115 Gardenia Grove Burleigh Heads @blackhopsbeer beer@blackhops.com.au

BLACK HOPS BREWING PTY LTD

CROWD-S O UR C ED F UN D IN G O F F ER DOCUM ENT

D A T E D 1 8 T H J A N U A R Y , 2 0 1 9

ISSUERBLACK HOPS BREWING PTY LTD

ACN 605 914 930

INTERMEDIARYBirchal Financial Services Pty Ltd

AFSL 502618

Offer of fully-paid ordinary shares in BLACK HOPS BREWING PTY LTD at $1.18 per share to raise a maximum of $400,000.

This crowd-sourced funding (CSF) offer document relates to the Offer of fully-paid ordinary shares in BLACK HOPS BREWING PTY LTD (Black Hops). This Offer is made under the CSF regime in Part 6D.3A of the Corporations

Act 2001 (Corporations Act).

2

v

Table of ContentsC L I C K T I T L E T O J U M P T O T H E PA G E

SECTION 1 - RISK WARNING __________________________________________________________________________________________________________________________________________ 4SECTION 2 - INFORMATION ABOUT BLACK HOPS BREWING PTY. LTD. ______________________________________________________________________________________________ 5

2.1 LETTER FROM THE FOUNDERS _____________________________________________________________________________________________________________________________62.2 COMPANY DETAILS _________________________________________________________________________________________________________________________________________7

2.3 DESCRIPTION OF THE BUSINESS _______________________________________________________________________________________________________________________82.3.1 WHO ARE WE? ________________________________________________________________________________________________________________________________________82.3.2 PRODUCTS & SERVICES ______________________________________________________________________________________________________________________________112.3.3 MARKETING & DISTRIBUTION ________________________________________________________________________________________________________________________162.3.4 MARKET AND COMPETITORS ________________________________________________________________________________________________________________________212.3.5 BUSINESS AND REVENUE MODEL ____________________________________________________________________________________________________________________262.3.6 ORGANISATIONAL STRUCTURE ______________________________________________________________________________________________________________________28

2.4 DIRECTORS AND SENIOR MANAGERS ______________________________________________________________________________________________________________________302.4.1 ISSUED CAPITAL _____________________________________________________________________________________________________________________________________332.4.2 EQUITY (PRE- AND POST-OFFER) _____________________________________________________________________________________________________________________352.4.3 RIGHTS AND LIABILITIES ASSOCIATED WITH SECURITIES __________________________________________________________________________________________362.4.4 DEBT FUNDING AND OTHER SOURCES OF FUNDING_________________________________________________________________________________________________362.4.5 OTHER FINANCING __________________________________________________________________________________________________________________________________36

2.5 RISKS FACING THE BUSINESS ______________________________________________________________________________________________________________________________372.6 FINANCIAL INFORMATION _________________________________________________________________________________________________________________________________402.6.1 BALANCE SHEET _________________________________________________________________________________________________________________________________________40

2.6.2 PROFIT AND LOSS STATEMENT ______________________________________________________________________________________________________________________422.6.3 STATEMENT OF CASH FLOWS _______________________________________________________________________________________________________________________44

3

v

2.6.4 STATEMENT OF CHANGES IN EQUITY _______________________________________________________________________________________________________________46SECTION 3 - INFORMATION ABOUT THE OFFER ___________________________________________________________________________________________________________________47

3.1 TERMS OF THE OFFER ______________________________________________________________________________________________________________________________________473.2 USE OF FUNDS ______________________________________________________________________________________________________________________________________________48

3.3 RIGHTS ASSOCIATED WITH THE SHARES _____________________________________________________________________________________________________________493.3.1 VOTING RIGHTS ______________________________________________________________________________________________________________________________________493.3.2 DIVIDENDS ___________________________________________________________________________________________________________________________________________493.3.3 GENERAL MEETINGS AND NOTICES _________________________________________________________________________________________________________________503.3.4 ELECTION AND REMOVAL OF DIRECTORS ___________________________________________________________________________________________________________503.3.5 WINDING-UP _________________________________________________________________________________________________________________________________________503.3.6 RESTRICTIONS ON SALE OR TRANSFER _____________________________________________________________________________________________________________50

3.4 INVESTOR REWARDS BLACK HOPS ALPHA TEAM _________________________________________________________________________________________________________513.5 WHAT CAN I DO WITH MY SHARES? ________________________________________________________________________________________________________________________52

SECTION 4 - INFORMATION ABOUT INVESTOR RIGHTS ____________________________________________________________________________________________________________ 534.1 COOLING-OFF RIGHTS ______________________________________________________________________________________________________________________________________544.2 COMMUNICATION FACILITY FOR THE OFFER ______________________________________________________________________________________________________________544.3 PROPRIETARY COMPANY CORPORATE GOVERNANCE OBLIGATIONS _____________________________________________________________________________________54

4.3.1 ANNUAL REPORT ____________________________________________________________________________________________________________________________________544.3.2 DISTRIBUTION OF ANNUAL REPORT ________________________________________________________________________________________________________________544.3.3 RELATED PARTY TRANSACTIONS ____________________________________________________________________________________________________________________554.3.4 TAKEOVERS __________________________________________________________________________________________________________________________________________55

SECTION 5 - GLOSSARY ______________________________________________________________________________________________________________________________________________ 56SECTION 6 - APPENDIX ______________________________________________________________________________________________________________________________________________ 57

4

Risk warningS E C T I O N 1

Crowd-sourced funding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of ventures is speculative and carries high risks.

You may lose your entire investment, and you should be in a position to bear this risk without undue hardship.

Even if the company is successful, the value of your investment and any return on the investment could be reduced if the company issues more shares. Your investment is unlikely to be liquid. This means you are unlikely to be able to sell your shares quickly or at all if you need the money or decide that this investment is not right for you.

Even though you have remedies for misleading statements in the offer document or misconduct by the company, you may have difficulty recovering your money.

There are rules for handling your money. However, if your money is handled inappropriately or the person operating the platform on which this offer is published becomes insolvent, you may have difficulty recovering your money.

Ask questions, read all information given carefully, and seek independent financial advice before committing yourself to any investment.

5

Yours sincerely,

Michael McGovern, Eddie Oldfield and Dan NorrisBlack Hops Brewing Founders

Information about Black Hops Brewing

Pty. Ltd.

S E C T I O N 2

6

Yours sincerely,

Michael McGovern, Eddie Oldfield and Dan NorrisBlack Hops Brewing Founders

Thanks for taking the time to look at this opportunity to invest in Australia’s current AIBA Champion Small Brewery, Black Hops Brewing. It’s a pleasure to share our story, from 3 guys sitting around at a pub talking about doing a home brew, to opening and running an award-winning brewery & taproom on the Gold Coast.

After 2.5 years of operating from our Burleigh Heads location, we have achieved a solid foothold in the local market, with around 400 venues stocking our beer including BWS and Dan Murphy’s. We have also built the highest rated brewery venue in the local market, where hundreds of customers come every week to drink up to 14 unique beers in a working brewery, a few hundred metres from the beach and restaurant strip.

We’ve built an amazing team, an instantly-recognised brand and have grown rapidly to over $300k in monthly revenue ($3.6m annual run rate) in 2.5 years at this location.

