ACQUISITION OF SURF HARDWARE INTERNATIONAL AND INSTITUTIONAL PLACEMENT

25 NOVEMBER 2015

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DISCLAIMER NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Disclaimer

This Presentation has been prepared by SurfStitch Group Limited ACN 602 288 004 (“SurfStitch Group”).

Summary information

This Presentation contains summary information about SurfStitch Group and its activities current as at 25 November 2015. The information in this Presentation is subject to change without notice

and does not purport to be complete or comprehensive. It does not purport to summarise all information that an investor should consider when making an investment decision. It should be read in

conjunction with SurfStitch Group’s other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au.

The information in this Presentation has been obtained from or based on sources believed by SurfStitch Group to be to be reliable. To the maximum extent permitted by law, SurfStitch Group, the

underwriters and their affiliates, officers, employees, agents and advisors do not make any warranty, express or implied, as to the currency, accuracy, reliability or completeness of the information

in this Presentation and disclaim all responsibility and liability for the information (including, without limitation, liabil ity for negligence).

Neither the underwriters nor any of their affiliates, or their respective related bodies corporate, directors, officers, partners, employees and agents (“Underwriter Group”) have caused or authorised

the issue, submission, dispatch or provision of this document, nor do they make any recommendation as to whether any potential investor should participate in the offer of securities referred to in

this document. None of the Underwriter Group makes or purports to make any statement in this document and further, no member of an Underwriter Group accepts any fiduciary obligation to or

relationship with any investor or potential investor in connection with the offer of securities or otherwise.

SurfStitch Group reserves the right to vary the timetable included in this Presentation.

Not financial product advice

This Presentation is not financial advice or a recommendation to acquire SurfStitch Group securities and has been prepared without taking into account the objectives, financial situation or needs of

individuals. Before making an investment decision prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs

and seek such legal, financial and/or taxation advice as they deem necessary or appropriate to their jurisdiction.

Financial data

All dollar values are in Australian dollars (A$) unless otherwise stated and all financial data is unaudited.

Future performance

This Presentation contains certain “forward looking” statements. The words “anticipated”, “expected”, “projections”, “forecast”, “estimates”, “could”, “may”, “target”, “consider” and “will” and other

similar expressions are intended to identify forward looking statements. Forward looking statements, opinions and estimates provided in this Presentation are based on assumptions and

contingencies which are subject to certain risks, uncertainties and change without notice, as are statements about market and industry trends, which are based on interpretations of current market

conditions. Forward-looking statements including projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only and should not be

relied upon as an indication or guarantee of future performance. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, there can be no

assurance that actual outcomes will not differ materially from these statements. To the full extent permitted by law, SurfStitch Group and its directors, officers, employees, advisers, agents and

intermediaries disclaim any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions.

An investment in SurfStitch Group securities is subject to investment and other known and unknown risks, some of which are beyond the control of SurfStitch Group, including possible loss of

income and capital invested. Please see the Appendix section of this Presentation for further details. SurfStitch Group does not guarantee any particular rate of return or the performance of

SurfStitch Group, nor does it guarantee the repayment of capital from SurfStitch Group or any particular tax treatment. Persons should have regard to the risks outlined in this Presentation.

Not an offer

This Presentation is not an offer or an invitation to acquire SurfStitch Group securities or any other financial products and is not a prospectus, product disclosure statement or other offering

document under Australian law or any other law.

This Presentation may not be released or distributed in the United States.

