           5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
                3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

        (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                    )LOH 1DPH DS




81,7('67$7(6&28572)$33($/6
                   )257+(6,;7+&,5&8,7
                     BBBBBBBBBBBBBBBBB


 3$&&$5 ,1&                      ;
          3ODLQWLII$SSHOOHH       
                                    
                                      1R
            Y                      
                                     !
                                    
 7(/(6&$1 7(&+12/2*,(6             
 //&                            
          'HIHQGDQW$SSHOODQW 
                                    
                                    
                                   1
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
      IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
    1Rn$YHUQ&RKQ6HQLRU'LVWULFWsXGJH
                      $UJXHGsXQH
              'HFLGHGDQG)LOHG)HEUXDU\
%HIRUH6,/(5DQG0225(&LUFXLWsXGJHV67$))25'
                    'LVWULFWsXGJH




    
     7KH +RQRUDEOH :LOOLDP + 6WDIIRUG sU 8QLWHG 6WDWHV 'LVWULFW sXGJH
IRU WKH 1RUWKHUQ 'LVWULFW RI )ORULGD VLWWLQJ E\ GHVLJQDWLRQ



                                    
    3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R

                    BBBBBBBBBBBBBBBBB
                         &2816(/
$5*8('0DU\0DVVDURQ5RVV3/81.(77	&221(<
'HWURLW 0LFKLJDQ IRU $SSHOODQW  'DYLG & /XQGVJDDUG
*5$+$0 	 '811 6HDWWOH :DVKLQJWRQ IRU $SSHOOHH
3DXO $ /HY\ 38%/,& &,7,=(1 /,7,*$7,21 *5283
:DVKLQJWRQ'&IRU$PLFXV&XULDH21%5,()0DU\
0DVVDURQ 5RVV 3/81.(77 	 &221(< 'HWURLW
0LFKLJDQIRU$SSHOODQW'DYLG&/XQGVJDDUG'RXJODV&
%HUU\ *5$+$0 	 '811 6HDWWOH :DVKLQJWRQ IRU
$SSHOOHH3DXO$/HY\38%/,&&,7,=(1/,7,*$7,21
*5283:DVKLQJWRQ'&IRU$PLFXV&XULDH
                    BBBBBBBBBBBBBBBBB
                        23,1,21
                    BBBBBBBBBBBBBBBBB
  6,/(5&LUFXLWsXGJH'HIHQGDQW7HOH6FDQ7HFKQRORJLHV
//&m7HOH6FDQlDSSHDOVWKHGLVWULFWFRXUWjVSUHOLPLQDU\
LQMXQFWLRQHQMRLQLQJLWIURPXVLQJSODLQWLII3$&&$5,QFjV
m3$&&$5lWUDGHPDUNVm3HWHUELOWlDQGm.HQZRUWKlLQDQ\
RILWV,QWHUQHWGRPDLQQDPHVDQGPHWDWDJV7KHGLVWULFWFRXUW
FRQFOXGHGWKDW3$&&$5GHPRQVWUDWHGDVWURQJOLNHOLKRRGRI
VXFFHVVRQWKHPHULWVRILWVFODLPVIRUWUDGHPDUNLQIULQJHPHQW
DQG WUDGHPDUN GLOXWLRQ XQGHU WKH /DQKDP $FW  86&
  DQG   $V VHW IRUWK EHORZ WKH SUHOLPLQDU\
LQMXQFWLRQ LV $)),50(' ,1 3$57 DQG 9$&$7(' ,1
3$57DQGWKHFDVH5(0$1'('IRUIXUWKHUSURFHHGLQJV
                               ,
$ )DFWXDO%DFNJURXQG
   3ODLQWLII 3$&&$5 LV D OHDGLQJ PDQXIDFWXUHU RI KHDY\
WUXFNVDQGWUXFNSDUWVXQGHUVHYHUDOWUDGHPDUNVLQFOXGLQJWKH
m3HWHUELOWl DQG m.HQZRUWKl WUDGHPDUNV  3HWHUELOW 0RWRUV
&RPSDQ\ DQG .HQZRUWK 0RWRU 7UXFN &RPSDQ\ ERWK
GLYLVLRQVRI3$&&$5KDYHEHHQPDQXIDFWXULQJWUXFNVXQGHU
    3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R                 1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV                     

SUHOLPLQDU\ LQMXQFWLRQ 7HOH6FDQjV IDLOXUH WR PDNH WKLV           WKHLUUHVSHFWLYHQDPHVIRURYHUVL[W\\HDUV3$&&$5ZKLFK
DUJXPHQWEHORZLVH[FXVHG                                             RZQV QXPHURXV 86 7UDGHPDUN 5HJLVWUDWLRQV IRU WKH
                                                                        m3HWHUELOWl DQG m.HQZRUWKl WUDGHPDUNV KDV LQYHVWHG
  7KHGLVWULFWFRXUWGLGQRWFRQGXFWDVHSDUDWHDQDO\VLVDVWR          VXEVWDQWLDODPRXQWVRIPRQH\LQGHYHORSLQJPDUNHWLQJDQG
ZKHWKHU 7HOH6FDQjV XVH RI 3$&&$5jV WUDGHPDUNV LQ WKH             DGYHUWLVLQJWKRVHPDUNV
PHWDWDJVRILWVZHEVLWHVLVOLNHO\WRFDXVHFRQIXVLRQDPRQJ
FRQVXPHUVUHJDUGLQJWKHRULJLQRUDIILOLDWLRQRIWKHZHEVLWHV            ,Q DGGLWLRQ WR LWV PDQXIDFWXULQJ EXVLQHVV 3$&&$5
,Q OLJKW RI WKH GLVWULFW FRXUWjV IDLOXUH WR FRQVLGHU ZKHWKHU   DGPLQLVWHUV D XVHG WUXFN ORFDWRU VHUYLFH RQ LWV ZHE VLWH
7HOH6FDQjVXVHRIWKHm3HWHUELOWlDQGm.HQZRUWKlPDUNVLQLWV           ZZZSDFFDUFRP7KLVVHUYLFHSHUPLWVFRQVXPHUVWRVHDUFK
PHWDWDJVDORQHZLWKRXWWKHLQFOXVLRQRIWKRVHPDUNVLQWKH             DGDWDEDVHRIXVHG3HWHUELOWDQG.HQZRUWKWUXFNVDYDLODEOHIRU
GRPDLQQDPHVFUHDWHVDOLNHOLKRRGRIFRQIXVLRQZHEHOLHYH             VDOHIURP3HWHUELOWDQG.HQZRUWKGHDOHUV&RQVXPHUVFDQ
WKDWWKHVFRSHRIWKHLQMXQFWLRQLVWRREURDG                        VHDUFKWKHGDWDEDVHXVLQJWZHOYHGLIIHUHQWILHOGVLQFOXGLQJ
                                                                        PRGHO\HDUDQGORFDWLRQ
                                ,9
                                                                            'HIHQGDQW7HOH6FDQRZQVVHYHUDOZHEVLWHVSURYLGLQJWUXFN
  %HFDXVH 3$&&$5 GHPRQVWUDWHG D VWURQJ OLNHOLKRRG RI              ORFDWRUVHUYLFHV8VLQJ7HOH6FDQjVZZZWUXFNVFDQFRPZHE
VXFFHVV RQ WKH PHULWV RI LWV WUDGHPDUN LQIULQJHPHQW FODLP       VLWHFRQVXPHUVFDQVHDUFKIRUQHZDQGXVHGWUXFNVHLWKHUE\
EDVHGRQ7HOH6FDQjVXVHRIWKHWUDGHPDUNVm3HWHUELOWlDQG               YLHZLQJ OLVWLQJV E\ GHDOHU RU E\ VHDUFKLQJ D GDWDEDVH RI
m.HQZRUWKlLQLWVGRPDLQQDPHVWKHGLVWULFWFRXUWGLGQRW              SDUWLFLSDWLQJ GHDOHUV XVLQJ HOHYHQ GLIIHUHQW VHDUFK WHUPV
DEXVH LWV GLVFUHWLRQ LQ JUDQWLQJ WKH SUHOLPLQDU\ LQMXQFWLRQ     LQFOXGLQJ PDQXIDFWXUHU PRGHO DQG \HDU  'HDOHUV SD\ D
$FFRUGLQJO\ZH$)),50WKHSUHOLPLQDU\LQMXQFWLRQDVWRWKH             PRQWKO\FKDUJHWRKDYHWKHLUOLVWLQJVLQFOXGHGLQWKHGDWDEDVH
GRPDLQQDPHV7KHLQMXQFWLRQjVSURKLELWLRQRQWKHXVHRI               $QRWKHU 7HOH6FDQ ZHE VLWH ZZZWHOHVFDQHTXLSPHQWFRP
3$&&$5jVWUDGHPDUNVLQ7HOH6FDQjVPHWDWDJVKRZHYHULV                 SURYLGHVOLQNVWR7HOH6FDQjVPDQXIDFWXUHUVSHFLILFZHE
9$&$7(' DQG WKH FDVH LV 5(0$1'(' IRU IXUWKHU                    V L W HV   L QFO X G L QJ ZZZS HW HUELOWQHZWUXFNVFRP
FRQVLGHUDWLRQ                                                          ZZZSHWHUELOWXVHGWUXFNVFRP        ZZZSHWHUELOWWUXFNGHDOHUVFRP
                                                                        ZZZNHQZRUWKQHZWUXFNVFRP           ZZZNHQZRUWKXVHGWUXFNVFRP

                                                                        DQG ZZZNHQZRUWKWUXFNGHDOHUVFRP,QDGGLWLRQWRXVLQJWKH
                                                                        m3HWHUELOWlDQGm.HQZRUWKlWUDGHPDUNVLQLWVGRPDLQQDPHV
                                                                        7HOH6FDQGLVSOD\VWKHPDUNVLQWKHZDOOSDSHUXQGHUO\LQJWKH
                                                                        PDQXIDFWXUHUVSHFLILF ZHE VLWHV LQ IRQWV VLPLODU WR WKH
                                                                        GLVWLQFWLYHIRQWVLQ3$&&$5jVWUDGHPDUNVLHFXUVLYHVFULSW
                                                                        IRUm3HWHUELOWlDQGEORFNVFULSWIRUm.HQZRUWKlDQGLQFOXGHV


