TIK TOK Technologies Ltd Company Snap Shot - February 2017 DRAFT FORM
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TIK TOK
Technologies Ltd
Company
Snap Shot
DRAFT FORM
February 2017
IMPORTANT NOTICE REGARDING TIK TOK TECHNOLOGIES LTD
(“TIK TOK” or “the Company”)
Disclaimer
No communication and no information in respect of any future proposed sale as maybe described in this Company Snap Shot document may be
distributed to the public in any jurisdiction where any registration or approval is required. No steps have been taken yet in any jurisdiction where
such steps would be required. Any future proposed sale that maybe described in this Snap Shot may be subject to specific legal or regulatory
restrictions in certain jurisdictions. TIK TOK takes no responsibility for any violation of any such restrictions by any person. This Snap Shot is not
a prospectus within the meaning of Directive 2003/71/EC, as implemented in each member state of the European Economic Area, and
amendments thereto, including Directive 2010/73/EU to the extent implemented in the relevant member State of the European Economic Area
(together, the “Prospectus Directive”). This Snap Shot is not an offer for the sale of shares nor is it a financial promotion. If TIK TOK does move
forward to an offer for the sale of shares in the Company it will seek authority to issue an approved financial promotion document under section
21 of the Financial Services and Markets Act 2000 (‘FSMA’).
Attention
In the future should the Company move forward with an offer ALL prospective Investors are advised to consult their own professional advisers
before contemplating any investment to which this Snap Shot may refer to or any future related Information Memorandum. In particular, if you
are in any doubt about the suitability of such an investment, you should contact your independent financial adviser authorised under the FSMA
and you are advised not to invest until you have done so. No advice is given by the Company to any future prospective Investors.
Be Aware of the Risks
Investing in the Company involves a number of risks and, in particular, your attention is drawn to the risk factors as set out in this document. An
investment in the Company may not be suitable for all recipients of this document. A prospective investor should consider carefully whether an
investment is suitable for them in light of their personal circumstances and the financial resources available to them. The Ordinary Shares of the
Company are not presently listed or dealt in on any stock exchange which limits the ability of investors to sell their shares.
This document should not be considered as constituting legal, taxation or investment advice by the Company or any of its shareholders,
directors, officers, agents, employees or advisers. Each party to whom this document is made available must make its own independent
assessment of the Company after making such investigations and taking such advice as may be deemed necessary. In particular, any estimates
or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumptions and each
recipient should satisfy themselves in relation to such matters. You should be aware that share values and income may go down as well as up
and you may not get back the amount you originally invested. Please note that if the Company moves forward to an offer of its shares that
applications may only be made, and will only be accepted, subject to the Terms & Conditions in that future document. This document does not
constitute, and may not be used for the purposes of, an offer or invitation to subscribe for shares by any person in any jurisdiction.
IMPORTANT The attention of prospective Investors is drawn in particular to that part of this Snap Shot or any future Information Memorandum to the section entitled "Risk Factors". TIK TOK TIK TOK Technologies Ltd was formed to further market develop IT systems and programs that in the future when fully developed would represent a clear commercial advantage to consumers. With the continuous development of new IT systems and programs it became clear to the TIK TOK founders that many of the developments in IT systems and programs in recent years did not optimise the consumer advantage to their systems, programs or business models. TIK TOK Technologies Ltd identified the FlashBet Wheel suite of systems, games and programs as a perfect integrated solution to address consumer value issues facing gamblers today. It is estimated that approximately £25 million is bet week in week out on live sporting events in the UK alone. There is a multitude of bookmakers offering many offers and incentives encouraging people to bet. Where these bookmakers aspire to give the consumer value they at times are enticing the gambler to bet beyond their means as the upfront incentives are often a well marketed lure. Each gambler often has multiple accounts at various bookmakers as a function of their lust for upfront incentives/odd boosting or the blatant offer of a win bonus. Where obviously every gambler has his success, the honest gambler should tell you losses are quickly forgotten. An app which provides value, without demanding a huge outlay whilst being attractive to play, would help a gambler control his propensity to bet. (Ref draft: article gamblers racing post). The fact that today’s average gambler holds at least 2 accounts and growing shows the appetite for betting is far from diminishing, therefore building a base of first time and existing gamblers should be achievable. The indication across borders shows similar phenomenal growth and with the ever growing budgets surrounding all sports /sports media and the power and weight of cyber commerce viewing rights and sponsorship exemplify that the sports betting sector will be growing for decades to come. TIK TOK intends to roll out the FlashBet Wheel initially to the fully identified existing markets.
BUSINESS OVERVIEW TIKTOK Technologies Ltd (TIKTOK) is a UK registered Technology Investment Company formed in 2016 which holds proprietary rights to an array of intellectual property including the FlashBet Wheel, Flashbet Mini-Wheel, Draw Predictor, Multi Sports Wheel and the Market Maestro along with other related patentable and protected technology. TIK TOK also operates as an independent software vendor (ISV) business that builds, develops and sells consumer or enterprise software. Although TIK TOK provided software is consumed by end users, it remains the property of the Company. TIK TOK builds and provides software applications that run on some or all backend platforms, like Windows, Linux or Apple. Applications owned by TIK TOK are developed and branded for its own proprietary use to generate its own revenue streams. TIK TOK also takes up strategic equity stakes in junior technology companies and provides support to companies that seek to commercialise their products. TIK TOK also offers a host of development, distribution hosting and support packages for TIK TOK related gaming Apps to potential white label partners on a business to business model, covering front-end and back-end integration giving rise to revenues from licence fees, maintenance fees and revenue split (as a % of gross income). Fees can be either fixed fee or revenue split with white label partners. TIK TOK has acquired the FlashBet Wheel technology including all the Intellectual Property surround the FlashBet suite of Apps. TIK TOK has also taken possession of the full patent rights to that technology. The FlashBet Wheel betting app is operated on a computerized device for managing a bet relating to statistics of a football match result. The statistics relate to FOOTBALL MATCH RESULTS but can be adapted to any team, position, play, or player. FlashBet App is first stage operational and TIK TOK are intending to negotiate with a number of online betting companies to fully commercialise the App by way of White Label Agreements directly and through non-branded affiliates in the Betting and Gaming industry. Full live implementation of FlashBet Token App is scheduled to be released in May 2017. The FlashBet Wheel is Patent Pending under application at the UK Patent office under number: GB1614145.9 FlashBet
Tik Tok Technologies Limited Company Snap Shot Non-Disclosure and Non-Competition: All of the business ideas, concepts, calculations and designs in this document are the intellectual property of TIK TOK Technologies Limited and are subject to the appropriate copyright, trademark and patent laws. The implementation of the ideas contained herein and/or the basic approaches of these ideas will only be possible following written agreement from TIK TOK Technologies Limited. The whole or partial duplication of this document, and/or their circulation to third parties, is not permitted. The recipient of this proposal is liable for all damage caused by such duplication and/or circulation to third parties. With delivery of this document, the recipient promises to maintain strict confidentiality and absolute silence on all ideas, concepts, calculations and designs contained within the document. Important notice: All references made to websites correct at the date of printing (January 2017).