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TRANSACTION OVERVIEW

1

The Acquisition

‒ SurfStitch Group has entered into definitive agreements to acquire 100% of the shares of SHI Holdings Pty Ltd (“Surf Hardware

International” or “SHI”) – the “Acquisition”

‒ Enterprise value of A$23.7 million – to be paid 100% in cash

‒ Compelling acquisition multiple of 7.5x FY16E EBITDA with 10%+ earnings accretion in FY16E on a full year pro forma basis

The Company

‒ SHI is the leading global designer, marketer and distributor of innovative and high performance water board sports products and

accessories

‒ In its established markets, SHI has a leading ~55% market share of total retail fins sales and ~40% market share of total plug sales,

with strong adoption from top tier manufacturers and retailers

‒ Houses four highly recognised water board sports brands, namely: FCS, Gorilla, Hydro and Softech. SHI’s brands are ubiquitous in

the global surf industry and in the broader water board sports market such as SUP and Kitesurfing

‒ Operates in the U.S., Australia, France and Japan, and has longstanding distributor relationships in other markets

‒ History of innovation with significant intellectual property and brand equity

‒ Strong financial profile, FY16E revenue of A$38.9 million (up 13% from FY15) and FY16E normalised EBITDA of A$3.2 million

(up 23% from FY15)

Highlights

‒ Enhances SurfStitch Group’s ability to engage with core customers at all points of the surf and action sports life cycle. With access to

33 (22 men and 11 women) top professional athletes to deliver relevant and authentic content, established relationships with shapers

and the ability to develop products that appeal to both the masses and core consumer

‒ Acquisition expected to deliver a range of strategic benefits across SurfStitch Group’s content and e-commerce businesses

‒ Acquisition expected to be earnings accretive and margin enhancing in FY16E

Institutional

Placement

‒ Fully-underwritten placement of approximately 25.6 million shares to institutional investors to raise approximately A$50 million (the

“Placement”). Fully-underwritten floor price of A$1.95 per share, with the final issue price to be determined via a bookbuild

‒ Proceeds from the Placement will be used to fund the repayment of certain debts of SHI as part of the Acquisition and transaction

costs, as well as to provide SurfStitch Group with the flexibility to pursue further strategic growth initiatives including complementary

acquisition opportunities. Proceeds will also be used for working capital and general corporate purposes

‒ SurfStitch Group reaffirms FY16E guidance of A$15–18 million EBITDA for the business, excluding SHI, and provides FY16E guidance

of A$18–22 million EBITDA1, including the contribution of SHI on a full year pro forma basis

Note: 1 Excludes transaction costs and one-time non-recurring expenses

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BUSINESS OVERVIEW

Gorilla

‒ Flagship ‘performance brand’

‒ Produces premium fin control

systems for water board sports

(surf, longboard, SUP, kitesurfing)

together with the market leading

range of board sports accessories

‒ Category leading brand renowned

for the invention of its market

leading detachable surfboard fin

systems (FCS I and FCS II)

‒ 9 of the top 10 rated male surfers

and 8 of the top 10 female surfers

ride the FCS II system

‒ Lifestyle oriented surf brand

‒ Produces functional traction pads,

grips, leashes, fins, board covers

apparel and other surf

accessories

‒ Brand image and target market

focused primarily on the youth

surf culture, music, fashion and

arts, in addition to catering to core

surfers

‒ Growth strategy focused on range

expansion to include new product

categories

‒ Swim fin and bodyboard brand

‒ Produces functional body boards

and swim propulsion fins, catering

to a broad audience of ocean

enthusiasts

‒ Products designed to enhance

water flow and increase

hydrodynamic performance

‒ Renowned for its innovative V-

Rail swim technology, allowing for

faster trajectory through the water

‒ Leading global softboard brand

‒ Produces premium quality

softboards for the surf specialty

market, catering for all skill levels

‒ Developed the first hand shaped

softboard, and the first mesh

bottom softboard

‒ Signature softboard series

developed and endorsed by WSL

World Champion Tom Carroll for

advanced level surfers

Hydro Softech FCS

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Elite athletes Board manufacturers Retailers

