crowdfunder investor document 8-25-14

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INVESTOR DOCUMENT www.sparo.com

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Sparo is a patent-pending application that allows customer to have a portion of their purchase donated to the charity of their choice. This is an investor document for those interested in giving capitalism a conscience.

TRANSCRIPT

Page 1: Crowdfunder investor document   8-25-14

INVESTOR DOCUMENT

www.sparo.com

Page 2: Crowdfunder investor document   8-25-14

PATENT-PENDING

EXECUTIVE SUMMARY

!ü First ever application that seamlessly marries e-commerce and charity on the

checkout page of online merchants !ü Transforms corporate social responsibility into a tool for revenue generation !ü Democratizes charity-giving in America and around the world !ü Created with patent-pending technology that is hard to copy and rebuild !

Seeking Meaningful Ownership - $1,000,000 total investment

Sparo is the game-changing platform that connects merchants, charities and shoppers.

Page 3: Crowdfunder investor document   8-25-14

HOW DOES SPARO WORK?

www.youtube.com/embed/RlS7COsjGCE

Sparo’s proprietary application can be easily embedded on any merchant’s site, and allows the customer to have a portion of their purchase donated to their charity of choice, at no extra cost.

Sparo’s network of charities vouch for Sparo merchants to their donors, while merchants get increased sales and an enhanced brand image.

Sparo’s revenue comes from a service fee charged with each transaction which utilized the app.

Page 4: Crowdfunder investor document   8-25-14

PATENT-PENDING

SPARO PROFILE

Sparo – Nevada-registered corporation Rob Sobhani – Founder 100% of the Common Stock. Invested $700k Employees (5) – Option Holders

Assets Patents – Patents filed November 2013 Personnel – Developers, Management, Finance, e-commerce Marketing, IT and Online Sales Fully-functional website and portals, transaction-based platform and database management systems !

Strategic Relationships and Partnerships Citron Clothing Washington Times Kay’s Naturals MommaLu (launching this Fall) VK Nagrani (launching this Fall) In advanced talks with leading national newspaper (NDA signed) In advanced talks with top-5 online retailer (NDA signed) In advanced talks with top-20 online retailer !

Structure and Ownership

Page 5: Crowdfunder investor document   8-25-14

The Sparo program can increase revenue for any merchant through incremental net revenues and value-added services for all sales on the website.

Value Added Services

Benefits to Merchant

Increased Net Revenues

+

• Increased deductions • Business expenses or charitable

deductions due to charity donations without the charity cap

• A new movement in charitable giving• Increased brand awareness• Increased loyalty• End-to-end program management

• Share shift from competitors not partnering with Sparo

Competitors Customers

Turnkey Processes

Tax Deductions

VALUE PROPOSITION FOR MERCHANTS

Positive PR Exposure

New Customers

• New customers from enrolled charities

• Cost of purchase is a fraction of traditional acquisition channels

Lower Cost of Purchase per

Customer

Merchant.com

Page 6: Crowdfunder investor document   8-25-14

SPARO REVENUE: The Economics

DONATION PERCENTAGE (%)(This refers to the percent of each purchase made through Sparo, which the merchant is willing to donate for charity.)

SPARO SERVICE FEE (%)(This refers to the percentage of each purchase made through Sparo, which Sparo keeps as revenue.)

+

Our revenue is driven by sales made through Sparo and is taken as a “Sparo Fee” from each gross sale:

TOTAL SPARO FEE=

We work with each merchant to determine how much they can donate per purchase, as well as a service fee to keep the program running.

TAX DEDUCTIONS AND SPAROWhen it comes to taxes, corporations can deduct charitable contributions from their taxes. However, the total amount of charitable contributions claimed cannot be more than 10% of their taxable income.

Because Sparo’s end-to-end program is a marketing campaign for merchants, the fees paid to Sparo are a dollar-for-dollar business expense.

Through Sparo, there is no limit to the good that merchants can do.

Page 7: Crowdfunder investor document   8-25-14

PATENT-PENDING

1%9%

90%

Market Potential Online Marketplaces (iGive, SocialVest, DailyGood) Paypal

!ü Currently, there is no single player that

dominates the online giving space. !

ü 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

MARKET POTENTIAL: We’re Equipped For Growth

Total Market Share of Online Charitable Giving

Total Size of Pie: $300 billion

($270 billion)

($ billion)($3 billion)

($27 billion)

Page 8: Crowdfunder investor document   8-25-14

COMPETITIVE OVERVIEW

Sparo is establishing a leadership position in online giving applications.

DIFFERENTIATORS

ACCESS TO MERCHANT WEBSITE Access to merchants, but no

charitable giving componentAccess to Amazon Smile and Affiliate Merchants Only

EMBEDDED ON MERCHANT WEBSITE First patented application to

ever be embedded on merchant checkout Only for Amazon shoppers

ALLOCATE DONATIONS TO VARIOUS CAUSES

Can add causes and donate to any cause–can save donation for later

During enrollment, member selects only one cause to donate to

Donations are only saved for later disbursement to a charity of choice

During enrollment, member selects only one cause to donate to

Direct donation to only one charity at a time through account

During enrollment, member selects only one cause to donate to

TUITION GRANTS % of all fees collected donated as college tuition grants

PATENT-PENDING TECHNOLOGY

Page 9: Crowdfunder investor document   8-25-14

PATENT-PENDING

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 0.05% to 0.10% of the e-commerce market by 2017, which equates to gross revenues

between $217M and $4.3B.