Executive Summary
Introduction
TIK TOK Technologies Ltd (TIK TOK) is an independent online application and software developer, focused on the
gaming, betting and financial market sectors. TIK TOK develops, implements and brands its applications for its own
use and licenses its proprietary, patented and otherwise protected technology to third parties. The company is
launching “FlashBet Wheel” and “FlashBet Exchange” applications that uniquely combines the popular pastimes of
sports betting with social online and mobile gaming. “FlashBet” will be launched on Mid-May, 2017, and TIK TOK are
implementing a rigorous marketing plan to penetrate the sports betting market and gain viral success in this high
growth and fertile market. Between Years 2-4 management projects to gain 317,500, 788,500 and 1.87 million users
respectively, which translates into £15.08 million revenue by 2020.
The Market
The Sports Betting and Social Network Game Industries are rapidly growing markets. It is estimated in the UK alone
that over £25 million is spent on sports bets each week, with the lions share on football. As far as sports betting is
concerned, Europe and Asia are the principle markets representing over 85% of revenue, and as such where the
focus of TIK TOK is concentrated. The online gambling market worldwide was estimated at $35.52 billion (ca. £23.68
billion1) in 2013 and forecast at $45.86 billion (ca. £30.57 billion2) in 20163.
1
Prevailing forex rates pre-Brexit vote
2
Ibid
3
https://www.statista.com/statistics/270728/market-volume-of-online-gaming-worldwide/
1With its unique product – a synthesis of highly popular gambling/gaming elements – in the market, together with a
strong marketing implementation plan, TIK TOK aims to gain market share of 0.0044%, 0.0130% and 0.0233% of
the global online gambling market between Years 2-4 respectively to achieve revenue projections.
Financial Considerations
TIK TOK is seeking to obtain equity financing for the amount of £5,000,000, in exchange for a 162/3% stake of the
company. The following is the revenue, expenses and profit projections for the FlashBet business over the first 4
years of operations following full launch in September 2017.
2018 2019 2020 2021
TOTAL
£64,661 £2,336,096 £7,585,934 £15,081,217
REVENUE
COST OF
(£195,000) (£955,000) (£1,750,000) (£2,002,500)
SALES
GROSS
(£130,339) £1,381,096 £5,835,934 £13,078,717
PROFIT
GROSS
(202%) 59% 77% 87%
MARGIN
The company see these targets as attainable through the strong marketing plan, quality and viral nature of the
product, together with the growing market the company competes in. This company presentation (and more fully in
the TIK TOK Technologies Business Plan) will discuss the tactics and strategies to generate the revenues as stated,
and the implementation to successfully become a fun and exciting viral brand in the sports betting market.
21.0 Business of the Company
1.1 Business Summary & History
TIK TOK Technologies (TIK TOK) is a UK registered Technology Investment Company established in 2016 that holds
proprietary rights to an array of intellectual property, and other patentable and protected technology. It also operates
as an independent software vendor (ISV) business that builds, develops and sells consumer or enterprise software.
The company’s first proposed flagship products, the FlashBet Wheel and FlashBet Mini-Wheel are fun and simple viral
applications – catered to a widespread audience – that uniquely incorporate 6-selection multiple accumulator sports
bets with a premature “cash-out” social exchange platform. FlashBet Exchange to follow.
1.2 Industry Overview
The Online Gambling Industry
In 2016, online gambling is estimated to be a $45.86 billion4 (circa. £30.6 billion) industry, which has experienced
rapid growth over recent years almost doubling in size from $24.73 billion in 20095. Online sports betting accounted
for almost 50% of the overall global online gambling market in 2013, equating to circa. $19.3 billion 6, with mobile
device gambling accounting for 18% in 2012.7
Strong Future Growth
4
https://www.statista.com/statistics/270728/market-volume-of-online-gaming-worldwide/
5
Ibid
6
http://www.egba.eu/facts-and-figures/studies/6-sports-betting-report
7
Ibid
3Analysts forecast the market to grow at a CAGR of 10.73% (in terms of gross gaming yield per year) over the period
2014-20198 – $56.05 billion in 20189. There is evidence of a strong upward trend in mobile device gambling,
expected to account for 44% of the global online gambling market by 201810 as:
Smartphones and tablets continue to penetrate the market; and
Increased device capability and the confidence of users.
Betting firms will capitalise on the increasing popularity of online (and mobile device) gambling by charging more for
currency transactions to generate higher revenue, and with this strong market adoption, online betting brands will be
seeking to increase awareness in this medium.