LEVERAGES ATHLETES, BOARD SHAPERS, RETAILERS AND GLOBAL BRANDS

‒ 22 out of the top 34 surfers on the Men’s

World Surfing tour and 11 out of the top 17

surfers on the Women’s tour use FCS

products

‒ Enhances SurfStitch Group’s ability to

leverage athletes across its digital media

stable – a key driver of conversion

‒ Adopted by leading surfboard, SUP and Kite

board manufacturers around the world

‒ Sells to 750+ board manufacturers globally

‒ Provides opportunity to secure enhanced

and exclusive supply agreements with board

manufacturers globally (3 million+ boards

manufactured annually)

‒ Deep relationships with global and local core

surf retailers around the world

‒ Sells to 2,500+ core retail doorways

worldwide – providing next phase of Click

and Collect capabilities for the Group

‒ Strong brand awareness and infrastructure

in key markets of South America and Asia

(Japan) to accelerate Group growth in these

markets

3

MICK FANNING

GABRIEL MEDINA

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COMPLEMENTARY GLOBAL FOOTPRINT AND DISTRIBUTION NETWORK

‒ Strong overlap between SHI’s and SurfStitch Group’s key markets

‒ SHI’s market-leading positions in South America and Asia provide opportunity for the Group to accelerate growth in these key markets

‒ Scope to accelerate SHI’s D2C offering via SurfStitch Group’s e-commerce portals

4

SHI Office locations

Overlapping regions

SSG only

SHI only

SSG Office locations

U.S.

Offices: California, Florida

Key markets: U.S., Canada,

Mexico, Brazil, Peru, Chile,

Costa Rica

Europe

Office: France

Key markets: France,

UK, Spain, Portugal,

Germany

Australasia

Office: Sydney

Key markets: Australia,

New Zealand, South Africa,

Indonesia, Thailand

Japan

Office: Chiba

Key market: Japan

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SHI’S BUSINESS MODEL CREATES A HIGHLY BENEFICIAL AND VIRTUOUS CYCLE

5

Shaper

Retailer

Customer

Product

Product development

FCS plugs are sold

directly to shapers

(ensures ongoing repeat

sales of FCS fins)

Boards arrive with FCS plugs

Customers demand,

and are locked into

FCS fins

Customer buys

boards and

detachable fins to fit Customer feedback via

social media and other

digital content platforms

received by FCS product

development team

Engagement on

social media and

SurfStitch Group’s

content networks

featuring FCS

products utilised

by athletes

Athletes

Wide range of fins available

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Product

Leverage relevant content to attract and

retain a rapidly evolving and increasingly

sophisticated customer base

Significantly enhance customer

engagement levels among action sports

and surf consumers

ENHANCING THE SURFSTITCH ECOSYSTEM

6

Product

Online reach of over 9 million

people globally via tier 1 athlete

social media accounts

Partnerships with high profile

athletes (sponsored and non

sponsored)

Market leading position with board

manufacturers and global brands

(collaboration)

Globally recognised brands

Vertical product integration

Strong relationships with

board manufacturers and

global brands

Click and collect

opportunities via core

doorway retail networks

Product E–commerce

Product Content & Community

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SURFSTITCH GROUP IS UNIQUELY PLACED TO LEVERAGE CONTENT ACROSS VERTICAL BRANDS

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Athletes Shapers

‒ World’s number 1 adventure

channel (SVOD) – 3,000+ titles

‒ Long form and short form content

creation (videos/documentaries)

that will reach a wide audience

and showcase the world’s elite

athletes using SHI products

‒ World’s leading surf forecasting

utility

‒ Largest surf library of user

generated content on the web

‒ Targeted advertising to surf

enthusiasts and users of SHI

hardware

‒ World’s leading online surf

publishing network

‒ Loyal following of surf enthusiasts

and trusted destination of surfing

product reviews

‒ Content platform where SurfStitch

Group can provide unique insight

into the lives of athletes and

shapers, product reviews, new and

exclusive content

SurfStitch Group’s unique content platforms will allow it to increase SHI’s brand awareness and legitimise the authenticity of its brands