We are in an industry that is growing at over 8% per year1 and believe we are only scratching the surface when compared with early adopting regions like the United States. We are in a space where history has shown that building a brand that people love, and a business that nails all of the important components (brand, product, story, venue, people etc), has the potential to result in companies with extremely high revenues, valuations, external investments and exits.

From day 1 we have believed we are on this path, and every step of the way our belief has been supported by constant growth in sales, press, production and industry recognition.

But we are just getting started. We have taken over 2 additional leases at our current location and we are ready to complete phase 3 of our plan, which is a fully

1 IBISWorld Industry Report OD5071, Craft Beer Production in Australia September 2018

Letter from the foundersS E C T I O N 2 . 1

fledged production brewery in an entirely new location.

This offer document will outline how we plan to do that, and how you can be involved. We hope you consider this as an opportunity to get in early on a rapidly rising brand and come along as we go from Australia’s best small brewery to hopefully Australia’s best large brewery.

This offer document will answer most of your questions. Please consider it carefully, in particular the general risk warning, and the description of main risks in Section 2.

7

Company DetailsS E C T I O N 2 . 2

Company Name BLACK HOPS BREWING PTY LTD

ACN 605 914 930

Offer Type Crowd-sourced funding

Offer Date 18th January 2019

Offer DetailsOffer of fully-paid ordinary shares in BLACK HOPS BREWING PTY LTD at $1.18 AUD per share to raise a maximum of $400,000.

Registered office 15 Gardenia Grove, BURLEIGH HEADS QLD 4220

Principal place of business 15 Gardenia Grove, BURLEIGH HEADS QLD 4220

This offer of shares is made by BLACK HOPS BREWING PTY LTD Pty Ltd ACN 605 914 930. The Company was incorporated on 19/05/15.

8

Who are we?

Description of the business

Black Hops Brewing started as 3 mates making beer and sharing everything they learned along the way. In 2014, Dan, Eddie and Govs made their first beer, the Eggnog Stout, after discussing the concept at the pub. That led them to opening up a brewery and taproom in Burleigh Heads in 2016, and being awarded Australia’s Champion Small Brewery at the 2018 AIBA Awards. These days Black Hops is one of Australia’s highest rated and fastest growing breweries, with a team of 15 full time staff we make and distribute beer to over 400 venues around Australia.

November 2014, we launched Black HopsAfter a pilot batch of a handful of bottles, we contract brewed 13 kegs of our very first beer, the Eggnog Stout, and launched Black Hops officially at HooHa bar in Brisbane. It was a part time hobby at this time, but Black Hops was born.

October 2015, we brewed the world’s first Call of Duty beerIn October 2015 we partnered up with the largest entertainment franchise on earth and brewed an official Call of Duty beer.

February 2016, we are the first brewery in Australia to launch via crowdfundingWe hit our goal of $10,000 on the first day and continued on to exceed our target and raise over $17k from 168 supporters.

The Black Hops story

Key achievements to date

S E C T I O N 2 . 3 . 1

S E C T I O N 2 . 3

9

June 2016, we opened our brewery in Burleigh HeadsIt felt like a long journey, but we finally opened the doors to our brewery and taproom in Burleigh Heads.

August 2017, we wrote a best selling bookWe wrote a best selling book on how to build a brewery. It’s sold over 1,000 copies and is being sold in bookshops thanks to distribution deals in Australia and the US. It averages 4.5 stars on Amazon and is regularly mentioned by people who come into the brewery or when we go out, as how people discovered Black Hops.

January 2018, 20th in GABS Hottest 100We made the GABS Hottest 100 craft beers list for the first time in positions 55 (Hornet) and 20 (Pale Ale). We were the second highest ranked QLD brewery behind the winners Balter, and our Pale Ale was the highest debut entry.

May 2018, Champion Small Australian BreweryIn May 2018 we visited Melbourne for the most prestigious beer awards in the Australian industry. We came home with the biggest medal and prize-winning haul out of any brewery in Australia, 5 gold medals along with 2 trophies, one being Australia’s Champion Small Brewery.

• Champion Small Australian Brewery (Trophy)

• Beach House - Best Belgian / French Ale (Trophy)

• Pale Ale - Gold Medal in category Australian Pale Ale

• Pink Mist - Gold Medal in Fruit Beer

• Code Red - Gold Medal in Double Hoppy Red Ale

• Beach House - Gold Medal in French / Belgian Ale

• G.O.A.T - Gold Medal in IPA - NEIPA

• Hornet - Silver Medal in New World Pale Ale

• Eggnog Stout - Bronze Medal in Herb / Spice Beer

• Lay Day - Bronze Medal in Wheat Beer Lager

• 30 Cal - Bronze Medal in Reduced Alcohol

10

July 2018, Started building BHIIIn July we signed the lease on what we believe is the perfect location for our second brewery. We planned the layout, ordered the equipment, started the process to get the site approved for production and went on to begin prepping and fitting out the brewery and taproom.

October 2018, Gold Coast Young EntrepreneursIn October we were awarded the Gold Coast Young Entrepreneurs of the year in the manufacturing category. This led to some positive press, meetings with councillors and local members and the attention of larger press outlets and banks.

11

Products & ServicesS E C T I O N 2 . 3 . 2

Our flagship beers can be found in bars on tap and at most independent bottle shops around Queensland in cans.

Flagship beers

Our Beers

Pale Ale - 4.8% Lay Day Tropical Lager - 4.4%

Send It Session Ale - 4.2%Hornet IPA - 6.0%

Defined by a balance of pale malted barley and tropical hop aromas, our Pale Ale is light in colour but big in flavour. But don’t overthink it. It is what it says on the tin, a Pale Ale, the Black Hops beer for every occasion. Our Pale Ale was the highest voted debut entry on the 2018 GABS Hottest 100 list and won Gold at the 2018 AIBA Awards.

Our modern twist on the classic Bohemian style, brewed with Pilsner and Wheat malts and lightly hopped with New Zealand and American hops for a subtle citrusaroma. Clean and crisp, unlike the surf today - so you better have yourself another Lay Day. Lay Day won a bronze medal at the 2018 AIBA Awards, and offers drinkers something slightly less crafty than our big 2, but more than the average lager.

Made by 3 mates in Burleigh Heads, at Australia’s 2018 AIBA Champion Small Brewery, Send It is our Gold Coast-inspired session ale. It’s light in colour and easy drinking. Beer that tastes like beer. The goal of Send It is to be our more affordable, high volume big seller once we can make larger volumes at BHII.

Dry, angry and bitter, Hornet has some serious sting with a balancing aroma of stone and citrus fruits. This modern IPA drinks with a subtle sweetness and a sturdy presence of hop bitterness. Hornet was voted #55 in the 2018 GABS Hottest 100 list and won a silver medal at the recent AIBA Awards.

Since dabbling around with the first home brew, we have brewed over 80 different beers. More than 3 years of selling commercially has taught us a lot about what the market wants and we’ve honed down our range as follows.

12

Year Round Core RangeIn addition to our flagship beers, the following beers are available year round in cans from the brewery and in kegs to wholesale customers.

30 Cal - Mid Strength Pale 3.5% Eggnog Stout - 5.8%

Pink Mist Raspberry Saison - 4.8%

Our mid strength take on the classic hop-forward West Coast style Pale Ale is bold yet refreshing. The punchy character from U.S. hops is balanced with a distinct malt base. At 3.5%, it’s the Black Hops beer to keep you in the battle for longer. 30 Cal was a debut entrant into the 2018 AIBA Awards and was awarded bronze.