European and UK Online Gambling Market
Of the $41.36 billion (ca. £27.57 billion) global online gambling market, the EU accounted for 47.6%, mainly due to
the innovative character of European operators and a lack of regulatory opportunities in the US and Asia 11. Betting is
most popular and represents 37% – the European market is expected to rise from €16.5 billion (ca.
$19.7bn/£13.12bn) in 2015 to €24.9 billion (ca. $29.7bn/£19.8bn) in 201612.
Within that European online gambling market, the UK is the largest (est. £2.5bn in 2013 and est. £4.4bn in 2018) and
the most mature market in terms of: product development, service and user interface innovation, industry
consolidation and regulatory approach.
8
http://www.prnewswire.com/news-releases/online-gambling---global-market-research-2015-2019-300192519.html
9
https://www.statista.com/statistics/270728/market-volume-of-online-gaming-worldwide/
10
http://www.egba.eu/facts-and-figures/studies/6-sports-betting-report
11
http://www.egba.eu/facts-and-figures/market-reality/
12
Ibid
4Major Market Participants
In mature markets such as the UK, the management of TIK TOK will be seeking B2B relationships with major
operators, as opposed to going into direct competition with them as a stand-alone operator. The three largest
operators offering essentially the same online betting opportunity to punters in the UK are: William Hill, Bet365 and
Paddy Power that account for 15%, 12%, 8%13 of the UK betting market by online revenue14.
Here is a brief synopsis of each of these online betting powerhouses:
William Hill
Founded as a postal/telephone betting service in 1934 at a time when gambling was illegal in the UK, William Hill is
now licensed in five of the world’s ten largest regulated gambling markets and has a presence in nine countries. The
company reports it has three million active digital customers worldwide and circa 16,000 employees. William Hill’s
2015 online revenues and gross operating profits were £550.7 million and £126.5 million respectively15.
Bet365
Still under the private ownership, Bet365.com was founded in 2000 by the daughter of a bookmaker from a
portakabin in a carpark16 with a £15 million bank loan against the family’s chain of betting shops. Launched in March
2001, Bet365 is now one of the world’s leading online gambling groups with over 19 million customers in almost 200
countries. Circa 25% of its online betting revenues are derived from the UK. The company’s 2014 revenues and gross
operating profits were £1,371 million and £317 million respectively17.
Paddy Power
13
Paddy Power’s share of the UK online betting market prior to its merger with Betfair in 2016
14
Gambling Compliance, UK Online Market Share, October 2015
15
William Hill plc Annual Report and Accounts 2015
16
https://www.theguardian.com/uk/2012/jun/08/denise-coates-woman-bet365-gambling
17
Sunday Times Profit Track 100 Research Report 2015. Bet365’s global headline numbers across all its business operations.
5Founded in 1998 by the merger of three Irish bookmakers, Paddy Power has business divisions in the UK, Ireland,
Australia and Italy. The company announced its merger with online betting exchange giants Betfair in 2015, which
was completed in February 2016, and could well position Paddy Power Betfair plc as the largest online betting
operator in the UK. Paddy Power’s 2015 online revenues and gross operating profits – which the UK accounts for
circa 48% – were €707.3 million and €152.4 million respectively18.
SkyBet.com
Another major player in the UK online betting sector is SkyBet.com, originally a wholly owned subsidiary (Sky Betting
& Gaming) of the satellite television giant Sky plc before it sold an 80% majority stake to CVC Partners in 2015.
SkyBet’s group revenue for 2015 was reported at £247 million, with £117 million coming from SkyBet.com, £117
million from Sky Gaming and £13 million from Oddschecker19, which it had acquired in 2007. The company accounts
for 8% of the UK betting market by online revenue20.
1.3 Current Situation of the Company
TIK TOK is a technology start-up company in the early funding and development stage. It is currently in the
development phase of its first product “FlashBet”, with the proposed product launch date of September, 2017.
1.4 Goals and Objectives
The primary goal of TIK TOK with FlashBet is to create a successful viral mobile sports betting application that
reaches a competitive level of popularity, quantified by acquiring over 300,000 monthly users within 18 months of
operations.
18
Paddy Power plc Annual Report and Accounts 2015
19
http://www.sbcnews.co.uk/sportsbook/2016/03/01/sky-betting-gaming-sees-revenues-increase-by-36/
20
Gambling Compliance, UK Online Market Share, October 2015
6Subsequently, the Company aims to continue to develop its stand-alone betting operation and launch spin-off
variants of the FlashBet Wheel FlashBet Mini-Wheel and FlashBet Exchange applications over the next 4 years of
operations.
The objective is to obtain £5 million of equity investment funding to finance the marketing and development of
FlashBet.
At an estimated £37.7 billion market in 2018, TIK TOK aims to acquire global market share of 0.0044% or £2.34
million revenues within 24 months of product launch.
1.5 Key Success Factors
The two key success factors for FlashBet is a viral product and effective marketing; a product that is unique and
engaging to the majority of online sports betting, regular football pools and national lotto players, together with its
ability to achieve a significant viral effect. These are achieved through:
The Company’s strong development team, with a track record of mobile app development success.
A unique product that adds interesting “Peer to Peer Cash-Out” and “Free-Play” elements to sports combination
accumulator betting, as well as providing a significant reward for sharing with friends via social media.
An effective marketing implementation strategy that creates sufficient brand awareness and drives active
monthly users.
Key Factors for Future Success
The key success factor to the ongoing future success for this company is to continually release new sports betting
verticals to appeal to an increasingly wider user-audience and number of potential B2B partners, as well as the
planned deployment of product spin-off variants.
7A second key factor is to continue to attract and retain a strong, experienced team for its management, development,
sales and marketing activities into the future.
1.6 Structure of the Company
TIK TOK Technologies Ltd, a company registered in the UK is the parent corporation and owns all intellectual
property rights to FlashBet and its associated applications. At an early stage TIK TOK Technologies Ltd intends to
convert to a Public Limited Company (“PLC”) Status.