                                                                              
                                                                              (YHU\ ZHE VLWH KDV D XQLTXH mGRPDLQ QDPHl DQ LGHQWLILHU DQDORJRXV
                                                                        WR D WHOHSKRQH QXPEHU RU VWUHHW DGGUHVV $ GRPDLQ QDPH FRQWDLQV D
                                                                        VHFRQGOHYHO GRPDLQ FRQVLVWLQJ RI D WHUP RU VHULHV RI WHUPV VXFK DV
                                                                        mSHWHUELOWXVHGWUXFNVl RU mNHQZRUWKWUXFNGHDOHUVl DQG D WRSOHYHO GRPDLQ
                                                                        W\SLFDOO\ GHVFULELQJ WKH QDWXUH RI WKH HQWHUSULVH VXFK DV mFRPl
                                                                        FRPPHUFLDO RU mHGXl HGXFDWLRQDO %URRNILHOG &RPPXQLFDWLRQV ,QF
                                                                        Y :HVW &RDVW (QWPjW &RUS  )G   WK &LU 
       3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R                      1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV                 

WKHZRUGVm3HWHUELOWlDQGm.HQZRUWKlLQWKHVLWHVjPHWDWDJV                  RWKHU SDUWLHV RU  OLNHOLKRRG RI FRQIXVLRQ PLVWDNH RU
7KHZZZWHOHVFDQHTXLSPHQWFRPDQGPDQXIDFWXUHUVSHFLILF                        GHFHSWLRQl86&
ZHEVLWHVSURYLGHOLQNVWRWKHZZZWUXFNVFDQFRPGDWDEDVH
(DFKPDQXIDFWXUHUVSHFLILFZHEVLWHFRQWDLQVWKHIROORZLQJ                        ,QKROGLQJWKDW7HOH6FDQjVXVHRI3$&&$5jVWUDGHPDUNV
GLVFODLPHUm7KLVZHEVLWHSURYLGHVDOLVWLQJVHUYLFHIRUQDPH                LQ LWV GRPDLQ QDPHV FRQVWLWXWHV WUDGHPDUN GLOXWLRQ WKH
EUDQGSURGXFWVDQGKDVQRDIILOLDWLRQZLWKDQ\PDQXIDFWXUHU                    GLVWULFWFRXUWHQJDJHGLQDFXUVRU\DQDO\VLVUHO\LQJSULPDULO\
ZKRVHEUDQGHGSURGXFWVDUHOLVWHGKHUHLQl                                    RQWKH1LQWK&LUFXLWjVGHFLVLRQLQ3DQDYLVLRQ,QWHUQDWLRQDOY
                                                                               7RHSSHQ /3  )G   WK &LU 
   %\ OHWWHU GDWHG 0D\   3$&&$5 DVVHUWHG WKDW                  1HLWKHU7HOH6FDQQRU3$&&$5GHYRWHVPXFKRILWVDUJXPHQW
7HOH6FDQjVXVHRILWVWUDGHPDUNVm3HWHUELOWlDQGm.HQZRUWKl                    RQDSSHDOWRWKHGLOXWLRQLVVXHFRQFHQWUDWLQJLQVWHDGRQWKH
LQ 7HOH6FDQjV GRPDLQ QDPHV LQIULQJHV XSRQ 3$&&$5jV                       LQIULQJHPHQWFODLP'HWHUPLQLQJZKHWKHUmWKHMXQLRUPDUN
WUDGHPDUN ULJKWV DQG GHPDQGHG WKDW 7HOH6FDQ UHOLQTXLVK                   FDXVHVGLOXWLRQRIWKHGLVWLQFWLYHTXDOLW\RIWKHVHQLRUPDUNl
RZQHUVKLS RI WKH GRPDLQ QDPHV  ,Q UHVSRQVH 7HOH6FDQ                  UHTXLUHVDQDQDO\VLVRIWHQQRQH[FOXVLYHIDFWRUV6HH96HFUHW
DFNQRZOHGJHG 3$&&$5jV RZQHUVKLS RI WKH WUDGHPDUNV                         &DWDORJXH,QFY0RVHOH\)GWK&LU
m3HWHUELOWlDQGm.HQZRUWKlEXWPDLQWDLQHGWKDWLWVXVHRIWKH                  LQWHUQDOTXRWDWLRQPDUNVDQGDOWHUDWLRQRPLWWHG:HQHHG
PDUNVLVDSHUPLVVLEOHJHQHULFIDLUXVH                                       QRWHQJDJHLQVXFKDQDQDO\VLVRQHZKLFKQHLWKHUWKHSDUWLHV
                                                                               QRUWKHGLVWULFWFRXUWHPSOR\HGDV3$&&$5jVGHPRQVWUDWLRQ
% 3URFHGXUDO+LVWRU\                                                          RIDVWURQJOLNHOLKRRGRIVXFFHVVRQPHULWVRILWVWUDGHPDUN
                                                                               LQIULQJHPHQW FODLP LV VXIILFLHQW WR VXVWDLQ WKH SUHOLPLQDU\
  ,Q3$&&$5EURXJKWDQDFWLRQXQGHUWKH/DQKDP$FW                       LQMXQFWLRQ
DQGVWDWHODZDJDLQVW7HOH6FDQLQWKH8QLWHG6WDWHV'LVWULFW
&RXUWIRUWKH:HVWHUQ'LVWULFWRI:DVKLQJWRQ7KHFDVHZDV                    & 0HWDWDJV
GLVPLVVHGIRUODFNRISHUVRQDOMXULVGLFWLRQRYHU7HOH6FDQ
                                                                                  7KH GLVWULFW FRXUWjV SUHOLPLQDU\ LQMXQFWLRQ HQMRLQHG
  6XEVHTXHQWO\ 7HOH6FDQ EURXJKW D GHFODUDWRU\ MXGJPHQW                   7HOH6FDQ IURP XVLQJ WKH m3HWHUELOWl DQG m.HQZRUWKl
DFWLRQ LQ WKH 8QLWHG 6WDWHV 'LVWULFW &RXUW IRU WKH (DVWHUQ            WUDGHPDUNVQRWRQO\LQDQ\GRPDLQQDPHEXWDOVRLQDQ\ZHE
'LVWULFWRI0LFKLJDQVHHNLQJDGHFODUDWLRQWKDWLWVDFWLYLWLHV                SDJH PHWDWDJ  %RWK 7HOH6FDQ DQG DPLFXV FXULDH 3XEOLF
GRQRWLQIULQJHXSRQ3$&&$5jVWUDGHPDUNV7HOH6FDQDOVR                       &LWL]HQFRQWHQGWKDWWKHGLVWULFWFRXUWjVLQMXQFWLRQLVWRREURDG
FODLPHGWKDW3$&&$5WRUWLRXVO\LQWHUIHUHGZLWKLWVEXVLQHVV                    EHFDXVH WKH XVH RI 3$&&$5jV WUDGHPDUNV LQ 7HOH6FDQjV
UHODWLRQVKLSVUHODWLQJWRLWVZHEVLWHVDQG,QWHUQHWEXVLQHVV                 PHWDWDJVGRHVQRWYLRODWHWKH/DQKDP$FW
                                                                                  3$&&$5FODLPVWKDW7HOH6FDQZDLYHGWKLVDUJXPHQWE\
                                                                               IDLOLQJ WR DUJXH WR WKH GLVWULFW FRXUW WKDW WKH XVH RI WKH
    
      m$ µPHWDWDJj LV D OLVW RI ZRUGV KLGGHQ LQ D ZHE VLWH DFWLQJ DV DQ        WUDGHPDUNVLQLWVPHWDWDJVVKRXOGEHYLHZHGDVDIDLUXVHRU
LQGH[ RU UHIHUHQFH VRXUFH LGHQWLI\LQJ WKH FRQWHQW RI WKH ZHE VLWH IRU VHDUFK   WKDWWKHVFRSHRIWKHLQMXQFWLRQZDVRYHUEURDG$UJXPHQWV
HQJLQHVl s 7KRPDV 0F&DUWK\       7UDGHPDUNV DQG 8QIDLU &RPSHWLWLRQ          WKDWZHUHQRWUDLVHGEHORZPD\QRWEHDVVHUWHGRQDSSHDO6HH
  WK HG 0HWDWDJV KDYH EHHQ mDQDORJL]HG WR WKH VXEMHFW LQGH[
                                                          ,G
RI D FDUG FDWDORJ LQGLFDWLQJ WKH JHQHUDO VXEMHFW RI D ERRNl     
                                                                               :KLWHY$QFKRU0RWRU)UHLJKW,QF)GWK
                                                                               &LUm7KLVFRXUWZLOOQRWGHFLGHLVVXHVRUFODLPVQRW
    
     7KH ZZZWUXFNVFDQFRP ZHE VLWH LV VWLOO LQ RSHUDWLRQ ZKLOH WKH
                                                                               OLWLJDWHGEHIRUHWKHGLVWULFWFRXUWl%HFDXVH3$&&$5GLG
ZZZWHOHVFDSHTXLSPHQWFRP DQG PDQXIDFWXUHUVSHFLILF ZHE VLWHV DUH QR
                                                                               QRW UHTXHVW UHOLHI DV WR PHWDWDJV LQ LWV PRWLRQ IRU D
ORQJHU DYDLODEOH
       3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R               1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV               