A dry Irish Stout with subtle notes of nutmeg, cinnamon, vanilla bean and French brandy. It showcases a mild bitterness through the use of roasted barley and a generous late hop addition. Eggnog Stout was the first beer we ever brewed and one that is close to our heart. It was awarded bronze at the 2018 AIBA Awards.

A modern take on the traditional Saison, brewed with New Zealand and Australian hops and a generous dose of local fresh raspberries. This results in a beautiful pink colour with a tart berry flavour and the dry crisp finish of the French farmhouse style. Pink Mist has been awarded an AIBA Gold medal for 2 years running.

13

Seasonal IPAsEach season we brew a specific IPA in a short run to sell mainly at the Taproom and also a small amount to venues. These batches are always popular and enable us to use scarcity to sell beer quickly and at a comparatively higher price.

Winter

ABC Bomb Black IPA - 6.5%

This hoppy Black Ale is balanced by a strong citrus and pine hop aroma and a distinct roasty dark malt character. The use of American hops gives this beer a genuine IPA backbone with a unique spice flavour through the addition of rye. An American Black C-hopped bomb.

Spring

Flash Bang White IPA - 6.8%

An American Wheat IPA with big citrus and pine hop aromas. With a light body and a smooth finish, it’s the perfect IPA to get you through Spring. Flash Bang is a big hit at the Taproom and at the few select venues that are able to get it on tap. This year it went into cans for the first time with a great reception.

Autumn

Code Red IPA - 6.2%

A classic American Red Ale, boasting a rich toffee malt body and a luscious ruby red colour. The minimal yeast character provides a clean finish allowing the aromatic American and New Zealand hops to take centre stage. Code Red was our first wholesale limited run can selling out in a few hours and was awarded a gold medal at the 2018 AIBA Awards.

Summer

Super Hornet - 8.7%

The Super Hornet DIPA is an upgraded redesign of our Hornet IPA, fitted with extra ABV firepower and extended bitterness range, this bad boy is destined to establish flavour superiority. Super Hornet is one of our most loved beers and one that gets a lot of attention from craft beer lovers.

14

We also have a bunch of beers that we bring out in limited runs. This helps us hype up launches and use scarcity to increase the margin on the product. These beers include:

• Monthly limited release beers into bottle shops.

• “Recon Series” beers brewed on the pilot system for testing new styles.

• Custom staff beers for the team after 1 year of service.

• Beers brewed for events and awards.

Some of them include Beach House (Australian Saison, gold medal recipient for 2 years running at the AIBAs), Caribbean Crusher, Beetlejuice, G.O.A.T., and many more. Offering up monthly limited releases to bottleshops has kept us at the forefront of relevance in the craft beer sector, while also building up our high volume sellers.

Our Taproom is really where our customers are engaged with our story and receive the ‘Black Hops Experience’. For a lot of our consumers, the first time they try our beers is at our Taproom and the positive effect of the experience they receive goes well beyond our Taproom walls.

Our Taproom in Burleigh Heads is the highest rated taproom in Queensland on Facebook. Our venue represents something unique on the Gold Coast, a place that is family and dog friendly, where you can drink up to 14 completely unique beers in a location that is walking distance to the beach and restaurant strip. Our patrons are spoilt for choice with our ability to brew small batch, experimental beers - in 2018 the variety was high as we created 52 different beers in the year, most of which were exclusive to the taproom.

Limited Release Beers

The Black Hops Taprooms

15

Since we’ve hired the right talent for the job in our Taproom, we’ve achieved a significant increase in revenue. In 2018 we saw an 80% increase in revenue and our December 2018 revenue was over 400% growth on our first month in July 2016.

With the new location up and running, we anticipate very quickly doing similar revenues to the original location and eventually building on that due to the location and size of the taproom (3x the size). By book-ending both ends of the Gold Coast geographically, locals won’t have far to go to get the full Black Hops experience.

Most of our customers who visit our online store are from interstate and looking to purchase our beer that they can’t currently find near them. We have our 4 flagship beers online and we often include a small allocation of our limited release beers to our online store where they sell out quickly. We also use the online store to sell merch and brewery tours.

The Black Hops Online Store

16

Where Black Hops Fits We can’t have a discussion about the craft beer industry without outlining our place in the industry.

We aren’t in this just to make money, or just to have fun. We are in it because this is what we want to be doing and we think we can occupy a unique place in the industry, in Australia and on the Gold Coast.

We have a legitimate story and a transparent brand, and we think that makes us unique. Not the usual irrelevant stories regurgitated by big brands to try to sell average product. But a real story. A story of 3 mates, sitting around at the bar talking about making beer, and then actually going on to do it. Going from homebrew to commercial brew in months, then landing a deal with one of the largest entertainment franchises in the world to brew the official Call of Duty Beer; all the way to opening Australia’s Champion Small Brewery. And on top of that, sharing everything we learnt along the way.

For any craft beer to have a chance in this competitive space, it needs to have a story. But it’s not enough to have a cool story, you have to actually work on it and actively engage in marketing. We aren’t afraid to do that. Here are some of our main marketing channels that we use to tell our story, and also tell the story of craft beer in Australia (drink fresh, drink local):

ProductThe number one form of marketing for us is and always will be our product. Our award-winning core range beers, and our experimental releases are the ultimate reason why anyone would buy Black Hops, and tell their friends about it. Our

Marketing & distributionS E C T I O N 2 . 3 . 3

Marketing strategy

17

challenge which we thrive on, is to always choose the right styles for the market, execute an award-winning level beer of that style and if we can, innovate on the style. For the beers we produce on a limited release schedule we have a more creative license and get a bit more experimental with ingredients and methods. In the end, this is what Black Hops is about - making good beer. Being the most awarded brewery at the recent 2018 AIBA Awards confirms we are well on track with that vision. But technical brewing awards don’t sum up the whole picture. Being relevant in the craft beer industry is something we are extremely focused on. Brewing 52 different beers in 2018 has provided us with a point of difference that none of our competitors have. And people are starting to take notice. In the GABS Hottest 100 of 2018 we made the list for the very first time debuting at #20 with our Pale Ale. It was the second highest Qld entrant and the highest debut entrant. In the annual Beer Cartel survey of 2018’s list of Australia’s best craft breweries, we went from 29th in the year prior to 10th. All we can say is bring on 2019, because we are just getting started.

Limited releasesOver the life of Black Hops we‘ve brewed 80+ different beers, which has put us in a very relevant position in the craft beer industry. 2018 marked the start of our effort to focus hard on limited releases. We do a monthly limited release into bottle shops as well as weekly limited releases at our Taproom.

The first one we released (G.O.A.T) sold out in 10 minutes with a line up out the door. For our first limited release wholesale can (Code Red), we distributed it to 20+ customers and sold 160+ cartons in a matter of hours. We are looking to take both of these programs to the next level in 2019. We have a new pilot brewery being commissioned at BHII which will enable us to double our number of taproom-only releases. We also will be able to dedicate more of Black Hops HQ to limited releases with BHII coming online meaning we can send our bottle shop limited releases to many more people.

We also use our pilot system for collabs, limited release beers, festival beers and custom staff beers and investor beers.

18

PressBusiness is business, and every business needs to get attention for what they are doing. We leverage our story wherever possible to help spread the word about Black Hops and craft beer. We also push the fresh beer angle and educate people on the benefits of drinking locally-made fresh beer.

