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PRS - OFFER FOR SUBSCRIPTION AND PLACING OF UP TO 700,000 SHARES OF ¿1 EACH AT AN

Company: Rapid Nutrition Date: 2014-05-13 Language: English Register to download
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Rapid Nutrition PLC

### **Prospectus**

**13 May 2014**

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take or the contents of this document you should consult your financial adviser, attorney, accountant or other person authorised under the *Financial Services and Markets Act 2000* as amended from time to time (**FSMA**), who specialises in advising on the acquisition of, or subscription to, shares and other securities.

Any reference in this document to "**Issuer**" means Rapid Nutrition PLC UK company number 7905640 and includes, where the context requires, companies which form part of the Rapid Nutrition Group. Any statements made by the Issuer are also, where the context requires, statements made for and on behalf of the other members of the Rapid Nutrition Group. Capitalised words used in this Prospectus have special meanings and are defined throughout this Prospectus and otherwise in Section [16.](#page-134-0)

All monetary amounts set out in this Prospectus are in Euro (which may be denoted by the € symbol) unless expressly stated to be in a different currency. As the primary trading activities of the Group are conducted out of Australia, the accounts and related information are presented in Australian Dollars (which may be denoted by the AU\$ symbol).

This document comprises a Prospectus dated 13 May 2014 relating to the Issuer and the Shares. It has been prepared in accordance with the *Prospectus Rules* of the Financial Conduct Authority (FCA) made under Section 73A of the FSMA and has been approved by the FCA in accordance with Section 87A of the FSMA. This Prospectus has been filed with the FCA and will be made available to the public in accordance with the Prospectus Rules. The FCA has not assessed the suitability or eligibility of the Company for admission to the Frankfurt Stock Exchange.

An investment in the Issuer may not be suitable for all recipients of this Prospectus, involves high risk and the whole text of this document should be read, but your attention is, in particular drawn to the section entitled "Risk Factors" in Section [2.](#page-21-0) Prospective investors should consider carefully whether an investment in the Issuer is suitable for them in the light of their personal circumstances and the financial resources available to them.

The Directors of the Issuer whose names appear in Section [3](#page-29-0) of this Prospectus and the Issuer accept responsibility for the information contained in this Prospectus. To the best of the knowledge of the Directors and the Issuers (who have taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect its import.

The share capital of the Issuer was previously listed on the GXG First Quote, but has been delisted from that exchange in preparation for listing on the Open Market (Entry Standard) of the Frankfurt Stock Exchange. As a result, on the date of this Prospectus, the share capital is not listed or dealt in on any recognised investment exchange. It is intended that an application will be made for all the Offer Shares to be admitted to trading on the Open Market (Entry Standard) of the Frankfurt Stock Exchange within two months of the date of this Prospectus.

**It is emphasised that no application has currently or is intended to be made for the Offer of Shares to be admitted to trading on any exchange other than the Frankfurt Stock Exchange. Nor has any application been made for the admission of the ordinary shares to the Official List or any other Recognised Investment Exchange.**

(Incorporated in England and Wales with registered number 7905640 and registered as a public limited company under the *Companies Act 2006*)

# OFFER FOR SUBSCRIPTION OF UP TO 700,000 SHARES OF €1 EACH AT AN OFFER PRICE OF €2.80 PER ORDINARY SHARE

| Offer for subscription               |        |                |
|--------------------------------------|--------|----------------|
| Number of Shares available           |        | 700,000        |
| Offer Price (per share)              |        | €2.80          |
| Type of shares                       |        | Ordinary       |
| Ordinary Share capital of the Issuer | Number | 23,888,405     |
| following close of the Offer         |        |                |
| (assuming full subscription of the   | Amount | €23, 888,405   |
| Offer Shares)                        |        |                |
| Offer Open Date                      |        | 19 May 2014    |
| Offer Close Date                     |        | 22 August 2014 |

There is no aggregate minimum subscription and the Offer is not conditional. The subscription list for the Offer Shares will open on the Offer Open Date and may be closed at any time thereafter, but not later than 3pm on the Offer Close Date unless, at the discretion of the Directors, it is extended beyond that date. The terms and conditions and procedures for application are set out in this Prospectus and the Application Form is attached to this Prospectus.

This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy Shares in any jurisdiction in which such offer or solicitation is unlawful and, in particular, is not for distribution in the United States, Canada, Australia, the Republic of South Africa, or Japan. The Shares have not been and will not be registered under the applicable securities laws of any of the aforementioned countries and may not be offered or sold, subject to certain exceptions, in or to residents or nationals of such countries. The distribution of this Prospectus in other jurisdictions may be restricted by law and therefore persons into whose possession this Prospectus comes should inform themselves about and observe any such restrictions.

In addition to paper copies of this Prospectus being available at the Issuer's London Office, this Prospectus, as well as announcements in relation to it and the Issuer, will be published on the Issuer's Website at www.rnplc.com. The electronic version of this document will be in substantially similar form to the paper version, but also includes navigation aids throughout the document to assist readers. Such navigation aids include external links to the Issuer's Website, bookmarks (which may or may not be available in some PDF viewers) and internal links to related content.

| 1.<br>2.                                      | Summary<br>Risk Factors<br>                                                                                                                                                                                            | 7<br>22  |
|-----------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| 2.1<br>2.2                                    | Risk factors<br>relating to the Issuer and its industry<br>23<br>Risk factors relating to the Shares<br>26                                                                                                             |          |
| 3.<br>4.                                      | Directors, Company Secretary, Registered Office and Advisors<br><br>Expected Timetable of Principal Events and Offer Statistics<br>                                                                                    | 30<br>32 |
| 4.1<br>4.2                                    | Timetable of Principal Events32<br>Offer Statistics<br>32                                                                                                                                                              |          |
| 5.                                            | Details of the Offer<br>                                                                                                                                                                                               | 33       |
| 5.1<br>5.2<br>5.3<br>5.4<br>5.5<br>5.6        | Securities33<br>Terms and Conditions of the Offer<br>41<br>Admission to Trading and Dealing Arrangements<br>44<br>Expenses of the Issue/Offer44<br>Dilution44<br>Major Shareholders45                                  |          |
| 6.<br>7.                                      | Letter from the Managing Director<br>Information on the Company and the Group<br>                                                                                                                                      | 46<br>47 |
| 7.1<br>7.2<br>7.3<br>7.4<br>7.5<br>7.6<br>7.7 | Information About the Issuer47<br>Business Overview<br>51<br>Organisational Structure<br>60<br>Property, Plant and Equipment<br>61<br>Capital Resources<br>62<br>Research and Development64<br>Trend Information<br>64 |          |
| 8.                                            | Persons Responsible, Directors, Senior Management and Corporate<br>Governance                                                                                                                                          | 65       |
| 8.1<br>8.2<br>8.3<br>8.4<br>8.5               | Directors' Responsibility65<br>Directors' and Senior Management Details, Advisors and Conflicts<br>65<br>Remuneration and Benefits70<br>Board Practices<br>70<br>Related Party Transactions73                          |          |
| 9.                                            | Reasons for the Offer, Use of Funds                                                                                                                                                                                    | 75       |
| 9.1                                           | Reasons for Offer and Use of Funds75                                                                                                                                                                                   |          |
| 10.<br>10.1<br>10.2<br>10.3                   | Selected Financial Information<br><br>Revenue Summary<br>76<br>Asset and Liability Summary<br>77<br>Employees<br>78                                                                                                    | 76       |
| 11.<br>11.1                                   | Operating and Financial Review of Rapid Nutrition<br><br>Overview79                                                                                                                                                    | 79       |

| 11.2<br>11.3<br>11.4 | Changes in financial condition since interim period ending 31 March 2014<br>Summary of Operating and Financial Review80<br>Liquidity and Capital Resources<br>81 | 80  |
|----------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----|
| 12.                  | Capitalisation and Indebtedness Statement<br>                                                                                                                    | 83  |
| 12.1<br>12.2         | Working Capital Statement83<br>Capitalisation and Indebtedness<br>83                                                                                             |     |
| 13.                  | Historical Financial Information<br>                                                                                                                             | 84  |
| 13.1                 | Condensed Consolidated Statement of Financial Position as at 31 March 2014                                                                                       | .84 |
| 14.                  | Dividend Policy and Legal Proceedings<br>                                                                                                                        | 127 |
| 14.1<br>14.2         | Dividend Policy127<br>Legal and Arbitration Proceedings127                                                                                                       |     |
| 15.                  | Additional Information                                                                                                                                           | 128 |
| 15.1                 | Share Capital<br>128                                                                                                                                             |     |
| 15.2                 | History<br>of Share Capital<br>128                                                                                                                               |     |
| 15.3                 | Article of Association128                                                                                                                                        |     |
| 15.4                 | Material Contracts<br>131                                                                                                                                        |     |
| 15.5                 | Third Party Information and Statement by Experts and Declarations of<br>Interests133                                                                             |     |
| 15.6                 | Documents on Display<br>133                                                                                                                                      |     |
| 16.                  | Definitions                                                                                                                                                      | 135 |

# <span id="page-6-0"></span>**1. Summary**

Summaries are made up of disclosure requirements known as 'Elements'. These elements are numbered in Sections A – E (A.1 – E.7).

This summary contains all the Elements required to be included in a summary for this type of securities and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of securities and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of 'not applicable'.

|     |                                                                                                               | Section A – Introduction and warnings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|---------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| A.1 | Warning                                                                                                       | Warning that:<br><br>this summary should be read as an introduction to the prospectus;<br><br>any decision to invest in the securities should be based on<br>consideration of the prospectus as a whole by the investor;<br><br>where a claim relating to the information contained in this prospectus<br>is brought before a court, the plaintiff investor might, under the<br>national legislation of the Member States, have to bear the costs of<br>translating the Prospectus before the legal proceedings are initiated;<br>and<br><br>Civil Liability attaches only to those persons who have tabled the<br>summary including any translation thereof, but only if the summary is<br>misleading, inaccurate or inconsistent when read together with the<br>other parts of the prospectus or it does not provide, when read<br>together with the other parts of the prospectus, key information in<br>order to aid investors when considering whether to invest in such<br>securities. |
| A.2 | Subsequent resale of<br>securities or final<br>placement of securities<br>through financial<br>intermediaries | Not applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

| Section B - Issuer |
|--------------------|
|--------------------|

| B.1 | The legal and            | Rapid Nutrition PLC, UK Company Number 7905640                               |
|-----|--------------------------|------------------------------------------------------------------------------|
|     | commercial name of the   |                                                                              |
|     | issuer.                  |                                                                              |
| B.2 | The domicile and legal   | The Issuer was incorporated as Rapid Nutrition PLC in England and Wales      |
|     | form of the issuer, the  | on 11 January 2012.                                                          |
|     | legislation under which  | The principal legislation under which the Issuer operates is the Companies   |
|     | the issuer operates and  | Act 2006, to the extent in force, and regulations made thereunder. The       |
|     | its country of           | liability of the members is limited.                                         |
|     | incorporation.           |                                                                              |
|     |                          |                                                                              |
| B.3 | Issuer's:                | The Rapid Nutrition Business has been operated by an Australian private      |
|     | (a)<br>operations        | company, Rapid Nutrition Pty Ltd (Australian Company Number 098 389          |
|     | (b)<br>principal         | 836), since 2001. In 2012 Rapid Nutrition PLC was incorporated to become     |
|     | activities,              | the global holding company for the Rapid Nutrition Business and to acquire   |
|     | (c)<br>products and      | all of the shares in Rapid Nutrition Pty Ltd for that purpose. On 24 July    |
|     | services                 | 2012 Rapid Nutrition Pty Ltd became a wholly owned subsidiary of Rapid       |
|     | (d)<br>principal markets | Nutrition PLC.                                                               |
|     |                          | Rapid Nutrition specialises in a range of healthcare supplements designed    |
|     |                          | to address obesity and exports those products globally. The supplements fit  |
|     |                          | into the category of 'Neutraceuticals' being food sources that provide extra |
|     |                          | health benefits over and above the basic nutritional value found in foods.   |
|     |                          | The product range includes:                                                  |
|     |                          | Leisa's Secret® Brand:                                                       |
|     |                          | -<br>Leisa's Secret® Premium Meal Replacement (Shake)                        |
|     |                          | -<br>Leisa's Secret® Energize (Tablets)                                      |
|     |                          | -<br>Leisa's Secret® Advanced Thermo (Tablets)                               |
|     |                          | -<br>Leisa's Secret® Resist (Powdered Drink)                                 |
|     |                          | System LS™ Brand :                                                           |
|     |                          | -<br>System LS™Accelerate – premium thermogenic formula                      |
|     |                          | -<br>System LS™Nourish – high-protein shake                                  |
|     |                          | -<br>System LS™ Satisfy – high-fibre bar                                     |
|     |                          | -<br>System LS™ Zest – organic multi-vitamin                                 |
|     |                          | -<br>System LS™ Energize – revitalizing and fat burning shot                 |
|     |                          | -<br>System LS™ Rise – super grain granola cereal                            |
|     |                          | The products have all been developed directly by Rapid Nutrition's team of   |
|     |                          | dieticians, naturopaths and pharmaceutical specialists and all intellectual  |
|     |                          | property is owned by Rapid Nutrition.                                        |
|     |                          | The products are nutritional diet supplements which are intended as          |
|     |                          | additions to the diet. They contain concentrated sources of vitamins,        |
|     |                          | minerals and other substances such as natural herbs with a nutritional       |

|  | benefit.                                                                                                                                                                                                                                                                                                                                                                     |
|--|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | Nutritional supplements are regulated in detail by the applicable regulations                                                                                                                                                                                                                                                                                                |
|  | and regulatory body in each country in which Rapid Nutrition operates.                                                                                                                                                                                                                                                                                                       |
|  | The Rapid Nutrition products are not pharmaceutical in nature.                                                                                                                                                                                                                                                                                                               |
|  | Rapid Nutrition has a broad range of product categories and development                                                                                                                                                                                                                                                                                                      |
|  | technologies with different timeframes to the market. A key strength of the                                                                                                                                                                                                                                                                                                  |
|  | Company is that it has current revenue and earnings while having                                                                                                                                                                                                                                                                                                             |
|  | technologies in development that can ensure sustainable growth.                                                                                                                                                                                                                                                                                                              |
|  | The Rapid Nutrition value chain is as follows:                                                                                                                                                                                                                                                                                                                               |
|  |                                                                                                                                                                                                                                                                                                                                                                              |
|  | Manufacture<br>Product<br>Research &<br>Market Entry<br>Registration<br>Appointing and<br>Development<br>a) Finished<br>outsourcing<br>Registering<br>Creation of<br>Product<br>manufacturing<br>finished<br>unique natural<br>to approved<br>products in<br>b) Private Label<br>science-based<br>accredited<br>each new<br>c) Licensing<br>formulas<br>facilities<br>market |
|  |                                                                                                                                                                                                                                                                                                                                                                              |
|  | The company has established major distribution relationships in three                                                                                                                                                                                                                                                                                                        |
|  | separate regions worldwide and has product registrations and successful                                                                                                                                                                                                                                                                                                      |
|  | export business in a number of other countries.                                                                                                                                                                                                                                                                                                                              |
|  | Rapid Nutrition has exported to and/or is currently distributing into the                                                                                                                                                                                                                                                                                                    |
|  | following markets:                                                                                                                                                                                                                                                                                                                                                           |
|  | United Kingdom                                                                                                                                                                                                                                                                                                                                                               |
|  | Ireland                                                                                                                                                                                                                                                                                                                                                                      |
|  | Australia                                                                                                                                                                                                                                                                                                                                                                    |
|  | United States                                                                                                                                                                                                                                                                                                                                                                |
|  | India                                                                                                                                                                                                                                                                                                                                                                        |
|  | China                                                                                                                                                                                                                                                                                                                                                                        |
|  | Singapore                                                                                                                                                                                                                                                                                                                                                                    |
|  | Korea                                                                                                                                                                                                                                                                                                                                                                        |
|  | Ghana                                                                                                                                                                                                                                                                                                                                                                        |
|  | Rapid Nutrition has successfully completed product registration and                                                                                                                                                                                                                                                                                                          |
|  |                                                                                                                                                                                                                                                                                                                                                                              |

|  | approval on a selection of its product portfolio in the following countries and |
|--|---------------------------------------------------------------------------------|
|  | is currently finalizing distribution arrangements:                              |
|  | Czech Republic                                                                  |
|  | Turkey                                                                          |
|  | Korea                                                                           |
|  | Thailand                                                                        |
|  | In Australia in particular Rapid Nutrition has achieved considerable success    |
|  | with its flagship products, the Leisa's Secret® range. The Group plans to       |
|  | capitalize on the success of Leisa's Secret® by introducing the new             |
|  | SystemLS™ range immediately into the Australian and USA markets,                |
|  | followed by Europe and the Middle East.                                         |
|  | The company leverages it's product brand recognition for rapid market           |
|  | penetration in international markets by establishing strong distribution        |
|  | channels and partners. This in turn maximises sales revenue for the             |
|  | company by introducing expanded product portfolios into established             |
|  | distribution channels. Additionally, this is supported by the implementation    |
|  | of strong marketing initiatives and media partners in each market.              |
|  |                                                                                 |
|  | The highest priorities in respect of the weight loss and weight maintenance     |
|  | range in the first quarter 2014 is continuing the System LS™ product range      |
|  | roll-out in Australia through Woolworths (Australia's largest supermarket       |
|  | retailer), commencing the full-scale market entry strategy into the USA and     |
|  | expanding distribution agreements in Europe. Long term distribution             |
|  | arrangements are already in place throughout Australia, Europe, Asia,           |
|  | USA and the Middle East which ensure financial stability in 2014 while          |
|  | these growth strategies are implemented.                                        |
|  |                                                                                 |
|  | The Company's growth plans are conservative to ensure the Company can           |
|  | at all times work within its resources and is not reliant on external funding   |
|  | to support its growth. The capital raised under this Issue is therefore not     |
|  | essential to support the Company's growth strategy, but will allow the          |
|  | implementation of the growth strategy to be accelerated.                        |
|  |                                                                                 |
|  | Key Commercial Relationships:                                                   |
|  | 1. Woolworths distribution approval was granted on 16 July 2013, and            |
|  | sale through an initial group of Woolworths stores commenced in                 |
|  | October 2013. Based on feedback to date from Woolworths that                    |
|  | arrangement is expected to be progressively extended to the full                |
|  | 820 stores by late 2014.                                                        |
|  |                                                                                 |

