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Sparo Investment
Presentation
www.sparo.com
EXECUTIVE SUMMARY
 Currently no providers that provide and interconnection between shopping with
charitable giving in a seamless and integrated manner- (embedded on the retailer site at
checkout and resident on the Charity site)
 Locally based at first (local charities, food banks and community organizations) then
national and regional (with bigger players).
 Selected charities have a stake in the business as Class B shareholders
 Tuition bank provides assistance to any Student enrolled in a accredited US College or
University- students become major users of Sparo and becoming loyalty debit card holders
 Patented technology is hard to replicate and rebuild
 Change platform- (not just a payment solution or online giving marketplace) which
inspires community building
Seeking Meaningful Ownership - $1M investment for 20% Equity position.
Preferably an investor with e-Commerce experience and networking
relationships with Merchants and Charitable organizations.
"What if every purchase made online resulted in a charitable
donation and each donation led to more purchases?“
• In December of 2012, a small group of people came together and talked about
their desire to make the world a better place.
• It is a known fact that people genuinely want to give more. What if we gave
them an easy and rewarding way to do more good? After much research and
thought, our team came up with a solution: an application, unobtrusively
embedded at an on-line checkout allowing online shoppers to donate a portion
of their purchase to the charity of their choice….not the Merchant’s choice.
• “In allowing people to support their favorite charity by simply purchasing from
sites they already trust, we could enable millions of shoppers to do more good
and ultimately "Purchase with a Purpose™.“
• Sparo's purpose is threefold. 1) It allows everyone to do more good and more
often through their everyday purchases, 2) provides merchants a way in which
they can contribute to the causes that their customers care about, 3) gives
Charities a role in the e-commerce business and advances the good work that
charities do for their community everyday.
BACKGROUND
Structure and Ownership
 Sparo – Maryland Registered LLC company
 Rob Sobhani – Founder 100% of the Common Stock. Invested $700k
 Employees (5) – Option Holders
Assets
 Patents – Provisional patents filed November 2013
 Personnel – Developers, Management, Finance, e-commerce Marketing, IT and
on-line Sales
 Fully functional website, transaction-based platform and database
management systems
Strategic Relationships and Partnerships
 C5i – IT security and outsourced database management
 Citron Clothing
 Washington Times
SPARO PROFILE
Sparo gives customers ability to chose the charity they
want and charities help promote the merchants
THE CHARITY DIFFERENCE – You Choose Your Charities
• Most company-sponsored
charitable initiatives often
focuses on only one cause
at a time, usually catering
solely to a specific group
of people, and neglecting
a majority of potentially
loyal customers who care
about other causes.
• Select charities are class B
shareholders in Sparo and
have agreed to share
information about Sparo
to their donor base.
Seamless Integration for the Merchant and Shopper) on the checkout cart
THE POINT OF SALE – The Checkout Page
Unlike other online charitable solutions, the Sparo solution is seamlessly integrated on the retail
website on the checkout pages. The customer is not required to go through a separate website or
download a widget to execute the donation. This provides a significant advantage (no barriers to
transact) for Sparo over its competitors, enabling and causing many more donations per
transaction.
 Sparo's online tuition bank provides
tuition assistance for students
enrolled in an accredited US college
or university.
 Sparo sets aside a percentage on
every merchant transaction to be
donated as a grant to an enrolled
Sparo student.
 Grants are disbursed every time the
tuition bank reaches $5k per student
through a random selection.
 Students are encouraged to shop with
Sparo merchants and share with
friends and family this unique value
proposition- promoting further
shopping with Sparo.
First ever Online Tuition Assistance Program that works with Sparo
application to provide grants to students enrolled in Sparo
ONE WAY WE HELP – Paid College Tuition is a Reality
THE CONSUMER CHOICE – Donate Now OR Visit Later
The customer has the ability
to direct a portion of the
value of the transaction to a
charity that they care about
or save the donation to their
piggy for a later
disbursement.