GRHVQRWLQFOXGHZRUGVOLNHmLQGHSHQGHQWlRUmXQDIILOLDWHGl              3$&&$5 FRXQWHUFODLPHG DOOHJLQJ FODLPV IRU WUDGHPDUN
LQLWVGRPDLQQDPHVWRGLVWLQJXLVKLWVZHEVLWHV,QVWHDG             LQIULQJHPHQWXQIDLUFRPSHWLWLRQIDOVHGHVLJQDWLRQRIRULJLQ
7HOH6FDQjVGRPDLQQDPHVFRQWDLQWKHPDUNVm3HWHUELOWlDQG                DQG WUDGHPDUN GLOXWLRQ XQGHU WKH /DQKDP $FW  86&
m.HQZRUWKl XQPRGLILHG VXJJHVWLQJ WKDW 3$&&$5 LV                    DQGDFFRPPRQODZXQIDLUFRPSHWLWLRQ
DVVRFLDWHGZLWKRUVSRQVRUVWKHZHEVLWHV                               DQG GLOXWLRQ DQG YLRODWLRQV RI WKH 0LFKLJDQ &RQVXPHU
                                                                         3URWHFWLRQ $FW 0LFK &RPS /DZV   HW VHT  7KH
     F     )LUVW6DOH                                                   GLVWULFWFRXUWUHDOLJQHGWKHSDUWLHVDQGRUGHUHGWKDWWKHFDSWLRQ
                                                                         VKRZ3$&&$5DVSODLQWLIIDQG7HOH6FDQDVGHIHQGDQW
   )LQDOO\ 7HOH6FDQ UHOLHV RQ WKH mILUVW VDOHl GRFWULQH DV D
GHIHQVHWR3$&&$5jVWUDGHPDUNLQIULQJHPHQWFODLPV7KH                     3$&&$5 WKHQ PRYHG IRU SUHOLPLQDU\ LQMXQFWLYH UHOLHI
ILUVWVDOHGRFWULQHDSSOLHVZKHQDSXUFKDVHUmGRHVQRPRUH               XQGHU)HG5&LY3VHHNLQJDQRUGHUHQMRLQLQJ7HOH6FDQ
WKDQVWRFNGLVSOD\DQGUHVHOODSURGXFHUjVSURGXFWXQGHUWKH           IURP XVLQJ GRPDLQ QDPHV WKDW LQFRUSRUDWH 3$&&$5jV
SURGXFHUjVWUDGHPDUNl6HEDVWLDQ,QWjO,QFY/RQJV'UXJ              WUDGHPDUNV DQG IURP XVLQJ ZHE VLWHV WKDW FRQYH\ WKH
6WRUHV&RUS)GWK&LU7KHILUVW             LPSUHVVLRQWKDWWKHVLWHVDUHDIILOLDWHGZLWKRUVSRQVRUHGE\
VDOHGRFWULQHRIIHUVQRGHIHQVHZKHQmWKHUHVHOOHUXVHGWKH              3$&&$5  3$&&$5 DOVR UHTXHVWHG WKDW 7HOH6FDQ EH
WUDGHPDUNLQDPDQQHUOLNHO\WRFDXVHWKHSXEOLFWREHOLHYHWKH          UHTXLUHG WR WUDQVIHU RZQHUVKLS RI WKH GRPDLQ QDPHV
UHVHOOHUZDVSDUWRIWKHSURGXFHUjVDXWKRUL]HGVDOHVIRUFHRU            FRQWDLQLQJ m3HWHUELOWl DQG m.HQZRUWKl WR 3$&&$5
RQHRILWVIUDQFKLVHHVl,G+HUH7HOH6FDQjVLQFRUSRUDWLRQRI         7HOH6FDQGHIHQGHGWKHPRWLRQRQWKHJURXQGVWKDWLWPDGHD
3$&&$5jV WUDGHPDUNV LQ LWV GRPDLQ QDPHV FUHDWHV D                 GHVFULSWLYHRUIDLUXVHRI3$&&$5jVWUDGHPDUNV
OLNHOLKRRGRIFRQIXVLRQDVWRWKHVRXUFHRUDIILOLDWLRQRIWKH
ZHEVLWHVDQGJRHVEH\RQGVLPSO\VWRFNLQJGLVSOD\LQJDQG                 ,QWKHGLVWULFWFRXUWJUDQWHG3$&&$5jVPRWLRQIRUD
UHVHOOLQJ3$&&$5jVWUXFNV                                          SUHOLPLQDU\ LQMXQFWLRQ FRQFOXGLQJ WKDW 3$&&$5
                                                                         GHPRQVWUDWHGDVWURQJOLNHOLKRRGRIVXFFHVVRQLWVWUDGHPDUN
% 7UDGHPDUN'LOXWLRQ                                                    LQIULQJHPHQW DQG WUDGHPDUN GLOXWLRQ FODLPV  ,W HQMRLQHG
                                                                         7HOH6FDQIURPXVLQJLWVGRPDLQQDPHVFRQWDLQLQJm3HWHUELOWl
   3$&&$5DOOHJHVWKDW7HOH6FDQjVXVHRIWKH3HWHUELOWDQG               RUm.HQZRUWKlDQGRUGHUHG7HOH6FDQWRWUDQVIHUUHJLVWUDWLRQ
.HQZRUWK PDUNV LQ LWV GRPDLQ QDPHV GLOXWHV 3$&&$5jV               RIWKRVHGRPDLQQDPHVWR3$&&$5,QDGGLWLRQLWHQMRLQHG
WUDGHPDUNVLQYLRODWLRQRIRIWKH/DQKDP$FW ZKLFK                7HOH6FDQ IURP XVLQJ WKH WUDGHPDUNV m3HWHUELOWl RU
SURYLGHVLQUHOHYDQWSDUWWKDWm>W@KHRZQHURIDIDPRXVPDUN           m.HQZRUWKlLQDQ\GRPDLQQDPHRUPHWDWDJDQGIURPXVLQJ
VKDOOEHHQWLWOHGWRDQLQMXQFWLRQDJDLQVWDQRWKHUSHUVRQjV        WKHWUDGHPDUNVRQLWVZHEVLWHVmLQDZD\VXFKWKDWLWLVOLNHO\
FRPPHUFLDOXVHLQFRPPHUFHRIDPDUNRUWUDGHQDPHLIVXFK              WRFDXVHFRQIXVLRQRQWKHSDUWRIFRQVXPHUVWKDWWKHZHESDJH
XVH EHJLQV DIWHU WKH PDUN KDV EHFRPH IDPRXV DQG FDXVHV          LVDVVRFLDWHGZLWK3$&&$53HWHUELOWRU.HQZRUWKLQFOXGLQJ
GLOXWLRQRIWKHGLVWLQFWLYHTXDOLW\RIWKHPDUNl86&             WKH XVH RI WKH WUDGHPDUNV DV WKH WLWOH RU DV µZDOOSDSHUj
 F  'LOXWLRQ LV GHILQHG DV mWKH OHVVHQLQJ RI WKH    EDFNJURXQGRIDZHESDJHl
FDSDFLW\RIDIDPRXVPDUNWRLGHQWLI\DQGGLVWLQJXLVKJRRGV
RU VHUYLFHV UHJDUGOHVV RI WKH SUHVHQFH RU DEVHQFH RI              7HOH6FDQ DSSHDOHG IURP WKH SUHOLPLQDU\ LQMXQFWLRQ DQG
FRPSHWLWLRQEHWZHHQWKHRZQHURIWKHIDPRXVPDUNDQG                 PRYHGWKLVFRXUWIRUDQRUGHUVWD\LQJWKHLQMXQFWLRQSHQGLQJ
                                                                         DSSHDO7KHPRWLRQZDVGHQLHG
     
     $PLFXV FXULDH 3XEOLF &LWL]HQ DGPLWWHG DW RUDO DUJXPHQW WKDW WKH
GRPDLQ QDPH    mZZZLQGHSHQGHQWSHWHUELOWFRPl ZDV SRVVLEOH
         3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R                        1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV                

                                       ,,                                         OLPLWHGLWVXVHRI3$&&$5jVWUDGHPDUNVWRXVLQJWKHZRUGV
                                                                                   m3HWHUELOWl DQG m.HQZRUWKl RQ LWV ZHE VLWHV  7HOH6FDQ
  :H UHYLHZ WKH GLVWULFW FRXUWjV GHFLVLRQ WR JUDQW D                       KRZHYHU LQFOXGHG 3$&&$5jV WUDGHPDUNV LQ LWV GRPDLQ
SUHOLPLQDU\ LQMXQFWLRQ IRU DEXVH RI GLVFUHWLRQ DFFRUGLQJ                    QDPHVWKHUHE\GHVFULELQJLWVRZQSURGXFWVLWVZHEVLWHV
mJUHDWGHIHUHQFHWRWKHGHFLVLRQRIWKHGLVWULFWFRXUWl%OXH
&URVV 	 %OXH 6KLHOG 0XW RI 2KLR Y %OXH &URVV 	 %OXH                      ,QDGGLWLRQ7HOH6FDQjVXVHRI3$&&$5jVWUDGHPDUNVGRHV
6KLHOG$VVjQ)GWK&LUm7KHGLVWULFW                    QRW VDWLVI\ WKH UHTXLUHPHQWV RI WKH QRPLQDWLYH IDLU XVH
FRXUWjVGHWHUPLQDWLRQZLOOEHGLVWXUEHGRQO\LI>LW@UHOLHGXSRQ                   DQDO\VLV  7R HVWDEOLVK D QRPLQDWLYH IDLU XVH GHIHQVH
FOHDUO\ HUURQHRXV ILQGLQJV RI IDFW LPSURSHUO\ DSSOLHG WKH                  7HOH6FDQPXVWSURYHWKUHHHOHPHQWV3$&&$5jVSURGXFW
JRYHUQLQJODZRUXVHGDQHUURQHRXVOHJDOVWDQGDUGl,G                          RUVHUYLFHPXVWEHRQHQRWUHDGLO\LGHQWLILDEOHZLWKRXWXVHRI
                                                                                   LWVWUDGHPDUNRQO\VRPXFKRIWKHPDUNRUPDUNVPD\EH
   :KHQUXOLQJRQDPRWLRQIRUDSUHOLPLQDU\LQMXQFWLRQWKH                       XVHG DV LV UHDVRQDEO\ QHFHVVDU\ WR LGHQWLI\ WKH SURGXFW RU
GLVWULFW FRXUW PXVW FRQVLGHU DQG EDODQFH IRXU IDFWRUV                      VHUYLFH DQG  7HOH6FDQ PXVW GR QRWKLQJ WKDW ZRXOG LQ
ZKHWKHUWKHPRYDQWKDVDVWURQJOLNHOLKRRGRIVXFFHVVRQ                       FRQMXQFWLRQ ZLWK WKH PDUN VXJJHVW VSRQVRUVKLS RU
WKHPHULWVZKHWKHUWKHPRYDQWZRXOGVXIIHULUUHSDUDEOH                        HQGRUVHPHQW E\ 3$&&$5  ,G  8VLQJ 3$&&$5jV
LQMXU\ ZLWKRXW WKH LQMXQFWLRQ  ZKHWKHU LVVXDQFH RI WKH                 WUDGHPDUNVLQLWVGRPDLQQDPHVUHSHDWLQJWKHPDUNVLQWKH
LQMXQFWLRQ ZRXOG FDXVH VXEVWDQWLDO KDUP WR RWKHUV DQG                      PDLQWLWOHVRIWKHZHEVLWHVDQGLQWKHZDOOSDSHUXQGHUO\LQJ
ZKHWKHUWKHSXEOLFLQWHUHVWZRXOGEHVHUYHGE\LVVXDQFHRI                     WKH ZHE VLWHV DQG PLPLFNLQJ WKH GLVWLQFWLYH IRQWV RI WKH
WKHLQMXQFWLRQ5RFN	5ROO+DOORI)DPH	0XVHXP,QFY                        PDUNVJREH\RQGXVLQJWKHPDUNVmDVLVUHDVRQDEO\QHFHVVDU\
*HQWLOH3URGV)GWK&LU7KHRQO\                      WR LGHQWLI\l 3$&&$5jV WUXFNV SDUWV DQG GHDOHUV  $V
IDFWRU WKDW 7HOH6FDQ FKDOOHQJHV RQ DSSHDO LV 3$&&$5jV                       GLVFXVVHGDERYH7HOH6FDQjVXVHRI3$&&$5jVWUDGHPDUNVLQ
OLNHOLKRRG RI VXFFHVV RQ WKH PHULWV RI LWV WUDGHPDUN                       LWV GRPDLQ QDPHV FUHDWHV D OLNHOLKRRG RI FRQIXVLRQ DV WR
LQIULQJHPHQWDQGGLOXWLRQFODLPV                                                  ZKHWKHULWVZHEVLWHVDUHDIILOLDWHGZLWK3$&&$5
                                      ,,,                                            ,QVXSSRUWRILWVDVVHUWLRQWKDWLWVXVHRI3$&&$5jVPDUNV
                                                                                   FRQVWLWXWHV D IDLU QRPLQDWLYH XVH 7HOH6FDQ FLWHV
$ 7UDGHPDUN,QIULQJHPHQW                                                          9RONVZDJHQZHUN$NWLHQJHVHOOVFKDIWY&KXUFK)G
                                                                                   WK&LULQZKLFKWKH1LQWK&LUFXLWDIILUPHGDGLVWULFW
         /LNHOLKRRGRI&RQIXVLRQ                                                 FRXUWjVKROGLQJWKDWDUHSDLUVHUYLFHVWDWLRQXQDIILOLDWHGZLWK
                                                                                   9RONVZDJHQFRXOGUHIHUWRLWVHOIDVm,QGHSHQGHQW9RONVZDJHQ
  3$&&$5DOOHJHVWKDW7HOH6FDQjVXVHRIWKHm3HWHUELOWlDQG                        3RUVFKH 6HUYLFHl 7KH 9RONVZDJHQZHUN GHFLVLRQ DFWXDOO\
m.HQZRUWKl PDUNV LQ LWV GRPDLQ QDPHV LQIULQJHV RQ                           KXUWV7HOH6FDQjVDUJXPHQW7KHFRXUWVWDWHGWKDWWKHRZQHU
3$&&$5jV WUDGHPDUN ULJKWV LQ YLRODWLRQ RI   RI WKH                     RI WKH VHUYLFH VWDWLRQ PD\ DGYHUWLVH WR WKH SXEOLF WKDW KH
/DQKDP$FWZKLFKSURYLGHVDFDXVHRIDFWLRQDJDLQVWm>D@                          UHSDLUV9RONVZDJHQFDUVEXWKHmPXVWQRWGRVRLQDPDQQHU
                                                                                   ZKLFKLVOLNHO\WRVXJJHVWWRKLVSURVSHFWLYHFXVWRPHUVWKDWKH
                                                                                  LV SDUW RI 9RONVZDJHQjV RUJDQL]DWLRQ RI IUDQFKLVHG GHDOHUV
         7HOH6FDQ DVVHUWV WKDW D PRYDQW EHDUV D KLJKHU HYLGHQWLDU\ EXUGHQ
                                                                                   DQGUHSDLUPHQl,GDW7KHRZQHUjVmSURPLQHQWXVHRI
ZKHQ VHHNLQJ D PDQGDWRU\ LQMXQFWLRQ UHTXLULQJ WKH QRQPRYDQW WR WDNH
DIILUPDWLYH DFWLRQ VXFK DV WKH SUHOLPLQDU\ LQMXQFWLRQ LVVXHG KHUH          :H
                                                                                   WKHZRUGµ,QGHSHQGHQWjZKHQHYHUWKHWHUPVµ9RONVZDJHQjRU
KDYH     UHMHFWHG   GLIIHULQJ   VWDQGDUGV    IRU   PDQGDWRU\   DQG   SURKLELWLYH
                                                                                   µ9:jDSSHDUHGLQKLVDGYHUWLVLQJZDVVXIILFLHQWWRGLVWLQJXLVK
           8QLWHG )RRG 	 &RPPHULFDO :RUNHUV 8QLRQ /RFDO  Y
LQMXQFWLRQV                                                                       KLVEXVLQHVVWRWKHH\HRIWKHFXVWRPHUl,G+HUH7HOH6FDQ
6RXWKZHVW 2KLR 5HJjO 7UDQVLW $XWK  )G   WK &LU 
    3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R                1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV                  