|  | 2. Joint venture agreement with US-based company Motivate Health             |
|--|------------------------------------------------------------------------------|
|  | Technology Inc to distribute SystemLS™ products directly to US               |
|  | customers. Contract was executed in August 2011 and major roll               |
|  | out into the USA market through that joint venture is commencing             |
|  | in the first half of 2014.                                                   |
|  | 3. US promotional agreement for News USA Inc to provide US\$10m in           |
|  | media credits to the Company. This advertising and marketing                 |
|  | programme will be commenced in conjunction with the Motivate                 |
|  | joint venture roll-out as referred to above.                                 |
|  | 4. Appointment of Verde Fulfillment & Distribution Inc. as the US            |
|  | logistics provider to provide US based product storage, ensure               |
|  | prompt delivery of goods and manage any returns.                             |
|  | 5. Five year distribution contract with Biolynx Ltd a European distributor   |
|  | to increase the volume of shipments into the EU region.                      |
|  | Australian Sales Growth                                                      |
|  | Thanks to strong interest both locally and globally, the new SystemLS™       |
|  | organic lifestyle range was recently approved by Woolworths, Australia's     |
|  | largest supermarket retailer. Woolworths has 820 stores throughout           |
|  | Australia and is one of Australia's largest listed companies. Woolworths     |
|  | started to offer the product range in October 2013 through Woolworths new    |
|  | concept stores. Sales have exceeded expectations and this distribution       |
|  | relationship is expected to grow quickly to extend to all of the 820 stores  |
|  | and provide a significant revenue stream for the Company.                    |
|  | US Product Launch                                                            |
|  | The US product launch is a very significant part of the 2014 growth strategy |
|  | for the Company. The launch will consist of two strategies running in        |
|  | parallel. Firstly a retail launch direct to consumers which will be          |
|  | coordinated and operated by Motivate Health Technology Inc. Motivate has     |
|  | a very experienced team for managing direct marketing campaigns and will     |
|  | be initiating a radio advertising driven sales process. Secondly, the        |
|  | Company will coordinate a wholesale launch to appropriate US distributors    |
|  | directly through its own, dedicated US team.                                 |
|  | Retail Launch in the US                                                      |
|  | The Company's Q1 2014 Direct Response Product Launch of the                  |
|  |                                                                              |

|  | SystemLS™ natural weight loss product line consists of six products as         |
|--|--------------------------------------------------------------------------------|
|  | described above. While the products are intended to be used in                 |
|  | combination and internal sales forecasts are built on package sales, they      |
|  | will also be sold separately and it is expected that purchase of one product   |
|  | is likely to lead to the purchase of additional, complimentary products.       |
|  |                                                                                |
|  | The key marketing approach for the retail launch in the US will be radio       |
|  | advertising. As the Company's products are designed to be used on an           |
|  | ongoing basis customers will typically make repeat purchases and the           |
|  | impact of advertising is significantly larger than for products designed for a |
|  | single purchase.                                                               |
|  |                                                                                |
|  | The break-even point for the US market is sales revenue in the range of        |
|  | €400,000 to €470,000 per annum, a volume which Rapid Nutrition expects         |
|  | to be able to achieve in the 2014 calendar year based on its current           |
|  | forecasts.                                                                     |
|  |                                                                                |
|  | Wholesale Launch in the US                                                     |
|  |                                                                                |
|  | Secondly, The Company will coordinate the wholesale launch directly with       |
|  | its own dedicated US team. Initially this team will consist of four people:    |
|  | -<br>Head of US Operations                                                     |
|  | -<br>Head of Production                                                        |
|  | -<br>Head of Sales & Distribution                                              |
|  | -<br>Brand Director                                                            |
|  |                                                                                |
|  | The team members have been selected and will commence work for Rapid           |
|  | Nutrition in mid-2014. They will work closely with a number the Company's      |
|  | key partners in the US who have already made initial introductions to the      |
|  | major retail chains.                                                           |
|  |                                                                                |
|  | In the Company's view there is a high likelihood that this approach will       |
|  | result in growth in US sales to the point that the cost of supplying the       |
|  | market will lead to growth being limited by the availability of capital to the |
|  |                                                                                |
|  | Company. While the Company will be able to fund growth to a reasonable         |
|  | level through its own resources, if this Issue is fully subscribed the pace of |
|  | growth is expected to be considerably faster.                                  |
|  |                                                                                |
|  | Markets other than Australia and US                                            |
|  | Additionally, the company will continue to build upon its existing             |

|      |                            | international markets as well as aggressively expanding its distribution        |
|------|----------------------------|---------------------------------------------------------------------------------|
|      |                            | channels throughout Europe, Asia and the Middle East into neighbouring          |
|      |                            | countries where the company is currently not present.                           |
|      |                            |                                                                                 |
| B.4a | Industry trends affecting  | The World Health Organisation (through its website at                           |
|      | Issuer                     | http://www.who.int/mediacentre/factsheets/fs311/en/ and                         |
|      |                            | http://www.who.int/gho/publications.en/ ) has provided the following            |
|      |                            | information regarding the health issues which underpin the RNL business :       |
|      |                            | •<br>Worldwide obesity has nearly doubled since 1980.                           |
|      |                            | •<br>In 2008, more than 1.4 billion adults, 20 and older, were overweight. Of   |
|      |                            | these over 200 million men and nearly 300 million women were                    |
|      |                            | obese.                                                                          |
|      |                            | •<br>35% of adults aged 20 and over were overweight in 2008, and 11% were       |
|      |                            | obese.                                                                          |
|      |                            | •<br>65% of the world's population live in countries where overweight and       |
|      |                            | obesity kills more people than underweight.                                     |
|      |                            | •<br>More than 40 million children under the age of five were overweight in     |
|      |                            | 2011.                                                                           |
|      |                            | •<br>Obesity is preventable.                                                    |
|      |                            |                                                                                 |
|      |                            | Rapid Nutrition seeks to address obesity by making neutraceutical products      |
|      |                            | available directly to consumers. A neutraceutical is distinct from a            |
|      |                            | pharmaceutical in that it is derived from recognised food sources that          |
|      |                            | provide health benefits in addition to their nutritional value as food, whereas |
|      |                            | a pharmaceutical is a compound manufactured from chemicals and/or               |
|      |                            | biological materials that are not recognised as food sources and typically      |
|      |                            | have no nutritional value.                                                      |
| B.5  | If the issuer is part of a | The Issuer is the parent company of Rapid Nutrition Pty Ltd which operates      |
|      | group, a description of    | the Rapid Nutrition Business. Currently these are the only two companies        |
|      | the group and the          | in the Rapid Nutrition Group however further subsidiaries will be               |
|      | issuer's position within   | incorporated as the Rapid Nutrition Business expands.                           |
|      | the group.                 |                                                                                 |

|     |                         | RAPID NUTRITION PLC<br>Registered Number: 7905640<br>(UK Incorporated) |  |                                |  |                   |  |                                                                              |
|-----|-------------------------|------------------------------------------------------------------------|--|--------------------------------|--|-------------------|--|------------------------------------------------------------------------------|
|     |                         |                                                                        |  |                                |  |                   |  |                                                                              |
|     |                         |                                                                        |  | Rapid Nutrition Pty Ltd        |  |                   |  |                                                                              |
|     |                         |                                                                        |  | Registered Number: 098 389 836 |  |                   |  |                                                                              |
|     |                         |                                                                        |  | (Australia Incorporated)       |  |                   |  |                                                                              |
|     |                         |                                                                        |  |                                |  |                   |  |                                                                              |
| B.6 | Notifiable interests    |                                                                        |  |                                |  |                   |  | The following table shows all shareholders with interests of greater than 4% |
|     | under Issuer's national |                                                                        |  |                                |  |                   |  | in the Issuer. Please note that values are rounded to two decimal places.    |
|     | laws                    | Investor Name                                                          |  | Percent                        |  | Percent           |  |                                                                              |
|     |                         |                                                                        |  | Shareholding of                |  | Shareholding      |  |                                                                              |
|     |                         |                                                                        |  | Issuer (prior to               |  | Issuer (after at  |  |                                                                              |
|     |                         |                                                                        |  | offer)                         |  | full subscription |  |                                                                              |
|     |                         | JBG Corp Pty                                                           |  | 44.72%                         |  | 43.41%            |  |                                                                              |
|     |                         | Ltd as trustee                                                         |  |                                |  |                   |  |                                                                              |
|     |                         | for the St                                                             |  |                                |  |                   |  |                                                                              |
|     |                         | Ledger Family                                                          |  |                                |  |                   |  |                                                                              |
|     |                         | Trust                                                                  |  |                                |  |                   |  |                                                                              |
|     |                         | Jenepe IPO                                                             |  | 21.66%                         |  | 21.02%            |  |                                                                              |
|     |                         | Capital S.P.                                                           |  |                                |  |                   |  |                                                                              |
|     |                         | Motivate Health                                                        |  | 6.06%                          |  | 5.88%             |  |                                                                              |
|     |                         | Technology Inc                                                         |  |                                |  |                   |  |                                                                              |
|     |                         | Late Afternoon                                                         |  | 4.35%                          |  | 4.22%             |  |                                                                              |
|     |                         | investments Pty<br>Ltd as trustee                                      |  |                                |  |                   |  |                                                                              |
|     |                         | for the Late                                                           |  |                                |  |                   |  |                                                                              |
|     |                         | Afternoon Trust                                                        |  |                                |  |                   |  |                                                                              |
|     |                         | Mancot Equities                                                        |  | 4.32%                          |  | 4.19%             |  |                                                                              |
|     |                         | Pty Ltd as                                                             |  |                                |  |                   |  |                                                                              |
|     |                         | trustee for the                                                        |  |                                |  |                   |  |                                                                              |
|     |                         | HGA                                                                    |  |                                |  |                   |  |                                                                              |
|     |                         |                                                                        |  |                                |  |                   |  |                                                                              |

|     |                                         | Superannuation                                                                            |                                                                              |                                                                        |                                                                       |
|-----|-----------------------------------------|-------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|------------------------------------------------------------------------|-----------------------------------------------------------------------|
|     |                                         | Trust                                                                                     |                                                                              |                                                                        |                                                                       |
|     |                                         |                                                                                           | The major Shareholders have the same voting rights as all other              |                                                                        |                                                                       |
|     |                                         |                                                                                           | Shareholders. There are no additional rights associated with the Shares      |                                                                        |                                                                       |
|     |                                         |                                                                                           | which have any effect on control of the Issuer. There are no measures in     |                                                                        |                                                                       |
|     |                                         |                                                                                           | place to prevent the rights of the majority shareholders being abused.       |                                                                        |                                                                       |
| B.7 | Key historical financial<br>information |                                                                                           | Period from 1 July<br>2013 to 31 March<br>2014<br>(Auditor's review)<br>AU\$ | Period from 11<br>January 2012 to<br>30 June 2013<br>(audited)<br>AU\$ | Period from 1<br>July 2010 to 10<br>January 2012<br>(audited)<br>AU\$ |
|     |                                         | Revenue                                                                                   | 1,561,124                                                                    | 474,897                                                                | 66,234                                                                |
|     |                                         | Cost of sales                                                                             |                                                                              |                                                                        |                                                                       |
|     |                                         | Opening inventory                                                                         | (160,967)                                                                    | (33,623)                                                               | (33,623)                                                              |
|     |                                         | Direct costs                                                                              | (457.778)                                                                    | (451,001)                                                              | (20,025)                                                              |
|     |                                         | Closing inventory                                                                         | 123,886                                                                      | 160,967                                                                | 33,623                                                                |
|     |                                         | Gross profit                                                                              | 1,066,265                                                                    | 151,240                                                                | 46,209                                                                |
|     |                                         | Gain on foreign exchange                                                                  | 316,652                                                                      | 329,634                                                                | -                                                                     |
|     |                                         | Administrative expenses                                                                   | (312,736)                                                                    | (817,466)                                                              | (97,379)                                                              |
|     |                                         | Operating loss                                                                            | 1,070,181                                                                    | (336,592)                                                              | (51,170)                                                              |
|     |                                         | Unrealised gain on financial<br>assets                                                    | 1,478,990                                                                    | 2,835,585                                                              | -                                                                     |
|     |                                         | Profit/(loss) before tax                                                                  | 2,549,171                                                                    | 2,498,993                                                              | (51,170)                                                              |
|     |                                         | Tax expense                                                                               | (313,781)                                                                    | (728,000)                                                              | -                                                                     |
|     |                                         | Net profit/(loss) for the<br>period attributable to<br>members of the Company             | 2,235,390                                                                    | 1,770,993                                                              | (51,170)                                                              |
|     |                                         | Other comprehensive<br>income                                                             | -                                                                            | -                                                                      | -                                                                     |
|     |                                         | Total comprehensive<br>income for the period<br>attributable to members<br>of the Company | 2,235,390                                                                    | 1,770,993                                                              | (51,170)                                                              |
|     |                                         |                                                                                           |                                                                              |                                                                        |                                                                       |

| Basic & diluted earnings<br>per share                  | 0.016                                          | 0.013                             |                                         |
|--------------------------------------------------------|------------------------------------------------|-----------------------------------|-----------------------------------------|
|                                                        | 31 March 2014<br>(Auditor's<br>review)<br>AU\$ | 30 June 2013<br>(audited)<br>AU\$ | 10 January<br>2012<br>(audited)<br>AU\$ |
| Current assets<br>Cash and cash<br>equivalents         | 1,945                                          | 13,274                            |                                         |
| Trade and other<br>receivables                         | 1,911,623                                      | 353,803                           | 371                                     |
| Inventory                                              | 123,886                                        | 160,967                           | 33,623                                  |
| Financial assets                                       | 4,960,860                                      | 3,165,218                         |                                         |
| Other assets                                           | 576,687                                        | 576,687                           |                                         |
| Total current assets                                   | 7,575,001                                      | 4,269,949                         | 33,994                                  |
| Non-current assets<br>Property, plant and<br>equipment | 49,555                                         | 78,947                            | 4,509                                   |
| Intangible assets                                      | 2,105                                          | 2,105                             | -                                       |
| Total non-current<br>assets                            | 51,660                                         | 81,052                            | 4,509                                   |
| Total assets                                           | 7,626,661                                      | 4,351,001                         | 38,503                                  |
| Current liabilities<br>Trade and other<br>payables     | 763,177                                        | 276,811                           | 68,361                                  |
| Borrowings                                             | 1,247,212                                      | 1,014,876                         | 4,656                                   |
| Other payables                                         | 9,729                                          | 568                               | 2,944                                   |
| Total current<br>liabilities                           | 2,020,118                                      | 1,292,255                         | 75,961                                  |
| Non-current liabilities                                |                                                |                                   |                                         |
| Borrowings                                             | 74,517                                         | 75,891                            | -                                       |
| Deferred tax liabilities                               | 1,041,781                                      | 728,000                           | -                                       |
| Total non-current<br>liabilities                       | 1,116,298                                      | 803,891                           | -                                       |
| Total liabilities                                      | 3,136,416                                      | 2,096,146                         | 75,961                                  |
| Net assets                                             | 4,490,245                                      | 2,254,855                         | (37,458)                                |
| Equity                                                 |                                                |                                   |                                         |
| Shares                                                 | 26,972,594                                     | 26,972,594                        | 373,863                                 |
| Merger reserve                                         | (26,077,411)                                   | (26,077,411)                      | -                                       |
| Retained earnings                                      | 3,595,062                                      | 1,359,672                         | (411,321)                               |
| Total equity and                                       |                                                |                                   |                                         |