Sparo is a catalyst for driving
more traffic (both unique and
repeat) to a customer’s
website through a save &
donate later feature
Donate now or save for a later date through a banking feature
9
CUSTOMER APPEAL – It’s Simple & It’s Possible
An independent study was done with 1,000 online shoppers to rate the Sparo Experience
* Online Survey conducted with panel of 1,011 online shoppers ages 18 – 64 years old
88% of
consumers say
they would
participate in Sparo
10
Shoppers are more likely to shop at Sparo retail partners and Shoppers are
more likely to donate to their favorite Charities
Consumers would like retailers a lot
more if they utilized Sparo
CUSTOMER APPEAL – Shopping Donation Shopping
Shoppers are more likely to convert if
Sparo is a partner
MARKET POTENTIAL – We’re Equipped For Growth
50%
40%
10%
Other smaller online donation facillitators (Recoup, charities, retailer option at checkout...)
Online Marketplaces (iGive, SocialVest, DailyGood)
Paypal
 There is currently no single player that
dominates the online giving space.
 The market is fragmented with many
small players such as online giving
marketplaces, charities partnering
directly with retailers and daily
shopping lists.
Sparo has the unique and timely opportunity to
dominate in a rapidly emerging market
EXPONETIAL GROWTH – The Right Choice, Right Time
US online retails sales will grow
from $225.5 Billion in 2012 to
$434.2 in 2017 according to
eMarketer
Our goal is to capture anywhere between 0.1% to 1% of this market, which
equates to gross revenues between $300M and $3.27B by 2016.
COMPETITVE MATRIX – The Difference That Matters
KEY ASSUMPTIONS & MILESTONES - First 12 Mths
1. Average No. Online Transactions per Month
Small Customers 500
Medium Customers 10,000
Large Customers 1,000,000
Mega Customers 5,000,000
2. Average Value per Transaction $125
3. % of On-line Transactions using Sparo 53%
4. Average % of Transaction to Donation 3.9%
5. Sparo Revenue Share of Donation 50.0%
6. Total Active Customers at Year End 15
Small Customers 11
Medium Customers 3
Large Customers 1
Mega Customers 0
7. % of Yr 1. Breakeven Achieved - Merchants Sold 109%
8. Total FTE's 10
9. Cash on Hand as % of Total Funding Amount 0%
FINANCIAL SUMMARY
($Million's) Year 1 Year 2 Year 3 Year 4 Year 5
Income Statement
Revenue $1.8 $28.0 $64.1 $142.6 $282.8
Revenue growth 1455% 129% 123% 98%
Gross Profit $1.4 $20.1 $48.7 $107.9 $209.1
Gross Margin % 79% 72% 76% 76% 74%
Operating Expenses $1.3 $9.9 $20.4 $38.1 $62.6
EBITDA $0.1 $10.2 $28.4 $69.8 $146.5
EBITDA Margin % 6% 36% 44% 49% 52%
Balance Sheet
Cash on Hand $1.2 $16.0 $37.2 $88.2 $193.9
Total Assets $1.4 $17.4 $40.0 $94.2 $205.1
Shareholders' Equity $1.2 $14.4 $33.9 $81.7 $181.7
Cash Flow
CapEx $0.1 $0.8 $1.0 $1.9 $2.5
Net Operating C/Flow $0.1 $14.8 $21.2 $51.0 $105.7
Investment (Funding Requirement) $1,040.0
IRR 1674%
Positive Cashflow - Months (from inception) 15.0
Investment Payback - Months 21.6
USE OF PROCEEDS – Sales Drives Investment
First Year Budgeted Expenses
• Hire an additional 5 people – Sales (Merchants), Marketing (Merchants,
Charities and Shoppers)and IT Network and Operations
- Cost of Consultants and Employees: $900k
- Sales-related expenses (incl Commissions): $100k
• Marketing Program Cost to source Merchants, Charities and Customers:
$120k
• General & Admin Cost – Prof Fees, Office Set-up, Licensing, Insurance
and other general overhead: $120k
• Variable Expense - Outsourced Cost of Service: Billing and Charity
Payments, IT Managed Service, CSC and Technical Support and Network
interconnection: $300k
NEAR TERM OPPORTUNITIES AND NEXT STEPS
Phase 1
Inception & Launch
Phase 2
Reach & Rollout
Phase 3
Growth & Expand
Timeline August 2013- Dec 2013 Jan 2014- July 2014 July 2014 - onwards
Technology
 Sparo API Developed and
launched on Citronclothing.com
collecting donations for all
transaction selecting API
 Interim website launched
 Launched new member site with
added functionality
• Scaling Technology for larger
retailers (completed by end of
Q1’14)
• Development of Tuition Bank
• Launch API on the Washington
Times (TWT0 by Q1’14
• Launch of online Tuition
Bank with major retailer
• Enhancement to API and full
ecommerce capability on
Sparo.com
• Automated ability for small
merchants to download API
• Sparo credit card
Business
Development
 Enrolled 20 charities