)GQWK&LUKROGLQJWKDWWKHIDLU           SHUVRQ ZKR    XVH>V@ LQ FRPPHUFH DQ\ UHSURGXFWLRQ
XVHGHIHQVHLVDYDLODEOHRQO\VRORQJDVVXFKXVHGRHVQRWOHDG        FRXQWHUIHLWFRS\RUFRORUDEOHLPLWDWLRQRIDUHJLVWHUHGPDUN
WR FXVWRPHU FRQIXVLRQ DV WR WKH VRXUFH RI WKH JRRGV RU       LQFRQQHFWLRQZLWKWKHVDOHRIIHULQJIRUVDOHGLVWULEXWLRQRU
VHUYLFHV=DWDUDLQV,QFY2DN*URYH6PRNHKRXVH,QF          DGYHUWLVLQJRIDQ\JRRGVRUVHUYLFHVRQRULQFRQQHFWLRQZLWK
)GWK&LUVWDWLQJWKDWXQGHUWKHIDLUXVH         ZKLFK VXFK XVH LV OLNHO\ WR FDXVH FRQIXVLRQl   86&
GHIHQVH mDQ\RQH LV IUHH WR XVH WKH WHUP LQ LWV SULPDU\     
GHVFULSWLYH VHQVH VR ORQJ DV VXFK XVH GRHV QRW OHDG WR
FXVWRPHU FRQIXVLRQ DV WR WKH VRXUFH RI WKH JRRGV RU              m7KHWRXFKVWRQHRIOLDELOLW\XQGHULVZKHWKHUWKH
VHUYLFHVl s 7KRPDV 0F&DUWK\ 7UDGHPDUNV DQG 8QIDLU            GHIHQGDQWjV XVH RI WKH GLVSXWHG PDUN LV OLNHO\ WR FDXVH
&RPSHWLWLRQWKHGmµ>)@DLUXVHjVKRXOGEHYLHZHG          FRQIXVLRQDPRQJFRQVXPHUVUHJDUGLQJWKHRULJLQRIWKHJRRGV
DV PHUHO\ RQH W\SH RI XVH ZKLFK LV QRW OLNHO\ WR FDXVH      RIIHUHGE\WKHSDUWLHVl'DGG\jVsXQN\0XVLF6WRUHV,QFY
FRQIXVLRQ DQG KHQFH LV D µGHIHQVHj RQO\ LQ WKDW VHQVH        %LJ'DGG\jV)DPLO\0XVLF&WU)GWK&LU
%HFDXVHWKHSDUDPRXQWJRDORIWKHODZRIWUDGHPDUNVLVWR              ,QGHWHUPLQLQJZKHWKHUDmOLNHOLKRRGRIFRQIXVLRQl
SUHYHQW OLNHO\ FRQIXVLRQ D VKRZLQJ RI OLNHO\ FRQIXVLRQ         H[LVWVZHH[DPLQHHLJKWIDFWRUVVWUHQJWKRIWKHSODLQWLIIjV
VKRXOG WUXPS D µIDLU XVHjl  %XW VHH &RVPHWLFDOO\ 6HDOHG    PDUNUHODWHGQHVVRIWKHJRRGVRUVHUYLFHVVLPLODULW\
,QGXV,QFY&KHVHEURXJK3RQGjV86$&R)G            RIWKHPDUNVHYLGHQFHRIDFWXDOFRQIXVLRQPDUNHWLQJ
G&LUm)DLUXVHLVDGHIHQVHWROLDELOLW\XQGHUWKH          FKDQQHOVXVHGOLNHO\GHJUHHRISXUFKDVHUFDUHLQWHQW
/DQKDP$FWHYHQLIDGHIHQGDQWjVFRQGXFWZRXOGRWKHUZLVH               RIWKHGHIHQGDQWLQVHOHFWLQJWKHPDUNDQGOLNHOLKRRGRI
FRQVWLWXWHLQIULQJHPHQWRIDQRWKHUjVWUDGHPDUNl                    H[SDQVLRQRIWKHSURGXFWOLQHV)ULVFKjV5HVWV,QFY(OE\jV
                                                                       %LJ %R\ RI 6WHXEHQYLOOH ,QF  )G   WK &LU
     E 1RPLQDWLYH)DLU8VH                                            7KHVHIDFWRUVmLPSO\QRPDWKHPDWLFDOSUHFLVLRQDQG
                                                                       DSODLQWLIIQHHGQRWVKRZWKDWDOORUHYHQPRVWRIWKHIDFWRUV
   7HOH6FDQ DOVR UHIHUV WR mQRPLQDWLYH IDLU XVHl D GHIHQVH    OLVWHG DUH SUHVHQW LQ DQ\ SDUWLFXODU FDVH WR EH VXFFHVVIXOl
DOORZHGE\WKH1LQWK&LUFXLWLQFDVHVmZKHUHWKHGHIHQGDQW             :\QQ 2LO &R Y 7KRPDV  )G   WK &LU
XVHV D WUDGHPDUN WR GHVFULEH WKH SODLQWLIIjV SURGXFW UDWKHU     m7KH XOWLPDWH TXHVWLRQ UHPDLQV ZKHWKHU UHOHYDQW
WKDQ LWV RZQl  1HZ .LGV RQ WKH %ORFN Y 1HZ $PHULFD        FRQVXPHUVDUHOLNHO\WREHOLHYHWKDWWKHSURGXFWVRUVHUYLFHV
3XEOjJ ,QF  )G   WK &LU   ,Q VXFK   RIIHUHGE\WKHSDUWLHVDUHDIILOLDWHGLQVRPHZD\l'DGG\jV
FDVHV WKH QRPLQDWLYH IDLU XVH DQDO\VLV UHSODFHV WKH HLJKW    sXQN\0XVLF6WRUHV)GDW
IDFWRUmOLNHOLKRRGRIFRQIXVLRQlWHVW3OD\ER\(QWHUV,QFY
:HOOHV)GWK&LU7KLVFLUFXLWKDV             :KHWKHU WKHUH LV D OLNHOLKRRG RI FRQIXVLRQ LV D PL[HG
QHYHU IROORZHG WKH QRPLQDWLYH IDLU XVH DQDO\VLV DOZD\V         TXHVWLRQRIIDFWDQGODZ:\QQ2LO&R)GDW
KDYLQJ DSSOLHG WKH )ULVFKjV 5HVWDXUDQWV WHVW  :H DUH QRW     7KXVZHUHYLHZIRUFOHDUHUURUWKHILQGLQJVRIIDFWVXSSRUWLQJ
LQFOLQHGWRDGRSWWKH1LQWK&LUFXLWjVDQDO\VLVKHUH(YHQLI          WKH H[LVWHQFH RI WKH mOLNHOLKRRG RI FRQIXVLRQl IDFWRUV EXW
ZHZHUHWRGRVR7HOH6FDQjVXVHRI3$&&$5jVWUDGHPDUNV                UHYLHZ GH QRYR WKH OHJDO TXHVWLRQ RI ZKHWKHU WKRVH
GRHVQRWIDOOZLWKLQWKHQRPLQDWLYHIDLUXVHGHIHQVH                  IRXQGDWLRQDOIDFWVFRQVWLWXWHDOLNHOLKRRGRIFRQIXVLRQ,G
   )LUVW7HOH6FDQFODLPVWKDWLWXVHG3$&&$5jVWUDGHPDUNV                  D   'RPDLQ1DPHVDV6RXUFH,GHQWLILHUV
WRUHIHUWR3$&&$5jVWUXFNVSDUWVDQGGHDOHUVDQGWKDWWKLV
LVWKHRQO\ZD\WRGHVFULEH3$&&$5jVEUDQGQDPHSURGXFWV                  :HILUVWDGGUHVV7HOH6FDQjVDUJXPHQWUHSHDWHGWKURXJKRXW
DQGHQWLWLHV7HOH6FDQjVDUJXPHQWZRXOGKDYHPHULWLILWKDG          LWVEULHIVWKDWWKHGLVWULFWFRXUWLPSURSHUO\DGRSWHGDSHUVH
                                                                       UXOHWKDWGRPDLQQDPHVDUHDOZD\VVRXUFHLGHQWLI\LQJDQGGLG
     3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R              1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV                      