|     |                                                                      | The period for which accounts have been provided above has seen Rapid<br>Nutrition take a significant step forward by converting to a public company<br>which has been successfully admitted to the GXG Stock Exchange. While<br>this was only a transition step to listing on the Open Market (Entry<br>Standard) of the Frankfurt Stock Exchange the GXG step resulted in Rapid<br>Nutrition implementing a high level or corporate compliance by engaging<br>and assembling an experienced corporate team, board of directors and<br>advisors as well as an independent company secretary. These are all |
|-----|----------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                      | essential elements for laying a strong foundation for the company's future<br>success and overall global growth strategy.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|     |                                                                      | By putting in place the necessary infrastructure of a new public company<br>has resulted in the company incurring significantly more expenses 'above<br>and beyond' its normal operational costs. Added to this the Subsidiary has<br>been in the research and development stage over the past 12 months for                                                                                                                                                                                                                                                                                                |
|     |                                                                      | its new System LS™ lifestyle range which was launched in the US and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|     |                                                                      | Australia in October 2013.<br>Rapid Nutrition also incurred a significant logistics hurdle with its Asia                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|     |                                                                      | operations where FDA requirements for natural healthcare products                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|     |                                                                      | changed, just after the company had shifted its manufacturing to the US                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                      | and completed a large production run for Asia. This was a major set back in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|     |                                                                      | the company's anticipated revenue for the period, with the company having                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|     |                                                                      | to hold back several thousand customer inquiries and anticipated orders in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|     |                                                                      | Asia as a result. The company is currently working through the process and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|     |                                                                      | has put in place several 'risk management' procedures to ensure this is                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                      | avoided in any future production.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|     |                                                                      | Whilst the board acknowledges the financial accounts may not yet show                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|     |                                                                      | large cash profits, the board firmly believes that the commencement of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|     |                                                                      | profitable operations is as a result of the foundation which has been laid                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|     |                                                                      | over the past 12 months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|     |                                                                      | There have been no significant changes to the financial position or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|     |                                                                      | operating results since 31 March 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|     |                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| B.8 | Selected key pro forma<br>financial information                      | Not applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| B.9 | Where a profit forecast<br>or estimate is made,<br>state the figure. | Not applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

| B.10 | Audit report<br>qualifications | The Issuer's auditors believe that the Rapid Nutrition Group's ability to<br>continue as a going concern is dependent on the Rapid Nutrition Group<br>receiving monies owed by trade receivables, and successfully realising<br>revenue growth via the Group's plans to launch their new product lines in<br>the coming year.<br>Without the above funding arrangements coming to fruition, certain<br>events may cast doubt on the Group's ability to continue as a going<br>concern. |
|------|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| B.11 | Working capital                | In the opinion of the Issuer, taking into account the availability of further<br>unsecured shareholder loans in the amount of up to €500,000, the Group<br>has sufficient working capital to meet its present requirements, that is for at<br>least the next 12 months following the date of this Prospectus.                                                                                                                                                                          |

|     |                          | Section C - Securities                                                       |
|-----|--------------------------|------------------------------------------------------------------------------|
| C.1 | Securities on offer      | Ordinary Shares, International Securities Identification Number (ISIN)       |
|     |                          | GB00BLG2TX24                                                                 |
| C.2 | Currency of the          | Euro (€)                                                                     |
|     | securities issue.        |                                                                              |
| C.3 | Pre-Offer Shares on      | As of the date of this Prospectus the Issuer has an authorised share capital |
|     | issue                    | of 23,188,405 ordinary shares, all of which are issued and fully paid. The   |
|     |                          | Shares have a nominal value (par value) of £1.00.                            |
| C.4 | Rights attaching to the  | Subject to any limitations imposed by third parties such as CREST or         |
|     | Shares                   | Clearstream, the Offer Shares include the right to attend company            |
|     |                          | meetings of shareholders, vote, and receive dividends and rank equally       |
|     |                          | with the existing Shares of the Issuer.                                      |
| C.5 | A description of any     | There are no restrictions on the free transferability of the Offer Shares.   |
|     | restrictions on the free |                                                                              |
|     | transferability of the   |                                                                              |
|     | securities.              |                                                                              |
| C.6 | Shares subject to        | Not applicable. While the shares will be the subject of an application for   |
|     | application for          | listing on the Entry Standard of the Frankfurt Stock Exchange, it is not a   |
|     | admission to trading     | regulated market.                                                            |
| C.7 | Dividend policy.         | No dividend policy has currently been agreed or tabled by the Board.         |

|     |                           | Section D - Risks                                                             |
|-----|---------------------------|-------------------------------------------------------------------------------|
| D.1 | Key risks relating to the | If the Issuer raises insufficient capital it will delay the US product launch |
|     | Issuer and its industry   | and will slow the expansion of the Rapid Nutrition Business.                  |

|     |                                     | If regulatory requirements change for product registration in one or more of<br>the Rapid Nutrition markets the Issuer may have to withdraw specific<br>products from markets where regulation cannot be dealt with, and this will<br>result in an associated decrease in revenues and profits.<br>Increase in competition and in raw materials costs for production of<br>inventory may result in increased costs of manufacturing for the Rapid<br>Nutrition Group, in which case either the profit margin will be reduced or the<br>price will need to be increased which may reduce the overall turnover, both<br>of which may impact negatively on the profit generated by the Issuer. |
|-----|-------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |                                     | New trading terms negotiated for entry into the US market are likely to<br>impact negatively on cash-flow and if insufficient capital reserves are<br>available then this is likely to restrict the growth of the Rapid Nutrition<br>Business in that market.                                                                                                                                                                                                                                                                                                                                                                                                                               |
| D.3 | Key risks relating to the<br>Shares | Should the Issuer or any member of the Rapid Nutrition Group not operate<br>profitably this may have an adverse effect on the Issuer's ability to pay<br>dividends to shareholders.<br>The Entry Standard of the Frankfurt Stock Exchange is not a market<br>regulated by EU or national legislation in the usual sense, and as such the<br>listing and trading of the Shares on the Entry Standard does not have the                                                                                                                                                                                                                                                                       |
|     |                                     | same level of transparency and protection that a listing on a regulated<br>exchange would have.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

|      |                        | Section E - Offer                                                                |
|------|------------------------|----------------------------------------------------------------------------------|
| E.1  | Expenses relating to   | The Issuer anticipates that upon full subscription of the Offer, the Issuer will |
|      | Offer                  | have raised €1,960,000. The costs of the Offer and the listing process have      |
|      |                        | been inextricably connected, but in any event the Issuer anticipates the         |
|      |                        | costs of both the Offer, including and the proposed listing on the Entry         |
|      |                        | Standard to not exceed €300,000.                                                 |
|      |                        | The costs associated with the Offer will be paid by the Issuer.                  |
| E.2a | Reasons for the offer, | This offer will be used primarily to accelerate the Group's growth by funding    |
|      | use of proceeds        | increased product marketing, larger inventory holdings (in order to reduce       |
|      |                        | cost of goods sold) and to pay the costs of the offer and listing processes.     |
|      |                        | The funding of increased inventory holdings will also have a positive impact     |
|      |                        | on the working capital available to the Group in that it will reduce the extent  |
|      |                        |                                                                                  |

|     |                         |                       | of the Issuer's reliance on accounts receivable payments being made          |                  |                        |
|-----|-------------------------|-----------------------|------------------------------------------------------------------------------|------------------|------------------------|
|     |                         | promptly and in full. |                                                                              |                  |                        |
|     |                         | Use of Funds          |                                                                              |                  | Estimated Net Amount € |
|     |                         |                       |                                                                              |                  | Fully Subscribed Offer |
|     |                         | •                     | Inventory - Increase inventory                                               | €1,000,000       |                        |
|     |                         |                       | holdings in order to reduce                                                  |                  |                        |
|     |                         |                       | manufacturing COGS.                                                          |                  |                        |
|     |                         | •                     | Cost of offer and listing process                                            | €300,000         |                        |
|     |                         |                       |                                                                              |                  |                        |
|     |                         | •                     | Marketing – accelerated media                                                | €660,000         |                        |
|     |                         |                       | strategy for faster market penetration                                       |                  |                        |
|     |                         |                       | and revenue.                                                                 |                  |                        |
|     |                         | Total                 |                                                                              | €1,960,000       |                        |
|     |                         |                       |                                                                              |                  |                        |
| E.3 | Terms and conditions of | a.                    | There is no aggregate minimum subscription and the Offer is not              |                  |                        |
|     | the Offer               |                       | conditional.                                                                 |                  |                        |
|     |                         | b.                    | Applications must be for at least 5,000 Shares and then in                   |                  |                        |
|     |                         |                       | multiples of 2,000 Shares.                                                   |                  |                        |
|     |                         | c.                    | The issue price is €2.80 per Share.                                          |                  |                        |
|     |                         | d.                    | The subscription list for the Offer Shares will open on 19 May 2014          |                  |                        |
|     |                         |                       | (Offer Open Date) and may be closed at any time thereafter, but              |                  |                        |
|     |                         |                       | not later than 3pm on 22 August 2014 (Offer Close Date) unless, at           |                  |                        |
|     |                         |                       | the discretion of the Directors, it is extended beyond that date.            |                  |                        |
| E.4 | Material interests and  |                       | The following table demonstrates the notifiable interests (greater than 4    |                  |                        |
|     | conflicts               |                       | percent) in the issuer, of Directors and managers within the issuer. Please  |                  |                        |
|     |                         |                       | note the values are rounded to two decimal places.                           |                  |                        |
|     |                         |                       |                                                                              | Percentage       | Percentage             |
|     |                         |                       |                                                                              | shareholding of  | shareholding of        |
|     |                         | Name                  | Investor Name                                                                | Issuer (prior to | Issuer (after          |
|     |                         |                       |                                                                              | offer)           | offer at full          |
|     |                         |                       |                                                                              |                  | subscription)          |
|     |                         | Simon St              | JBG Corp Pty Ltd as                                                          |                  |                        |
|     |                         | Ledger                | trustee for the St                                                           |                  |                        |
|     |                         | and Leisa             | Ledger Family Trust                                                          | 44.72%           | 43.41%                 |
|     |                         | St Ledger             |                                                                              |                  |                        |
| E.5 | Name of the person or   |                       | Rapid Nutrition PLC is issuer of the security. All Shareholders have entered |                  |                        |

|     | entity offering to sell the | into a voluntary holding lock of their shares which prevents them from        |
|-----|-----------------------------|-------------------------------------------------------------------------------|
|     | security.                   | disposing their shares on Market for 12 months from the date of the Listing.  |
|     | Lock-up agreements:         |                                                                               |
|     | the parties involved;       | The directors will nominate at least 10% of the issued shares as being        |
|     | and indication of the       | freely tradeable (without a holding lock) in the course of the application to |
|     | period of the lock up.      | list the Shares on the Entry Standard of the Frankfurt Stock Exchange.        |
| E.6 | Dilution resulting from     | The Existing Ordinary Shares will represent approximately 96.98% of the       |
|     | Offer                       | total issued Ordinary Shares in the event that the Offer is fully subscribed. |
| E.7 | Estimated expenses          | Not applicable; there are no expenses charged to the investor by the          |
|     | charged to the investor     | Issuer.                                                                       |
|     | by the issuer or the        |                                                                               |
|     | offeror.                    |                                                                               |
|     |                             |                                                                               |

# <span id="page-21-0"></span>**2. Risk Factors**

The business activities of the Issuer are subject to various risks that may impact on the future performance of the Issuer. Some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, but some are outside the control of the Issuer and cannot be mitigated. There are a number of risk factors that investors should consider and seek independent advice on, before deciding whether or not to invest in Shares. The material risk factors are included in this Part 2.

The following list of risk factors are those considered to be material risks by the Board and ought not to be taken as an exhaustive list of the risks faced by the Issuer or by investors in the Issuer. The following factors may in the future materially affect the financial performance of the Issuer and the value of the Shares offered under this Prospectus. Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those securities.

**Potential investors should consider that an investment in the Issuer is high risk, speculative, and should consult their professional advisers before deciding whether to apply for Shares pursuant to the Offer contained in this Prospectus.**

| 2.1.1 | Economic                                                                                        |  |
|-------|-------------------------------------------------------------------------------------------------|--|
|       | The Rapid Nutrition Group consists of companies located in Australia and the UK and             |  |
|       | servicing markets in those and other countries. Changes in Australia, the United Kingdom        |  |
|       | and world economic conditions generally may adversely affect the financial performance of       |  |
|       | any one or more of the members of the Rapid Nutrition Group, and therefore the Issuer.          |  |
|       | Factors such as inflation, currency fluctuations, interest rates, industrial disruption and     |  |
|       | economic growth may impact on future operations and earnings.                                   |  |
|       | The Issuer's future business prospects rely on particular raw material commodity pricing to     |  |
|       | remain consistent with market trends. Economic changes that result in significant increases     |  |
|       | in prices and that continue for long periods would have an adverse effect on the revenue and    |  |
|       | viability of the Issuer.                                                                        |  |
| 2.1.2 | Limited history and new ventures                                                                |  |
|       | The Issuer has only relatively recently completed the acquisition of the Australian Subsidiary, |  |
|       | and the subsidiary is engaged in ongoing market and product development. It therefore has       |  |
|       | a limited operating history on which an evaluation of its prospects can be made.                |  |
|       | The prospects of the Issuer must be considered in light of the risks, expenses and difficulties |  |
|       | frequently encountered by investing in companies developing products, particularly in heavily   |  |
|       | regulated industries such as the food industry, which are subject to commercial uncertainties   |  |
|       | relating to applications and approvals processes.                                               |  |
|       | If the Issuer and its senior management cannot adequately address the uncertainties and         |  |
|       | risks associated with its limited history and in any new ventures that it pursues, this may     |  |
|       | have a significant detrimental impact on the operations and profitability of the Issuer and the |  |
|       | Group.                                                                                          |  |
| 2.1.3 | Competition                                                                                     |  |
|       | The Issuer's subsidiary competes with other companies, including major competitors in its       |  |
|       | industry. These competitors will likely have greater financial and other resources than the     |  |
|       | Issuer, and as a result, may be in a better position to compete for future business             |  |
|       | opportunities. Many of the Issuer's competitors compete directly with its products and          |  |
|       | services in the market place. There can be no assurance that the Issuer can compete             |  |
|       | effectively with these competitors.                                                             |  |
| 2.1.4 | Consumer Behaviour                                                                              |  |
|       | The Group operates in a discretionary consumer market which is heavily dependent on             |  |
|       | consumer preferences, trends and behaviours. The preferences, trends and behaviours may         |  |
|       | change over time in ways over which the Group has no control, and which result in               |  |
|       | decreasing sales of the Group's products.                                                       |  |
| 2.1.5 | Insufficient insurance and risk cover                                                           |  |
|       | While the Issuer maintains insurance covering various risks and in such amounts as it           |  |
|       |                                                                                                 |  |

# <span id="page-22-0"></span>**2.1 Risk factors relating to the Issuer and its industry**

|       | believes reasonable, such insurance may not be sufficient to cover losses in certain                    |  |
|-------|---------------------------------------------------------------------------------------------------------|--|
|       | circumstances which could have a material adverse effect on its business, its results, its              |  |
|       | balance sheet and its financial position.                                                               |  |
|       | Also, changes in regulations or an increase in claim events, particularly in the event of an            |  |
|       | incident resulting in increased premiums, could have a material adverse effect on the                   |  |
|       | Issuer's profits, its results, its balance sheet and its financial position.                            |  |
| 2.1.6 | Regulatory– procurement and maintenance of approvals                                                    |  |
|       | In Australia, herbal, vitamin and mineral products with therapeutic claims are classified and           |  |
|       | regulated as ''complimentary medicines' under the Therapeutic Goods Act 1989. The                       |  |
|       | Therapeutic Goods Administration (TGA) is Australia's national regulator of therapeutic                 |  |
|       | goods, including complimentary medicines. Each such product must be entered in the                      |  |
|       | Australian Register of Therapeutic Goods and be manufactured in accordance with an                      |  |
|       | approved process before it can be made available for sale in Australia.                                 |  |
|       | Other regimes differ in the rigour and detail of their supervisory systems, however some                |  |
|       | approval process is required in most of the countries in which the Issuer or its subsidiary<br>operate. |  |
|       | As a result there is a risk that the Company may be unable to develop and manufacture                   |  |
|       | products that meet all of the regulatory requirements in one or all of the countries in which it        |  |
|       | wishes to market. Failure to obtain necessary approvals or maintain such approvals may                  |  |
|       | cause the Company to stop selling the products to such markets, increase costs, or frustrate            |  |
|       | delivery to such markets; and consequently have a material detrimental impact on the                    |  |
|       | Company's performance.                                                                                  |  |
| 2.1.7 | Product Quality                                                                                         |  |
|       | In the event that there are any issues with the Group's raw materials, manufacturing                    |  |
|       | processes or supply chain there may be contamination of the Group's products resulting in a             |  |
|       | product that is undesirable or harmful to consumers. Such contamination could result in a               |  |
|       | negative reaction from or health problems for consumers.                                                |  |
|       | Any such issues could have a serious impact on the sales of the Group's products,                       |  |
|       | potentially across the entire product range, with a resulting drop in revenues and profits for          |  |
|       | the Group.                                                                                              |  |
| 2.1.8 | Product Development                                                                                     |  |
|       | The Group has a relatively small number of products in a limited number of markets, and so              |  |
|       | the revenue will be affected if one of these products or markets encounters problems. Such              |  |
|       | problems could include demographic trends, macro-economic conditions, regulatory                        |  |
|       | changes or changing customer preferences/                                                               |  |
|       | Due to the inherent risks involved in creating new technology and products, there is also a             |  |

|        | risk that development costs will be overspent or spent without resulting in a successful          |  |
|--------|---------------------------------------------------------------------------------------------------|--|
|        | product, resulting in increased capital requirements, which may cause delays or cancellation      |  |
|        | of the release of products.                                                                       |  |
| 2.1.9  | Cost of remaining competitive                                                                     |  |
|        | One of the competitive advantages claimed by the Company, and on which many of its sales          |  |
|        | targets are based, is the superior performance of its product. Competitors may release            |  |
|        | products that make these claims redundant and additional development expenditure may be           |  |
|        | required to maintain the market positioning.                                                      |  |
| 2.1.10 | Varying jurisdiction and laws                                                                     |  |
|        | The business supplies its products in a number of jurisdictions. These jurisdictions are the      |  |
|        | subject of different legal systems and laws. If the business or its personnel are not             |  |
|        | conversant with the laws of the jurisdiction in which the products are being delivered, liability |  |
|        | may attach to the Issuer, its Australian Subsidiary or its personnel, as the case may be, and     |  |
|        | cause delay, losses or other impediments to the continued operation of the business in one        |  |
|        | or more jurisdictions. This may have an adverse effect on the Issuer's profits, its trading       |  |
|        | results, its balance sheet and its financial position.                                            |  |
| 2.1.11 | Raw materials procurement costs                                                                   |  |
|        | The Company is using a variety of materials in order to achieve the performance                   |  |
|        | characteristics of its products. There are risks that materials will not be available at an       |  |
|        | acceptable cost, on time or at all, resulting in failure to meet performance specifications, or   |  |
|        | inability to manufacture product to schedule.                                                     |  |
| 2.1.12 | Underachieving sales performance risk                                                             |  |
|        | Due to the nature of the market for natural health supplement products the perceived value        |  |
|        | and desirability of the product may be affected by press reports, reviews, competitor             |  |
|        | advertising and other unknown factors. This could affect the capability of the Company to         |  |
|        | achieve its sales targets.                                                                        |  |
| 2.1.13 | Dependence on key personnel                                                                       |  |
|        | The Company is heavily reliant on key personnel. The Issuer's future depends, in part, on its     |  |
|        | ability to attract and retain key personnel. It may not be able to hire and retain such           |  |
|        | personnel at compensation levels consistent with its existing or intended compensation and        |  |
|        | salary structure. Its future also depends on the continued contributions of its executive         |  |
|        | management team and other key management and technical personnel, the loss of whose               |  |
|        | services may be difficult to replace.                                                             |  |
| 2.1.14 | Distance from existing and planned markets                                                        |  |
|        | The business operates in a number of markets, and is planning on ventures into many               |  |
|        |                                                                                                   |  |
|        | additional markets. Both existing and planned markets can be long distances away from the         |  |
|        | Australian Subsidiary's headquarters. Such distances require staff and suppliers to travel for    |  |
|        | extended periods and can be subject to delays, cancellations and other factors which may          |  |

| at all. Delays and cancellations may have immediate or ongoing consequences for the        |
|--------------------------------------------------------------------------------------------|
| customers and the business relationship with them. As a result, this may have an adverse   |
| effect on the Issuer's profits, its results, its balance sheet and its financial position. |