 Preliminary Discussions with
key retailers such as
Quicksilver, Brighton Jewelers,
UT San Diego & Auto Supply
Chain Stores
 Signed The Washington Times for
all subscriptions types
• Continue discussions with key
merchants- sign 2-3 medium/large
merchants (Revenues >$500k)
• Continue signing charities relevant
to new merchant signings
• Launch and integration with
major retailer such as
Target, JC Penny or Staples
• >20 small-medium size
merchants partnering with
Sparo (Revenues >$250k)
• > 150 Charities partnering
with Sparo
Marketing
 Developed all charity collateral
and all marketing assets
 Marketed with Citron increasing
revenues by 25% since launch
 Launching promotional campaigns
for Citron with key charities (Save a
Child’s Heart & San Marin Food
Bank)
 Developing Marketing plan with
TWT for launch
• Sparo 360 member
marketing
• PR campaign for Tuition
Bank with large retailer
THANK YOU
Ian Gerrard – Financial Advisor
igerrard@verizon.net
571 422-1783
Rob Sobhani – CEO
rsobhani@sparo.com
240 401-8930

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Investor presentation 51314

  • 2. EXECUTIVE SUMMARY  Currently no providers that provide and interconnection between shopping with charitable giving in a seamless and integrated manner- (embedded on the retailer site at checkout and resident on the Charity site)  Locally based at first (local charities, food banks and community organizations) then national and regional (with bigger players).  Selected charities have a stake in the business as Class B shareholders  Tuition bank provides assistance to any Student enrolled in a accredited US College or University- students become major users of Sparo and becoming loyalty debit card holders  Patented technology is hard to replicate and rebuild  Change platform- (not just a payment solution or online giving marketplace) which inspires community building Seeking Meaningful Ownership - $1M investment for 20% Equity position. Preferably an investor with e-Commerce experience and networking relationships with Merchants and Charitable organizations.
  • 3. "What if every purchase made online resulted in a charitable donation and each donation led to more purchases?“ • In December of 2012, a small group of people came together and talked about their desire to make the world a better place. • It is a known fact that people genuinely want to give more. What if we gave them an easy and rewarding way to do more good? After much research and thought, our team came up with a solution: an application, unobtrusively embedded at an on-line checkout allowing online shoppers to donate a portion of their purchase to the charity of their choice….not the Merchant’s choice. • “In allowing people to support their favorite charity by simply purchasing from sites they already trust, we could enable millions of shoppers to do more good and ultimately "Purchase with a Purpose™.“ • Sparo's purpose is threefold. 1) It allows everyone to do more good and more often through their everyday purchases, 2) provides merchants a way in which they can contribute to the causes that their customers care about, 3) gives Charities a role in the e-commerce business and advances the good work that charities do for their community everyday. BACKGROUND
  • 4. Structure and Ownership  Sparo – Maryland Registered LLC company  Rob Sobhani – Founder 100% of the Common Stock. Invested $700k  Employees (5) – Option Holders Assets  Patents – Provisional patents filed November 2013  Personnel – Developers, Management, Finance, e-commerce Marketing, IT and on-line Sales  Fully functional website, transaction-based platform and database management systems Strategic Relationships and Partnerships  C5i – IT security and outsourced database management  Citron Clothing  Washington Times SPARO PROFILE
  • 5. Sparo gives customers ability to chose the charity they want and charities help promote the merchants THE CHARITY DIFFERENCE – You Choose Your Charities • Most company-sponsored charitable initiatives often focuses on only one cause at a time, usually catering solely to a specific group of people, and neglecting a majority of potentially loyal customers who care about other causes. • Select charities are class B shareholders in Sparo and have agreed to share information about Sparo to their donor base.