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ROADMAP TO MARGIN ENHANCEMENT VIA VERTICAL PRODUCT STRATEGY

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Today 12 months 2 – 3 years

<1%

Sales

5–10%

Sales

20–30%

Sales

% G

rou

p S

ale

s

Marg

in %

Group GP margin:

46% Group GP margin:

50–55%

SurfStitch Group’s focus is on core action sports products, legitimised by athletes, authenticated by our content networks

Hard goods 20%+ of Group sales and fastest growing market segment

Minimise fast fashion risk and price deflation

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PERFORMANCE BASED FLAGSHIP DOORWAYS WILL BE THE GLOBAL

DESTINATION FOR THE ACTION SPORTS AND YOUTH DEMOGRAPHIC

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Omni Channel leverage Consumer participation

Media and digital content Athlete promotion

Enhanced shopping experience leveraging

content and e-commerce across physical

doorways

Providing Group's 600+ Brands unique and

exclusive opportunities to launch products

globally in a combined bricks, digital and

content world

The hardware section will showcase a full

range of action sports hardware and

consumer participation opportunities

SurfStitch Group’s full media and content

spectrum will be on display SurfStitch Group and SHI’s athlete

partnerships and SHI’s brand ambassadors

will draw customers to the stores

SurfStitch Group will open 3x flagship

SWELL stores in key cities across the

globe

The stores will be the destination for

the action sports and youth

demographic

The stores will feature ‘doorways’ into

each section of the SurfStitch Group

ecosystem

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HIGHLY EXPERIENCED MANAGEMENT TEAM TO DRIVE GROWTH AMBITIONS

10

Justin Cameron Chief Executive

Officer

15+ years

Co

mm

erc

e

Lex Pedersen

Co-Founder,

President

15+ years

NORTH

AMERICA

Justin Stone

Managing

Director

10+ years

EUROPE

Justin Hillberg

General

Manager

8+ years

ASIA-PACIFIC

Glo

bal

Merc

h Chis Athas

Global Retail / Merch Director

30+ years in leading retail

Co

nte

nt

& C

om

mu

nit

y

Sam

McIntosh

Founder

Stab Magazine

15+ years

Ben

Freeston

Founder

Magicseaweed

15+ years

Michael

Lawrence

Founder Garage

Entertainment

10+ years

A global e-commerce

platform with

infrastructure in key

markets across the world

providing consumers

access to 600+ action

sports brands with next

day delivery to 130+

countries and exclusive

action sports content

Market leading audience

in digital content

provides the key avenue

for athletes to legitimise

core brands amongst

consumers and elevate

awareness

Exclusive core hardware

products with higher

margins, developed with

customer feedback in

mind

Content that captures

and monetises

customers with

authentic stories,

athletes that

legitimise our brands,

and exclusive

assortment that

retains loyal

customers and

encourages repeat

visitation

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PATHWAY FOR A$1 BILLION IN REVENUE

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Today

A$199 million

Growth in existing

markets

Content driven

focus

Vertical brand

focus

Growth in new

markets

In 5 years

A$1 billion

Group focus on driving long term strong double digit revenue and EBITDA Growth

‒ Penetration

‒ Flagship Stores

‒ AOV

‒ Conversion

‒ Order Frequency

‒ Awareness

‒ New market

segments

‒ Asia

‒ South America

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SHI ALIGNS WITH SURFSTITCH GROUP’S STRATEGIC OBJECTIVES

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‒ SHI’s globally recognised brands and high performance products appeal to SurfStitch Group’s core demographic

‒ Access to high profile athletes (both sponsored and not sponsored), board shapers and brands provides opportunities to

curate relevant and engaging content, which can be displayed on SurfStitch Group’s digital media platforms

‒ Provides greater leverage to ‘Hard Goods’, which has proven to be one of SurfStitch Group’s fastest growing categories