# <span id="page-25-0"></span>**2.2 Risk factors relating to the Shares**

| 2.2.1 | Dividend risks                                                                                    |  |
|-------|---------------------------------------------------------------------------------------------------|--|
|       | If one or more businesses operated by the Issuer are not profitable, or the Issuer is not         |  |
|       | managed effectively so that profits made in one business must be used to fund another, this       |  |
|       | may have an adverse effect on the Issuer as a whole and the Issuer may not be profitable.         |  |
|       | Consequently, the Issuer would not be able to pay, and shareholders may not receive,              |  |
|       | dividends.                                                                                        |  |
|       | Pursuant to the dividend policy, the Issuer may determine that it will not pay dividends at any   |  |
|       | time or any future time. Consequently the shareholders would not receive dividends for the        |  |
|       | affected period or future period as the case may be.                                              |  |
| 2.2.2 | No Prior market for shares                                                                        |  |
|       | While the Issuer's shares have not been previously listed on a regulated market, they have        |  |
|       | been listed on the GXG First Quote. The GXG First Quote is not a full public exchange,            |  |
|       | however it does allow for the creation of a market in the listed company's shares. The Issuer     |  |
|       | delisted from the GXG First Quote in February 2014 in anticipation of applying for admission      |  |
|       | on the Entry Standard of the Frankfurt Stock Exchange. Despite being listed on the GXG First      |  |
|       | Quote there was no material trading of the Issuer's shares through that exchange.                 |  |
| 2.2.3 | Post Offer Share Price may fluctuate considerably                                                 |  |
|       | In recent years, the stock markets have experienced significant fluctuations that often have      |  |
|       | had nothing to do with the results of the companies whose shares have been traded thereon.        |  |
|       | Market fluctuations and economic conditions in the current economic environment may               |  |
|       | increase the volatility of the Shares. The market for the Shares may be influenced by economic    |  |
|       | and market conditions and, to varying degrees, interest rates, currency exchange rates and        |  |
|       | inflation rates in other European and other industrialised countries.                             |  |
|       | As a result, the price of the Shares following the Offer may be highly volatile. Factors that may |  |
|       | affect the share price include:                                                                   |  |
|       | a. developments that impact the financial results of the Issuer and fluctuations in the financial |  |
|       | results of the Issuer;                                                                            |  |
|       | b. changes in market expectations about the valuation of the Issuer;                              |  |
|       | c.<br>investors' assessments of the Issuer as well as changes in the valuation of its competitors |  |
|       | and the industries and markets in which it operates;                                              |  |
|       | d. investors' perception as to the success and impact of this Offer and the strategy described    |  |
|       | in this Prospectus;                                                                               |  |
|       | e. changes in general conditions in the economy or the financial markets and other                |  |

|       | developments affecting the Issuer, its subsidiary or its competitors; and                              |  |
|-------|--------------------------------------------------------------------------------------------------------|--|
|       | f.<br>potential litigation or regulatory action involving the Issuer and/or its subsidiary or industry |  |
|       | sectors influencing the businesses of the Issuer and/or its subsidiary.                                |  |
|       | There can be no assurance that events in Germany, the United Kingdom, Australia, Europe, or            |  |
|       | elsewhere will not cause market volatility or that such volatility will not adversely affect the       |  |
|       | price of the Shares or that economic and market conditions will not have any other adverse             |  |
|       | effect.                                                                                                |  |
| 2.2.4 | Sale of substantial numbers of shares following the Offer                                              |  |
|       | Sales of a substantial number of Shares in the public market following the Offer, or the               |  |
|       | perception that these sales might occur, could adversely affect the prevailing market price for        |  |
|       | the Shares and materially impair the Issuer's future ability to raise capital through offers of        |  |
|       | Shares or securities relating to the Shares.                                                           |  |
|       | Upon completion of the Offer and at Full Subscription, the Issuer will have a total of 23,888,405      |  |
|       | Shares on issue, of which 2,388,840 will be freely tradeable. The remaining Shares, which will         |  |
|       | total 21,499,565, including Shares held by the Directors, will be subject to a lock-up of 12           |  |
|       | months from 1 March 2014. After this lock-up period expires, these Shares may be sold in the           |  |
|       | public market. If a large number of Shares are sold in the public market at once, the market           |  |
|       | price of the Shares could fall significantly.                                                          |  |
| 2.2.5 | Risks arising from the Shares being traded on a stock market not regulated by the EU                   |  |
|       | and national legislation                                                                               |  |
|       | In Europe, there are two ways to access the capital market:                                            |  |
|       | a. securities can be admitted to and traded at EU-regulated markets (defined as Organised              |  |
|       | Markets or Regulated Markets under the European Directive 2001/34/EC and as defined                    |  |
|       | in respective national legislation, such as Section 2, paragraph 5 of the German Securities            |  |
|       | Trading Act (Wertpapierhandelsgesetz – WpHG)); or                                                      |  |
|       | b. alternatively, securities can be traded on stock markets which are regulated by the stock           |  |
|       | exchanges themselves (Stock Exchange Regulated Markets).                                               |  |
|       | The Organised Markets or Regulated Markets are governed by national securities laws. In                |  |
|       | Germany, the Organised or Regulated Markets are governed, inter alia, by the German                    |  |
|       | Securities Trading Act. The Stock Exchange-Regulated Markets are generally governed by                 |  |
|       | private law, with only limited application of the statutory provisions of the German Securities        |  |
|       | Trading Act, such as a prohibition of insider trading and market abuse.                                |  |
|       | The German Stock Exchange-Regulated Markets are established in accordance with Section                 |  |
|       | 48 of the German Stock Exchange Act (Börsengesetz) and governed by private law of the                  |  |
|       | respective stock markets' General Terms and Conditions.                                                |  |
|       | Entry Standard as a segment of the Open Market at Frankfurt Stock Exchange (Frankfurter                |  |
|       | Wertpapierbörse) is a Stock Exchange Regulated Market and therefore not an Organised                   |  |
|       | Market or Regulated Market as defined under the European Directive 2001/34/EC and Section              |  |
|       | 2 paragraph 5 of the German Securities Trading Act.                                                    |  |
|       |                                                                                                        |  |

| 2.2.8 | Trading risks – dilution                                                                           |  |
|-------|----------------------------------------------------------------------------------------------------|--|
|       | Shareholders.                                                                                      |  |
|       | Issuer's financial position and prospects and its ability to distribute dividends to its           |  |
|       | Issuer. The impact of such unfavourable currency exchange rates may materially affect the          |  |
|       | increases the relevant exchange rates for those revenues may have a similar impact on the          |  |
|       | converted into British pounds sterling. As trading volume with the USA and other countries         |  |
|       | may cause profits realised in Australia, in Australian dollars, to be of less value when           |  |
|       | Large fluctuations in the comparable value of British pounds sterling and the Australian Dollar    |  |
|       | in the past are likely to do so in the future.                                                     |  |
|       | Australian dollars. The exchange rates between these currencies have fluctuated significantly      |  |
|       | consequence its revenues are denominated in a combination of British pounds sterling and           |  |
|       | The Issuer is based in the United Kingdom, and has a subsidiary in Australia. As a                 |  |
| 2.2.7 | Currency and exchange rate risks                                                                   |  |
|       |                                                                                                    |  |
|       | f.<br>terrorism or other hostilities.                                                              |  |
|       | e. the demand for, and supply of, capital; and                                                     |  |
|       | d. changes in investor sentiment;                                                                  |  |
|       | c.<br>currency fluctuations;                                                                       |  |
|       | b. interest rates and inflation rates;                                                             |  |
|       | a. general economic outlook;                                                                       |  |
|       | many factors such as:                                                                              |  |
|       | regardless of the Issuer's operating performance. Share market conditions are affected by          |  |
|       | Further, share market conditions may affect the value of the Issuer's quoted securities            |  |
| 2.2.6 | General factors affecting value of shares                                                          |  |
|       | the outstanding shareholders.                                                                      |  |
|       | Takeover Act, such as the obligation of controlling shareholders to make a mandatory offer to      |  |
|       | Shareholders, are not protected by the provisions of the German Securities Acquisition and         |  |
|       | have an influence on the Share price. Shareholders of the Issuer, and in particular minority       |  |
|       | particular major Shareholders or controlling Shareholders, certain inside information that may     |  |
|       | information for Shareholders regarding, inter alia, the shareholdings of other Shareholders, in    |  |
|       | certain German legislation relating to the holding and trading of securities may lead to a lack of |  |
|       | The listing and trading of the Shares at Entry Standard and the non-application to the Issuer of   |  |
|       | applicable to the Issuer.                                                                          |  |
|       | rights are not applicable to shares being traded at Entry Standard, and therefore will not be      |  |
|       | relating to notification, publication and transmission of changes in the percentage of voting      |  |
|       | inside information by an issuer and the provisions in the German Securities Trading Act            |  |
|       | the German Securities Trading Act regarding the notification, publication and transmission of      |  |
|       | shares which are traded on Stock Exchange Regulated Markets. In particular, the provisions in      |  |
|       | Certain German legislation relating to the holding and trading of securities is not applicable to  |  |
|       |                                                                                                    |  |

| Under English law, shareholders usually have pre-emption rights to subscribe on a pro-rata  |
|---------------------------------------------------------------------------------------------|
| basis for the cash issues of new shares. In the event that the Issuer was to carry out such |
| issues in the future, certain shareholders may not be able to participate in such issue and |
| would accordingly have their percentage interest in the Issuer Diluted.                     |

# <span id="page-29-0"></span>**3. Directors, Company Secretary, Registered Office and Advisors**

| PARTY                     | DETAILS                                              |  |
|---------------------------|------------------------------------------------------|--|
| Issuer:                   | Rapid Nutrition PLC                                  |  |
|                           | Registered Office                                    |  |
|                           | nd Floor<br>2                                        |  |
|                           | 145-157 St John Street                               |  |
|                           | London EC 1V 4PY                                     |  |
|                           | United Kingdom                                       |  |
|                           | Principal Place of Business                          |  |
|                           | 40-46 Nestor Drive                                   |  |
|                           | Meadowbrook Qld 4131                                 |  |
|                           | Australia                                            |  |
|                           | Ph: +61 7 3200 4222                                  |  |
| Directors of the Issuer:  | Mr Simon St Ledger                                   |  |
|                           | Mr Malcolm Sinclair                                  |  |
|                           | Mr Vaidyanathan Nateshan                             |  |
| Company Secretary:        | Nick Lindsay                                         |  |
|                           | Elemental CoSec Limited                              |  |
|                           | 27 Old Gloucester Street                             |  |
|                           | London WC1N 3AX                                      |  |
|                           | United Kingdom                                       |  |
| Auditor of the Issuer:    | KSI (WA)                                             |  |
|                           | Level 1 1304 Hay St                                  |  |
|                           | West Perth WA 6005                                   |  |
|                           | Australia                                            |  |
|                           | (member of the Institute of Chartered Accountants in |  |
|                           | England and Wales)                                   |  |
| Accountant of the Issuer: | CatalystBPO Pty Ltd                                  |  |
|                           | Level 3 46 Ord Street                                |  |
|                           | West Perth WA 6005                                   |  |
|                           | Australia                                            |  |
| Australian Subsidiary:    | Rapid Nutrition Pty Ltd                              |  |
|                           | 40-46 Nestor Drive                                   |  |
|                           | Meadowbrook Qld 4131                                 |  |
|                           | Australia                                            |  |
| Auditor of the Australian | KSI (WA)                                             |  |
|                           | Level 1 1304 Hay St                                  |  |
|                           |                                                      |  |

| Subsidiary:                         | West Perth WA 6005                           |  |
|-------------------------------------|----------------------------------------------|--|
|                                     | Australia                                    |  |
| Accountant of the Australian        | Spiro Hazidavis, Accountant & Tax Agent      |  |
| Subsidiary:                         | Level 1 198 Old Cleveland Road Coorparoo QLD |  |
|                                     | 4151                                         |  |
|                                     | Australia                                    |  |
| Lawyers of the Australian           | Argus Lawyers                                |  |
| Subsidiary:                         | Level 11, 535 Bourke Street                  |  |
|                                     | Melbourne Vic 3000                           |  |
|                                     | Australia                                    |  |
| Listing Partner and Co-ordinator of | Süddeutsche Aktienbank AG                    |  |
| Offer                               | Kronenstrasse 30                             |  |
|                                     | D-70174                                      |  |
|                                     | Stuttgart                                    |  |
|                                     | Germany                                      |  |
| Company registrar:                  | Equiniti Limited of Aspect House,            |  |
|                                     | Spencer Road Lancing                         |  |
|                                     | West Sussex BN99 60A                         |  |
| UK Custodian (UK):                  | Equiniti Limited of Aspect House,            |  |
|                                     | Spencer Road Lancing                         |  |
|                                     | West Sussex BN99 60A                         |  |
|                                     |                                              |  |

# <span id="page-31-0"></span>**4. Expected Timetable of Principal Events and Offer Statistics**

<span id="page-31-2"></span><span id="page-31-1"></span>

| 4.1 | Timetable of Principal Events                                                               |  |
|-----|---------------------------------------------------------------------------------------------|--|
|     | 13 May 2014 Approval of Prospectus by the FCA, notification of the Prospectus by the        |  |
|     | FCA to the German Federal Financial Supervisory Authority (Bundesanstalt für                |  |
|     | Finanzdienstleistungsaufsicht – "Bafin")                                                    |  |
|     |                                                                                             |  |
|     | 16 May 2014 Publication of the Prospectus as approved by FCA to BaFin on Issuers<br>Website |  |
|     | 19 May 2014 Offer Open date                                                                 |  |
|     | 22 August 2014 Offer Close date                                                             |  |
|     | 27 August 2014 Acceptance of applications                                                   |  |
|     | 29 August 2014 Allotment of shares                                                          |  |
|     | 12 September 2014 Issue of share certificates/placement on automated transaction            |  |
|     | system (xetra or equivalent)                                                                |  |
|     |                                                                                             |  |
|     |                                                                                             |  |
| 4.2 | Offer Statistics                                                                            |  |
|     |                                                                                             |  |
|     | Offer Price €2.80                                                                           |  |
|     | Number of Ordinary Shares on issue prior to Offer 23,188,405                                |  |
|     | Number of Ordinary Shares being offered in the Offer (excluding any Over-allotment          |  |
|     | Shares) 700,000                                                                             |  |
|     |                                                                                             |  |
|     | Percentage of the Company's issued share capital being offered in the Offer 3.02%           |  |
|     | Estimated gross proceeds of the Offer receivable by the Company €1,960,000                  |  |
|     | Expected market capitalisation of the Company at the Offer Price €66,887,534                |  |