We don’t put our competitors down, we aren’t into that. We focus on telling our story and the craft beer story and we often do so in collaboration with other breweries of the same mindset.

We have been featured by many major local press outlets such as The Courier Mail, The Gold Coast Bulletin, 9 News, Channel 7 News etc as well as the major beer publications like Froth Beer Mag, Brews News and Crafty Pint.

We have great relationships with local journalists and make sure we are there to help them out any time they need information for beer-related stories. In return we always let them know when we have any newsworthy content.

We’ve also managed to get mentions and features in big international publications like TechCrunch, IGN, Gamespot for projects we’ve worked on and our founders have been mentioned on major business sites like Forbes, Business News Australia and INC. We aren’t afraid to seek out and capitalise on opportunities to get attention for what we are doing. After all, we believe in what we are doing, and want to spread the word.

In September 2018 we had some negative press from a beer release for a staff member. Our hearts were in the right place with the beer but it was out of touch with the industry. It was a very hard time and a hard lesson and as a result we had some negative press. There was fierce debate on both sides and unwanted attention. We dealt with it quickly, imperfectly but in a genuine manner. We didn’t please everybody but we were praised by many in the industry for owning our mistake and quickly making amends. More importantly it made us realise the position we have in the industry as leaders and we saw it as a turning point for us.

19

We learned a lot as a company and undertook some big internal changes to make sure we were only adding in a positive way to the industry from then on. The press love writing about beer and because we have a genuine and unique story, we have always been a bit of a magnet for press.

ContentFrom day 1, we have had a big focus on content. We’ve published over 100 pieces of content on our blog since we started. Everything from “How to print tap decals” or “How to make jockey boxes”, through to how much beer costs, how much brewery equipment costs and recipes for different beers we make. We saw this as an opportunity that not many other breweries were taking, and we made an effort to do this every week.

We average 6,000+ visitors a month to our website and rank on the front page of Google for a lot of major keywords. We are 1st in the Google Places listings (top of the page) for ‘Gold Coast craft beer’ and the only brewery on the front page of the natural listings (further down the page). For the keyword ‘Gold Coast Brewery’ we are 1st in the places listing with the most reviews and the highest rating, beating our competitors that are 10 years old.

Our content spreads further than the blog into our book, Operation Brewery, which has sold over 1,000 copies and is being sold in bookshops thanks to distribution deals in Australia and the US. It averages 4.5 stars on Amazon and is regularly mentioned in person to us as how people discovered Black Hops. We also have an email list of 4,000+ members and growing, which receives a monthly Black Hops newsletter about what is happening in our world.

CommunityWe have made a strong, recent effort to be more active in the community and give back where we can. That has led us to launching our ‘Community @ Black Hops’ program which features monthly donations and support to different causes, Karma Kegs for staff beer, support of the Independent Brewers Association and other similar community groups.

20

Each month we allocate $500 - $1,000 to support a different community cause or charity. We’ve recently teamed up with a number of community organisations to support their event or organisation as a whole.

Redsix - in November 2018, we teamed up with Redsix, an app which is aimed at supporting mental health amongst the veteran community, and raised over $880 which allowed them to fly to New Zealand and begin launching the app there.

Pink Boots - all female employees of Black Hops are members of Pink Boots Society, a community which supports women working in the brewing industry.

The Common Good Foundation - we brewed a custom beer for Wade Curtis, diagnosed with Hypertrophic Cardiomyopathy (HCM), and are donating $1 per schooner sold at our Taproom in addition to $30 per keg to the The Prince Charles Hospital Foundation – Cardiology Clinical Research Centre (The Common Good).

Social mediaMuch like content, we have always been active and hands-on with social media, particularly Instagram and Facebook. We’ve built a solid following of 13,000+ on Instagram, growing rapidly and with great engagement. Our daily stories regularly get 1,000+ views and our #blackhops hashtag has had over 4,000 posts. We also have our first Black Hops fan account, but between us, we think it’s one of our investors ;).

On Facebook, our natural traction is also something we are proud of. While some businesses struggle for organic traction and need to focus on paid channels, we are the opposite. As a venue we have 250+ organic reviews averaging 4.8 out of 5. We have over 7,000 likes and 2,700 check ins. We have a 94% response rate and a 4 hour average response time. Our posts regularly reach thousands of people organically (tens of thousands for some). We then have the opportunity to use boosted posts to capitalise on the natural traction, instead of paying to try to get traction in the first place.

Our Facebook Ambassador group, has over 1,000 active members who regularly help us out when we need it by promoting our content, buying our limited run beers and merch, or giving us quick feedback on ideas. We help them in return with brewing and business questions and exclusive access.

We get regular mentions on Twitter and craft beer app Untappd, where we also keep an active presence. In addition to the core Black Hops account, founders and staff also have engaged audiences reaching tens of thousands of people regularly, as well as being active and respected in all the major online beer communities.

EventsWe are a regular presence at craft beer events and major festivals such as Brewsvegas & GABS and have events & tastings on most weekends. We speak at beer and business events, organise and run beer degustation dinners and much more.

We don’t have the budget of some of the big brewers, but we always try and make our presence felt and always support local community events and charity fundraisers, when we are in a position to.

The whole craft beer movement has been about consuming locally-made fresh product, and being an active part of the local community is a big part of that.

21

Market and competitorsS E C T I O N 2 . 3 . 4

Industry overview Beer production dates back over a thousand years. There are beer companies in Europe like Weihenstephan who still make great beer and have been around for almost a thousand years. Yuengling in the U.S. is a family-owned brewery that is 190 years old. Even in Australia we have Coopers who are still a force in craft beer, and are family-owned and have been in existence since 1862.

The craft beer boomThe recent craft beer boom in Australia has been influenced by the 20-odd year boom in the U.S. In America, the craft beer sector has been experiencing consistent growth for almost 20 years. In 2018, the number of craft breweries passed 7,000 an increase of 20% on the year before. Craft beer makes up 23% of the market2.

In February 2018 the Black Hops founders visited the U.S. to get the full craft beer experience and they were blown away. They visited cities a fraction of the size of the Gold Coast with 10X as many breweries. Portland for example with a population of 650,000 compared with 590,000 for the Gold Coast has around 60 breweries. The Gold Coast has 53.

Seeing how far and wide craft beer has entered into the U.S. way of life was the most eye opening part. Bottleshops in small regional towns with 20 meters of craft beer fridges and tasting rooms with 50 taps, local IPA’s on at every restaurant, breweries on every corner, the list goes on. The craft beer scene in the U.S. has to be seen to be believed, and the founders trip was a huge influence on what we’ve done since and how we feel it’s going to go in Australia.

2 http://iba.org.au/rise-craft-beer/3 IBISWorld Industry Report OD5071, Craft Beer Production in Australia September 2018

22

The Australian craft beer marketA few years ago there were 50 breweries in the country, in 2018 there are over 400.4 We think Australia is on a similar path to the United States where the craft beer market has grown from 3% to 23% in recent years.5 In Australia we are at 5%6 and we believe the boom is still coming.

Research agencies are predicting over 5% annual growth in the craft beer component of the broader Australian beer industry, which has a market size of $5b.7 Craft beer is by far the fastest growing mainstream alcohol category both in Queensland and Australia.

Beer is big business, and we are excited to be part of the change and feel like we have an early and unique position.