‒ Opportunity to create new products through ongoing innovation and by leveraging SHI’s intellectual property and brand

equity

‒ Opportunity to consolidate SHI’s warehousing and fulfilment functions with SurfStitch Group in each region, to maximise

distribution efficiencies

‒ Ability to quickly integrate and scale-up SHI’s e-commerce capabilities within SurfStitch Group’s existing portals

‒ Margin enhancement from vertical integration, marketing savings, shared services synergies and branding partnership

opportunities

‒ The Acquisition is expected to be earnings accretive and margin enhancing in FY16E

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INSTITUTIONAL PLACEMENT

Overview

‒ Fully-underwritten institutional placement of ordinary shares to qualified and sophisticated institutional investors

to raise approximately A$50 million (the “Placement”)

‒ Placement of approximately 25.6 million new ordinary shares, representing 10.3% of issued capital. New

shares issued under the Placement will rank equally with existing shares of SurfStitch Group

‒ Fully-underwritten floor price of A$1.95 per share, representing a 2.3% and 5.3% discount to the 5-day VWAP

of A$2.00 and last close of A$2.06, respectively. Final issue price to be determined via a bookbuild

Use of proceeds

‒ Used to fund the repayment of certain debts of SHI as part of the Acquisition and transaction costs, as well as

to provide SurfStitch Group with the flexibility to pursue further strategic growth initiatives including

complementary acquisition opportunities. Proceeds will also be used for working capital and general corporate

purposes

Timetable

‒ Trade date of 26 November 2015

‒ Settlement of the placement is scheduled to take place on 1 December 2015

‒ Allotment and quotation of shares expected to occur on the ASX on 2 December 2015

SurfStitch Group is undertaking a fully-underwritten A$50 million institutional placement

Note: IRESS market data as at 25 November 2015

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Bookrunners ‒ J.P. Morgan and UBS AG, Australia Branch are Joint Bookrunners, Lead Managers and Underwriters

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FY16E EARNINGS GUIDANCE

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Guidance and Outlook

‒ For the four months ending 31 October 2015, Group YTD

revenue growth of 40%+

‒ Reaffirm FY16E guidance of A$15–18 million EBITDA for the

business, excluding SHI

‒ Pro forma FY16E EBITDA1 of A$18–22 million, assuming a full

year contribution of SHI

‒ Acquisition expected to be highly accretive, with 10%+ earnings

accretion in FY16E on a full year pro forma basis

‒ Net cash position, following the completion of the Placement

and the Acquisition expected to be c.A$45 million

‒ Global content strategy delivering early signs of strong

momentum in core markets

‒ No dividend currently planned. Cash will continue to be

reinvested in growth given recognisable double digit growth

opportunities

Note: 1 Excludes transaction costs and one-time non-recurring expenses

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APPENDIX

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HIGHLY ATTRACTIVE PRODUCT PORTFOLIO

24%

30% 5%

9%

7%

7%

6%

9% 3%

FY16E

Revenue

‒ Diverse revenue base, with scope for future additional growth

across all categories

‒ Cross promotional activities with SurfStitch Group’s content

businesses expected to drive further growth

Production sets Retail fins

Grips Board covers

Leashes Retail other

Hydro Softboards

3rd party brands

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Diversified revenue base Broad spectrum of water board sports

SURF LONGBOARD

SUP KITE

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LEADING MARKET SHARE ACROSS CORE PRODUCT CATEGORIES

Plugs Leashes Board covers Retail fins Traction pads

33%

41%

55%

FY13 FY14 FY15

33%

39% 41%

FY13 FY14 FY15

16%

19%

22%

FY13 FY14 FY15

12%

14%

16%

FY13 FY14 FY15

9% 9%

12%

FY13 FY14 FY15

‒ Significant market share

gains from launch of FCS II

‒ Increased penetration

amongst other water board

sport categories (SUP, Kite)