# <span id="page-32-0"></span>**5. Details of the Offer**

# <span id="page-32-1"></span>**5.1 Securities**

| 5.1.1   | Type and class of securities                                                                |  |
|---------|---------------------------------------------------------------------------------------------|--|
|         | The Shares, including the Offer Shares, are ordinary shares in the Issuer. The Shares in    |  |
|         | the Issuer were created under the Act and are regulated by the Financial Services and       |  |
|         | Markets Act. The liability of the members of the Company is limited to the value of their   |  |
|         | respective shareholding.                                                                    |  |
| 5.1.2   | Listing and Trading                                                                         |  |
| 5.1.2.1 | Admission to Entry Standard                                                                 |  |
|         | Inclusion of the Offer Shares to trading on the Open Market in the Entry Standard segment   |  |
|         | of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and commencement of           |  |
|         | trading of the Offer Shares on the Frankfurt Stock Exchange (Frankfurter                    |  |
|         | Wertpapierbörse) on the Entry Standard is expected to take place during the month of        |  |
|         | June 2014                                                                                   |  |
|         |                                                                                             |  |
|         | The inclusion of the Offer Shares to trading on the Entry Standard segment of the           |  |
|         | Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) is subject to the relevant           |  |
|         | provisions within the Exchange Rules for the Frankfurt Stock Exchange (Frankfurter          |  |
|         | Wertpapierbörse) (Börsenordnung für die Frankfurter Wertpapierbörse) as of 16               |  |
|         | December 2013 and the General Terms and Conditions of Deutsche Börse AG for the             |  |
|         | Regulated Unofficial Market (Freiverkehr) on the Frankfurt Stock Exchange (Allgemeine       |  |
|         | Geschäftsbedingungen der Deutsche Börse AG für den Freiverkehr an der Frankfurter           |  |
|         | Wertpapierbörse) as of 26 July 2013.                                                        |  |
|         | The provisions in the German Securities Trading Act regarding the notification, publication |  |
|         | and transmission of inside information and the provisions in the German Securities          |  |
|         | Trading Act relating to notification, publication and transmission of changes in the        |  |
|         | percentage of voting rights are not applicable to shares being traded at Entry Standard,    |  |
|         | and therefore not applicable to the Issuer.                                                 |  |
|         |                                                                                             |  |
|         | Similarly, as the Entry Standard is not an "organised" or "regulated market", the German    |  |
|         | Securities Acquisition and Takeover Act (Wertpapierübernahmegesetz – WpÜG) is not           |  |
|         | applicable to shares being traded at Entry Standard, and therefore not applicable to the    |  |
|         | Issuer. The Issuer is, however, currently subject to the provisions of the UK City Code on  |  |
|         | Takeovers and Mergers.                                                                      |  |
|         | With regard to the Issuer's Shares being traded on a stock market not regulated by EU       |  |
|         | regulations and national statutory law, please also see the                                 |  |
| 5.1.2.2 | Clearing Codes                                                                              |  |
|         |                                                                                             |  |

<span id="page-33-0"></span>

|         | The International Securities Identification Number (ISIN) is GB00BLG2TX24. The German             |  |
|---------|---------------------------------------------------------------------------------------------------|--|
|         | Securities Identification Number (WKN) is A110V1.The Frankfurt Stock Exchange ticker              |  |
|         | symbol is expected to be RNP and will be issued soon after this Prospectus has been               |  |
|         | passported from the UKLA to BaFin.                                                                |  |
|         | Any further clearing codes or identification numbers that apply to the Shares will be             |  |
|         | published on the Website.                                                                         |  |
| 5.1.2.3 | Paying Agent                                                                                      |  |
|         | As long as the Shares are listed on the Entry Standard, the Issuer will maintain a principal      |  |
|         | paying agent (Zahlstelle) in Germany. The Issuer is yet to appoint the principal paying           |  |
|         | agent and will provide details on the Website once the appointment has been made.                 |  |
|         |                                                                                                   |  |
| 5.1.2.4 | Expenses                                                                                          |  |
|         | The Issuer will pay all brokerage and placing fees associated with the Offer. The Issuer          |  |
|         | will also pay incidental costs such as insurance, accounting, tax advice and certain legal        |  |
|         | fees relating to the Issuer which the Issuer estimates will not exceed €50,000.                   |  |
| 5.1.2.5 | Form of the Shares, settlement and clearing                                                       |  |
|         | Initially, no share certificates will be issued for the Offer Shares, and share certificates will |  |
|         | not be available for physical delivery to individuals in the Offer. Delivery of the Offer         |  |
|         | Shares will be made in book-entry form through the facilities of CREST and Clearstream.           |  |
| 5.1.2.6 | Admission of Shares to Crest                                                                      |  |
|         | The Articles permit the holding of Shares under the CREST system and the Issuer will              |  |
|         | apply for the Offer Shares to be admitted to CREST with effect from admission to trading          |  |
|         | and listing.                                                                                      |  |
|         | CREST is a paperless settlement procedure operated by Euroclear UK & Ireland Limited              |  |
|         | enabling securities to be evidenced otherwise than by a certificate and transferred               |  |
|         | otherwise than by a written instrument. Accordingly, settlement of transactions involving         |  |
|         | the transfer of legal title to Shares held in uncertificated form following admission to trading  |  |
|         | and listing will take place within the CREST system.                                              |  |
|         | CREST is a voluntary system. Following admission to listing and trading, holders of               |  |
|         | Shares who wish to receive and retain share certificates will be able to do so. However, it       |  |
|         | is not permitted for Share certificates to be issued in respect of Shares which are               |  |
|         | simultaneously admitted to CREST.                                                                 |  |
|         | Shareholders who wish to hold their Shares in certificated form would need to withdraw            |  |
|         | their Shares from CREST and would not be able to settle transactions in such Shares               |  |
|         | through CREST (or through Clearstream) without first submitting the certificates for              |  |
|         | dematerialisation into CREST.                                                                     |  |
|         | No provision has been made for physical settlement of Shares held in certificated form in         |  |
|         | connection with the Issuer's listing and inclusion to trading on the Entry Standard.              |  |
| 5.1.2.7 | Transfer of Shares from CREST to Clearstream                                                      |  |
|         |                                                                                                   |  |
|         | Upon admission to trading and listing, all the Offer Shares will be delivered through             |  |

|         | CREST to the UK Custodian on behalf of Clearstream.                                          |  |
|---------|----------------------------------------------------------------------------------------------|--|
| 5.1.2.8 | Representation and Form of Shares for trading in Clearstream                                 |  |
|         | The interests in the Offer Shares will be traded in electronic form on the Entry Standard.   |  |
|         | The UK Custodian will be the legal owner of the Shares in accordance with the laws of        |  |
|         | England and Wales.                                                                           |  |
|         | The Offer Shares being transferred into CREST and held by the UK Custodian on behalf         |  |
|         | of Clearstream are traded in Clearstream by way of co-ownership in a global bearer           |  |
|         | certificate issued by Clearstream for the Offer Shares. The global bearer certificate        |  |
|         | duplicates the Offer Shares. The duplicate certification in a global bearer certificate is   |  |
|         | required because registered shares of English companies do not fulfil the legal              |  |
|         | requirements for tradable securities under German securities and depositary laws.            |  |
|         | Accordingly, for the purpose of good delivery of the Offer Shares to Entry Standard,         |  |
|         | Clearstream will issue the global bearer certificate for the relevant number of Offer Shares |  |
|         | to be included to trading at Entry Standard.                                                 |  |
|         | The co-ownership in the global bearer certificate conveys to the co-owner (i.e. the          |  |
|         | beneficial owner of the Shares held by the UK Custodian on behalf of Clearstream),           |  |
|         | through his or her depositary bank and in proportion to his or her share in the global       |  |
|         | bearer certificate, all rights arising from the Shares. Cash dividends will be passed on by  |  |
|         | Clearstream to the co-owner in his or her capacity as the beneficial Shareholder.            |  |
|         | The same applies to the exercise and/or benefit of other shareholder rights, such as         |  |
|         | subscription rights, stock dividends, and shares from stock splits. Any holder of Shares     |  |
|         | being admitted to CREST and traded through Clearstream shall be entitled, at his or her      |  |
|         | expense, to have his or her Shares delivered through his or her depositary bank to the UK    |  |
|         | Custodian, for crediting them to the safe custody account of Clearstream against issuance    |  |
|         | of corresponding co-ownership shares in the global bearer certificate.                       |  |
|         | In the event of any change in the number of Shares represented by the global bearer          |  |
|         | certificate (e.g. in cases of deliveries to the safe custody account, withdrawals from the   |  |
|         | safe custody account or allotment of Shares), Clearstream shall amend the global bearer      |  |
|         | certificate accordingly.                                                                     |  |
| 5.1.2.9 | Delivery of the Offer Shares to investors in the Offer                                       |  |
|         | The Offer Shares will be credited by Clearstream to the accounts of institutions (brokerage  |  |
|         | houses and depository banks) that participate in Clearstream ("Clearstream                   |  |
|         | Participants"). The Clearstream Participants, in turn, will credit the Offer Shares to the   |  |
|         | accounts held with them by investors in the Offer or by those investors' nominees in         |  |
|         | accordance with settlement instructions placed by investors and in a manner and time as      |  |
|         | instructed by the Issuer. Payment for the Offer Shares will be effected in Euros, unless     |  |
|         | otherwise agreed between the Issuer and the Applicant.                                       |  |
|         | Subsequent settlement of transactions made on Entry Standard will be made in book-entry      |  |
|         | form through the facilities of Clearstream only.                                             |  |

<span id="page-35-0"></span>

| 5.1.2.10 |              | Holding of the Shares held through Clearstream                                                          |  |
|----------|--------------|---------------------------------------------------------------------------------------------------------|--|
|          |              | Neither the Clearstream Participants (shown in the records of Clearstream), nor the                     |  |
|          |              | persons shown in the records of such Clearstream Participants as owners of the Shares                   |  |
|          |              | held through Clearstream will:                                                                          |  |
|          | (a)          | have the Shares registered in their names in the Issuer's register of members;                          |  |
|          | (b)          | receive physical delivery of definitive certificates evidencing their interest in the                   |  |
|          |              | Shares; or                                                                                              |  |
|          | (c)          | be considered the registered holders of the Shares in accordance with the laws<br>of England and Wales. |  |
|          |              | Accordingly, such persons will not necessarily be considered as shareholders for the                    |  |
|          |              | purpose of the laws of England and Wales in respect of the Shares they hold through                     |  |
|          | Clearstream. |                                                                                                         |  |
|          |              | Instead, the UK Custodian will be entered in the Issuer's register of members as the                    |  |
|          |              | registered holder of such Shares and will, for the purpose of the laws of England and                   |  |
|          |              | Wales, be considered to have legal title to the Shares (subject to the beneficial interests of          |  |
|          |              | investors who hold their Shares through Clearstream).                                                   |  |
|          |              | In order to become the registered holder of the Shares they hold through Clearstream,                   |  |
|          |              | such investors would need to instruct the UK Custodian (or to instruct the Clearstream                  |  |
|          |              | Participant which holds their Shares through Clearstream on their behalf to instruct the UK             |  |
|          |              | Custodian) to withdraw the relevant number of Shares from Clearstream and CREST, and                    |  |
|          |              | notify the Issuer or its share registrar of the persons to whom physical share certificates             |  |
|          |              | should be issued. However, such certificated Shares would not be capable of settlement                  |  |
|          |              | through Clearstream (nor CREST) and would need to be resubmitted to CREST for                           |  |
|          |              | dematerialisation and transfer to the UK Custodian if that shareholder subsequently                     |  |
|          |              | wished to be able to settle transactions in those Shares through Clearstream.                           |  |
|          |              | Transaction on Shares effected on the Entry Standard                                                    |  |
| 5.1.2.11 |              | Investors who hold their Shares through Clearstream will be able to transfer such Shares                |  |
|          |              | in accordance with the rules and procedures of Clearstream only. Settlement (delivery and               |  |
|          |              | payment) of transactions on the Entry Standard will be effected through Clearstream only.               |  |
|          |              |                                                                                                         |  |
| 5.1.2.12 |              | Voting rights and distributions under the Shares held through Clearstream                               |  |
|          |              | In order to exercise voting rights in relation to their Shares, investors who hold their                |  |
|          |              | Shares through Clearstream must send an instruction order to their depositary bank which                |  |
|          |              | sends an instruction to Clearstream (or must instruct the Clearstream Participant which                 |  |
|          |              | holds their Shares through Clearstream on their behalf to send an instruction order to                  |  |
|          |              | Clearstream) in respect of the exercise of the voting right.                                            |  |
|          |              | Clearstream will then notify the UK Custodian of the number of votes cast for or against                |  |
|          |              | the relevant resolution and the UK Custodian will in turn exercise such voting rights                   |  |
|          |              | through CREST as the registered holder of the Shares. The UK Custodian may be                           |  |
|          |              | prepared to grant written letters of representation to individual holders of Shares through             |  |

|         | Clearstream, enabling them to attend and speak at a general meeting and to vote the               |  |
|---------|---------------------------------------------------------------------------------------------------|--|
|         | Shares in which they are interested.                                                              |  |
|         | Rights and entitlements attached to the Shares under the laws of England and Wales,               |  |
|         | including rights and entitlements to distributions, to information, to make choices and           |  |
|         | elections and to call for, attend and vote at meetings will be passed on through                  |  |
|         | Clearstream in the form in which they are received by the UK Custodian together with any          |  |
|         | amendments and additional documentation necessary to effect such passing-on. All                  |  |
|         | distributions will be made to the UK Custodian, in the first instance, as the registered          |  |
|         | holder of the Shares, which will, in turn, pass them through Clearstream Participants to the      |  |
|         | holders of the Shares held through Clearstream.                                                   |  |
| 5.1.3   | Currency                                                                                          |  |
|         | The Issuer's functional currency is GBP. The majority of the Rapid Nutrition Group's              |  |
|         | Revenue is denominated in currencies other than the GBP, principally Australian Dollars.          |  |
|         |                                                                                                   |  |
|         | Exchange rate movements can affect comparability of its operational results between               |  |
|         | accounting periods.                                                                               |  |
| 5.1.4   | Rights                                                                                            |  |
| 5.1.4.1 | Dividends                                                                                         |  |
|         | Please refer to Section 14.1for information relating to dividends.                                |  |
|         |                                                                                                   |  |
| 5.1.4.2 | Voting Rights                                                                                     |  |
|         | Each Share (including the Shares held through Clearstream) carries one vote at                    |  |
|         | shareholders meetings.                                                                            |  |
| 5.1.4.3 | Pre-emption rights                                                                                |  |
|         | Under section 561 of the UK Companies Act, the Issuer may not allot:                              |  |
|         | (i) Shares in the Issuer; or                                                                      |  |
|         | (ii) rights to subscribe for, or convert securities into, Shares in the Issuer (together, "equity |  |
|         | securities")                                                                                      |  |
|         | to a person on any terms unless it has made an offer to each person who holds                     |  |
|         | Shares in the Issuer to allot to him on the same or more favourable terms a proportion of         |  |
|         | those securities that is as nearly as practicable equal to the proportion in nominal value        |  |
|         | held by him of the share capital of the Issuer. The Offer must state a period during which it     |  |
|         | may be accepted of at least 14 days beginning with the date on which the Offer is sent or         |  |
|         | supplied (in the case of offers made in hard copy form), sent (in the case of offers made in      |  |
|         | electronic form) or published (in the case of offers made by publication in the Gazette) and      |  |
|         | the Offer may not be withdrawn before the end of that period.                                     |  |
|         | The statutory pre-emption rights set out in section 561 of the UK Companies Act                   |  |
|         | do not apply to the allotment of bonus shares, the allotment of equity securities for non         |  |
|         | cash consideration or the allotment of equity securities pursuant to an employees' share          |  |

|         | Where the Directors are authorised to allot Shares in the Issuer for the purposes            |  |
|---------|----------------------------------------------------------------------------------------------|--|
|         | of section 551 of the UK Companies Act, the Issuer may by a special resolution of the        |  |
|         | Shareholders authorise the Directors to allot equity securities for cash consideration as if |  |
|         | the statutory pre-emption rights under section 561 of the UK Companies Act did not apply     |  |
|         | to such allotment. Such authority may be granted by Shareholders for the same period as      |  |
|         | the authority granted for the purposes of section 551 of the UK Companies Act or such        |  |
|         | shorter period as the special resolution may specify.                                        |  |
|         | On 31 March 2014 a special resolution was passed in a general meeting of the                 |  |
|         | Issuer to give the directors power to allot up to £10,048,308 of Shares (or equivalent       |  |
|         | amount in other denomination) in the period up to 31 December 2014, or the date of the       |  |
|         | next Annual General meeting whichever occurs first, as if section 561 of the Act did not     |  |
|         | apply to any such allotment.                                                                 |  |
| 5.1.4.4 | Liquidation rights                                                                           |  |
|         | Subject to any specific limitations imposed by the Offer, the holders of the Shares will     |  |
|         | under general law be entitled to share in any surplus assets in a winding up in proportion   |  |
|         | to their shareholdings.                                                                      |  |
|         | The Board will have power in the name and on behalf of the Issuer to present a petition to   |  |
|         | the court for the Issuer to be wound up.                                                     |  |
|         | If the Issuer is wound up, a liquidator may, with the sanction of a special resolution       |  |
|         | and any other sanction required by the UK Insolvency Act 1986 divide among the               |  |
|         |                                                                                              |  |
|         | shareholders the whole or any part of the assets of the Issuer.                              |  |
| 5.1.5   | Approval of Offer                                                                            |  |
|         | The allotment of the Offer Shares was approved by the Board and by a resolution of the       |  |
|         | Shareholders at general meeting on 31 March 2014.                                            |  |
| 5.1.6   | Issue Date                                                                                   |  |
|         | The anticipated date of issue of the Offer Shares is 29 August 2014.                         |  |
| 5.1.7   | Holding Lock                                                                                 |  |
|         | A minimum of 10% of the total securities of the issuer will be free trading. Apart from this |  |
|         | the Issuer's Shareholders have consented to the Issuer imposing a holding lock on their      |  |
|         | Shares for a period of 12 months from 1 March 2014. The Issuer at its discretion may vary    |  |
|         | the holding lock for any purpose; and one such purpose would be to comply with any           |  |
|         | listing rules, which require a certain amount of 'free float' on the exchange.               |  |
|         | There are a number of restrictions and other rules about the transferability of shares in UK |  |
|         | companies. Such restrictions and rules originate from a number of sources and include:       |  |
|         | (a) The UK Companies Act;                                                                    |  |
|         | (b) The Takeover Code; and                                                                   |  |
|         | (c) the general laws of the UK and Wales.                                                    |  |
|         | Such laws may impose restrictions on the free transfer, or positive obligations on           |  |