  • 6. Seamless Integration for the Merchant and Shopper) on the checkout cart THE POINT OF SALE – The Checkout Page Unlike other online charitable solutions, the Sparo solution is seamlessly integrated on the retail website on the checkout pages. The customer is not required to go through a separate website or download a widget to execute the donation. This provides a significant advantage (no barriers to transact) for Sparo over its competitors, enabling and causing many more donations per transaction.
  • 7.  Sparo's online tuition bank provides tuition assistance for students enrolled in an accredited US college or university.  Sparo sets aside a percentage on every merchant transaction to be donated as a grant to an enrolled Sparo student.  Grants are disbursed every time the tuition bank reaches $5k per student through a random selection.  Students are encouraged to shop with Sparo merchants and share with friends and family this unique value proposition- promoting further shopping with Sparo. First ever Online Tuition Assistance Program that works with Sparo application to provide grants to students enrolled in Sparo ONE WAY WE HELP – Paid College Tuition is a Reality
  • 8. THE CONSUMER CHOICE – Donate Now OR Visit Later The customer has the ability to direct a portion of the value of the transaction to a charity that they care about or save the donation to their piggy for a later disbursement. Sparo is a catalyst for driving more traffic (both unique and repeat) to a customer’s website through a save & donate later feature Donate now or save for a later date through a banking feature
  • 9. 9 CUSTOMER APPEAL – It’s Simple & It’s Possible An independent study was done with 1,000 online shoppers to rate the Sparo Experience * Online Survey conducted with panel of 1,011 online shoppers ages 18 – 64 years old 88% of consumers say they would participate in Sparo
  • 10. 10 Shoppers are more likely to shop at Sparo retail partners and Shoppers are more likely to donate to their favorite Charities Consumers would like retailers a lot more if they utilized Sparo CUSTOMER APPEAL – Shopping Donation Shopping Shoppers are more likely to convert if Sparo is a partner
  • 11. MARKET POTENTIAL – We’re Equipped For Growth 50% 40% 10% Other smaller online donation facillitators (Recoup, charities, retailer option at checkout...) Online Marketplaces (iGive, SocialVest, DailyGood) Paypal  There is currently no single player that dominates the online giving space.  The market is fragmented with many small players such as online giving marketplaces, charities partnering directly with retailers and daily shopping lists. Sparo has the unique and timely opportunity to dominate in a rapidly emerging market
  • 12. EXPONETIAL GROWTH – The Right Choice, Right Time US online retails sales will grow from $225.5 Billion in 2012 to $434.2 in 2017 according to eMarketer Our goal is to capture anywhere between 0.1% to 1% of this market, which equates to gross revenues between $300M and $3.27B by 2016.