For each territory entered into as a stand-alone or joint venture operator, a separate subsidiary will be formed. The
proposed group structure at outset is proposed as shown below: The lower company structure will be subject to
change.
82.0 Product Description
2.1 Description of the Product
The “FlashBet Wheel” inspired by the centre-piece of a casino
floor – the roulette wheel – is an engaging interface to generate
odds permutations, which approaches the multiple ‘accumulator’
sports bet from an odds perspective, as opposed to calculating
odds from the player’s selected results predictions.
As shown in the illustration opposite, six sporting fixtures are
selected based on 3 Home Wins (1), 2 Draws (N) and 1 Away
Win (2), e.g. from the English Premier League (odds in
brackets):
[1] Chelsea Home Win (2.40/1)
[1] Watford Home Win (2.40/1)
[1] Arsenal Home Win (2.40/1)
[N] Swansea vs Manchester City Draw (3.25/1)
[N] Manchester Utd vs West Ham Draw (3.25/1)
[2] Liverpool Away Win (3.30/1)
Based on these selections, the FlashBet Wheel is spun with ten
neat odds groups being created, from ca. 500/1 to 1,000,000/1.
In this example, FLASH BET has been selected, and the TOTAL
BET of €10,00 spread evenly across the odds groups, creating
10 €1,00 six-fold multiple accumulator bets.
9The first odds group (481/1) is based on the selected fixture odds, i.e. (2.40 X 2.40 X 2.40 X 3.25 X 3.25 X 3.30)/1
and subsequent odds groups by derivatives of the chosen fixtures, such as final score and half-time/full-time
predictions, e.g. the 1,000/1 odds group contains two half-time/full-time predictions, to the 1,000,000/1 odds group
containing five final score predictions.
And, the MANUAL BET feature allows a player to select how their total betting stake is distributed around the wheel,
subject to a bet always being placed in the minimum odds group. It also allows for the wheel to be spun repeatedly
to generate a variety of odds groups in line with a player’s preferences, prior to all of the bets being placed.
Free-Play Version
A free version of the FlashBet Wheel App will be available for download in the Google Play, Windows and Apple
iTunes stores, as well as being available to play on Facebook. Upon download the player will be credited with 1,000
tokens to play with and the FlashBet Wheel will be populated with live sports betting odds, simulating the live
FlashBet experience.
Regular competitions based on a player’s virtual performance will be run to serve as a catalyst to gain viral traction in
the market place, incentivising players to share the FlashBet experience with their friends.
2.2 Certification and Regulatory Standards Required
FlashBet must adhere to the above-mentioned App Stores’ and Facebook’s guidelines for game submission. FlashBet
will meet these specifications through the app creation development firm. This will involve restricting access to users
outside of the US and any other prohibited territories, and paid gaming elements will not be included in the Facebook
version of FlashBet.
All rights to the FlashBet proprietary technology are wholly owned by TIK TOK Technologies Limited based out of the
UK. All licensing, incorporation, permits and insurance requirements for this firm will be completed by April 28, 2017.
The FlashBet Wheel App design and technology is currently Patent Pending in the UK.
102.3 Example Player Attracted to FlashBet
John Squires is a moderate gambler who typically spends circa £70 each week betting
on English Premier League fixtures. Like many gamblers, John prefers Patent Bets that
are a form of full coverage multiple bet offering coverage of all possible combinations
of bets from three selections.
Having predicted the outcomes of six matches – as shown here – John decides to split
his £70 betting stake into two £35 patent bets, with each bet comprising of a £5 stake
on the 7 possible combination bets, i.e. 3 singles, 3 doubles and a treble, which are
shown in more detail below:
Patent Bet #1 Patent Bet #2
Description Payout/£ Description Payout/£
• Single on Middlesbrough @ 16/5 (A) 21.00 • Single on Draw @ 14/5 (D) 19.00
• Single on Sunderland @ 9/5 (B) 14.00 • Single on Draw @ 23/10 (E) 16.50
• Single on Swansea @ 6/1 (C) 35.00 • Single on West Brom @ 11/5 (F) 16.00
• Double on A and B 58.80 • Double on D and E 62.70
• Double on A and C 147.00 • Double on D and F 60.80
• Double on B and C 98.00 • Double on E and F 52.80
• Treble on A and B and C 411.60 • Treble on D and E and F 200.64
Maximum Total Payout: 785.40 Maximum Total Payout: 428.44
If John correctly predicts all six fixture results, his two patent bets will pay out a profit of £1,143.84 (£1,213.84 -
£70)
11John is good at maths but has limited time. Using the FlashBet Wheel he can secure his usual type of minimum odds
groups, to spread his stake evenly and instantly over progressively increasing odds groups, in order to create a
substantial boost in terms of his maximum return potential.
John’s minimum bet odds group segment betting slips are based on his original fixture
selections:
1 Middlesbrough Home Win 3.2/1
1 Sunderland Home Win 1.8/1
1 Swansea Home Win 6.0/1
N Man. Utd v. Leicester Draw 2.8/1
N Bournemouth v. Everton Draw 2.3/1
2 West Brom Away Win 2.2/1
And so, John places 70 £1 bets across all ten market segments: 10 X (7 X £1 bets). He used the Manual Bet feature
in order to alter the specific fixture outcomes in odds groups 1,000/1 and up, to create bet combinations in
accordance with his own preferences.
If John correctly predicts all six fixture results, his seven £1 “minimum bets” will pay out a total profit of £3,423 (7 X
£489) an increase of £2,216.16 ((£3,423 – £1,143.84) – £63 (stake in other odds groups)) over his previous patent
bets. Moreover, he has a further 63 X £1 bets spread across the remaining 9 odds groups ranging from 1,000/1 to
1,000,000/1. John’s football betting has just got a whole lot more exciting with FlashBet!