|         | or otherwise.                                                                                    |  |
|---------|--------------------------------------------------------------------------------------------------|--|
|         | The Issuer recommends that Applicants obtain professional advice in relation to the              |  |
|         | suitability of the Shares in this regard, as the Issuer is unable to provide information         |  |
|         | relevant to every possible Applicant's circumstances.                                            |  |
| 5.1.8   | Takeover Bids                                                                                    |  |
|         | There are no mandatory takeover bids and/or squeeze-out and sell out rules in relation to        |  |
|         | the securities.                                                                                  |  |
|         | There have been no public takeover bids by third parties in respect of the issuer's equity,      |  |
|         | which have occurred during the last financial year or the current financial year.                |  |
| 5.1.9   | Taxes                                                                                            |  |
| 5.1.9.1 | Issuers responsibility for withholding taxes                                                     |  |
|         | The following paragraphs include advice received by the Directors on the current tax             |  |
|         | position of shareholders who are resident or ordinarily resident in the UK for tax purposes      |  |
|         | and holding Ordinary Shares beneficially as investments. The statements below are                |  |
|         | intended only as a general guide and do not constitute advice to any shareholder on his          |  |
|         | personal tax position and may not apply to certain classes of investor who may be subject        |  |
|         | to special rules (such as dealers in securities, insurance companies, charities, collective      |  |
|         | investment schemes or pension providers). The comments are based on current                      |  |
|         | legislation and H.M. Revenue & Customs practice at the date of this document.                    |  |
|         | Any investor who is in doubt as to their tax position or who is subject to taxation in a         |  |
|         | jurisdiction other than the UK, should consult his or her own professional advisers              |  |
|         | immediately.                                                                                     |  |
|         | Shareholders should note that the levels and bases of, and relief from, taxation may             |  |
|         | change and that changes may affect benefits of investment in the Issuer. This summary is         |  |
|         | not exhaustive and does not generally consider tax relief or exemptions.                         |  |
| 5.1.9.2 | Taxation of dividends                                                                            |  |
|         | The Issuer will not be required to withhold tax at source when paying a dividend.                |  |
|         | An individual shareholder who is resident in the UK for tax purposes and who receives a          |  |
|         | dividend from the Issuer will generally be entitled to a non-refundable tax credit which he      |  |
|         | may set off against his total income tax liability on the dividend. The tax credit will be equal |  |
|         | to 10 percent of the aggregate of the dividend and the tax credit (the "gross dividend"),        |  |
|         | which is also equal to one-ninth of the cash dividend received. A UK resident individual         |  |
|         | shareholder who is liable to income tax at the starting or basic rate only will be subject to    |  |
|         | tax on the dividend at the rate of 10 percent of the gross dividend, so that the tax credit will |  |
|         | satisfy in full any such shareholder's liability to income tax on the dividend. A UK resident    |  |
|         | individual shareholder who is liable to income tax at the higher rate of 40 percent will be      |  |
|         | liable to tax on the gross dividend at the rate of 32.5 percent. A UK resident individual        |  |
|         | shareholder liable to income tax at the additional rate of income tax of 50 percent (broadly,    |  |
|         | an individual with taxable income in excess of £150,000) will be liable to tax on the gross      |  |

|         | dividend at the rate of 42.5 percent. After taking into account the 10 percent tax credit,      |  |
|---------|-------------------------------------------------------------------------------------------------|--|
|         | such individuals will have to account for additional tax equal to 22.5 percent of the gross     |  |
|         | dividend (which is also equal to 25 percent of the cash dividend received) or 32.5 percent      |  |
|         | of the gross dividend respectively (which is also equal to 36.1 percent of cash dividends       |  |
|         | received).                                                                                      |  |
|         | UK resident taxpayers who are not liable to UK tax on dividends, including pension funds        |  |
|         | and charities, will not be entitled to claim repayment of the tax credit attaching to dividends |  |
|         | paid by the Issuer.                                                                             |  |
|         | Subject to certain exceptions, a shareholder which is a company resident for tax purposes       |  |
|         | in the UK and which receives a dividend paid by another company resident for tax                |  |
|         | purposes in the UK will not generally have to pay corporation tax in respect of it. Such        |  |
|         | shareholders will not be able to claim repayment of tax credits attaching to dividends.         |  |
|         | Persons who are not resident in the UK should consult their own tax advisers concerning         |  |
|         | their tax liabilities on dividends received from the Issuer and on whether they can benefit     |  |
|         | from all or part of any tax credit in the jurisdiction in which they are resident.              |  |
| 5.1.9.3 | Taxation of chargeable gains                                                                    |  |
|         | If a shareholder disposes of any or all of his Ordinary Shares in the Issuer he may incur a     |  |
|         | liability to tax on chargeable gains depending upon the shareholder's particular                |  |
|         | circumstances and subject to any available exemptions and reliefs. Companies are                |  |
|         | entitled to indexation allowance which may also reduce the chargeable gain.                     |  |
| 5.1.9.4 | Stamp duty and stamp duty reserve tax (SDRT)                                                    |  |
|         |                                                                                                 |  |
|         |                                                                                                 |  |
|         | No liability to stamp duty or SDRT will generally arise on the allotment and issue of new       |  |
|         | Ordinary Shares for cash by the Issuer.                                                         |  |
| 5.1.10  | Shares held outside the CREST system                                                            |  |
|         | The conveyance or transfer on sale of the Ordinary Shares will usually be subject to stamp      |  |
|         | duty on the instrument or transfer, generally at the rate of 0.5 percent of the amount or       |  |
|         | value of the consideration. Stamp duty is charged in multiples of £5 and is rounded up. An      |  |
|         | obligation to account for SDRT at the rate of 0.5 percent of the amount or value of the         |  |
|         | consideration will also arise if an unconditional agreement to transfer the ordinary shares     |  |
|         | is not completed by a duly stamped instrument of transfer before the accountable date for       |  |
|         | SDRT purposes. The accountable date is the seventh day of the month following the               |  |
|         | month in which the agreement for the transfer is made. Payment of the stamp duty will           |  |
|         | cancel the liability to account for SDRT. It is the purchaser who is in general liable to       |  |
|         | account for stamp duty or SDRT.                                                                 |  |
| 5.1.11  | Shares held within the CREST system                                                             |  |
|         | The transfer of the Ordinary Shares in uncertificated form in the CREST system will             |  |
|         | generally attract a liability to SDRT at the rate of 0.5 percent of the amount or value of the  |  |
|         | consideration. The SDRT is payable on the fourteenth day following the date of the              |  |
|         | unconditional agreement for the transfer of the Ordinary Shares.                                |  |

|        | The above statements are intended as a general guide to the current stamp duty and           |  |
|--------|----------------------------------------------------------------------------------------------|--|
|        | SDRT position. Certain categories of person are not liable to stamp duty or SDRT and         |  |
|        | others may be liable at a higher rate as mentioned above or may, although not primarily      |  |
|        | liable for the tax, be required to notify and account for it under the Stamp Duty Reserve    |  |
|        | Tax Regulations 1986.                                                                        |  |
|        | Special rules apply to agreements made by market intermediaries and to certain sale and      |  |
|        | repurchase and stock borrowing arrangements. Agreements to transfer Ordinary Shares to       |  |
|        | charities will not give rise to SDRT or stamp duty.                                          |  |
| 5.1.12 | Inheritance Tax                                                                              |  |
|        | The inheritance tax status of individual Shareholders' Ordinary Shares will depend upon      |  |
|        | their personal circumstances. Shareholders should consult with their professional advisers   |  |
|        | if they are concerned with the potential inheritance tax implications of their shares in the |  |
|        | Issuer.                                                                                      |  |
|        |                                                                                              |  |

# <span id="page-40-0"></span>**5.2 Terms and Conditions of the Offer**

| 5.2.1 | a)                            | The Offer will initially be extended to investors in the United Kingdom and, subject            |  |
|-------|-------------------------------|-------------------------------------------------------------------------------------------------|--|
|       |                               | to the Prospectus being first passported to Germany, to German investors. The                   |  |
|       |                               | Offer may be extended to other countries subject to the Issuer first passporting                |  |
|       |                               | this Prospectus to those countries and/or meeting the relevant capital raising                  |  |
|       |                               | requirements in those countries.                                                                |  |
|       | b)                            | There is no aggregate minimum subscription and the Offer is not conditional.                    |  |
|       | c)                            | Applications must be for at least 5,000 Shares, and then in multiples of 2,000                  |  |
|       |                               | Shares, up to a maximum of 700,000 Shares.                                                      |  |
|       | d)                            | The issue price is €2.80 per Share.                                                             |  |
|       | e)                            | The subscription list for the Offer Shares will open 19 May 2014 (Offer Open Date)              |  |
|       |                               | and may be closed at any time thereafter, but not later than 3pm on 22 August                   |  |
|       |                               | 2014 (Offer Close Date) unless extended by the Directors.                                       |  |
| 5.2.2 |                               | There are no existing securities offered for sale as part of this offer; all securities offered |  |
|       |                               | for subscription are those that are issued in connection to this offer.                         |  |
|       |                               | The announcement to the public will be made on the day the offer opens.                         |  |
| 5.2.3 |                               | The Offer is open for applications as of the Offer Open Date and may be closed at any           |  |
|       |                               | time thereafter, but no later than 3pm on the Offer Close Date unless, at the discretion of     |  |
|       |                               | the Directors, it is extended beyond that date.                                                 |  |
|       |                               | Applications are subject to the terms and conditions contained in this Prospectus, and as       |  |
|       |                               | included in the Application Form.                                                               |  |
| 5.2.4 | Applications are irrevocable. |                                                                                                 |  |
| 5.2.5 |                               | Once submitted applicants cannot withdraw subscriptions.                                        |  |
|       |                               |                                                                                                 |  |

|        | Moneys may be transferred to the Issuer as the Directors may determine against allotment      |  |
|--------|-----------------------------------------------------------------------------------------------|--|
|        | and issue of Offer Shares If any application is not accepted, the amount (if any) paid on     |  |
|        | application will be returned without interest and in each case sent through the post at the   |  |
|        | Applicant's risk.                                                                             |  |
| 5.2.6  | Applications must be for at least 5,000 Shares, and then in multiples of 2,000 Shares, up     |  |
|        | to a maximum of 700,000 Shares                                                                |  |
| 5.2.7  | Investors are not permitted to withdraw applications once submitted                           |  |
|        |                                                                                               |  |
| 5.2.8  | Full payment for an Application must either:                                                  |  |
|        | (i)<br>accompany the Application Form by cheque; or                                           |  |
|        | (ii) be made by direct bank transfer to the Receiving Agent's bank account as set out         |  |
|        | in the Application Form.                                                                      |  |
|        | Timing of the Offer Shares allotment shall occur on clearance of the cheque, receipt of the   |  |
|        | payment or the closing date of the Offer, whichever is later.                                 |  |
| 5.2.9  | The status of the Offer will be published on the Website until 11 May 2015 which is twelve    |  |
|        | months after the Prospectus Date.                                                             |  |
|        | The results of the Offer will be announced within two weeks of the close of the Offer, on     |  |
|        | the Website. Subject to any changes to the timetable, this is planned for 5 September         |  |
|        | 2014.                                                                                         |  |
| 5.2.10 | Under section 561 of the UK Companies Act, the Issuer may not allot:                          |  |
|        | Shares in the Issuer; or                                                                      |  |
|        | rights to subscribe for, or convert securities into, Shares in the Issuer (together,          |  |
|        | "equity securities")                                                                          |  |
|        | to a person on any terms unless it has made an offer to each person who holds Shares in       |  |
|        | the Issuer to allot to him on the same or more favourable terms a proportion of those         |  |
|        | securities that is as nearly as practicable equal to the proportion in nominal value held by  |  |
|        | him of the share capital of the Issuer. The Offer must state a period during which it may be  |  |
|        | accepted of at least 14 days beginning with the date on which the Offer is sent or supplied   |  |
|        | (in the case of offers made in hard copy form), sent (in the case of offers made in           |  |
|        | electronic form) or published (in the case of offers made by publication in the Gazette) and  |  |
|        | the Offer may not be withdrawn before the end of that period.                                 |  |
|        | The statutory pre-emption rights set out in section 561 of the UK Companies Act do not        |  |
|        | apply to the allotment of bonus shares, the allotment of equity securities for non-cash       |  |
|        | consideration or the allotment of equity securities pursuant to an employees' share           |  |
|        | scheme.                                                                                       |  |
|        | Where the Directors are authorised to allot Shares in the Issuer for the purposes of section  |  |
|        | 551 of the UK Companies Act, the Issuer may by a special resolution of the Shareholders       |  |
|        |                                                                                               |  |
|        | authorise the Directors to allot equity securities for cash consideration as if the statutory |  |

|          | allotment. Such authority may be granted by Shareholders for the same period as the          |  |  |  |  |
|----------|----------------------------------------------------------------------------------------------|--|--|--|--|
|          | authority granted for the purposes of section 551 of the UK Companies Act or such shorter    |  |  |  |  |
|          | period as the special resolution may specify.                                                |  |  |  |  |
|          | On 31 March 2014 a special resolution was passed in a general meeting of the Issuer to       |  |  |  |  |
|          | give the directors power to allot up to £10,048,308in Shares (or equivalent amount in other  |  |  |  |  |
|          | denomination) in the period to 31 December 2014, or until the date of the next Annual        |  |  |  |  |
|          | General Meeting of the Issuer whichever occurs first, as if section 561 of the Act did not   |  |  |  |  |
|          | apply to any such allotment.                                                                 |  |  |  |  |
| 5.2.11   | The basis of allotment will be determined by the Directors in their absolute discretion. The |  |  |  |  |
|          | Directors reserve the right to:                                                              |  |  |  |  |
|          | a)<br>reject any application, in whole or in part, to scale down any applications, or to     |  |  |  |  |
|          | accept applications on a "first come, first served" basis;                                   |  |  |  |  |
|          | b)<br>to effect one or more closings of the Offer;                                           |  |  |  |  |
|          | c)<br>to extend the period during which the subscription list remains open; and              |  |  |  |  |
|          | treat any application as valid and binding on an applicant even if the Application Form is   |  |  |  |  |
|          | not complete                                                                                 |  |  |  |  |
| 5.2.12   | The securities are being offered internationally in one tranche. There is no variance in     |  |  |  |  |
|          | categories of potential investors as all securities are being offered simultaneously. All    |  |  |  |  |
|          | applications will be treated equally and no preference will be given to any individual or    |  |  |  |  |
|          | category of applicant.                                                                       |  |  |  |  |
| 5.2.13   | To the knowledge of the issuer no existing shareholders have indicated that they intend to   |  |  |  |  |
|          | subscribe in the offer. The issuer is not aware of any person that intends to subscribe for  |  |  |  |  |
|          | more than 5% of the offer.                                                                   |  |  |  |  |
| 5.2.14   | Pre-allotment Disclosure:                                                                    |  |  |  |  |
| 5.2.14.1 | The Offer may be closed at any time, but no later than 3pm on the Offer Close Date           |  |  |  |  |
|          | unless, at the discretion of the Directors, it is extended beyond that date.                 |  |  |  |  |
| 5.2.14.2 | Multiple applications for Shares pursuant to the Offer by the same person are permitted.     |  |  |  |  |
|          |                                                                                              |  |  |  |  |
| 5.2.15   | Applications are subject to the terms and conditions contained in this Prospectus, and as    |  |  |  |  |
|          | included in the Application Form.                                                            |  |  |  |  |
| 5.2.16   | Over-allotment                                                                               |  |  |  |  |
|          | The Directors of the Issuer have the right, in their absolute discretion, to accept          |  |  |  |  |
|          | applications of up to a further 200,000 shares over and above the 700,000 shares which       |  |  |  |  |
|          | are the subject of the Offer. Such further applications must be received prior to the Offer  |  |  |  |  |
|          | Close Date, must comply with all of the terms and conditions of this Prospectus and will in  |  |  |  |  |
|          | all respects be dealt with in the same manner as the remaining applications.                 |  |  |  |  |
| 5.2.17   | Pricing                                                                                      |  |  |  |  |
|          | The Offer Price for the shares is €2.80.                                                     |  |  |  |  |
|          |                                                                                              |  |  |  |  |