‒ Highest levels of plug market

share in Australia, U.S.,

Europe and Japan

‒ Expanded into growing water

board sports markets

‒ Leash growth achieved

through provision of a high

quality product and range

updates (e.g. colour)

‒ Growth in board covers

primarily from introduction of

innovative premium product

offerings, widely accepted by

the market

‒ Growth in grips driven by

introduction of industry first

printed tailpads and

expansion of the athlete

series

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Source: SHI market share estimates based on global board manufacturers databases. Note: market shares for board covers and traction pads are global weighted average market shares

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SurfStitch Group is subject to risks that are both of a general nature and risks which are specific to its business activities. Any or a combination of these risk factors may have a

material adverse effect on SurfStitch Group’s business, financial performance and operations. The following pages outline what SurfStitch Group considers to be some of the

potential risks associated with SurfStitch Group’s business, and general risks associated with an investment in SurfStitch Group.

Integrity and performance of SurfStitch Group’s Websites, databases and systems

The performance of SurfStitch Group’s Websites and databases is critically important to SurfStitch Group’s ability to attract and retain customers and to make sales to

customers. SurfStitch Group relies upon third party operators for key aspects of maintaining its Websites and databases and selling its products. If a prolonged system failure

or corruption were to occur, it could damage SurfStitch Group’s business reputation and brand name thereby reducing the attractiveness of its Websites to visitors and

negatively impacting its ability to make sales to customers, which could have a material adverse effect on SurfStitch Group’s business, financial performance and operations.

Continued growth of retail e-commerce in general and growth in demand for Action Sports products may be affected by factors outside of SurfStitch Group’s

control

Whilst e-commerce sales in the categories in which SurfStitch Group’s business operates have been growing, there can be no guarantee that this growth will continue in the

future. The B2C retail e-commerce market and the Action Sports segment in which SurfStitch Group’s business operates are subject to factors outside SurfStitch Group’s

control. This includes factors such as the market outlook for economic growth, the availability and cost of credit, interest rates, taxation, unemployment levels, and consumer

confidence and sentiment. If one or more of these factors leads to growth slowing or a contraction in this segment or market, SurfStitch Group may be unable to meet its

business objectives which could have a material adverse effect on SurfStitch Group’s business, financial performance and operations.

The growth of internet penetration and rate of migration to online platforms

A number of factors including the migration from more traditional retailing to online retailing platforms have underpinned growth in e-commerce. There can be no assurance

that the rate of penetration and migration will continue to increase in the future despite increased internet penetration and a migration of retail sales to online platforms in many

geographies in recent years. If the rate of penetration and migration does not increase in line with SurfStitch Group’s expectations, it may have a material adverse effect on its

business, financial performance and operations.

Competition could adversely affect prices and demand for Action Sports products and decrease its market share

The Action Sports segment is highly competitive. Competition can arise from a number of sources including traditional retailers, omni-channel mono and multi-branded

retailers, and pure play e-commerce competitors. SurfStitch Group’s market share in online Action Sports may decline if its competitors increase their focus on growing online

sales through increasing investment in their online operations. In addition, competitors may also merge or form strategic partnerships, which could increase competition and

could have a material adverse effect on SurfStitch Group’s business, financial performance and operations.

SurfStitch Group relies on third party suppliers for its products and IT platform

SurfStitch Group relies on products and IT platform supplied by third parties. Any disruption to the availability or supply of products and IT services to SurfStitch Group or any

deterioration in the terms on which products and services are supplied to SurfStitch Group could have a material adverse effect on SurfStitch Group’s business, financial

performance and operations.

KEY RISKS

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Changes in technology

SurfStitch Group’s ability to compete effectively in the future may be impacted by its ability to maintain or develop appropriate technology platforms for the efficient delivery of

its services. The cost of implementing emerging and future technologies could be significant. No assurance can be given that SurfStitch Group will have the resources to

acquire or the ability to develop new competitive technologies. In addition, maintaining or developing appropriate technologies may require significant capital investment by

SurfStitch Group.