EXPONENTIAL GROWTH: The Right Choice. The Right Time.

Billio

ns $

0

125

250

375

500

Year2011 2013 2015 2017

Page 10: Crowdfunder investor document   8-25-14

PATENT-PENDING

FINANCIAL SUMMARY

Financial projection based on the premise of partnering with one major retailer or 15 medium-sized retailers:*

* According to the “Internet Retailer 2014 Top 500 Guide,” the top 500 retailers in 2013

web sales totaled to $255.6 billion.

Page 11: Crowdfunder investor document   8-25-14

PATENT-PENDING

First Year Budgeted Expenses !

• Investing in next generation technology to allow exponential growth in membership !• Complete development of plug-and-play technology to access small to medium-sized merchants • Immediate execution of a large-scale marketing campaign to source Merchants, Charities and Shoppers • General & Admin Cost – Professional Fees, Office Set-up, Licensing, Insurance and other general overhead !• Hire additional staff for Marketing, Business Development, and IT Support

USE OF PROCEEDS: Sales Drive Investment

Page 12: Crowdfunder investor document   8-25-14

PATENT-PENDING

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

ü Sparo API Developed and launched on citronclothing.com collecting donations for all transaction selecting API

ü Interim website launched

ü Launched new member site with added functionality

• Scaling Technology for larger retailers • Launch API on major national newspaper

• Enhancement to API and full e-commerce capability on Sparo.com

• Automated ability for small merchants to download API

!Business

Development

ü Enrolled 20 charities ü Preliminary Discussions with key

retailers

ü Signed major national newspaper for all subscriptions types

• Continue discussions with key merchants- • Continue signing charities relevant to new

merchant signings

• Launch and integration with major retailer

• >20 small-medium size merchants partnering with Sparo (Revenues >$250k)

• > 200 Charities partnering with Sparo

!Marketing

ü Developed all charity collateral and all marketing assets

ü Marketed with Citron increasing revenues by 25% since launch

ü Launching promotional campaigns for Citron with key charities

ü Developing Marketing plan with major national newspaper for launch

• Sparo 360 member marketing • PR campaign with large retailer

NEAR TERM OPPORTUNITIES AND NEXT STEPS

Page 13: Crowdfunder investor document   8-25-14

PATENT-PENDING

With the soft launch of Sparo’s patent-pending application, which was embedded with our first merchant at the beginning of 2014, we have seen remarkable results.

"Partnering with Sparo has enabled our organization to increase our visibility and attract new donors through ecommerce. The innovative Sparo technology has made it easy for

shoppers to contribute to our charity at no cost to the donors or our organization. There are many ecommerce charity platforms out there, but Sparo soars above them all."

- David Litwack, Executive Director, Save a Child's Heart Foundation

"Dear Sparo Team, I think this new donation vehicle is a GREAT idea, and just made a purchase with your partner Citron Clothing as a result of this added benefit. I would love it if some of my favorite on-line

merchants such as IKEA, Amazon, LL Bean, and Crate and Barrel joined your partner network..” Anne Rooney - Current Shopper

“I have just reviewed our online sales for Q1 of 2014 and have seen an increase in sales of almost 50% after only three full months of Sparo’s Application in our online checkout. There has also been a significant increase in new customers who have not purchased

from us before. Congratulations to the Sparo Team!” - Ricki Wolman, Owner & Designer, Citron Clothing of Santa Monica

Current Merchant

Current Non-Profit

RESULTS AND TESTIMONIALS

Page 14: Crowdfunder investor document   8-25-14

the effectGiving everyday purchases an

extraordinary purpose.

MERCHANTS

Sparo is a proven lead generation tool that enables merchants to lower their

cost of acquisition and increase sales, simply by caring about the causes that

are important to all their customers.

MEMBERS

Sparo empowers shoppers with a simple — yet profound — way to do more good by providing them with a platform

where their favorite charities and merchants connect.

INVESTORS

Sparo has the incredible potential to capture a significant percentage of

the booming e-commerce market by revolutionizing the way we give and

the way we buy.

CHARITIES

Sparo fosters relationships with charities, and collaborates with each

one to increase their donations by connecting their millions of donors

to our partnering merchants.

Page 15: Crowdfunder investor document   8-25-14

PATENT-PENDING

"What if every purchase made online resulted in a charitable donation and each donation led to more purchases?“

Recently, 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™.“

BACKGROUND: THE SPARO STORY

Sparo's purpose is threefold:

Allows everyone to do more good and more often through their everyday purchases,

Provides merchants a way in which they can contribute to the causes that their customers care about,

Gives charities a role in the e-commerce business and advances the good work that charities do for their community everyday.