Alcohol beverage revenues from the Queensland Craft Beer Strategy document.

4 https://www.brewersassociation.org/statistics/national-beer-sales-production-data/ 5 http://iba.org.au/rise-craft-beer/ 6 http://iba.org.au/rise-craft-beer/ 7 IBISWorld Industry Report OD5071, Craft Beer Production in Australia September 2018

23

Change is comingUntil recently, craft beer breweries have operated under what we feel were outdated and restrictive rules. Wineries have traditionally had more favourable regulatory conditions, such as a producer rebate for up to $500,000, compared with $30,000 for craft beer. That has resulted in a healthy independent wine market in Australia.

However this is now changing, thanks to recent budgetary tax reform for the small brewing industry, resulting in an end to the higher excise paid on beer sold in kegs smaller than 50 litres, and an increase in the amount of excise brewers can claim back. Brewers can currently claim a refund of 60 percent of the excise duty they have paid up to a maximum of $30,000 a year. This will increase to $100,000 from July 1 2019.8 It won’t make a huge difference to us, but it’s a sign that people are starting to take notice. And it will help fuel the local independent breweries, which will be responsible for educating consumers on quality beer. As craft beer drinkers, we know that once we tried and understood a great tasting beer, it was very hard to go back!

The Queensland government are taking great steps to get behind craft beer in the state with the implementation of their Queensland Craft Beer Strategy (QCBS). They’ve set out three key priorities, addressing improvements in infrastructure and education, wider supply networks, and regulation changes including the way excise is managed.

In Australia there are around 6 times as many wineries than breweries (just under 2,500 vs just over 400),9 in the US breweries (7,000) are fast catching wineries (8,700).10

We believe the Government will continue to offer greater support to the craft beer industry.

8 https://www.brewsnews.com.au/2018/05/04/beer-excise-changes-what-it-means/ 9 https://www.wineaustralia.com/market-insights/australian-wine-sector-at-a-glance 10 IBISWorld Industry Report OD5071, Craft Beer Production in Australia September 2018

24

Black Hops HQOne of the cool things about the Australian craft beer scene is the ‘cellar door license’. It allows us to sell what we make onsite. As a result we have a thriving community at HQ filled with locals and visitors who love a beer. This is great for our brand but it’s also great to balance cash flow wise against the wholesale business.

Many of the restrictions that exist for restaurants and small bars don’t exist with a cellar door license. We can sell what we make, make good margins on that, and not have the big overheads. We have been able to build a very good business at our Taproom with low comparative costs.

We think our venue represents something unique on the Gold Coast. A place where you can drink up to 14 completely unique beers in a great location, where on average we put on a completely new beer every week. It’s walking distance to the beach and the restaurant strip, in one of the most popular tourist locations in the country, Burleigh Heads.

Ali and our Taproom team offer a service that people compliment us on a weekly if not daily basis. That is why we are the highest rated brewery bar among our local Queensland competitors.

Competitive landscapeWe opened our brewery in 2015, at a very similar time to Balter Brewing 20 minutes down the road. Also in Burleigh, Gold Coast craft beer pioneers, Burleigh Brewing have been open for over 10 years. Since we have opened, we have seen the doors to Lost Palms Brewing open 5 minutes north of us and we have been happy to pass on knowledge and lessons learned to Lost Palms and other local startups within the industry such as Lake Brewhouse.

While we think that the Gold Coast is a hot spot for craft beer, we also believe there is a huge allowance in the market for more breweries to open and still remain a competitive space.

To us, the more breweries and brewpubs that open mean there is a higher demand for craft beer and more people drinking craft beer, and that is a great thing.

25

Business strategyS E C T I O N 2 . 3 . 5

At Black Hops our intention was never to only start a small local brewery, we wanted to build a recognised brand. While it seemed like a dream when we were sending hand labelled bottles of Eggnog Stout out to bloggers in 2014, it’s fast

becoming a reality.

26

Black Hops’s core business model is the manufacture and wholesale distribution of craft beer. Our aim is to build a recognised national brand by starting small and local and offering something unique to the market.

Our taprooms offer great margins and give us the cash to fund our wholesale aspirations. But they are also a core part of what we are about. We believe the craft beer experience is more than just drinking better beer. Our taprooms enable us to provide that experience and education to new audiences and convert more and more people over to drinking craft beer. However once we have our second brewery live, we don’t have any immediate plans to build more taprooms. We want to use our Gold Coast foothold to then move our focus onto scaling production and interstate distribution.

Black Hops is one of Australia’s fastest growing craft breweries. To date, our growth has mainly come from selling locally. We sell most of our beer in Queensland and NSW. We sell a small amount in Sydney and Newcastle and haven’t distributed outside of those areas. We are in only 10% of Dan Murphy’s and BWS stores nationally and haven’t launched in SA or VIC at all.

Still, with limits on supply we have managed to grow at a rapid pace. The chart below shows our monthly revenue and profit since we opened our Burleigh Heads brewery and taproom.

Business and revenue modelS E C T I O N 2 . 3 . 6

Core business model

Growth opportunities

Queensland

NSW

Revenue EBIT

27

Our biggest challenge in the past has been not having enough beer. For that reason we have held off launching in the larger southern beer markets. Once BHII is operational our production capacity will go up from around 600,000L per year to 2,250,000L per year. We have designed the brewery so the current 6 fermenters can be increased to 16 giving us a capacity of over 5,000,000L. There is also the possibility of expanding into surrounding tenancies on the large industrial site

The second site will enable us to supply, and more importantly re-supply the southern states and begin a full scale effort to market and distribute beer wider than our local area. We will be working with existing distribution partners and hiring our own local reps in key markets to make this happen.

Production

28

When Black Hops started, it was 3 mates having a crack. Before too long it became clear that we all brought very different things to the table and we needed to have a clear definition of roles to take the company to the next level.

Towards the end of 2018 we realised that a lot of staff had 3 bosses and that wasn’t going to work for us going forward. We implemented clear roles for the founders and a clear structure for all of our team. Our structure is based on putting our founders in the position where they are at their best, and giving our team clear lines of reporting.

Organisational structureS E C T I O N 2 . 3 . 7

Directors and management

29

Management structure

30

F O U N D E R / C E O / D I R E C T O RDan Norris

Dan is an entrepreneur who has run his own businesses for over 12 years.

Dan’s last business was a WordPress support business which he started from scratch in his garage with $0 in funding and sold to one of the biggest internet companies in the world, GoDaddy 2 years later.

Dan is a multiple best-selling author whose books have sold 70,000+ copies. He has spoken at events around the world on business and marketing and has used his award-winning content marketing skills to build all of his businesses, including Black Hops.

At Black Hops Dan is the CEO and works on business strategy, fundraising and finance, marketing, PR and content and manages the sales and office team (The Chair Force).

Description of Dan’s duties as CEO• Ultimately responsible for ensuring all areas of the business run efficiently

• Directly responsible for finance, keeping the business well funded and operating in a financially sustainable manner

• Manage and take ownership of capital and expansion projects

• Oversee the sales team and establish targets, strategy and direction

• Establish policies that promote company culture and vision

• Work closely with HR regarding hiring practices and policies, payroll and employee benefits

Directors and senior managersS E C T I O N 2 . 4

31

F O U N D E R / B E E R O P S M A N A G E R / D I R E C T O REddie Oldfield

Eddie is the glue that holds Black Hops together. He’s the founder who can understand every aspect of the business at a level of detail that the other founders can’t. He is detail-oriented and an operational expert at Black Hops. He works across the beer supply chain from purchasing to production, distribution and everything in between. Our most commonly uttered phrase at Black Hops is ‘Ask Eddie’.