Note: If John incorrectly predicted some of the fixture results, e.g. Swansea (from patent bet #1) and West Brom (from patent bet #2) didn’t win – these bets
would still return £93.80 and £98.20 respectively. For John’s minimum FlashBets to pay out, he must have correctly predicted all six fixture results.
123.0 Market
3.1 Target Market Profile
TIK TOK have established from their research into gambler profiles and preferences that FlashBet will appeal to a
range of gambling and gaming users, such as:
• Lottery “Lucky Dip” players; who are attracted to high win, low probability, low stake gambling but who can
now add an element of skill and knowledge to their ‘punt’.
• Social gamblers; who can interact with fellow gamblers especially regarding their scheme or team choices and
through the exchange mechanism.
• The sports betting analytical gambler; who may like to pore over team form, injury news and historical match
ups but who wants a quick and easy odds compiler choice, probably as a side bet or alternative when time
constrained.
• Accumulator players; as an alternative or addition to their traditional betting format.
• Football pool players; since effectively FlashBet offers a wider selection of odds choices and by definition better
odds
3.2 Estimated Revenues
The Company estimates to gain negligible revenue in Year 1 (ending six months after launch), gaining 79,388
monthly active users by the end of Year 2, 197,131 users by the end of Year 3 and 340,197 users by the end of Year
134. This will translate into cash generated of circa £748,991, £4.8m and £11.8m in Years 2, 3 and 4 respectively (see
below)21.
Monthly Active Global Market Gross Profit Net Income Cash
Year
Users Share (Loss) (Loss) Generated
2018 10,973 0.00% (£130,339) (£265,339) (£306,264)
2019 79,388 0.00% £1,381,096 £1,059,096 £748,991
2020 197,131 0.01% £5,835,934 £5,327,934 £4,868,969
2021 340,197 0.02% £13,078,717 £12,442,717 £11,827,309
These figures are based on assumptions of being able to achieve these numbers of active users, and management’s
ability to translate this customer base into equivalent industry-standard revenue through the successful acquisition of
B2B affiliations and licensing agreements.
3.3 Rules of Purchase
The rules of purchase of this target market is that the App must have a free to play version offering the opportunity
to buy additional competitively priced gaming tokens and convert to a live betting “real money” interface. In other
words, the quality of FlashBet is critical in that it must contain the minimum threshold of credibility, uniqueness and
shareability for the user to try and continue as a regular user.
21
See Financials (Section 8.0) and ‘Assumptions to Financial Documents’ sections of this Company Presentation.
144.0 SWOT ANALYSIS
The diagram opposite provides a summary of the
primary strengths, weaknesses, opportunities
and threats, currently facing TIK TOK in respect
of its FlashBet business.
4.1 Strengths of FlashBet
Early-mover advantage: FlashBet Wheel is a new
concept for the sports betting industry.
Personal network of contacts at high level: All of
the members of management have an extensive
experience of the different verticals, sectors and
operations they’re responsible for, jointly with a
vast personal network of contacts, e.g. within top
sports betting organisations.
Multiple jurisdictional operation: TIK TOK Technologies Limited is a private limited company registered in the UK
holding all proprietary rights to the FlashBet Wheel, and will initially have subsidiary operational entities in United
Kingdom, France and Spain, and subsequently may apply for a Remote Class 2 Gaming License issued by the Malta
Gaming Authority (MGA).
Dynamic organisation: TIK TOK are a dynamic and flexible organisation that can quickly make and revise decisions in
order to react to market developments. This flexibility is also a result of the fact that control over the company is still
in the hands of the founders.
154.2 Weaknesses of FlashBet
Small organization: TIK TOK is a relatively small organization that needs to develop the business in all aspects very
quickly, requiring a high level of commitment from all employees and consultants working for and with the
company.
No established brand: TIK TOK and FlashBet are new brands unknown to a larger audience. As such – even if
marketing is primarily conducted through our partners and their brands – TIK TOK cannot risk to rely too heavily on
the support of its partners. It must quickly gain its own unique foothold in the space.
Funding: TIK TOK is currently financed by a number of smaller private investors and as such must obtain funding to
expand its marketing, sales and product development activities to successfully compete.
4.3 Opportunities for FlashBet
Easy to multiply concept: It is very easy to multiply the entire set-up for additional verticals. TIK TOK estimate a time
frame of 4-6 weeks to create the graphical interface and back-end API integration required for a new vertical.
Internet usage (and penetration) still growing: The Internet is the fastest growing media, both in terms of
penetration, number of sessions and time spent online. Even in saturated countries like Germany, the US, and UK,
growth is expected to remain high, due to increasing broadband connectivity, online advertising, and online channel
investments.
Online and Mobile App: The FlashBet Wheel App is proprietary sports betting software technology designed to
calculate, present, and facilitate placing of multiple accumulator bets on a range of predetermined sporting fixtures.
Functionality, performance, security and scalability have been confirmed.
Changes in legislation: Further deregulation of monopoly markets, mainly in Europe and the US, is relatively likely.
This will open up new markets and advertising possibilities, which will further boost the growth of betting.
16Partnerships: In place are collaborations with THE LEAGUE magazine and the Legends Network which will enable
larger marketing campaigns at limited cost. Also in place is an agreement with MYCLUBBETTING.COM Limited.
4.4 Threats to FlashBet
Easy to copy concept: While the FlashBet Wheel App is patent-pending in the UK, there is some possibility
competitors of TIK TOK could copy the concept, if not the back-end algorithm itself; however, the adaptation of TIK
TOK’s business model has some prohibitive implications for established betting companies.
Irresistible affiliate deals: Potential partners may choose safe and guaranteed affiliations over the possibly unsafe but
potentially much higher income from a partnership with TIK TOK.
Changes in legislation: The uncertain legislative position in some jurisdictions does not only hold opportunities. There
is also a risk that it can get more difficult to offer and advertise betting and online gaming in certain countries.
