain the basis for that view.
As at the end of February 2021, results and internal management forecasts indicated that EM1 couldexpect to add 10,000 standard MIGGSTER subscriptions per month. On this basis, to 30 June 2021EM1 would achieve a subscriber base of ±200,000.Discussions with Crowd1 began 1 March 2021 (per query response 1) focused on accelerating the sizeof the MIGGSTER community using promotions but seeking to ensure that these strategies deliveredsimilar financial benefit to EM1 over the proposed 12-month promotional period.This is consistent with EM1's communication to the market referring to the MIGGSTER promotionalstrategy in ASX announcements on 3 March 2021, 15 March 2021, 30 April 2021, 21 May 2021 and inthe referenced C. EM1’s announcement titled “MIGGSTER achieves milestone of 1 million paidsubscribers” lodged on MAP on 9 June 2021.EM1’s expectation at the time that the focus on accelerating the size of the MIGGSTER communityusing promotions would not materially affect EM1’s financial results has proven correct. The numberof MIGGSTER subscriptions has increased significantly beyond the level which EM1 believes wouldhave been achieved without the use of the promotions, which has been offset by the reduced revenueper subscription derived under the promotional subscriptions and, as a result has not materiallyaffected EM1’s financial results.
9. Please confirm that EM1 is complying with the listing rules and, in particular, listing rule 3.1. The Company confirms that it is complying with the listing rules including listing rule 3.1
10. Please confirm that EM1’s responses to the questions above have been authorised and approved in accordance with its published continuous disclosure policy or otherwise by its board or
Confirmed
EM1 Price at posting:
3.6¢ Sentiment: None Disclosure: Not Held
(20min delay)