Eddie is the reason Black Hops exists, after imagining our very first beer the Eggnog Stout. And he continues to work closely with Govs on coming up with beer recipes, while still somehow staying on the pulse of everything that’s happening at Black Hops.

Description of Eddie’s duties as Beer Ops Manager• Work with the Brewmaster on efficient production planning

• Coordinate and oversee all aspects of wholesale distribution

• Ensure stocked levels of completed goods are maintained

• Manage stock control, purchasing and warehousing

• Work directly with the CEO to manage budgets in each department and implement ideas to reduce costs and

increase efficiency

• Manage inward delivery of goods

• Prepare excise volume report for the Australian Taxation Office

32

F O U N D E R / B R E W M A S T E RMichael (Govs) McGovern

Govs is an award-winning brewer with 10 years’ experience, working in most of Queensland’s best early craft breweries. As head brewer, Govs looks after the brewing operations and brewery team, brew days and everything in between from ordering ingredients and planning through to production and quality testing.

Govs is the man who majestically crafted our most impactful beers at critical times in our story (Eggnog Stout and Pale Ale), in his first attempt.

He’s presided over a core range that’s grown 3x in revenue this year, and at the same time somehow managed to release a unique beer each week in the last year (52 total).

Black Hops with Govs as the Brewmaster won more gold medals and trophies at the recent AIBA Awards than any other brewery in the country and is recognised as one of the country’s best craft brewers.

He is also a constant presence in the industry, hanging out with locals, engaging onsite and speaking at events, not just hiding behind the tanks in the brewhouse. Govs is a one of a kind Brewmaster who can balance the need for scientific precision in the Brew House with crowd-pleasing charisma in the public eye. He’s our not so secret weapon.

Description of Govs’ duties as Brewmaster• Oversee the production and brewery team

• Own the creation of new beers / new beer development / recipe development.

• Initiate creative recipe development, Recon Series brews, ingredient selections

• Ultimate responsibility for the quality of finished/packaged product, including taste and flavour profiles of beer,

canning quality, kegging quality

• Meet production quality and volume targets

• Initiate and maintain positive hop/malt contracts with suppliers.

33

BLACK HOPS BREWING PTY LTD has 15,207,587 ordinary shares on issue. Table 1 below sets out the issued capital of BLACK HOPS BREWING PTY LTD.

Issued capitalS E C T I O N 2 . 4 . 1

Share Holder Share Type Shares Options

DNFT Holdings (Dan Norris) ORD 4,002,812 NIL

Michael McGovern ORD 1,455,570 NIL

Edward Oldfield ORD 4,002,812 NIL

Paul Simpson ORD 1,247,631 NIL

Steven Marks ORD 1,219,672 NIL

Trimat Corporation Pty Ltd ORD 225,066 NIL

DAPK Hill Pty Ltd ORD 175,066 NIL

Bryant & Josephine Ackers ORD 245,066 NIL

Timothy & Michelle Hong ORD 225,066 NIL

Andrew Poore ORD 225,066 NIL

Anthony Sutherland & Colleen Sutherland ORD 249,091 NIL

Damajary Super Pty Ltd ORD 175,066 NIL

David & Rachel Ford ORD 175,066 NIL

James Davidson ORD 50,000 NIL

Wardlorn SMSF Pty Ltd ORD 64,415 NIL

Diana Doake ORD 74,025 NIL

34

Null Monkey Holdings Pty Ltd ORD 250,000 NIL

Double H Super Pty Ltd ORD 75,000 NIL

David & Pauline Kuipers ORD 75,000 NIL

McGill Investment Trust ORD 75,000 NIL

Jason Reid ORD 75,000 NIL

Nigel & Karen Hickey ORD 55,000 NIL

Connor & Lesley McCormick ORD 50,000 NIL

David Gaunt & Anna Zahon ORD 55,000 NIL

L&A Bettson-Barker Pty Ltd ORD 50,000 NIL

Shulie Investments Pty Ltd ORD 100,000 NIL

David & Fiona Watson ORD 50,000 NIL

WHAL Pty Ltd ORD 74,025 NIL

David O'Brien ORD 70,000 NIL

Ape Man Pty Ltd ORD 50,000 NIL

ADS Holdings (NSW) Pty Ltd ORD 50,000 NIL

Mark Harris & Lakshmi Kerr ORD 75,000 NIL

Blair Ohlenrott ORD 65,000 NIL

Leah Spong ORD 10,000 NIL

Kris Railton ORD 20,000 NIL

Brett Sounness Pty Ltd ORD 72,074 NIL

TOTAL 15,207,587

35

Equity (pre- and post-offer)S E C T I O N 2 . 4 . 2

Table 2: Issued capital of the Company following the Offer

Shares Minimum Subscription

Maximum Subscription

Existing Shares 15,207,58799.17%

15,207,58797.83%

Offer Shares 127,1190.83%

338,9842.18%

Total shares on issue 15,334,706100%

15,546,571100%

36

Rights and liabilities associated with securities

Debt funding and other sources of funding

Other financing

S E C T I O N 2 . 4 . 3

S E C T I O N 2 . 4 . 4

S E C T I O N 2 . 4 . 5

Set out below is a brief summary of the rights and liabilities associated with the Company’s securities. For further information, including information relating to restrictions on transfer and drag along and tag along rights, please refer to the Constitution in the annexure to this Offer Document.

Immediately after issue and allotment, the shares offered under this Offer Document will be fully paid ordinary shares. All ordinary shares have the same voting rights (one vote for each share held) and the same rights to receive dividends. A more detailed description of the rights associated with the shares can be found in section 3.3. of this Offer Document.

Black Hops has been mostly funded through founder and investor equity investing. Our canning machine is provided on a Lease arrangement through Barrel Finance & Logistics on the following terms:

We pay $3,283.50 per month on a 60 month rental agreement. Payments end on 1st November 2022 at which point we have the option to purchase the canning machine for $1. Black Hops also has several finance facilities for 6 vehicles used by the business, including delivery vans. As at the date of the offer document, the total of these facilities is $208,432.

Black Hops is currently negotiating two additional funding sources including a convertible note to be issued to 5 investors for a total of $250,000, and an equipment finance facility with a major Australian lender for a total of $800,000.

37

Risks facing the businessS E C T I O N 2 . 5

Type / description of risk Our approach

Project risks

The expansion of the Black Hops business into the BHII facility is a big project and as with any significant project there is always a risk that key parts of the project fall behind and the project falls behind as a result.

If the project falls behind, this could impact the business by increasing project costs and decreasing revenue and efficiency. This could affect the profitability and future prospects of the Black Hops business.

This is the reality with any project like this, be it new or an expansion. This is particularly challenging given the scale of what we are building. However with the original brewery build and recent expansion under our belt, we are in a great position to understand exactly what is involved and we feel we have been realistic with the estimates of both time and money for completing the project.

We are also well underway with the construction and due to open in February.

An investment in BLACK HOPS BREWING PTY LTD should be seen as high-risk and speculative. A description of the main risks that may impact our business is below. Investors should read this section carefully before deciding to apply for shares under the Offer. There are also other, more general risks associated with BLACK HOPS BREWING PTY LTD (for example, risks relating to general economic conditions or the inability to quickly or easily sell your shares).