QRW JLYH DGHTXDWH ZHLJKW WR WKH HLJKW mOLNHOLKRRG RI         RI WKH PXVHXPjV PDUN  7KH FRXUW VWDWHG WKDW D FULWLFDO
FRQIXVLRQlIDFWRUV7HOH6FDQKRZHYHUPLVFKDUDFWHUL]HVWKH         TXHVWLRQ ZRXOG EH ZKHWKHU WKH GHIHQGDQWjV XVH ZDV
GLVWULFWFRXUWjVRSLQLRQ7KHGLVWULFWFRXUWGLGQRWDGRSWDSHU    mRWKHUZLVHWKDQDVD>WUDGH@PDUNl,GDW7KHDQVZHUWR
VH UXOH WKDW HYHU\ GRPDLQ QDPH LGHQWLILHV WKH RZQHU RU      WKDWTXHVWLRQZRXOGmHVVHQWLDOO\WXUQRQZKHWKHUFRQVXPHUV
DIILOLDWLRQRIWKHVLWH,QVWHDGWKHGLVWULFWFRXUWMRLQHGPDQ\    YLHZWKHZRUGVµ52&.1j52//+$//2))$0(jDVD
RWKHUFRXUWVLQVWDWLQJWKHREYLRXVZRUGVLQPDQ\GRPDLQ           ODEHOIRU>WKHGHIHQGDQWjV@SKRWRJUDSKRUDVDQLQGLFDWRUWKDW
QDPHVFDQDQGGRFRPPXQLFDWHLQIRUPDWLRQDVWRWKHVRXUFH            >WKH GHIHQGDQWjV@ SKRWRJUDSK RULJLQDWHG ZLWK RU ZDV
RUVSRQVRURIWKHZHEVLWH6HHHJ3HRSOHIRUWKH(WKLFDO       VSRQVRUHGE\WKH0XVHXP$VDOZD\VWKHWRXFKVWRQHZLOOEH
7UHDWPHQWRI$QLPDOVY'RXJKQH\)GWK             WKH OLNHOLKRRG  RI FRQVXPHU FRQIXVLRQl  ,G HPSKDVLV
&LU  m7KH GRPDLQ QDPH SHWDRUJ VLPSO\ FRSLHV           DGGHG
3(7$jV 0DUN FRQYH\LQJ WKH PHVVDJH WKDW LW LV UHODWHG WR
3(7$l %URRNILHOG &RPPXQLFDWLRQV  )G DW              5RFNDQG5ROO+DOORI)DPHVXSSRUWVWKHGLVWULFWFRXUWjV
m7KHGRPDLQQDPHLVPRUHWKDQDPHUHDGGUHVVOLNH            UHMHFWLRQRI7HOH6FDQjVIDLUXVHGHIHQVH$FRQVLGHUDWLRQRI
WUDGHPDUNV VHFRQGOHYHO GRPDLQ QDPHV FRPPXQLFDWH                WKH HLJKW mOLNHOLKRRG RI FRQIXVLRQl IDFWRUV OHDGV WR WKH
LQIRUPDWLRQDVWRVRXUFH:KHQDILUPXVHVDFRPSHWLWRUjV      FRQFOXVLRQWKDW7HOH6FDQjVXVHRI3$&&$5jVWUDGHPDUNVLQ
WUDGHPDUNLQWKHGRPDLQQDPHRILWVZHEVLWHXVHUVDUHOLNHO\       LWV GRPDLQ QDPHV FUHDWHV D VWURQJ OLNHOLKRRG RI FRQIXVLRQ
WREHFRQIXVHGDVWRLWVVRXUFHRUVSRQVRUVKLSl3DQDYLVLRQ        UHJDUGLQJWKHVRXUFHRIWKHZHEVLWHV%DVHGRQWKHDERYH
,QWjO/3Y7RHSSHQ)GWK&LU          TXRWHGODQJXDJHIURP5RFNDQG5ROO+DOORI)DPHVXFKD
m:HUHMHFW>WKH@SUHPLVHWKDWDGRPDLQQDPHLVQRWKLQJPRUH         FRQFOXVLRQ HVWDEOLVKHV WKDW 7HOH6FDQ XVHG WKH PDUNV
WKDQDQDGGUHVV$VLJQLILFDQWSXUSRVHRIDGRPDLQQDPHLV          m3HWHUELOWlDQGm.HQZRUWKlDVWUDGHPDUNVSUHFOXGLQJWKHIDLU
WRLGHQWLI\WKHHQWLW\WKDWRZQVWKHZHEVLWHl&DUGVHUYLFH        XVHGHIHQVH7KLVLVFRQVLVWHQWZLWKWKHYLHZWKDWDILQGLQJ
,QWjO,QFY0F*HH)6XSS('9DDII
G       RI D OLNHOLKRRG RI FRQIXVLRQ IRUHFORVHV D IDLU XVH GHIHQVH
 )G  WK &LU m>$@ GRPDLQ QDPH LV PRUH      6HHHJ7UDQVJR,QFY$MDF7UDQVPLVVLRQ3DUWV&RUS
WKDQDPHUHLQWHUQHWDGGUHVV,WDOVRLGHQWLILHVWKHLQWHUQHWVLWH
WR WKRVH ZKR UHDFK LW PXFK OLNH  D FRPSDQ\jV QDPH
LGHQWLILHVDVSHFLILFFRPSDQ\l,QIDFWmFXVWRPHUVZKRGR            
QRWNQRZZKDWDFRPSDQ\jVGRPDLQQDPHLVZLOORIWHQJXHVV                  7KH GLVWULFW FRXUW LQ 5RFN DQG 5ROO 0XVLF +DOO RI )DPH IRXQG WKDW
WKDWWKHGRPDLQQDPHLVWKHVDPHDVWKHFRPSDQ\jVQDPHlRU           WKH GHIHQGDQWjV XVH RI WKH PXVHXPjV EXLOGLQJ GHVLJQ DQG WKH ZRUGV

WUDGHPDUN  *UHHQ 3URGV &R Y ,QGHSHQGHQFH &RUQ %\        m52&. 1j 52// +$// 2) )$0(l ZDV OLNHO\ WR FDXVH FRQIXVLRQ ,W
                                                                     GLG QRW FRQVLGHU ZKHWKHU XVH RI WKH ZRUGV DORQH ZRXOG FUHDWH D OLNHOLKRRG
3URGV&R)6XSS1',RZD             RI FRQIXVLRQ ,G DW 
VHHDOVR%URRNILHOG)GDWm:HEXVHUVRIWHQ
DVVXPH DV D UXOH RI WKXPE WKDW WKH GRPDLQ QDPH RI D         
                                                                           ,I ZH ZHUH WR DFFHSW 7HOH6FDQjV DVVHUWLRQ WKDW LW XVHG 3$&&$5jV
SDUWLFXODUFRPSDQ\ZLOOEHWKHFRPSDQ\QDPHIROORZHGE\              WUDGHPDUNV PHUHO\ WR GHVFULEH RU WR UHIHU WR 3$&&$5jV WUXFNV SDUWV DQG
µFRPj6RPHWLPHVDWUDGHPDUNLVEHWWHUNQRZQWKDQWKH        GHDOHUV WKHQ WKH IDLU XVH GHIHQVH LV LQDSSOLFDEOH IRU DQRWKHU UHDVRQ 7KH
FRPSDQ\LWVHOILQZKLFKFDVHD:HEVXUIHUPD\DVVXPHWKDW           IDLU XVH GHIHQVH DOORZV WKH XVH RI D WHUP WR GHVFULEH WKH GHIHQGDQWjV JRRGV

WKHGRPDLQDGGUHVVZLOOEHµWUDGHPDUNjFRPl3DQDYLVLRQ            RU VHUYLFHV QRW WKH SODLQWLIIjV 6HH &DLUQV Y )UDQNOLQ 0LQW &R 1RV 
                                                                        :/  DW  WK &LU sXQH  
,QWjO)GDWm$FXVWRPHUZKRLVXQVXUHDERXWD           m>7@KH FODVVLF IDLU XVH DQDO\VLV LV DSSURSULDWH ZKHUH D GHIHQGDQW KDV XVHG
FRPSDQ\jV GRPDLQ QDPH ZLOO RIWHQ JXHVV WKDW WKH GRPDLQ       WKH SODLQWLIIjV PDUN RQO\ WR GHVFULEH KLV RZQ SURGXFW DQG QRW DW DOO WR
QDPHLVDOVRWKHFRPSDQ\jVQDPHl                               GHVFULEH WKH SODLQWLIIjV SURGXFWl      $FFRUGLQJ WR 7HOH6FDQ LW XVHG
                                                                     3$&&$5jV PDUNV WR GHVFULEH 3$&&$5jV SURGXFWV WKHUHIRUH WKH
                                                                     GHIHQVH GRHV QRW DSSO\
      3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R              1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV                     