  • 13. COMPETITVE MATRIX – The Difference That Matters
  • 14. KEY ASSUMPTIONS & MILESTONES - First 12 Mths 1. Average No. Online Transactions per Month Small Customers 500 Medium Customers 10,000 Large Customers 1,000,000 Mega Customers 5,000,000 2. Average Value per Transaction $125 3. % of On-line Transactions using Sparo 53% 4. Average % of Transaction to Donation 3.9% 5. Sparo Revenue Share of Donation 50.0% 6. Total Active Customers at Year End 15 Small Customers 11 Medium Customers 3 Large Customers 1 Mega Customers 0 7. % of Yr 1. Breakeven Achieved - Merchants Sold 109% 8. Total FTE's 10 9. Cash on Hand as % of Total Funding Amount 0%
  • 15. FINANCIAL SUMMARY ($Million's) Year 1 Year 2 Year 3 Year 4 Year 5 Income Statement Revenue $1.8 $28.0 $64.1 $142.6 $282.8 Revenue growth 1455% 129% 123% 98% Gross Profit $1.4 $20.1 $48.7 $107.9 $209.1 Gross Margin % 79% 72% 76% 76% 74% Operating Expenses $1.3 $9.9 $20.4 $38.1 $62.6 EBITDA $0.1 $10.2 $28.4 $69.8 $146.5 EBITDA Margin % 6% 36% 44% 49% 52% Balance Sheet Cash on Hand $1.2 $16.0 $37.2 $88.2 $193.9 Total Assets $1.4 $17.4 $40.0 $94.2 $205.1 Shareholders' Equity $1.2 $14.4 $33.9 $81.7 $181.7 Cash Flow CapEx $0.1 $0.8 $1.0 $1.9 $2.5 Net Operating C/Flow $0.1 $14.8 $21.2 $51.0 $105.7 Investment (Funding Requirement) $1,040.0 IRR 1674% Positive Cashflow - Months (from inception) 15.0 Investment Payback - Months 21.6
  • 16. USE OF PROCEEDS – Sales Drives Investment First Year Budgeted Expenses • Hire an additional 5 people – Sales (Merchants), Marketing (Merchants, Charities and Shoppers)and IT Network and Operations - Cost of Consultants and Employees: $900k - Sales-related expenses (incl Commissions): $100k • Marketing Program Cost to source Merchants, Charities and Customers: $120k • General & Admin Cost – Prof Fees, Office Set-up, Licensing, Insurance and other general overhead: $120k • Variable Expense - Outsourced Cost of Service: Billing and Charity Payments, IT Managed Service, CSC and Technical Support and Network interconnection: $300k
  • 17. NEAR TERM OPPORTUNITIES AND NEXT STEPS Phase 1 Inception & Launch Phase 2 Reach & Rollout Phase 3 Growth & Expand Timeline August 2013- Dec 2013 Jan 2014- July 2014 July 2014 - onwards Technology  Sparo API Developed and launched on Citronclothing.com collecting donations for all transaction selecting API  Interim website launched  Launched new member site with added functionality • Scaling Technology for larger retailers (completed by end of Q1’14) • Development of Tuition Bank • Launch API on the Washington Times (TWT0 by Q1’14 • Launch of online Tuition Bank with major retailer • Enhancement to API and full ecommerce capability on Sparo.com • Automated ability for small merchants to download API • Sparo credit card Business Development  Enrolled 20 charities  Preliminary Discussions with key retailers such as Quicksilver, Brighton Jewelers, UT San Diego & Auto Supply Chain Stores  Signed The Washington Times for all subscriptions types • Continue discussions with key merchants- sign 2-3 medium/large merchants (Revenues >$500k) • Continue signing charities relevant to new merchant signings • Launch and integration with major retailer such as Target, JC Penny or Staples • >20 small-medium size merchants partnering with Sparo (Revenues >$250k) • > 150 Charities partnering with Sparo Marketing  Developed all charity collateral and all marketing assets  Marketed with Citron increasing revenues by 25% since launch  Launching promotional campaigns for Citron with key charities (Save a Child’s Heart & San Marin Food Bank)  Developing Marketing plan with TWT for launch • Sparo 360 member marketing • PR campaign for Tuition Bank with large retailer
  • 18. THANK YOU Ian Gerrard – Financial Advisor igerrard@verizon.net 571 422-1783 Rob Sobhani – CEO rsobhani@sparo.com 240 401-8930