There’s no investment without risks and in this section we will outline what we feel are the biggest risks we face in getting Black Hops to the next level and completing this expansion project.

38

11 http://iba.org.au/rise-craft-beer/ 12 https://www.brewersassociation.org/statistics/national-beer-sales-production-data/

Type / description of risk Our approach

Not hitting our targets

We have set growth targets to almost quadruple the size of the business in 2 years. This is aggressive by any measure and of course there is a risk that we aren’table to grow this quickly.

If we don’t hit the targets we’ve set, this will impact management’s plans for expansion of the business. Additionally, if the business expands too quickly, the quality of Black Hops products may be affected.

We feel based on our existing growth, this is achievable. If we don’t achieve it within 2 years, it just means we need to take a bit longer. We believe the market is big enough for us to achieve this goal in the near future. There are risks with growing quickly, particularly around quality control and staffing which we are conscious of and are already working towards managing.

We have planned out the hires and when we need them, and we have already taken steps to increase our focus on beer quality with things like external lab testing, more brewing staff planned, etc.

Declining beer sales

While craft beer sales are increasing year on year, beer consumption as a whole is decreasing.

There is a risk that the trend of decreasing overall beer consumption continues, or accelerates, which could affect the revenue, profitability and future prospects of Black Hops.

Because there is now a huge range of beverages available, beer consumption on the whole is decreasing. We believe what is happening is consumers are becoming increasingly educated in beer and as a result they are choosing to move from the big brand generic beers to the specialised craft beverages.

In other words, overall beer consumption is declining but craft beer consumption is achieving strong growth. The growth is coming from small craft breweries taking market share away from the big mainstream brewers. With only 5%11 of the total beer drinking market covered by craft suppliers and evidence in other similar markets of this getting as high as 23%,12 we are hopeful that this growth will continue.

39

Type / description of risk Our approach

Cashflow

There is always a risk of not having enough available cash or working capital to meet obligations, due to either poor sales or late paying customers.

This is something we deal with at Black Hops on a monthly basis, as do all breweries, it’s just the nature of the business. There is a risk that we have late paying customers or poor sales for a month or two that puts us back into negative profitability and negative cash. The wholesale business is very challenging cashflow wise, but the onsite Taproom helps, and we are monitoring cashflow on a weekly basis to make sure it doesn’t get out of hand.

Being underfunded

There is a risk with raising money that you can’t raise the money or can’t raise all of it.

We are in the process of raising funds to achieve our strategic business objectives and to cover our projected operating expenses for the next 12 to 24 months. We may not raise all of the required funding and therefore may not achieve our business objectives.

We also may need to obtain additional funding to continue operations and execute our business strategy beyond the next 12 to 24 months.

We cannot guarantee the availability of funds in the future, or that funds will be available on more favourable terms. If we are unable to raise these funds, it could adversely impact our business and its prospects

40

Financial information

Balance Sheet

S E C T I O N 2 . 6

S E C T I O N 2 . 6 . 1

Below are the financial statements, which have been prepared in accordance with the Accounting Standards, for the financial year ending 30 June 2018. Financial information for the period ending 31 December 2018 has been prepared based on management accounts, and may be subject to change.

The Special Purpose Financial Statements, including notes to the financial statements, are available to download from the offer page on the Intermediary’s website.

41

42

Profit and loss statementS E C T I O N 2 . 6 . 2

43

44

Statement of cash flowsS E C T I O N 2 . 6 . 3

45

46

Statement of changes in equityS E C T I O N 2 . 6 . 4

47

Terms of the OfferS E C T I O N 3 . 1

Term Details

Price Fully-paid ordinary shares

Shares $1.18 per share

Minimum investment parcel $50

Maximum investment parcel (Retail Investors) $10,000

Maximum investment parcel (Wholesale Investors)

$50,000

Minimum Subscription $150,000

Maximum Subscription $400,000

Opening date 18 January 2019

Closing date 14 February 2019, unless closed earlier by the Intermediary

Information about the OfferS E C T I O N 3

BLACK HOPS BREWING PTY LTD is offering up to 338,984 shares at an issue price of AU $1.18 per share to raise up to $400,000.

The key terms and conditions of the Offer are set out in the Table on the right.

To participate in the Offer, you must submit a completed application form together with the application money via the Intermediary’s platform. The Intermediary’s website provides instructions on how to apply for shares under the Offer at www.birchal.com.

The Intermediary must close the Offer early in certain circumstances. For example, if the Maximum Subscription is reached, the Offer must be closed. If the Minimum Subscription is not reached or the Offer is closed but not completed, you will be refunded your application money.

A description of the rights associated with the shares is set out in Section 3.2 below.

Investors may withdraw their application during the Cooling-off Period. Further information on investor cooling-off rights can be found in Section 4 of this CSF offer document.

The Offer is not underwritten.

48

Use of fundsS E C T I O N 3 . 2

The table below sets out the intended use of funds raised under this Offer based on the minimum and maximum subscription amounts. Note we are building the brewery either way, the crowdfunding enables us to use some equity funds for the build as opposed to debt. This helps our cashflow position going forward.

The Offer is not underwritten and there is no guarantee that these funds will be raised.

The cost of the Offer includes the Intermediary’s fees under the hosting agreement between the Company and the Intermediary.

These fees are up to 6% of all funds raised by the Issuer through Birchal Pty Ltd (Intermediary).

Other than as specified above, no other payments from the funds raised will be paid (directly or indirectly) to related parties, controlling shareholders, or any other persons involved in promoting or marketing the Offer.

Intended use Financial Year 2018/19 Minimum Subscription

Financial Year 2018/19Maximum Subscription

Taproom fitout & Brewery construction $100,000 $250,000

Working capital $41,000 $126,000

Cost of the offer $9,000 $24,000

Total $150,000 $400,000

49

Rights associated with the shares

Voting rights

Dividends

S E C T I O N 3 . 3

S E C T I O N 3 . 3 . 1

S E C T I O N 3 . 3 . 2

Immediately after issue, the shares will be fully-paid shares. There will be no liability on the part of shareholders and the shares will rank equally with the shares currently onissue.

The rights associated with the shares are set out in the BLACK HOPS BREWING PTY LTD’s constitution. These rights are described below. A copy of the constitution is available on the Intermediary’s platform.

A shareholders agreement is in place between the existing shareholders of Black Hops. The shareholders are in the process of terminating this shareholders agreement.

Each shareholder has one vote on a show of hands and, on a poll, one vote for each share held.

All shareholders have a right to receive any dividends declared and paid by the Company. The directors have a discretion and may resolve to pay dividends, subject to their obligations under the Corporations Act (for example, they cannot pay dividends unless the Company’s assets are sufficiently in excess of its liabilities immediately before the dividend is declared and where it may materially prejudice the Company’s ability to pay its creditors). The directors note that the Company does not envisage paying any dividends in the short to medium terms (i.e. 2 - 3 years).

50

General meetings and noticesS E C T I O N 3 . 3 . 3

Directors have the power to call meetings of all shareholders or meetings of only those shareholders who hold a particular class of shares. Shareholders who hold at least 5% of the votes which may be cast at a general meeting of the Company have the power to call and hold a meeting themselves or to require the directors to call and hold a meeting.