Suppliers: TIK TOK’s business is dependent on a number of suppliers. In respect to competitive markets where it
plans to collaborate, it will depend on the provision of fixtures and result administration from those partners.
Regarding the FlashBet technology itself, TIK TOK does rely in part on contracted IT for operational support and
development, together with back-end API integration with its collaborative partners’ betting systems.
175.0 Marketing
5.1 Positioning
FlashBet will be positioned by its product attributes, with potential users seeing the sports betting App as unique and
engaging, in that nothing like it currently exists on the market.
5.2 Sales Strategy and Tactics
The management of TIK TOK will deploy a strategic marketing and sales implementation plan, comprising a series of
push tactics and direct sales marketing over the next two years to create interest and awareness of the FlashBet App,
drive users and acquire key advertisement, sponsorship, licensing and affiliation contracts. The latter will develop
more quickly as FlashBet gains traction in the market and builds a user base over the upcoming months.
5.3 Advertising and Promotion Plans
The following is a brief description of the advertisement and promotional tools used to create customer awareness
and drive monthly active users playing FlashBet. In the months preceding FlashBet’s launch, each channel will focus
on building excitement and engagement with the market. After the product is launched, the promotional plan will be
to aggressively drive users of FlashBet, and maintain high brand recall and playing frequency in users.
Sports Betting Forums
Online forums are literally the place that online players/punters hangout and meet up, like a virtual pub or bar. By
taking the FlashBet App to the target market’s meeting place, TIK TOK will be deploying what is arguably one of the
most effective forms of market penetration.
18Facebook Groups
The Company will create and market to existing groups through Facebook that are interested in online sports betting,
and will use this channel to communicate, build interest and create awareness of FlashBet to target market and build
strong user base.
Odds Comparison Listings
Management have identified odds comparison websites as the ideal place to not only advertise the FlashBet App, but
also as a source of potential affiliate and licensing partners.
Search Engine Optimisation (SEO)
TIK TOK will be sourcing and working with a leading team of search engine experts, to expedite this critical part of
their marketing strategy for the FlashBet App.
Advertising
Online banner advertising works well to build brand awareness, and which, TIK TOK will be deploying on special
interest websites. By implementing paid advertising in this way, the Company will stay in full control over all the
aspects of the advertisement (time frame, message, etc.)
Here are some further marketing strategies forming part of the company’s marketing and sales implementation plan:
• Organic Growth Through Ongoing Competitions, Communications and Sponsorships
• Affiliate Marketing
• Editorial advertising in sports and betting publications, e.g. THE LEAGUE MAGAZINE and Legends Network.
TIK TOK are exploring alternative cost-effective ways of advertising, e.g. free FlashBet listings in online reviews, etc.
196.0 Organisation
6.1 Key Persons Biography
Lord Jordan Lavignasse, Chairman & CEO
As Chairman and CEO, Jordan’s duties are to overseeing the overall vision, direction and strategy of the Company.
Jordan is a French Entrepreneur with years of experience in venture start-up businesses. Jordan’s experience covers
a wide range of business activity from property and construction to mechanical devices and more recently IT Business
Development. Jordan is fluent in English, French, Spanish and Portuguese and is competent in other languages.
CFO to be appointed: Director: A Chartered Accountant has already been identified to fulfil this role. To be appointed
as director. CFO will set up the finance and management reporting function, together with hiring an in-house contract
and licensing specialist.
6.2 Other Non-Executive Directors
Eduardo Autran, Operations Manager
Manager to be appointed Director: Eduardo attended University of Santa Barbara California, and the University of
New Castle and is fluent in French -English - Spanish –Portuguese. Eduardo has a vast experience in Radio, TV and
Film production and promotion and is now using that expertise in the promotion of Apps for full commercialisation.
Lidija Nikolic, Marketing and PR
Lidija Nikolic has been involved with gaming, music and venue brand promotions for many years. Lidija studied in
Belgrade, Vienna, Stockholm, Montpelier, London and Barcelona. Lidija is fluent in English, Spanish, German and
Serbian and is competent in Russian, French, Portuguese and Italian.
206.3 Professional Management Support
The following professionals have been engaged by TIK TOK to guide the Company and to support the management;
Michael Byrne
From his position, as Mobile Marketing and Product Manager at William Hill working closely with Playtech’s Mobile
Product team. Michael moved on to become Head of Mobile William Hill and on to become Chief Executive Officer at
BetandMove.com and was the Chief Commercial Officer of Probability. Currently Senior Director of GTECH/IGT.
NeoMades is a well-recognised name in the business of App Development and Consultancy Support
and are engaged to assist the Company with, native cross-platform development, monitoring, and
centralised maintenance. Architecture: Mobile Backend 360° Apps Panel, unified management off apps data, push
notifications, security and statistics, sustainable and customizable architecture (WS / API), centralized maintenance.
Support: frame-working requirements, promotion, animation, analytics, performance, evolutions, integration in the
information system.
Alear apps and web design. Alear supplies, technical & project management across a wide array of
online site interfaces.
SOS supplies the company with online security and filter data services along with the development
of bespoke solutions.
Flavia Alvis supplies full back support services in IT and Promotional and Digital Material.
6.4 Ownership
There are 100 million shares in issue and the current company ownership of TIK TOK Technologies Ltd is divided
amongst 27 shareholders with Gazel Investment Group Ltd as the majority shareholder.
Management interest are: Lord Jordan Lavignasse: 5,000,000 shares - Lidija Nikolic: 510,000 shares
217.0 Key Risks
7.1 Description of Risks
1. New Company
TIK TOK Technologies Limited are a new company and FlashBet is a new product. This creates significant risk if the
company is unable to gain market traction with its product, create and maintain required users or adapt to any
unforeseen technical problems associated with the product or release process. Additionally, as a start-up it is difficult
to project accurate revenue projections, and any inability to adapt to unforeseen events could negatively affect the
company’s success.