# <span id="page-43-0"></span>**5.3 Admission to Trading and Dealing Arrangements**

| 5.3.1 | The share capital of the Issuer was previously listed on the GXG First Quote, but has been |
|-------|--------------------------------------------------------------------------------------------|
|       | delisted from that exchange in preparation for listing on the Open Market (Entry Standard) |
|       | of the Frankfurt Stock Exchange. As a result, on the date of this Prospectus, the share    |
|       | capital is not listed or dealt in on any recognised investment exchange.                   |
|       | It is intended that an application will be made for all the Offer Shares to be admitted to |
|       | trading on the Open Market (Entry Standard) of the Frankfurt Stock Exchange within two     |
|       | months of the date of this Prospectus.                                                     |
|       | It is emphasised that no application has currently or is intended to be made for the Offer |
|       | Shares to be admitted to trading on any exchange other than the Frankfurt Stock            |
|       | Exchange. Nor has any application been made for the admission of the ordinary shares to    |
|       | the Official List or any other Recognised Investment Exchange (REI).                       |
|       |                                                                                            |
|       |                                                                                            |

# <span id="page-43-1"></span>**5.4 Expenses of the Issue/Offer**

| 5.4.1 | Expected gross proceeds of Offer: €1,960,000                                             |
|-------|------------------------------------------------------------------------------------------|
|       | Expected cost of Offer and listing process: €300,000                                     |
|       | Expected net proceeds of Offer: €1,660,000                                               |
|       | The expenses of the offer and listing process can not readily be separated, but together |
|       | are not expected to exceed the stated amount.                                            |
|       |                                                                                          |

# <span id="page-43-2"></span>**5.5 Dilution**

| 5.5.1 |                                                                                                                                                                | The amount and percentage of immediate dilution resulting from the offer.                      |            |                 |              |            |  |  |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|------------|-----------------|--------------|------------|--|--|
|       |                                                                                                                                                                | The following table illustrates the dilution of existing Shareholders, if all Offer Shares are |            |                 |              |            |  |  |
|       | issued to new Shareholders.                                                                                                                                    |                                                                                                |            |                 |              |            |  |  |
|       | Subscription                                                                                                                                                   | Type of<br>Shares                                                                              | Pre-Offer  | Offer<br>Shares | Total Shares | Dilution % |  |  |
|       | Maximum<br>Subscription                                                                                                                                        | Ordinary                                                                                       | 23,188,405 | 700,000         | 23,888,405   | 3.02%      |  |  |
| 5.5.2 | In the case that existing Shareholders participate in the Offer, such Shareholders will be<br>diluted to a lesser extent than demonstrated in the table above. |                                                                                                |            |                 |              |            |  |  |

# <span id="page-44-0"></span>**5.6 Major Shareholders**

<span id="page-44-1"></span>

| 5.6.1 | The only Shareholders who hold a notifiable interest (greater than 4 percent) in the Issuer     |                            |                                            |  |  |  |  |  |
|-------|-------------------------------------------------------------------------------------------------|----------------------------|--------------------------------------------|--|--|--|--|--|
|       | are those set out in the table below. The only shareholder which has any connection to          |                            |                                            |  |  |  |  |  |
|       | directors, senior management or staff is JBG Corp Pty Ltd which is the trustee of the St        |                            |                                            |  |  |  |  |  |
|       | Ledger family trust, a family trust of which Simon St Ledger and Leisa St Ledger are            |                            |                                            |  |  |  |  |  |
|       | beneficiaries.                                                                                  |                            |                                            |  |  |  |  |  |
|       |                                                                                                 |                            |                                            |  |  |  |  |  |
|       | Investor Name                                                                                   | Percent Shareholding       | Percent Shareholding Issuer (after at full |  |  |  |  |  |
|       |                                                                                                 | of Issuer (prior to offer) | subscription                               |  |  |  |  |  |
|       | JBG Corp Pty Ltd as trustee for the St Ledger                                                   | 44.72%                     | 43.41%                                     |  |  |  |  |  |
|       | Family Trust                                                                                    |                            |                                            |  |  |  |  |  |
|       | Jenepe IPO Capital S.P.                                                                         | 21.66%                     | 21.02%                                     |  |  |  |  |  |
|       | Motivate Health Technology Inc                                                                  | 6.06%                      | 5.88%                                      |  |  |  |  |  |
|       | Late Afternoon investments Pty Ltd as trustee                                                   | 4.35%                      | 4.22%                                      |  |  |  |  |  |
|       | for the Late Afternoon Trust                                                                    |                            |                                            |  |  |  |  |  |
|       | Mancot Equities Pty Ltd as trustee for the HGA                                                  | 4.32%                      | 4.19%                                      |  |  |  |  |  |
|       | Superannuation Trust                                                                            |                            |                                            |  |  |  |  |  |
|       |                                                                                                 |                            |                                            |  |  |  |  |  |
|       | The major Shareholders have the same voting rights as other Shareholders, and there are         |                            |                                            |  |  |  |  |  |
|       | no additional rights attached to their Shares. There are no measures in place to prevent        |                            |                                            |  |  |  |  |  |
|       | the rights of the majority Shareholders being abused.                                           |                            |                                            |  |  |  |  |  |
| 5.6.2 | Except to the extent of the voting rights attaching to the major Shareholders as outlined in    |                            |                                            |  |  |  |  |  |
|       | Section 5.6.1 above the Issuer is not directly or indirectly controlled by any party, and as at |                            |                                            |  |  |  |  |  |
|       | the date of this Prospectus the Issuer is not aware of any circumstances likely to result in a  |                            |                                            |  |  |  |  |  |
|       | change of control of the Issuer.                                                                |                            |                                            |  |  |  |  |  |
|       |                                                                                                 |                            |                                            |  |  |  |  |  |

# <span id="page-45-0"></span>**6. Letter from the Managing Director**

It gives me great pleasure to introduce you to Rapid Nutrition PLC, a fast growing Healthcare company that is a pioneer in the field of healthcare supplements and is experiencing significant international success.

The Rapid Nutrition business has been operating since 2001, and we are based in the UK and Australia. We specialise in a range of innovative and effective healthcare supplements which we export globally, and our goal is to be a major force within the healthcare industry worldwide. Our rapid success can be attributed to meticulous research, quality product ranges and detailed strategies to steer our products through the most effective distribution channels. These qualities are reinforced by an experienced and professional team including one of Australia's leading Dieticians 'Peter Rhodes' who continues to provide invaluable support and assistance in comprehensively compiling the data and information to support the companies product ranges, and naturopath Malcolm Sinclair our devoted Naturopath and board member who coordinates the research and development of new and exciting formulas that will benefit our customers.

Treating obesity has become a major area of focus for us. It is one of the most common, and fastest growing health concerns in the world. It is a global health epidemic which contributes to the rise of other related diseases, including diabetes, high blood pressure, back pain, high cholesterol and has even been linked to certain types of cancer.

The industry has expanded as a result of the increasing popularity of consumers choice to adopt a preventative approach to maintaining their health and well-being through a combination of traditional and alternative therapies.

As an established and respected manufacturer of weight loss products, that puts Rapid Nutrition in a very favourable position in the worldwide market. Not only do we have a proven and comprehensive weight loss and lifestyle system, but we are working towards a future as a major health care provider – a goal we have set ourselves that appears to be coming to fruition more swiftly than we could have imagined.

Our development team is a synergistic combination of dieticians, naturopaths and pharmaceutical specialists. They meticulously formulate our products to create maximum effect. Our aim is to be absolutely certain that we are releasing the very best of what nature has to offer onto the market. Our Board believes Rapid Nutrition has all of the elements it needs to become a major provider of health supplements to a global market and we would like to invite to come along with us on this journey.

Managing Director/CEO – Rapid Nutrition PLC

# <span id="page-46-0"></span>**7. Information on the Company and the Group**

# <span id="page-46-1"></span>**7.1 Information About the Issuer**

| 7.1.1 | Background                                                                         |                                                                                              |  |  |  |  |
|-------|------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|--|--|--|--|
|       |                                                                                    | The Rapid Nutrition Business consists of the development, manufacture and distribution of    |  |  |  |  |
|       | a range of healthcare supplements designed to address obesity. The Rapid Nutrition |                                                                                              |  |  |  |  |
|       |                                                                                    | Business was founded by Simon St Ledger in 2001, and he continues to act as the CEO of       |  |  |  |  |
|       | that business.                                                                     |                                                                                              |  |  |  |  |
|       |                                                                                    |                                                                                              |  |  |  |  |
|       |                                                                                    | The Issuer was incorporated in January 2012 to act as a holding company for Rapid            |  |  |  |  |
|       |                                                                                    | Nutrition Pty Ltd and the Rapid Nutrition Business which it operates, and to assist with the |  |  |  |  |
|       |                                                                                    | global expansion of that business.                                                           |  |  |  |  |
|       |                                                                                    | Rapid Nutrition Pty Ltd (an Australian Company) became a wholly owned subsidiary of the      |  |  |  |  |
|       |                                                                                    | Issuer on 24 July 2012 and is the primary trading entity in the Group. The Issuer itself     |  |  |  |  |
|       |                                                                                    | operates solely as a holding company of the Subsidiary and does not conduct any other        |  |  |  |  |
|       | business.                                                                          |                                                                                              |  |  |  |  |
|       |                                                                                    |                                                                                              |  |  |  |  |
|       |                                                                                    | The business has grown from servicing only the Australian market to the point where it       |  |  |  |  |
|       |                                                                                    | now has two product ranges being distributed in nine countries, including the USA, the       |  |  |  |  |
|       | United Kingdom and China.                                                          |                                                                                              |  |  |  |  |
|       |                                                                                    |                                                                                              |  |  |  |  |
|       | Key Dates:                                                                         |                                                                                              |  |  |  |  |
|       | No.                                                                                | Details<br>Status                                                                            |  |  |  |  |
|       |                                                                                    |                                                                                              |  |  |  |  |
|       | 2002                                                                               | Establish national distribution network in Australia<br>2002                                 |  |  |  |  |
|       | 2004-2014                                                                          | Secured exports sales and or product registration in the following<br>2004 - 2014            |  |  |  |  |
|       |                                                                                    | countries already:                                                                           |  |  |  |  |
|       |                                                                                    | China, Korea, Singapore, Thailand, India, Ghana, UK, Ireland, Poland                         |  |  |  |  |
|       |                                                                                    | Czech Republic,                                                                              |  |  |  |  |
|       |                                                                                    | Turkey, South Africa and USA                                                                 |  |  |  |  |
|       | 2007-2008                                                                          | Secured Licensing Deal in Ireland & Middle East<br>2007-2008                                 |  |  |  |  |
|       |                                                                                    |                                                                                              |  |  |  |  |
|       | 2001-2005                                                                          | Completed R&D on two key lifestyle brands Leisa's Secret®<br>2001-2005                       |  |  |  |  |
|       | 2013                                                                               | and SystemLS™<br>2013                                                                        |  |  |  |  |
|       | 2012                                                                               | Secured USD\$10 million media allocation in USA<br>2012                                      |  |  |  |  |
|       |                                                                                    |                                                                                              |  |  |  |  |
|       | 2012                                                                               | Approved for US government incentive to establish US Headquarters<br>2012                    |  |  |  |  |
|       |                                                                                    |                                                                                              |  |  |  |  |
|       | 2012                                                                               | Acquired 15% stake in US-based health technology company Motivate<br>2012                    |  |  |  |  |
|       |                                                                                    |                                                                                              |  |  |  |  |

|         | Health Technology Inc                                                                                 |  |
|---------|-------------------------------------------------------------------------------------------------------|--|
|         |                                                                                                       |  |
|         | While the Subsidiary will continue to grow its business the Issuer is also actively seeking           |  |
|         | further merger and acquisition targets to accelerate penetration into existing and new                |  |
|         | markets and to broaden its product portfolio. There are however currently no targets which            |  |
|         | are sufficiently advanced to warrant disclosure in this Prospectus.                                   |  |
| 7.1.2   | The legal name of the Issuer is Rapid Nutrition PLC, and it trades under that name.                   |  |
| 7.1.3   | The issuer was registered through Companies House, UK (Coy. No. 7905640) and its                      |  |
|         | registered address is 2nd Floor, 145-157 St John Street, London EC 1V 4PY, United                     |  |
|         | Kingdom. Other contact details for the Issuer are included in the Corporate Directory.                |  |
| 7.1.4   | The Issuer was incorporated as Rapid Nutrition PLC in England and Wales on 11th of                    |  |
|         | January 2012.                                                                                         |  |
|         |                                                                                                       |  |
| 7.1.5   | The Issuer operates pursuant to the UK Companies Act 1985 (as amended) and the<br>Companies Act 2006. |  |
| 7.1.6   | Investments                                                                                           |  |
|         | The Issuer has made two significant investments since its incorporation. Both investments             |  |
|         | were made in exchange for equity in the Issuer, and both relate to the expansion of the               |  |
|         | Rapid Nutrition Business into the USA. The Issuer does not currently have any                         |  |
|         | investments that are in progress, nor any that are planned and for which firm commitments             |  |
|         | have been made.                                                                                       |  |
| 7.1.6.1 | Motivate Health Technology Inc                                                                        |  |
|         |                                                                                                       |  |
|         | The Issuer has formed a joint venture with Nevada based Motivate Health Technology Inc                |  |
|         | to create a weight-loss video application for use on mobile phones and other internet                 |  |
|         | connected devices. It is an incorporated joint venture and the Issuer received 15% of the             |  |
|         | issued capital in Motivate in exchange for US\$2.25 million worth of shares in the Issuer             |  |
|         | being transferred to Motivate. The agreement was entered into on 17 August 2011 with the              |  |
|         | Subsidiary and that agreement was assigned to the Issuer on the Issuer acquiring the                  |  |
|         | Australian Subsidiary on 24 July 2012. The transfer of shares from the Issuer to Motivate             |  |
|         | Health Technology was completed on 22 November 2013.                                                  |  |
|         | Motivate specialises in the application of 21st century media technology and custom video             |  |

|       | programming to assist customers in attaining their health goals.                                                                                                    |  |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|
|       | Motivate will incorporate its existing products and services as well as consumable weight<br>loss products developed by Rapid Nutrition into the new joint venture. |  |
|       |                                                                                                                                                                     |  |
|       | The Issuer expects this product/service combination has the potential to gain a material                                                                            |  |
|       | share of the \$57 billion dollar annual market for consumer weight loss products and                                                                                |  |
|       | services in the US.                                                                                                                                                 |  |
|       | NewsUSA                                                                                                                                                             |  |
|       | A US\$10 million pre-paid media investment has been made with News USA, Inc. 2841                                                                                   |  |
|       | Hartland Road, Suite 301, Falls Church, VA 22043 a Delaware corporation a media                                                                                     |  |
|       | placement and promotional firm which will support the US product launch by Rapid                                                                                    |  |
|       | Nutrition. The investment was made through the issue of shares by the Issuer to                                                                                     |  |
|       | NewsUSA, resulting in NewsUSA acquiring approximately 0.65% of the Issuer (prior to the<br>capital raising outlined in this Prospectus).                            |  |
|       |                                                                                                                                                                     |  |
|       | NewsUSA clients include WalMart, NASDAQ, AOL, IBM, Coca Cola, Apple, Master Card                                                                                    |  |
|       | and Disney.                                                                                                                                                         |  |
|       |                                                                                                                                                                     |  |
| 7.1.7 | A key focus for the Issuer in the short-term is expansion into the US market. To that end a                                                                         |  |
|       | US team specialising in retail, marketing, production and sales has been selected.                                                                                  |  |
|       | Mr Max Martin - Head of US Operations                                                                                                                               |  |
|       | Max Martin experience in sales and management career profiles a broad- based skill set,                                                                             |  |
|       | over 20+ years of experience in domestic and global markets. Year-over-year of business                                                                             |  |
|       | development success in sales and management positions, demonstrating consistent                                                                                     |  |
|       | achievement of objectives and dedication to organizational goals, generating multimillion                                                                           |  |
|       | dollar business growth to profit turnarounds.<br>His vast experience in contract negotiations, niche market development, import and export                          |  |
|       | operations, streamlining and solutions selling strategies, R&D for companies in USA and                                                                             |  |
|       | overseas has provided a trend of success for his clients and companies associated with                                                                              |  |
|       | him. Max lives in California with his wife and two children. He is an active member of the                                                                          |  |
|       | Interactive Television Alliance & Technology, educated at the Southern California                                                                                   |  |
|       | Broadcasting/Radio University, Universidad de Guadalajara, Mexico. He is also a License                                                                             |  |
|       | Soccer Coach with USA Soccer Federation, and with his free time, he is a volunteer                                                                                  |  |
|       | soccer coach for RealSoCal Soccer League, in Southern California, and JV Girls Soccer                                                                               |  |
|       | Team at Granada Hills Charter High School.                                                                                                                          |  |
|       |                                                                                                                                                                     |  |

|       | Mrs Annie Preston - Head of Production                                                     |  |
|-------|--------------------------------------------------------------------------------------------|--|
|       | 30 year experience in formulating and producing health food supplements in the US.         |  |
|       | Product sourcing specialists and overseeing production from initial concept to completion. |  |
|       | Mr Al Sirignano - Head of US Sales & Distribution                                          |  |
|       | An experienced sales executive on both the national and regional level offering expertise  |  |
|       | in a range of categories.                                                                  |  |
|       | Marketing Solutions                                                                        |  |
|       | • Optimal Brand Positioning                                                                |  |
|       | • Packaging review & design                                                                |  |
|       | • Pricing & product specifications                                                         |  |
|       | • Presentation design                                                                      |  |
|       | • Sell Sheet design                                                                        |  |
|       | Sales Solutions                                                                            |  |
|       | • Select & train broker sales team                                                         |  |
|       | • Develop & implement sales strategy                                                       |  |
|       | • Monitor & report results                                                                 |  |
|       | • Manage sales broker teams                                                                |  |
|       | • Coordinate trade show participation                                                      |  |
|       | Mr Greg Neice - Brand Director                                                             |  |
|       | 33 Years working with Retail Consumer Product Companies through out the country            |  |
|       | Specializing in Retail Products, Packaging, and Print Services .                           |  |
|       | Skills: Product Development and Implementation, Retail Packaging: Design, Development,     |  |
|       | & Production, Labelling: Design Development & Production, Retail Point of Purchase         |  |
|       | Materials: Shelf Talkers, Mobiles, Banners, Posters. Floor Graphics.                       |  |
|       | Retail Displays: Counter & Floor, Product Support Materials: Sell Sheets, Catalogues,      |  |
|       | Brochures, Magazines, Total Product Fulfillment, Product Costing Strategies, Cost          |  |
|       | Effective Print Solutions.                                                                 |  |
| 7.1.8 | US Market Entry Approach                                                                   |  |
|       |                                                                                            |  |
|       | Distribution: Contact will be made with the major national distributors and the key        |  |
|       | nutrition distributors to present the product line. These presentations include an annual  |  |
|       | marketing plan and partnership that uses the resources provided by each distributor to     |  |
|       | assist in the process of launching our brand. The annual plan will include the retail      |  |
|       | promotion calendar, the level of advertising support with the distributor, introduction    |  |
|       | allowances (slotting), distributor sponsored trade shows and table tops that help a brand  |  |
|       | gain maximum exposure to the distributors retailers and key sales personnel. During this   |  |
|       | phase the company will also be informing the market (distributors & retailers) of the      |  |

company's NewsUSA advertising programme which will deliver external advertising to build brand awareness and create demand.