Election and removal of directors

Winding-up

Restrictions on sale or transfer

S E C T I O N 3 . 3 . 4

S E C T I O N 3 . 3 . 5

S E C T I O N 3 . 3 . 6

Shareholders may vote to elect and remove directors at a general meeting by way of ordinary resolution (50%). Additionally, shareholders holding more than 10% but less than 20% of the total issued share capital of the Company may appoint one director. Shareholders holding more than 20% of the total issued capital of the company may appoint two directors.

If the Company is wound up and there are any assets left over after all the Company’s debts have been paid, the surplus is distributed to holders of ordinary shares after secured and unsecured creditors of the Company. Holders of fully-paid ordinary voting shares rank ahead of other classes of shares (if any).

We also draw your specific attention to the fact (and by entering into this Subscription Agreement you are taken to acknowledge) that any CSF Shares acquired under the Offer must not be onsold within 12 months of their issue without a prospectus or other disclosure document, unless an exemption under section 708 of the Corporations Act 2001 (Cth) applies (e.g. sales to sophisticated or professional investors) or unless ASIC gives relief from the requirement to provide such prospectus or other disclosure document.

51

Investor Rewards Black Hops Alpha Team

S E C T I O N 3 . 4

In addition to being a shareholder of BLACK HOPS BREWING PTY LTD, a range of incentives and rewards are being offered for investors (called the Black Hops Alpha Team).

These include:

• Discount on online store and Taprooms.

• Ability to purchase exclusive Ambassador

merchandise.

• Ability to reserve special releases for 24

hours.

• Custom beer brewed at HQ or BHII.

When you invest in Black Hops in this raise, you will be a part of the “Alpha Team”, and more broadly you are joining the incredible community we’ve grown and are especially proud of.

The table on the right sets out the ‘investor gifts’ based on amount invested.

T

Reward $50 $250-$499 $500-$999 $10,000

Custom numbered Black Hops Alpha Team keyring NO YES YES YES

Discount on online store and Taprooms NO 5% 5% 7.5%

Ability to purchase exclusive Ambassador “Alpha Team” merchandise

YES YES YES YES

Ability to reserve special releases for 24 hours NO NO YES YES

Custom beer brewed at HQ or BHII NO NO NO YES

R E W A R D S T A B L E

52

What can I do with my shares?

S E C T I O N 3 . 5

Shares in the Company are considered illiquid as they cannot easily be transferred or sold. However, there are numerous possible circumstances that may create an opportunity for shareholders to exit the business. These include, but are not limited to:

• A trade purchase of the Company

• A listing on a recognised stock exchange (eg the ASX)

• A private equity investment in the Company

• A share buy-back by the Company

There is no guarantee that any of the exit options will eventuate.

53

You have the right to withdraw your application under this Offer and to be repaid your application money. If you wish to withdraw your application for any reason (including if you change your mind about investing in the Company), you must do so within five business days of making your application (the Cooling-off Period).

You must withdraw your application via the Intermediary’s platform as follows: by following the link and instructions on the CSF Offer page on the Intermediary’s platform.

After your withdrawal has been processed, the Intermediary will refund the application money to your nominated account as soon as practicable.

You can ask questions about the Offer on the communication facility available on the Intermediary’s platform. You can also use the communication facility to communicate with other investors, with the Company and with the Intermediary about this Offer.

You will be able to post comments and questions about the Offer and see the posts of other investors on the communication facility. The Company and/or the Intermediary will also be able to respond to questions and comments posted by investors.

Officers, employees or agents of the Company, and related parties or associates of the Company or the Intermediary, may participate in the facility and must clearly disclose their relationship to the Company and/or Intermediary when making posts on the facility.

Any comments made in good faith on the communication facility are not subject to the advertising restrictions in the Corporations Act.

S E C T I O N 4 . 1

S E C T I O N 4 . 2

Information about investor rights

S E C T I O N 4

Cooling-off rights

Communication facility for the Offer

54

Proprietary company corporate governance obligations

Annual report

Distribution of annual report

S E C T I O N 4 . 3

S E C T I O N 4 . 3 . 1

S E C T I O N 4 . 3 . 2

While the Company is currently a small proprietary company that is not required to prepare annual financial reports and directors’ reports, if we successfully complete this Offer, then we will be required to prepare and lodge these annual reports with ASIC (within four months of the financial year end). The Company has a 30 June year end and its financial reports must be lodged by 31 October each year.

Our financial reports are currently not required to be audited as we are a small proprietary company. This means that the Company’s financial reports will not be subject to auditor oversight and, therefore, there will be no independent assurance of the Company’s financial statements. However, the directors are still required to ensure that the financial statements give a true and fair view of the Company’s financial position and performance and that the financial statements comply with the accounting standards.

We may be required to have our financial reports audited in the future if we raise more than $3 million from CSF offers (including this current offer and any future offers) or otherwise become a large proprietary company.

The Company is not required to notify shareholders in writing of the options to receive or access the annual report. Shareholders will not be able to elect to receive a copy of the annual report by way of email or post. However, shareholders can access the annual report on the Company’s website at the following address https://blackhops.com.au/ (free of charge) or can purchase the report from ASIC.

55

If we successfully complete this Offer, the rules on related party transactions in Chapter 2E of the Corporations Act will apply to the Company (for so long as we continue to have CSF shareholders). This means that the Company is required to obtain shareholder approval before giving financial benefits to related parties of the company (e.g. directors and their spouses, children or parents), subject to certain exceptions (such as reasonable remuneration provided to directors).

If we successfully complete this Offer and have more than 50 shareholders, the takeover rules in the Corporations Act will only apply to the Company in a very limited way. If someone wants to buy more than 20% of the voting shares in the Company, they will be able to do so without complying with the takeover rules. This means a person may be able to get control of the Company without making a formal takeover bid to all shareholders or without seeking shareholder approval.

Shareholders will not have the benefit of the full protections under the takeover rules, which means you may not have the right to vote on or participate in a change of control of the company. However, the general principles of ensuring shareholders have sufficient information and time to consider a change of control, and all have a reasonable and equal opportunity to participate in any benefits, will apply to the Company. In addition, the Takeovers Panel has jurisdiction to hear disputes relating to control of the Company.

S E C T I O N 4 . 3 . 3

S E C T I O N 4 . 3 . 4

Related party transactions

Takeovers

56

GlossaryS E C T I O N 5

Company means BLACK HOPS BREWING PTY LTD ACN 605 914 930

Cooling-off Period means the period ending five business days after an application is made under this Offer, during which an investor has a right to withdraw their application and be repaid their application money

CSF means crowd-sourced funding under Part 6D.3A of the Corporations Act

Intermediary means Birchal Financial Services Pty Ltd AFSL 502618

Maximum Subscription means the amount specified in this CSF offer document as the maximum amount sought to be raised by the Offer

Minimum Subscription means the amount specified in this CSF offer document as the minimum amount sought to be raised by the Offer

Offer means an offer of fully-paid ordinary shares by the Company under this CSF offer document

Wholesale Investor means an investor who satisfies the definition of a ‘wholesale client’ under Chapter 7 of the Corporations Act 2001 (Cth).

57

AppendixS E C T I O N 6

The constitution of Black Hops Brewing Pty Ltd is available to download from the offer page on the Intermediary’s website.The Special Purpose Financial Statements for the 2017/18 Financial Year are available to download from the offer page on the

Intermediary’s website.