Page 16: Crowdfunder investor document   8-25-14

PATENT-PENDING

www.youtube.com/embed/zidoN6RgOb4

SPARO MERCHANT VIDEO

A video on how we provide value for our merchants through charitable giving.

Page 17: Crowdfunder investor document   8-25-14

PATENT-PENDING

https://www.youtube.com/embed/KDU7EUfgImo

Illustrative only

SPARO APPLICATION WALK-THROUGH VIDEO

Page 18: Crowdfunder investor document   8-25-14

PATENT-PENDING

SPARO ASSETS

1. Sparo Application We’ve created an non-obtrusive and secure application that can be embedded on a merchant’s checkout and provides customers with a selection of charities to choose from. In this app, Sparo Members have the option to donate directly to their Sparo Piggy Bank to collect their donations for later.

What we’ve built since we started.

Page 19: Crowdfunder investor document   8-25-14

PATENT-PENDING

SPARO ASSETS

2. Merchant Portal We’ve provided a portal for Sparo Merchants to sign-in and manage their account, track their transactions, as well as view and pay their invoices.

What we’ve built since we started.

Page 20: Crowdfunder investor document   8-25-14

PATENT-PENDING

SPARO ASSETS

3. Charity Portal We’ve provided a portal for Sparo Charities to sign-in and manage their account, update their landing page, track their donations, and select how they would like to receive their donations.

What we’ve built since we started.

Page 21: Crowdfunder investor document   8-25-14

PATENT-PENDING

SPARO ASSETS

5. Admin Portal The Admin Portal is build to oversee and manage all of Sparo’s charities, merchants and members -- from membership to accounting and site content.

What we’ve built since we started.

Page 22: Crowdfunder investor document   8-25-14

PATENT-PENDING

SPARO ASSETS

4. Member Site (Main Sparo Site) We’ve created a platform where Sparo members can see their donation activity, track and save their favorite merchants and charities, discover other merchants and charities and manage their Sparo Piggy Bank.

What we’ve built since we started.

Page 23: Crowdfunder investor document   8-25-14

PATENT-PENDING

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 bank 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 piggy-banking feature

THE CONSUMER CHOICE: Donate Now OR Visit Later

Profile Page of the Member Site:

Page 24: Crowdfunder investor document   8-25-14

PATENT-PENDING

The Sparo Member Site will be the hub where shoppers can save and track their favorite merchants and charities under one roof, keep track of the latest news, activities, promotions and events, and share this information with

their network of friends.

THE SPARO CONNECTION: Track your favorite merchants and charities on one site.

Member Favorites

Page 25: Crowdfunder investor document   8-25-14

PATENT-PENDING

THE SPARO CONNECTION: Merchants and Charities Connect with Our Members

Our charities and merchants are given

a unique opportunity to

connect with our members.

Merchant profile page: Charity profile page:

Page 26: Crowdfunder investor document   8-25-14

PATENT-PENDING

Sparo gives customers ability to chose the charity they want, and our charities help promote our merchants

At Sparo, our charities are our

partners who drive their donors to

socially-responsible merchants.

!

THE SPARO DIFFERENCE: Shoppers choose the charity.

Sample of our charity partners:

*See a full list at sparo.com

Page 27: Crowdfunder investor document   8-25-14

PATENT-PENDING

Seamless and secure integration for the merchant and shopper on the checkout cart

Unlike other online charitable solutions, Sparo is seamlessly integrated on the checkout page.  The customer is not required to go through a separate website or download a widget to execute the donation.  This provides a significant advantage for Sparo over its competitors,

enabling many more donations and purchases simultaneously.

THE POINT OF SALE: The Checkout Page

Page 28: Crowdfunder investor document   8-25-14

PATENT-PENDING

* Online Survey conducted with panel of 1,011 online shoppers ages 18 – 64 years old

88% of consumers say they would

participate in Sparo

CUSTOMER APPEAL: It’s Simple & It’s Possible

•  An independent study was done with 1,000 online shoppers to rate the Sparo Experience

How likely would you participate in Sparo?

0

0

0

0

1

0%1%

11%

44%44%

Extremely Likely Somewhat Likely Not sureSomewhat Unlikely Definitely Unlikely

Page 29: Crowdfunder investor document   8-25-14

PATENT-PENDING29

90% Consumers would like retailers a lot more if they utilized Sparo

77% of shoppers are more likely to convert if Sparo is a partner

CUSTOMER APPEAL:Shop, Donate. Repeat.

Shoppers are more likely to shop at Sparo retail partners and Shoppers are more likely to donate to their favorite Charities

0%0%

9%

37%

53%

Much More A Little More The Same A Little LessA Lot Less

0%1%

22%

39%38%

Much More A Little More No Change A Little LessA Lot Less

How likely are you to complete a purchase if you found out Sparo was utilized after you already have an item in your cart?

How much more would you like an online retailer if they utilized Sparo?

Page 30: Crowdfunder investor document   8-25-14

PATENT-PENDING

!Rob Sobhani – CEO [email protected]

240 401-8930 !

Ian Gerrard – Financial Advisor [email protected]

571 422-1783

THANK YOU