LQWKHVDPHILHOGRISURYLGLQJXVHGWUXFNORFDWRUVHUYLFHVYLD            7HOH6FDQjV DUJXPHQW GLVWUDFWV IURP WKH NH\ LVVXH KHUH
WKH,QWHUQHW                                                          ZKHWKHU7HOH6FDQjVXVHRIWKHm3HWHUELOWlDQGm.HQZRUWKl
                                                                       WUDGHPDUNVLQLWVGRPDLQQDPHVLVOLNHO\WRFDXVHFRQIXVLRQ
       G &RQFOXVLRQ                                                   DPRQJFRQVXPHUVUHJDUGLQJWKHVRXUFHRUVSRQVRUVKLSRIWKH
                                                                       ZHE VLWHV  ,Q PDNLQJ WKDW GHWHUPLQDWLRQ WKH GLVWULFW FRXUW
   7KH 1LQWK &LUFXLW KDV KHOG WKDW LQ WKH ,QWHUQHW FRQWH[W   SURSHUO\FRQVLGHUHGHDFKRIWKHHLJKW)ULVFKjV5HVWDXUDQWV
VLPLODULW\RIWKHPDUNVUHODWHGQHVVRIWKHJRRGVRUVHUYLFHV         IDFWRUV
DQGVLPXOWDQHRXVXVHRIWKH,QWHUQHWDVDPDUNHWLQJFKDQQHO
DUHWKHWKUHHPRVWLPSRUWDQWIDFWRUVLQILQGLQJDOLNHOLKRRGRI             E 6XIILFLHQF\RIWKH)DFWXDO5HFRUG
FRQIXVLRQ*R7RFRPY:DOW'LVQH\&RUS)G
 WK &LU  FLWLQJ %URRNILHOG  )G DW        $FFRUGLQJWR7HOH6FDQWKHIDFWXDOUHFRUGLVLQVXIILFLHQWWR
Q+HUH7HOH6FDQjVGRPDLQQDPHVDUHYHU\VLPLODUWR              VXSSRUWDILQGLQJ RIOLNHOLKRRGRIVXFFHVVRQWKHPHULWVRI
3$&&$5jVPDUNV%RWK7HOH6FDQDQG3$&&$5RIIHUXVHG                   3$&&$5jV WUDGHPDUN LQIULQJHPHQW FODLP  &LWLQJ 'DWD
WUXFNORFDWRUVHUYLFHVYLDWKH,QWHUQHW&RQVLGHUDWLRQRIWKHVH       &RQFHSWV,QFY'LJLWDO&RQVXOWLQJ,QF)GWK
WKUHHIDFWRUVDVZHOODVWKHRWKHUILYHFRPSHOVWKHFRQFOXVLRQ       &LU7HOH6FDQDVVHUWVWKDWWKLVFRXUWKDVEHHQTXLFNWR
WKDW3$&&$5KDVGHPRQVWUDWHGDOLNHOLKRRGRIFRQIXVLRQDQG             UHYHUVH D GLVWULFW FRXUWjV LQMXQFWLRQ LQ D WUDGHPDUN
WKXV D VWURQJ OLNHOLKRRG RI VXFFHVV RQ WKH PHULWV RI LWV     LQIULQJHPHQWFDVHRQWKHEDVLVRIWKHUHFRUGSUHVHQWHG'DWD
WUDGHPDUNLQIULQJHPHQWFODLP                                   &RQFHSWVKRZHYHULQYROYHGWKHHQWU\RIVXPPDU\MXGJPHQW
                                                                       DQG SHUPDQHQW LQMXQFWLYH UHOLHI 7HOH6FDQ DSSHDOV D
          7HOH6FDQjV'HIHQVHV                                        SUHOLPLQDU\LQMXQFWLRQ:HKDYHUHFRJQL]HGWKDWWKHGLVWULFW
                                                                       FRXUWXSRQDPRWLRQIRUSUHOLPLQDU\LQMXQFWLRQmPXVWPDNH
  ,Q LWV GHIHQVH 7HOH6FDQ XVHV WKH WHUPV mIDLU XVHl          DGHFLVLRQEDVHGXSRQLQFRPSOHWHIDFWXDOILQGLQJVDQGOHJDO
mQRPLQDWLYHIDLUXVHlDQGmILUVWVDOHlLQWHUFKDQJHDEO\$V           UHVHDUFK(YHQVRWKDWGHFLVLRQLVJHQHUDOO\DFFRUGHGDJUHDW
WKHVHDUHGLVWLQFWFRQFHSWVZHZLOODGGUHVVWKHPVHSDUDWHO\          GHDORIGHIHUHQFHRQDSSHOODWHUHYLHZl%OXH&URVV	%OXH
                                                                       6KLHOG 0XW  )G DW  LQWHUQDO TXRWDWLRQ PDUNV
       D    )DLU8VH                                                  RPLWWHG
   7KH mIDLU XVHl GHIHQVH SHUPLWV D SDUW\jV XVH mRWKHUZLVH         F    (LJKWm/LNHOLKRRGRI&RQIXVLRQl)DFWRUV
WKDQDVDPDUNlRIDWHUPmZKLFKLVGHVFULSWLYHRIDQGXVHG
IDLUO\DQGLQJRRGIDLWKRQO\WRGHVFULEHWKHJRRGVRUVHUYLFHV                  L 6WUHQJWKRI3$&&$5jV0DUNV
RIVXFKSDUW\l86&E7HOH6FDQDUJXHVWKDW
WKH GRPDLQ QDPHV FRQWDLQLQJ 3$&&$5jV WUDGHPDUNV                     7KHGLVWULFWFRXUWIRXQGWKDWm3HWHUELOWlDQGm.HQZRUWKl
WUXWKIXOO\LGHQWLI\WKHWUXFNVDYDLODEOHWKURXJKLWVZHEVLWHV         mDUHYHU\VWURQJPDUNVZKLFKKDYHEHHQXVHGQDWLRQZLGHWR
DQGWKDWWKLVXVHLVDGHVFULSWLYHRUIDLUXVH                        LQGLFDWHDFHUWDLQPDQXIDFWXUHURIWUXFNVIRUGHFDGHVl%RWK
                                                                       PDUNV ZHUH GHULYHG IURP D YDULDWLRQ RI WKH QDPHV RI WKH
  ,QVXSSRUWRIWKLVDUJXPHQW7HOH6FDQUHOLHVRQ5RFNDQG             RULJLQDORZQHUVDQGIDOOLQWRWKHFDWHJRU\RIIDQFLIXOPDUNV
5ROO+DOORI)DPHDQG0XVHXP,QFY*HQWLOH3URGXFWLRQV
)GWK&LU,Q5RFNDQG5ROO+DOORI)DPH
WKLVFRXUWYDFDWHGDSUHOLPLQDU\LQMXQFWLRQLQSDUWEHFDXVHWKH           
GHIHQGDQWjVXVHRIWKHZRUGVm5RFNDQG5ROO+DOORI)DPHl                   0DQ\ RI WKH IDFWXDO ILQGLQJV WKDW 7HOH6FDQ FODLPV ZHUH LQDGHTXDWHO\

LQKLVSKRWRJUDSKRIWKHPXVHXPPLJKWFRQVWLWXWHDIDLUXVH            VXSSRUWHG E\ WKH UHFRUG VXFK DV KRZ XVHUV VHDUFK WKH ,QWHUQHW DUH ZHOO
                                                                       HVWDEOLVKHG
    3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R                        1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV                