2. Relationship with B2B Partners and Facebook
If the Company is unable to maintain good relationships with affiliates, licensing, sponsorship and other B2B partners,
the business will suffer. As a large majority of the FlashBet Free-Play users will come through the Facebook platform,
it’s imperative TIK TOK maintain a good relationship with Facebook; therefore, any changes, limitations, terminations,
or providing other social media competitors more favourably on behalf of Facebook can have a significantly negative
impact on the company’s success.
3. New and Rapidly Changing Industry
TIK TOK is entering a new and rapidly changing industry, which presents challenges when evaluating the business
and its prospects. The growth of the remote interactive betting industry and the level of demand and market
22acceptance of FlashBet are subject to a high degree of uncertainty. Future operating results will depend on numerous
factors affecting the betting industry, many of which are beyond management’s control, including:
• Continued worldwide growth in the adoption and use of Facebook and other social networks.
• Changes in consumer demographics and public tastes and preferences.
• The availability and popularity of other forms of entertainment.
• The worldwide growth of personal computer, Internet and mobile device users and the rate of such growth.
• General economic conditions, particularly conditions adversely affecting discretionary consumer spending.
• Changes in betting and online gambling legislation and taxation.
Management’s ability to plan for App development, distribution and promotional activities will be significantly affected
by its ability to anticipate and adapt to relatively rapid changes in the tastes and preferences of current and potential
users of FlashBet. New and different types of entertainment may increase in popularity at the expense of online
sports betting. A decline in the popularity of sports betting in general, or FlashBet in particular, would harm business
prospects.
4. Security Breaches
Security breaches, computer viruses and computer hacking attacks could potentially harm TIK TOK’s business and the
results of operations.
5. Loss of Management or Development Team
Any loss of key management or development team members during production and launch of FlashBet would have a
very significant impact on the Company and its ability to meet revenue projections.
238.0 Financial Requirements and Cash Flow Projections
8.1 Type and Amount of Financing Required
The Company in the future will be seeking to raise £5 million in equity financing in exchange for 162/3% ownership in
TIK TOK Technologies Ltd. Please see details of the proposed share capital structure and planned use of the funds
below:
Share Capital Structure of the Fundraise:
Shares on offer: 20,000,000
Offer price per share: £0.25
Minimum investment per allocation: £5,000 (subject to conditions)
Total fundraising expected: £5,000,000
Shares in issue prior to funding: 100,000,000
Shares in issue upon full subscription: 120,000,000
Valuation prior to fundraising: £25,000,000*
Valuation assuming full subscription: £30,000,000**
*Based on an internal enterprise valuation.
** Valuation plus proceeds of the fund-raise.
24Use of Proceeds: (Based on full subscription)
Completion, securing, defending of IP documentation: £380,000
Marketing-development user base setup of secure data storage, licensing of odds service: £1,550,000
Leasing of secure servers and hosting, software maintenance and support: £100,000
Legal, accountancy, registrars – Professional Consultancy Services: £580,000
Management costs – remuneration, accommodation, administration and travel: £800,000
Stage 2 development specified on basis of Stage 1 results and experience – software
and hardware – marketing of Stage 2: £1,450,000
Reserve (contingency) to be added to working capital of the Company: £140,000
Exit Strategy:
The aimed for exit strategy plan for the Company is trade sale or IPO with targeted exit value of £50–100 million. The
Company is aware that outside investors want to collect a return on their investment within a set period of time and
have factored an exit strategy into the Company’s business model. The Company is looking to list on a recognised
sub-market of a Primary Exchange, e.g. the Alternative Investment Market (AIM – London Stock Exchange) or on the
OTC markets as a “Pink Sheets” company with the intention of a subsequent NASDAQ Listing, or the ECM segment of
the Cyprus Stock Exchange all options offer a suitable platform to allow for the trade in the Company’s shares. The
Company also intends to put into place full working manuals for all operations, along with all required accreditation
certifications to allow for an approach via a Bid or Merger.
258.2 Pro-forma Income Statement
KEY
2018 2019 2020 2021 2018 2019 2020 2021
P&L SUMMARY DRIVERS
Revenue Affiliates £64,661 £1,093,644 £3,113,349 £5,285,224 Affiliates Territories 1 3 6 9
Joint
Ventures £0 £890,563 £3,360,036 £7,529,663 Active Users 10,973 58,875 132,374 206,554
Av Income / Active
White lables £0 £351,890 £1,112,549 £2,266,330 User £5.89 £18.58 £23.52 £25.59
Joint
Total Revenues £64,661 £2,336,096 £7,585,934 £15,081,217 Ventures Territories 0 1 3 6
Cost of Sales (£195,000) (£955,000) (£1,750,000) (£2,002,500) Active Users 0 20513 64757 133643
Av Income / Active
Gross Profit (£130,339) £1,381,096 £5,835,934 £13,078,717 User £43.42 £51.89 £56.34
Gross Margin (202%) 59% 77% 87% White lables Territories 0 2 4 8
Overhaed (£135,000) (£322,000) (£508,000) (£636,000) Income per territory £175,945 £278,137 £283,291
Operating