SurfStitch Group’s Websites may experience a reduction in visits if SurfStitch Group is significantly slower than its competitors to adapt to technological change. This could

impact SurfStitch Group’s ability to attract new and retain existing customers, which could materially adversely affect SurfStitch Group’s business, financial performance and

operations.

SurfStitch Group’s future growth may place significant demands on management and its infrastructure

In recent periods, SurfStitch Group has experienced significant revenue growth and SurfStitch Group intends to continue with the rapid growth of its operations, which may

include entering into new markets. SurfStitch Group expects that this growth will result in an increased level of responsibility for both existing and new management personnel

and require the recruitment, training, integration and management of the staff to support this expected growth. Furthermore, as SurfStitch Group’s operations grow further, it

will need to continue to improve and upgrade its systems and infrastructure.

If SurfStitch Group is unable to manage the demands placed onto management and its infrastructure, its business, financial performance and operations may be materially

adversely affected.

SurfStitch Group’s expansion into new markets may not be successful

SurfStitch Group may explore expansion opportunities into new markets. Any expansion into markets outside SurfStitch Group’s key markets would expose it to a number of

risks including different regulatory requirements, difficulties managing staffing and foreign operations, differences in consumer behaviour, exchange rates fluctuations, potential

political and economic instability, potential difficulties in enforcing contracts and intellectual property rights, the potential for higher rates of fraud and adverse tax

consequences.

Any of these factors could materially adversely affect SurfStitch Group’s business, financial performance and operations.

SurfStitch Group’s Websites may be excluded from or ranked lower in organic search results due to changes to search engines’ algorithms or terms of services

A significant proportion of SurfStitch Group’s customers access SurfStitch Group’s Websites by clicking on a link in search engines’ “organic” listings, which are listings not

dependent on advertising or other payments. Search engines rely on algorithms to determine which websites are included in the search results. Search engines often modify

their algorithms and ranking criteria to prevent their organic listings from being manipulated, which could hinder SurfStitch Group’s SEO activities. These algorithms and

ranking criteria may be confidential or proprietary information, and SurfStitch Group may not understand or have access to complete information on the methods used to rank

its Websites. If SurfStitch Group is unable to recognise and adapt quickly to such changes in search engine algorithms, or if the effectiveness of SurfStitch Group’s SEO

activities is affected for any other reason, SurfStitch Group could suffer a significant decrease in traffic to its Websites and conversion rates.

In addition, a website can be excluded from a search engine’s organic listing if it is found to violate the search engine’s terms of services, which could be modified in the future.

Such exclusion may significantly affect SurfStitch Group’s ability to direct higher margin customer traffic to SurfStitch Group’s Websites, which could materially adversely affect

SurfStitch Group’s business, financial performance and operations.

KEY RISKS (CONT’D)

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SurfStitch Group may experience a significant increase in the cost of, or become more reliant on, SEM

A significant proportion of SurfStitch Group’s revenues are attributable to customers who access SurfStitch Group’s Websites by clicking on links that SurfStitch Group paid to

list on search engines’ results pages. SurfStitch Group frequently places a very large number of bids on key words at a certain cost per click, which is paid to the search

engine, in order to place these listings with a search engine. The cost of search engine marketing generally increases as the importance of online advertising increases and

competition to be ranked higher in paid listings increases. Furthermore, SurfStitch Group might have to submit higher bids in order to purchase certain key words to offset a

reduction in its click-through rate. In addition, if SurfStitch Group’s Websites were to experience a reduction in natural search visibility in search engines (i.e. a fall in its

websites’ organic search ranking), it may increase SurfStitch Group’s reliance on SEM. If this were to occur there is no guarantee that SurfStitch Group’s Websites’ natural

search visibility will improve in a timely manner or at all.

SurfStitch Group’s business, financial performance and operations may be materially adversely affected by any increase in the cost of or in its reliance on SEM, or any

decrease in the effectiveness of its SEM.