m$ µIDQFLIXOj PDUN LV D FRPELQDWLRQ RI OHWWHUV RU RWKHU               ZLWKRULGHQWLFDOWRWKHRWKHUSDUW\lVHHDOVR,QGXFW20DWLF
V\PEROVVLJQLI\LQJQRWKLQJRWKHUWKDQWKHSURGXFWRUVHUYLFH                   &RUS)GDWm%HLQJVNLOOHGLQWKHLURZQDUW
WRZKLFKWKHPDUNKDVEHHQDVVLJQHGHJ([[RQ.RGDNl                     GRHVQRWQHFHVVDULO\SUHFOXGHWKHLUPLVWDNLQJRQHWUDGHPDUN
/LWWOH&DHVDU(QWHUVY3L]]D&DHVDU,QF)G                 IRUDQRWKHUZKHQWKHPDUNVDUHDVVLPLODUDVWKRVHKHUHLQ
WK&LU)DQFLIXOPDUNVDUHmWKHVWURQJHVWDQGPRVW                   LVVXH DQG FRYHU PHUFKDQGLVH LQ WKH VDPH JHQHUDO ILHOGl
GLVWLQFWLYHl'DGG\jVsXQN\0XVLF6WRUHV)GDW                   FLWDWLRQRPLWWHG
m7KHPRUHGLVWLQFWDPDUNWKHPRUHOLNHO\LVWKHFRQIXVLRQ
UHVXOWLQJ IURP LWV LQIULQJHPHQW DQG WKHUHIRUH WKH PRUH                       YLL 7HOH6FDQjV,QWHQW
SURWHFWLRQ LW LV GXHl  ,G  7HOH6FDQ GRHV QRW GLVSXWH WKDW
m3HWHUELOWl DQG m.HQZRUWKl DUH VWURQJ PDUNV HQWLWOHG WR                    7HOH6FDQFRQWHQGVWKDWWKHGLVWULFWFRXUWUHMHFWHGWKHUHFRUG
SURWHFWLRQ                                                              HYLGHQFHWKDWLWVLQWHQWZDVQRWWRGHFHLYHEXWWRLQVXUHWKDWLWV
                                                                               ZHEVLWHVFRXOGEHUHDGLO\ORFDWHGE\FXVWRPHUVDQGGHDOHUV
       LL 5HODWHGQHVVRI*RRGVDQG6HUYLFHV                                   ORRNLQJ IRU LQIRUPDWLRQ RQ 3HWHUELOW DQG .HQZRUWK WUXFNV
                                                                               7HOH6FDQKRZHYHUFLWHVQRHYLGHQFHRQWKLVSRLQWRWKHUWKDQ
  7KH GLVWULFW FRXUW IRXQG WKDW WKH JRRGV DQG VHUYLFHV                 LWVEDOGDVVHUWLRQVRIODFNRILQWHQW5HJDUGOHVVm>W@KHODFNRI
SURYLGHGE\3$&&$5DQG7HOH6FDQDUHFORVHO\UHODWHG:H                       LQWHQWE\DGHIHQGDQWLVODUJHO\LUUHOHYDQWLQGHWHUPLQLQJLI
KDYHLGHQWLILHGWKUHHFDWHJRULHVUHJDUGLQJWKHUHODWHGQHVVRI                  FRQVXPHUV OLNHO\ZLOOEHFRQIXVHGDVWRVRXUFHl'DGG\jV
JRRGVDQGVHUYLFHV                                                            sXQN\0XVLF6WRUHV)GDWm,QWHQWLVDQLVVXH
                                                                               ZKRVHUHVROXWLRQPD\EHQHILWRQO\WKHFDXVHRIDVHQLRUXVHU
  )LUVW LI WKH SDUWLHV FRPSHWH GLUHFWO\ E\ RIIHULQJ WKHLU             QRWRIDQDOOHJHGLQIULQJHUl
  JRRGV RU VHUYLFHV FRQIXVLRQ LV OLNHO\ LI WKH PDUNV DUH
  VXIILFLHQWO\VLPLODUVHFRQGLIWKHJRRGVRUVHUYLFHVDUH                      m'LUHFWHYLGHQFHRILQWHQWLRQDOFRS\LQJLVQRWQHFHVVDU\WR
  VRPHZKDWUHODWHGEXWQRWFRPSHWLWLYHWKHOLNHOLKRRGRI                      SURYHLQWHQWl,GDW7KHUHDUHWZRUHDVRQVIRULQIHUULQJ
  FRQIXVLRQZLOOWXUQRQRWKHUIDFWRUVWKLUGLIWKHJRRGVRU                 LQWHQW KHUH  )LUVW mWKH XVH RI D FRQWHVWHG PDUN ZLWK
  VHUYLFHVDUHWRWDOO\XQUHODWHGFRQIXVLRQLVXQOLNHO\                       NQRZOHGJH RI WKH SURWHFWHG PDUN DW LVVXH FDQ VXSSRUW D
                                                                               ILQGLQJRILQWHQWLRQDOFRS\LQJl,G7HOH6FDQNQHZWKDWWKH
'DGG\jVsXQN\0XVLF6WRUHV)GDW7KLVFDVHILWV                   m3HWHUELOWl DQG m.HQZRUWKl PDUNV ZHUH DVVRFLDWHG ZLWK
LQWRWKHILUVWDQGVHFRQGFDWHJRULHV)LUVWERWK7HOH6FDQDQG                 WUXFNVPDQXIDFWXUHGE\3$&&$5DQGXVHGWKHPDUNVLQLWV
3$&&$5RIIHUDXVHGWUXFNORFDWRUGDWDEDVHRQWKH,QWHUQHW                    GRPDLQ QDPHV VR WKDW GHDOHUV DQG RWKHU FXVWRPHUV FRXOG
6HFRQGHYHQLI3$&&$5GLGQRWRIIHUDXVHGWUXFNORFDWRU                      HDVLO\ DFFHVV LWV ZHE VLWHV WR ILQG 3HWHUELOW DQG .HQZRUWK
GDWDEDVH7HOH6FDQSURYLGHVVHUYLFHVUHODWHGWR3$&&$5jV                       WUXFNV6HFRQGWKHQDWXUHRI7HOH6FDQjVXVHRIWKHPDUNVRQ
SURGXFWVoORFDWLQJ QHZ DQG XVHG 3HWHUELOW DQG .HQZRUWK                    LWV ZHE VLWHV VXFK DV LQFOXGLQJ WKH PDUNV LQ LWV GRPDLQ
WUXFNVIRUVDOHYLDWKH,QWHUQHW7HOH6FDQGRHVQRWGLVSXWHWKDW              QDPHVUHSHDWLQJWKHPDUNVLQZDWHUPDUNVDQGPLPLFNLQJWKH
LWVDQG3$&&$5jVJRRGVDQGVHUYLFHVDUHFORVHO\UHODWHG                       GLVWLQFWLYHVFULSWVRIWKHPDUNVLQGLFDWHVDQLQWHQWWRFUHDWH
                                                                               WKHLPSUHVVLRQWKDWWKHZHEVLWHVDUHVSRQVRUHGE\RUDIILOLDWHG
       LLL 6LPLODULW\RI0DUNV                                                ZLWK3$&&$5
  )LQGLQJWKDW7HOH6FDQjVGRPDLQQDPHVDUHYHU\VLPLODUWR                            YLLL   ([SDQVLRQLQWR3URGXFW/LQHV
3$&&$5jVPDUNVWKHGLVWULFWFRXUWQRWHGWKDWHDFKGRPDLQ
QDPHFRQWDLQVDQH[DFWFKDUDFWHUPDWFKWRHLWKHUWKH               7KHSDUWLHVDJUHHDVGLGWKHGLVWULFWFRXUWWKDWWKLVIDFWRULV
m3HWHUELOWl          RU     m.HQZRUWKl            PDUN          H  J       LUUHOHYDQWEHFDXVH7HOH6FDQDQG3$&&$5DOUHDG\FRPSHWH
    3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R                    1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV              

  )LUVW LW FODLPV WKDW WKH GLVWULFW FRXUW IDLOHG WR JLYH DQ\    ZZZSHWHUELOWQHZWUXFNVFRP   ZZZNHQZRUWKXVHGWUXFNVFRP
ZHLJKW WR 7HOH6FDQjV DUJXPHQW WKDW WUXFN EX\HUV DUH                 DQGWKDWWKHDGGLWLRQRIFKDUDFWHUVIROORZLQJWKHPDUNGRHV
VRSKLVWLFDWHGSXUFKDVHUV:HKDYHUHFRJQL]HGWKDW                        QRWHOLPLQDWHWKHOLNHOLKRRGRIFRQIXVLRQ7HOH6FDQDVVHUWV
                                                                           WKDWWKHGLVWULFWFRXUWHQJDJHGLQDVLGHE\VLGHFRPSDULVRQ
  >J@HQHUDOO\LQDVVHVVLQJWKHOLNHOLKRRGRIFRQIXVLRQWR                 ZLWKQRFRQVLGHUDWLRQRIWKHOLNHOLKRRGRIFRQIXVLRQZLWKLQ
  WKHSXEOLFWKHVWDQGDUGXVHGE\WKHFRXUWVLVWKHW\SLFDO               WKHIDFWXDOFRQWH[WRIWKLVFDVH
  EX\HU H[HUFLVLQJ RUGLQDU\ FDXWLRQ +RZHYHU ZKHQ D
  EX\HUKDVH[SHUWLVHRULVRWKHUZLVHPRUHVRSKLVWLFDWHG                     m:KHQ DQDO\]LQJ VLPLODULW\ FRXUWV VKRXOG H[DPLQH WKH
  ZLWKUHVSHFWWRWKHSXUFKDVHRIWKHVHUYLFHVDWLVVXHD                 SURQXQFLDWLRQ DSSHDUDQFH DQG YHUEDO WUDQVODWLRQ RI
  KLJKHUVWDQGDUGLVSURSHU6LPLODUO\ZKHQVHUYLFHVDUH                  FRQIOLFWLQJPDUNVl'DGG\jVsXQN\0XVLF6WRUHV)GDW
  H[SHQVLYH RU XQXVXDO WKH EX\HU FDQ EH H[SHFWHG WR               $VLGHE\VLGHFRPSDULVRQLVQRWWKHWHVWUDWKHUmWKH
  H[HUFLVHJUHDWHUFDUHLQKHUSXUFKDVHV:KHQVHUYLFHVDUH                PDUNVPXVWEHYLHZHGLQWKHLUHQWLUHW\DQGLQFRQWH[W>DQGD@
  VROGWRVXFKEX\HUVRWKHUWKLQJVEHLQJHTXDOWKHUHLVOHVV             FRXUW PXVW GHWHUPLQH LQ OLJKW RI ZKDW RFFXUV LQ WKH
  OLNHOLKRRGRIFRQIXVLRQ                                                PDUNHWSODFHZKHWKHUWKHPDUNZLOOEHFRQIXVLQJWRWKHSXEOLF
                                                                           ZKHQVLQJO\SUHVHQWHGl'DWD&RQFHSWV)GDW
+RPHRZQHUV*URXS,QFY+RPH0NWJ6SHFLDOLVWV,QF
)GWK&LU7HOH6FDQDVVHUWVWKDWWKH                  ([FOXGLQJ WKH JHQHULF RU FRPPRQ GHVFULSWLYH ZRUGV
KHDY\WUXFNVPDQXIDFWXUHGE\3$&&$5DUHH[SHQVLYHDQG                      IROORZLQJWKHPDUNVXFKDVmWUXFNVlDQGmGHDOHUVlVHH,QGXFW
ZRXOG EH SXUFKDVHG RUGLQDULO\ E\ D VRSKLVWLFDWHG EX\HU             20DWLF&RUSY,QGXFWRWKHUP&RUS)GWK
LQGLFDWLQJDOHVVHUOLNHOLKRRGRIFRQIXVLRQ                               &LU  VWDWLQJ WKDW GHVFULSWLYH OHWWHUV V\OODEOHV RU
                                                                           SKUDVHVDUHQRWFRQVLGHUHGLQGHWHUPLQLQJZKHWKHUWZRPDUNV
   6HFRQG7HOH6FDQFRQWHQGVWKDWHYHQLI,QWHUQHWXVHUVGR                DUHVLPLODUHDFKGRPDLQQDPHFRQWDLQVDQH[DFWFKDUDFWHU
QRWHQJDJHLQDVRSKLVWLFDWHGDQDO\VLVWRILQGDSDUWLFXODUVLWH          PDWFK WR HLWKHU WKH m3HWHUELOWl RU m.HQZRUWKl PDUN  ,Q
WKH\ OHDUQ QRW WR WDUU\ ORQJ DW VLWHV WKDW GR QRW VXSSO\ WKH   DGGLWLRQ 7HOH6FDQjV GRPDLQ QDPHV DQG WKH PDUNV DUH
LQIRUPDWLRQWKH\VHHN3$&&$5UHVSRQGVWKDWHYHQWKRXJK                   SURQRXQFHG WKH VDPH  &RQVLGHUDWLRQ RI WKH PDUNV LQ WKH
DQ ,QWHUQHW XVHU PD\ QRW WDUU\ ORQJ DQ LQIULQJLQJ GRPDLQ         ,QWHUQHWFRQWH[WIXUWKHUVXSSRUWVWKHGLVWULFWFRXUWjVILQGLQJ
QDPH OHDGV WR LQLWLDO LQWHUHVW FRQIXVLRQ ZKHQ WKH XVHU LV         WKDW7HOH6FDQjVGRPDLQQDPHVDQG3$&&$5jVWUDGHPDUNV
PLVGLUHFWHGWRWKHZURQJVLWH6HH%URRNILHOG)GDW                DUHVLPLODU%HFDXVHDOOGRPDLQQDPHVDSSHDULQWKHVDPH
,QLWLDOLQWHUHVWFRQIXVLRQmDIIOLFWVVRSKLVWLFDWHG,QWHUQHW         IRQWDQGLQDOOORZHUFDVHOHWWHUV7HOH6FDQjVGRPDLQQDPHV
XVHUVQROHVVWKDQLWGRHVXQVRSKLVWLFDWHGXVHUVl2%+,QF              VXFK DV ZZZSHWHUELOWQHZWUXFNVFRP DQG
Y 6SRWOLJKW 0DJD]LQH ,QF  ) 6XSS G                ZZZNHQZRUWKQHZWUXFNVFRPKDYHWKHVDPHDSSHDUDQFHDV
:'1<                                                           3$&&$5jV GRPDLQ QDPHV ZZZSHWHUELOWFRP DQG
                                                                           ZZZNHQZRUWKFRP 
   7KHGLVWULFWFRXUWjVILQGLQJUHJDUGLQJFXVWRPHUFDUHLQWKH
,QWHUQHW FRQWH[W LV QRW FOHDUO\ HUURQHRXV  ,Q DQ\ HYHQW LI            LY $FWXDO&RQIXVLRQ
PDUNVDUHVLPLODUDVWKH\DUHKHUHmWKHQSXUFKDVHUFDUHZLOO
GHFUHDVH WKH OLNHOLKRRG RI FRQIXVLRQ RQO\ PLQLPDOO\l                  :KLOHFRQFHGLQJWKDWWKHDEVHQFHRIDQ\HYLGHQFHVKRZLQJ
'DGG\jV sXQN\ 0XVLF 6WRUHV  )G DW  m7KDW LV            DFWXDOFRQIXVLRQLVQRWGLVSRVLWLYH7HOH6FDQDUJXHVWKDWWKH
FRQIXVLQJO\ VLPLODU PDUNV PD\ OHDG D SXUFKDVHU ZKR LV              GLVWULFW FRXUW HUUHG E\ JLYLQJ WKDW DEVHQFH QR ZHLJKW
H[WUHPHO\FDUHIXODQGNQRZOHGJHDEOHDERXWWKH>SURGXFW@KH                 ZKDWVRHYHU7KHGLVWULFWFRXUWSURSHUO\QRWHGWKHDEVHQFHRI
LVEX\LQJWRDVVXPHQRQHWKHOHVVWKDWWKHVHOOHULVDIILOLDWHG              DFWXDOFRQIXVLRQHYLGHQFHDQGDSSOLHGWKLVFRXUWjVUXOHWKDW
    3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV 1R               1R 3$&&$5,QFY7HOH6FDQ7HFKQRORJLHV                                     

