Southern Crown Resources (ASX:SWR) is acquiring New York-based...

Southern Crown Resources (ASX:SWR) is acquiring New York-based social media platform ROMIO that could benefit from multiple high margin revenue streams.

ROMIO is a crowd-sourced review and recommendations provider that seeks to improve on incumbent review and recommendation providers by providing users with credible reviews of services in their neighbourhood from their friends and local experts.

It also acts as a customer portal for local businesses using a revenue model similar to other successful technology platforms.
This includes a transactional fee for any purchases using the platform, advertising on a pay per click and cost per thousand views basis as well as premium and ultra-premium listings on the platform.

The local US media advertisement revenue is projected to be US$152 billion by 2017.

ROMIO has three years of development, an Apple Store App and website as well as an established local presence in New York City.

Existing shareholders include private strategic investors from prominent investment institutions such as early Amazon investor Bob Gelfond, early investor in online betting platform Betfair David Jaxton, former chairman of UBS ASIA Ken Kwok, managing partner at Lazard Investments Sean Reynolds as well as several CEOs and private family offices.

Subject to shareholder approval, Southern Crown Resources will issue 200 million shares to acquire ROMIO from the existing shareholders of Homepeople Corporation, which owns the platform.

All shares issued to the shareholders of Homepeople will be escrowed for a minimum of 12 months and may be up to 24 months post re-listing.

The company has also agreed to provide a $500,000 loan facility to Homepeople in two tranches.

The first tranche of $300,000 will be provided following the completion of an initial equity placement while the second tranche of $200,000 will be provided following the completion of the rights issue to be undertaken by the company.

Southern Crown has received commitments for an equity placement of 10.75 million shares priced at $0.03 each to raise $322,000.

It will also make a 1 for 4 non-renounceable entitlement offer to existing shareholders to raise a further $322,000.
Proceeds from this initial fund raising will be used to meet the costs associated with the ROMIO acquisition, the loan facility made available to ROMIO prior to completion and general working capital.

The company will also undertake a capital raising of up to $8 million under a prospectus to expand the ROMIO subscriber base by launching the business in a number of U.S. cities by the end of 2015.