SurfStitch Group’s acquisition strategy may be unsuccessful

SurfStitch Group may make acquisitions in circumstances where the Directors believe that those acquisitions are complementary to SurfStitch Group’s strategy and enhances

its growth prospects. SurfStitch Group may encounter a number of issues associated with making acquisitions including the difficulties involved in integrating companies,

businesses or assets, as well as the diversion of financial and management resources from SurfStitch Group’s core business.

To the extent that the acquisition of SHI and future acquisitions are not successfully integrated with SurfStitch Group’s existing business, SurfStitch Group’s business, financial

performance and operations could be materially adversely affected.

Surf Hardware International relies on third party suppliers for its products and IT platform

Surf Hardware International (“SHI”) relies on products and IT platform supplied by third parties. Any disruption to the availability or supply of products and IT services to SHI or

any deterioration to the terms on which products and services are supplied to SHI could have a material adverse effect on SHI’s business, financial performance and

operations.

Unauthorised use of Surf Hardware International’s intellectual property or independent development of technology

Surf Hardware International (“SHI”) regards substantial elements of its Websites, software tools, applications, customer databases and underlying technology as proprietary.

Third parties may copy or otherwise obtain and use SHI’s proprietary information without authorisation or may develop similar technology independently despite precautionary

measures that SHI takes. Furthermore, competitors may be able to design around SHI’s technology or develop competing technologies substantially similar to those of SHI

without any infringement of its proprietary rights. SHI may seek to protect its proprietary information through legal action which could be unsuccessful and expensive and would

divert management’s attention from its business operations. This could have a material adverse effect on SHI’s business, financial performance and operations.

Other key risks

A number of other key risks relating specifically to an investment in SurfStitch Group include risks associated with changes in customer preferences, changes in seasonal

trading patterns, SurfStitch Group’s reliance on the efficient operation of its distribution centres, SurfStitch Group’s dependence on recruiting and retaining experienced and

high-performing staff and SurfStitch Group’s dependence on its Executive Directors, reputational and operational risks (such as IT risks) and general risks.

KEY RISKS (CONT’D)

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INTERNATIONAL OFFER RESTRICTIONS This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document

may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to the extent permitted below.

Hong Kong

WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of

Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of

Hong Kong (the "SFO"). No action has been taken in Hong Kong to authorise or register this document or to permit the distribution of this document or any documents issued in

connection with it. Accordingly, the New Shares have not been and will not be offered or sold in Hong Kong other than to "professional investors" (as defined in the SFO).

No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in

Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the

securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional

investors (as defined in the SFO and any rules made under that ordinance). No person allotted New Shares may sell, or offer to sell, such securities in circumstances that amount

to an offer to the public in Hong Kong within six months following the date of issue of such securities.

The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt

about any contents of this document, you should obtain independent professional advice.

New Zealand

This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the "FMC Act"). The New

Shares are not being offered or sold in New Zealand (or allotted with a view to being offered for sale in New Zealand) other than to a person who:

‒ is an investment business within the meaning of clause 37 of Schedule 1 of the FMC Act;

‒ meets the investment activity criteria specified in clause 38 of Schedule 1 of the FMC Act;

‒ is large within the meaning of clause 39 of Schedule 1 of the FMC Act;

‒ is a government agency within the meaning of clause 40 of Schedule 1 of the FMC Act; or

‒ is an eligible investor within the meaning of clause 41 of Schedule 1 of the FMC Act.

Singapore

This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority

of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares, may

not be issued, circulated or distributed, nor may the New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or

indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of

Singapore (the "SFA"), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA.

This document has been given to you on the basis that you are (i) an existing holder of the Company’s shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a

"relevant person" (as defined in section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this document

immediately. You may not forward or circulate this document to any other person in Singapore.

Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be

applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and

comply accordingly.

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