ZKLOH VXFK HYLGHQFH LV WKH EHVW HYLGHQFH RI OLNHOLKRRG RI    UHDGE\DFRQVXPHUDIWHUUHDFKLQJWKHZHEVLWHFRPHVWRRODWH
FRQIXVLRQ WKH DEVHQFH RI DFWXDO FRQIXVLRQ HYLGHQFH LV         7KLV mLQLWLDO LQWHUHVW FRQIXVLRQl LV UHFRJQL]HG DV DQ
LQFRQVHTXHQWLDO6HH'DWD&RQFHSWV)GDWm>7@KH          LQIULQJHPHQWXQGHUWKH/DQKDP$FW6HH(OL/LOO\	&RY
ODFNRIHYLGHQFHRIDFWXDOFRQIXVLRQLVQRWVLJQLILFDQWXQOHVV        1DWXUDO $QVZHUV ,QF  )G   WK &LU 
WKHFLUFXPVWDQFHVLQGLFDWHGWKDWVXFKHYLGHQFHVKRXOGKDYH            m6XFKFRQIXVLRQZKLFKLVDFWLRQDEOHXQGHUWKH/DQKDP$FW
EHHQDYDLODEOHl                                                RFFXUVZKHQDFRQVXPHULVOXUHGWRDSURGXFWE\LWVVLPLODULW\
                                                                      WRDNQRZQPDUNHYHQWKRXJKWKHFRQVXPHUUHDOL]HVWKHWUXH
       Y   0DUNHWLQJ&KDQQHOV                                        LGHQWLW\ DQG RULJLQ RI WKH SURGXFW EHIRUH FRQVXPPDWLQJ D
                                                                      SXUFKDVHl %URRNILHOG  )G DW  m>7@KH XVH RI
  7KHGLVWULFWFRXUWIRXQGWKDWERWK3$&&$5DQG7HOH6FDQ              DQRWKHUjVWUDGHPDUNLQDPDQQHUFDOFXODWHGµWRFDSWXUHLQLWLDO
PDUNHW WKHLU JRRGV DQG VHUYLFHV WKURXJK WKH ,QWHUQHW D       FRQVXPHU DWWHQWLRQ HYHQ WKRXJK QR DFWXDO VDOH LV ILQDOO\
PDUNHWLQJFKDQQHOWKDWLQFUHDVHVWKHOLNHOLKRRGRIFRQIXVLRQ          FRPSOHWHG DV D UHVXOW RI WKH FRQIXVLRQ PD\ EH VWLOO DQ
EHWZHHQWKHWZRPDUNV 7HOH6FDQDJUHHVWKDWERWKSDUWLHV            LQIULQJHPHQWjl *UHHQ 3URGV &R  ) 6XSS DW 
RSHUDWH ORFDWRU VHUYLFHV IRU 3HWHUELOW DQG .HQZRUWK WUXFNV     m'XHWRWKHQDWXUHRI,QWHUQHWXVHGHIHQGDQWjVDSSURSULDWLRQ
RYHUWKH,QWHUQHWEXWDVVHUWVWKDWWKHUHZDVOLWWOHUHFRUGSURRI      RI SODLQWLII>j@V PDUN DV D GRPDLQ QDPH DQG KRPH SDJH
UHJDUGLQJ WKH LPSDFW RI WKH ,QWHUQHW PDUNHW DV RSSRVHG WR    DGGUHVV FDQQRW DGHTXDWHO\ EH UHPHGLHG E\ D GLVFODLPHU
EULFNDQGPRUWDU VWRUHV  ,Q %URRNILHOG WKH 1LQWK &LUFXLW     'HIHQGDQWjV GRPDLQ QDPH DQG KRPH SDJH DGGUHVV DUH
H[SODLQHGZK\VLPXOWDQHRXVXVHRIWKH,QWHUQHWDVDPDUNHWLQJ         H[WHUQDO ODEHOV WKDW RQ WKHLU IDFH FDXVH FRQIXVLRQ DPRQJ
WRROH[DFHUEDWHVWKHOLNHOLKRRGRIFRQIXVLRQ                         ,QWHUQHW XVHUV DQG PD\ FDXVH ,QWHUQHW XVHUV ZKR VHHN
                                                                      SODLQWLII>j@V ZHE VLWH WR H[SHQG WLPH DQG HQHUJ\ DFFHVVLQJ
  ,QWKH,QWHUQHWFRQWH[WLQSDUWLFXODUHQWHULQJDZHEVLWH         GHIHQGDQWjVZHEVLWHl 
  WDNHVOLWWOHHIIRUWXVXDOO\RQHFOLFNIURPDOLQNHGVLWHRU
  DVHDUFKHQJLQHjVOLVWWKXV:HEVXUIHUVDUHPRUHOLNHO\                      YL &XVWRPHU&DUH
  WR EH FRQIXVHG DV WR WKH RZQHUVKLS RI D ZHE VLWH WKDQ
  WUDGLWLRQDOSDWURQVRIDEULFNDQGPRUWDUVWRUHZRXOGEH               7KH GLVWULFW FRXUW IRXQG WKDW WKH UHOHYDQW FXVWRPHU LV DQ
  RIDVWRUHjVRZQHUVKLS                                             DYHUDJH ,QWHUQHW XVHU DQG WKDW WKH FRQIXVLRQ FDXVHG E\ DQ
                                                                      LQIULQJLQJGRPDLQQDPHUHVXOWVEHFDXVHm,QWHUQHWXVHUVGRQRW
%URRNILHOG)GDW(YHQLQWKHDEVHQFHRISURRI           XQGHUJRDKLJKO\VRSKLVWLFDWHGDQDO\VLVZKHQVHDUFKLQJIRU
UHJDUGLQJ,QWHUQHWPDUNHWLQJjVHIIHFWRQFRQVXPHUFRQIXVLRQ          GRPDLQQDPHVlTXRWLQJ*UHHQ3URGV&R)6XSSDW
WKH GLVWULFW FRXUWjV ILQGLQJ WKDW XVLQJ WKH ,QWHUQHW DV D    7HOH6FDQFRQWHQGVWKDWWKHGLVWULFWFRXUWjVDQDO\VLVLV
PDUNHWLQJFKDQQHOLQFUHDVHVWKHOLNHOLKRRGRIFRQIXVLRQLVQRW        IODZHGLQWZRUHVSHFWV
FOHDUO\HUURQHRXV
   7HOH6FDQ DOVR FRQWHQGV WKDW WKH GLVWULFW FRXUW HUUHG LQ        
                                                                            !#
GLVFRXQWLQJ WKH GLVFODLPHU LQFOXGHG RQ LWV ZHE VLWHV  7KH   FRQVLGHUDWLRQ     RI
                                                                                          DVVHUWV WKDW 7HOH6FDQjV GLVFODLPHU LV LQHIIHFWLYH ZLWKRXW
                                                                                             LQLWLDO   LQWHUHVW   FRQIXVLRQ    )LUVW   WKH   GLVFODLPHU   LV
GLVWULFW FRXUW IRXQG WKDW 7HOH6FDQjV GLVFODLPHU GRHV QRW       XQREWUXVLYH UHODWLYHO\ VPDOO DQG FRQWDLQHG LQ ILQH SULQW DVVRFLDWHG ZLWK
UHPHG\ WKH FRQIXVLRQ FDXVHG E\ WKH XVH RI 3$&&$5jV            WHFKQLFDO LQIRUPDWLRQ DERXW WKH ZHE VLWH GHVLJQHU             6HFRQG 7HOH6FDQjV

WUDGHPDUNVLQLWVGRPDLQQDPHV$QLQIULQJLQJGRPDLQQDPH            XVH RI WKH ZRUGV m3HWHUELOWl DQG m.HQZRUWKl LQFOXGLQJ WKH LQFRUSRUDWLRQ

KDVWKHSRWHQWLDOWRPLVGLUHFWFRQVXPHUVDVWKH\VHDUFKIRU           RI WKH PDUNV LQ WKH GRPDLQ QDPHV WKH UHSHWLWLRQ RI WKH PDUNV LQ WKH


ZHE VLWHV DVVRFLDWHG ZLWK WKH RZQHU RI D WUDGHPDUN  $      ZDOOSDSHU DQG WKH XVH RI GLVWLQFWLYH VFULSWV ZDV GHVLJQHG WR PD[LPL]H WKH
                                                                      LOOXVLRQ   RI   DIILOLDWLRQ   DQG   SUHYHQWV    WKH   GLVFODLPHU   IURP    HIIHFWLYHO\
GLVFODLPHUGLVDYRZLQJDIILOLDWLRQZLWKWKHWUDGHPDUNRZQHU            LQIRUPLQJ FRQVXPHUV WKDW WKH VLWH LV QRW DIILOLDWHG ZLWK 3$&&$5