Profit (£265,339) £1,059,096 £5,327,934 £12,442,717 EPS - 0.8 4.0 9.3
Operating Margin (410%) 45% 70% 83% Divendend / share - 0.1 1.3 3.3
Cash generated (£306,264) £748,991 £4,868,969 £11,827,309
268.3 Pro-forma Cash Flow Statement
Cash Flow Statement Year 1 of Operations
TIKTOK FLASHBET
Pro-Forma Cash Flow Statement For Year Ending: June 30, 2018
Total Year
Month: Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
1
Revenues
Affiliate (Aff) Revenues 0 0 0 0 0 0 0 0 6,161 11,698 19,765 27,037 64,661
Joint Venture (JV) Revenues 0 0 0 0 0 0 0 0 0 0 0 0 0
White Label Revenue 0 0 0 0 0 0 0 0 0 0 0 0 0
Total Revenues 0 0 0 0 0 0 0 0 6,161 11,698 19,765 27,037 64,661
Cash In
Previous Month Revenues 0 0 0 0 0 0 0 0 0 6,161 11,698 19,765 37,624
Total Cash Receipts 0 0 0 0 0 0 0 0 0 6,161 11,698 19,765 37,624
Cash Out
Aff. Server & Advertising 0 0 0 0 0 0 (25,000) (15,000) (20,000) (20,000) (20,000) (45,000) (145,000)
JV Server and Advertising 0 0 0 0 0 0 (10,000) (10,000) (12,500) (12,500) (12,500) (22,500) (80,000)
App Dev. Maintenance 0 0 (5,000) (5,000) (5,000) (5,000) (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (80,000)
Staff Costs 0 0 0 (3,000) (7,000) (7,000) (7,000) (14,000) (14,000) (14,000) (14,000) (14,000) (94,000)
Office Overhead 0 0 0 (1,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (17,000)
Legal and Accounting 0 0 (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (10,000)
Travel 0 (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (22,000)
Miscellaneous 0 0 (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (20,000)
Total Cash Payments 0 (2,000) (10,000) (14,000) (19,000) (19,000) (59,000) (56,000) (63,500) (63,500) (63,500) (98,500) (468,000)
Cash Flow Surplus/Deficit (-) 0 (2,000) (10,000) (14,000) (19,000) (19,000) (59,000) (56,000) (63,500) (57,339) (51,802) (78,735) (306,264)
Opening Cash Balance 0 20,000 18,000 8,000 244,000 225,000 456,000 397,000 341,000 277,500 220,161 168,359 0
Financing 20,000 250,000 250,000 520,000
Closing Cash Balance 20,000 18,000 8,000 244,000 225,000 456,000 397,000 341,000 277,500 220,161 168,359 89,624 213,736
27Cash Flow Statement Year 2 of Operations
TIK TOK FLASHBET
Pro-Forma Cash Flow Statement For Year Ending: June 30, 2019
Total Year
Month: Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2
Revenues
Affiliate (Aff) Revenues 33,569 45,613 56,449 66,209 74,993 82,881 96,157 108,103 118,848 128,529 137,224 145,067 1,093,644
Joint Venture (JV)
0 14,565 27,656 46,728 63,920 79,364 93,271 105,801 109,801 113,377 116,582 119,496 890,563
Revenues
White Label Revenue 0 50,861 1,635 2,762 3,779 4,692 116,375 7,890 9,253 70,481 11,584 72,578 351,890
Total Revenues 33,569 111,039 85,740 115,699 142,692 166,937 305,803 221,794 237,903 312,387 265,390 337,142 2,336,096
Cash In
Previous Month
27,037 33,569 111,039 85,740 115,699 142,692 166,937 305,803 221,794 237,903 312,387 265,390 2,025,991
Revenues
Total Cash Receipts 27,037 33,569 111,039 85,740 115,699 142,692 166,937 305,803 221,794 237,903 312,387 265,390 2,025,991
Cash Out
Aff. Server & Advertising (20,000) (45,000) (35,000) (35,000) (35,000) (35,000) (60,000) (50,000) (50,000) (50,000) (50,000) (50,000) (515,000)
JV Server and
(12,500) (22,500) (22,500) (22,500) (22,500) (22,500) (32,500) (32,500) (32,500) (32,500) (32,500) (32,500) (320,000)
Advertising
App Dev. Maintenance (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (10,000) (120,000)
Staff Costs (14,000) (14,000) (21,000) (21,000) (21,000) (21,000) (21,000) (21,000) (21,000) (21,000) (21,000) (21,000) (238,000)
Office Overhead (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (24,000)
Legal and Accounting (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (1,000) (12,000)
Travel (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (24,000)
Miscellaneous (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (24,000)
Total Cash Payments (63,500) (98,500) (95,500) (95,500) (95,500) (95,500) (130,500) (120,500) (120,500) (120,500) (120,500) (120,500) (1,277,000)
Cash Flow
(36,463) (64,931) 15,539 (9,760) 20,199 47,192 36,437 185,303 101,294 117,403 191,887 144,890 748,991
Surplus/(Deficit)
Opening Cash Balance 213,736 177,273 112,342 127,881 118,121 138,320 185,512 221,950 407,253 508,547 625,949 817,837 213,736
Financing
Closing Cash Balance 177,273 112,342 127,881 118,121 138,320 185,512 221,950 407,253 508,547 625,949 817,837 962,727 962,727
288.4 Assumptions to Financial Documents
Financials are based on pro-forma projections, and are subject to significant variation. The following are assumptions
and clarification to the financial documents:
All figures shown are in pound sterling (GBP/£)
FlashBet plans to acquire the envisaged 10,973 monthly active users from a single territory in 2018, 79,388
users from both affiliate and joint venture models over 4 territories and two white label licensees in 2019 and
197,131 users and 4 licensees in 2020 and 340,197 users and 8 licensees in 2021.
In Years 2-4 estimated that 12% of these users will be acquired in Q1, 20% in Q2, 30% in Q3 and 38% in Q4,
due to estimated nature of viral growth.
Annualised revenue of £5.89 per user from affiliate territories in 2018 rising to £25.59 by 2021 and £43.42
rising to £56.34 by 2021 per user from joint venture territories, with attrition rate assumptions in line with
industry averages.
FlashBet will achieve gross margin of 42.3% in Year 2, 67.8% in Year 3 and 81.5% in Year 4.
Stand-alone betting operations expected to commence in Year 2, Q3 and financials subject to separate analysis
once betting operating license obtained.
For more information please contact the Company.
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