**Retailers:** The company has identified key retailers in the five major geographical areas that represent the core US market. The target list represents the major accounts that control the grocery market share in each respective region. The company has also noted independent natural food stores in each region which play a key role in the successful launch of health food brands. These stores explain products to their customers and help them to understand how the product works and should be used, and typically provide the foundation required to build a solid retail business in this market. Success with the independents is also the first step to securing distribution through the major grocery chains which prefer to stock category leading brands.

**Industry Events:** There are some major trade shows that the company will be attending in addition to the distributor related events. Expo West & Expo East are the two major shows in this industry and Rapid Nutrition will be presenting at both. There are a number of regional shows that the company will also consider attending in 2014.

# <span id="page-50-0"></span>**7.2 Business Overview**

.

| 7.2.1 |                                                                                                                                                                                                                                                                                                               | Principal Activities                                                             |  |  |  |  |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|--|--|--|--|
|       | Rapid Nutrition is a natural healthcare company focused on the research, development<br>and production of a range of life science products.<br>The company commenced business with the launch of its successful weight loss<br>supplement range which is exported internationally, and has now grown to offer |                                                                                  |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               |                                                                                  |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               |                                                                                  |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               |                                                                                  |  |  |  |  |
|       | consumers a growing range of health and wellbeing solutions to meet existing and                                                                                                                                                                                                                              |                                                                                  |  |  |  |  |
|       | emerging societal health concerns, as well as a providing number of wider services to the                                                                                                                                                                                                                     |                                                                                  |  |  |  |  |
|       | life sciences industry.                                                                                                                                                                                                                                                                                       |                                                                                  |  |  |  |  |
|       | Market position in global nutraceutical & over the counter products<br>1.                                                                                                                                                                                                                                     |                                                                                  |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | The company specialises in natural and organic weight management and lifestyle   |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | products which can be brought to market within a relatively short time frame in  |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | combination with an innovative weight-loss coaching application for mobile       |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | phones and internet capable devices. The SystemLS™ cross-platform app            |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | utilizes a proprietary player called the Video Assembly Engine, (the VAE). The   |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | VAE has the ability to self assemble programming, on the fly, personalized to    |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | each individual user. The unique capabilities of the VAE are crucial to          |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | motivational intervention and targeted information delivery. The VAE enables the |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | SystemLS™ Coaching System to deliver an historic breakthrough in the ability to  |  |  |  |  |
|       |                                                                                                                                                                                                                                                                                                               | stream television-like programming, custom tailored to each viewer's personal    |  |  |  |  |

|    | wellness goals "on the fly" to any internet enabled device or phone 24/7. The        |
|----|--------------------------------------------------------------------------------------|
|    | proprietary media technology provided together with an expert team of video-on       |
|    | demand specialists together with Motivate's access to clinically tested              |
|    | intervention programs provides the opportunity to utilize the power of video and     |
|    | mobile/internet delivery technology to dramatically benefit the profitability of its |
|    | health industry partners.                                                            |
| 2. | Strong track record of value creation driven by capital discipline & a focus         |
|    | on returns.                                                                          |
|    | The company operates on a cash efficient business model in order to maximise         |
|    | value for its shareholders and partners. A key component of this model is utilising  |
|    | the boards and key managements extensive networks as well as forming                 |
|    | strategically alliances w for key global distribution opportunities. One of the      |
|    | significant advantages the company offers aside from its unique formulas and         |
|    | intellectual property is that is already shipping orders to customer and securing    |
|    | sales both domestically and internationally.                                         |
| 3. | Management are owners not caretakers of assets.                                      |
|    | The board, key management, and advisors to the board have all invested into the      |
|    | company and hold shares. This commitment and invested interest by                    |
|    | management and owners further validates the company in the eyes of                   |
|    | employees, customers, partners and investors. The company also invests in            |
|    | human capital by emphasising corporate culture and maintaining high retention        |
|    | rates, Key Opinion Leaders "KOL" and influencers with well connected networks.       |
| 4. | Strong pipeline of high quality international distribution partners.                 |
|    | The company has already established international distribution                       |
|    | channels throughout Australia, Asia, Middle East and the UK. One of the              |
|    | company's highest priorities for 2014 and onwards is to expand its distribution into |
|    | neighbouring countries where not already present. Additionally the company will      |
|    | leverage these established distribution pipelines by introducing an expanded         |
|    | product range into these international distribution channels to maximize global      |
|    | growth.                                                                              |
| 5. | Marketing operations are scale-able at medium capital cost.                          |
|    | The groups marketing model is to research and survey a new market by                 |
|    | leveraging of its established business relationships with government bodies and      |
|    | managements established relationships within those markets before investing          |
|    | resources into a new market. Once confirmed, the company then conducts a             |
|    | serious of small cost effective marketing campaigns to confirm market interest       |
|    | and obtain the analytics before scaling the marketing model to a larger scale.       |
|    | Sales and marketing strategy breakdown:                                              |
|    | •E-commerce & F-commerce brand. Better margins, better inventory control.            |
|    |                                                                                      |

|    | •Stand out against retail clutter. Our custom product designs and unique natural     |
|----|--------------------------------------------------------------------------------------|
|    | and organic formulas will garner extensive retail support and editorial press as     |
|    | they pop off shelves.                                                                |
|    | •SystemLS™ and Leisa's Secret®: Instead of using sponsored celebrities or print      |
|    | models for our brand, we plan to use successful, attractive, real people who use     |
|    | our products.                                                                        |
|    | •Social impact through the company's unique video mobile app.                        |
|    | •Continual engagement. We will engage customers through social media                 |
|    | platforms, email blasts, unique contests and promotions.                             |
|    |                                                                                      |
| 6. | Growing balance sheet, IP, Product Portfolio and Branding.                           |
|    | - The company continues to expand its product portfolio and with the launch of its   |
|    | new range SystemLS™.                                                                 |
|    | - The company has acquired A 15% stake in US-based Motivate Health                   |
|    | Technology Inc. at Euro 0.19 per share. Since its initial acquisition Motivate share |
|    | value has now tripled in value as of the 5th of February 2014.                       |
|    |                                                                                      |
| 7. | Merger and acquisitions creating accelerated market penetration.                     |
|    | The partial acquisition and joint venture partnership with US-based Motivate         |
|    | Health Technology Inc provide a local presence and experienced team located in       |
|    | the US. As part of the JV Motivate are responsible for funding the direct            |
|    | marketing cost for Rapid Nutrition's direct-to-customer marketing expenses.          |
|    | Additionally the acquisition provides the company a unique intellectual property     |
|    | which allows each user interaction of the mobile phone (or other device) to          |
|    | update their user profile and makes it more complete so that the system is aware     |
|    | of what's already been viewed by the user, as well as clips that were of particular  |
|    | help or relevance to them. Sophisticated logic takes into account the user's profile |
|    | and needs and generates a unique video playlist that is streamed, real time.         |
|    |                                                                                      |
|    | Everyone using the system receives a personalized video coaching session that        |
|    | is designed according to their needs or health goals.                                |
|    | Some of the factors the app takes into account are the users: disease state,         |
|    | obesity, whether a viewer smokes, age, race, gender, and other psychographic         |
|    |                                                                                      |
|    | and demographic factors guide the SystemLS™ Coaching System as it                    |
|    | personalizes each viewer's experience. The system also can embed intelligence        |
|    | developed by health experts and behaviorists designed to motivate patients.          |
|    | The app will not only provide personalised support for consumers, the                |
|    | SystemLS™ Coaching System is expected to dramatically empower sales as a             |
|    | result of increased customer success in reaching their weight loss goals,            |
|    | increased customer satisfaction, and increased re-orders.                            |

| INNOVATION &    | The Rapid Nutrition Business specialises                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| BRANDING        | in nutraceuticals and over the counter product creation                                                                                                                                                                                                                                                                                                                                                                                                             |
|                 | with the view of building out a global brand.                                                                                                                                                                                                                                                                                                                                                                                                                       |
| SCALE           | •<br>The company's top priority is to further expand                                                                                                                                                                                                                                                                                                                                                                                                                |
|                 | its international distribution contracts and enter                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                 | into neighbouring countries where not already                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                 | present.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                 | •<br>Maximize sales revenue by introducing                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                 | expanded product portfolios into established                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                 | distribution channels.                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                 | •<br>Implementation of strong marketing initiatives                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                 | and media partners in each market.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| DIVERSIFICATION | •<br>Established and emerging distribution channels                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                 | domestically as well as internationally offering a                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                 | diverse and widespread customer base for the                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                 | company. As a result the company is not reliant                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                 | on any one customer.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                 | •<br>Working towards expanding distribution into                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                 | neighbouring countries where not already<br>present.                                                                                                                                                                                                                                                                                                                                                                                                                |
|                 | •<br>The company will be working towards acquiring                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                 | and or developing an expanded product port folio                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                 | which it intends to introduce through its current                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                 | and future distribution partners to maximize                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                 | global growth.                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                 | As a result of the Issuers effective business model it recently won the Queensland<br>(Australia) Export Awards 2013 in the small business category and was recognised as a<br>finalist in the national Australian Export Awards. Additionally, the company was awarded<br>finalist for the Health & Biotechnology Award, in recognition of its international success in<br>the medical, healthcare and biotechnology fields for products, technology, equipment or |
| services.       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                 | The Rapid Nutrition Business has been operated by an Australian private company, Rapid                                                                                                                                                                                                                                                                                                                                                                              |
|                 | Nutrition Pty Ltd (Australian Company Number 098 389 836), since 2001. In 2012 Rapid                                                                                                                                                                                                                                                                                                                                                                                |
|                 | Nutrition PLC was incorporated to become the global holding company for the Rapid                                                                                                                                                                                                                                                                                                                                                                                   |

Nutrition Business and to acquire all of the shares in Rapid Nutrition Pty Ltd for that purpose. On 24 July 2012 Rapid Nutrition Pty Ltd became a wholly owned subsidiary of Rapid Nutrition PLC.

Rapid Nutrition specialises in a range of healthcare supplements designed to address obesity. Obesity has become a major area of health focus for the Rapid Nutrition Business. According to the World Health Organisation obesity is one of the most common, and fastest growing health concerns in the world. It is a global health epidemic which has been linked to the rise of other diseases, including diabetes, high blood pressure, back pain, high cholesterol and even certain types of cancer.

Rapid Nutrition exports its products globally. The supplements fit into the category of 'Neutraceuticals' being food sources that provide extra health benefits over and above the basic nutritional value found in foods.

The product range includes:

*Leisa's Secret® Brand (introduced in 2001):* 

- *Leisa's Secret® Premium Meal Replacement (Shake)*
- *Leisa's Secret® Energize (Tablets)*
- *Leisa's Secret® Advanced Thermo (Tablets)*
- *Leisa's Secret® Resist (Powdered Drink)*

*System LS™ Brand (introduced in 2013) :* 

- *System LS™Accelerate – premium thermogenic formula*
- *System LS™Nourish – high-protein shake*
- *System LS™ Satisfy – high-fibre bar*
- *System LS™ Zest – organic multi-vitamin*

The products have all been developed directly by Rapid Nutrition's team of dieticians, naturopaths and pharmaceutical specialists and all intellectual property is owned by Rapid Nutrition.

The products are nutritional diet supplements which are intended as additions to the diet. They contain concentrated sources of vitamins, minerals and other substances such as natural herbs with a nutritional benefit.

Nutritional supplements are regulated by the applicable regulations and regulatory body in each country in which Rapid Nutrition operates.

The Rapid Nutrition products are not pharmaceutical in nature.

Rapid Nutrition has a broad range of product categories and development technologies with different timeframes to the market. A key strength of the Company is that it has current revenue and earnings while having technologies in development that can ensure sustainable growth. The company has established distribution relationships in three separate regions worldwide and has product registrations and successful export business

in a number of countries within these regions.

The company's success to date can be attributed to meticulous research, quality product

| ranges and detailed strategies to steer our products through the most effective distribution   |  |
|------------------------------------------------------------------------------------------------|--|
| channels. These attributes have enabled us to establish ourselves as a fast-growing            |  |
| business in the weight loss industry.                                                          |  |
|                                                                                                |  |
| 7.2.3<br>Rapid Nutrition has been distributing the Leisa's Secret® products since the business |  |
| commenced in 2001. In 2013 Rapid Nutrition launched a new product range called System          |  |
| LS™, which is a complete, organic weight loss system.                                          |  |
| Thanks to strong interest both locally and globally, the new System LS™ organic lifestyle      |  |
| range was recently approved by Woolworth's, Australia's supermarket giant, which has           |  |
| 820 stores throughout Australia, and commenced a national rollout of the product range in      |  |
| October 2013.                                                                                  |  |
|                                                                                                |  |
| In addition, Rapid Nutrition has secured a five-year distribution contract in Europe with      |  |
| Biolynx Limited, a company with extensive experience dealing with products in this             |  |
| industry and with good access to a number of large European markets. Rapid Nutrition           |  |
| currently offers its healthcare products globally, including Asia, UK, Middle East and is      |  |
| expanding to the United States this quarter, and System LS™ is being introduced into all       |  |
| of these distribution channels.                                                                |  |
|                                                                                                |  |
| System LS™ includes six innovative products and all are based on natural and organic           |  |
| ingredients which is a rapidly growing sub-sector in this industry. The products               |  |
| complement each other to enhance the impact of each component. The range includes a            |  |
| premium metabolising thermogenic formula, organic multi vitamin, energizing and fat            |  |
| burning liquid shot, Hi Fiber Bar, a natural low calorie sugar substitute, and comprehensive   |  |
| meal replacement.                                                                              |  |
|                                                                                                |  |
| To further enhance the effectiveness of System LS™, the products are supported with a          |  |
| revolutionary video phone app, giving consumers encouragement and motivation 24 hours          |  |
| a day, 7 days a week. This engagement strategy is proving to be highly effective and is        |  |
| making System LS™ a serious competitor in the marketplace. More information on                 |  |
| System LS™, which focuses on getting "slim with science," is available at:                     |  |
| www.systemls.com                                                                               |  |
| Principal Markets<br>7.2.4                                                                     |  |
|                                                                                                |  |
| According to a new healthcare market research report 'Global Weight Loss and Gain              |  |
| Market (2009 - 2014)', published by MarketsandMarkets (www.marketsandmarkets.com),             |  |
| the total global weight loss market is expected to be valued at US\$586.3 billion by 2014.     |  |
| The market has a compound annual growth rate (CAGR) of 10.9% from 2009 to 2014                 |  |

The food and beverage (F&B) market is the largest segment and is expected to reach US\$355.7 billion by 2014 at a CAGR of 12.2%. The F&B market owes its growth to the introduction of new components in this segment, as well as increased demand from consumers.

The U.S. is the largest geographical segment; and is expected to be worth US\$310 billion by 2014. . Its 12.2% CAGR (2009 to 2014) is driven by the greater availability of products and services, as well as greater consumer awareness in this region.

The next largest segment is Europe, which has a CAGR of 10.9%. It is expected to reach US\$238 billion by 2014. This segment is growing due to the increasing number of products and services in this region. Consumers are becoming more health-conscious and also have greater awareness about the availability of weight management products.

The Company has registered products in and or exported its products to the following countries as at the date of this Prospectus:

- China
- Korea
- Thailand
- Singapore
- India
- United Kingdom

- Ireland
- Poland
- Czech Republic
- Turkey
- Ghana
- South Africa
- Saudi Arabia
- UAE
- USA
- Australia

While the SystemLS™ range does not yet have sufficient sales revenue to provide meaningful data, the Leisa's Secret® range has had the following sales from the time the company commenced operations in 2001 to 31 December 2013:

Sales by Country since 2001 (in AU\$)

| Region          | Country           | Historicals        | Percentage |
|-----------------|-------------------|--------------------|------------|
| Asia-Pacific    |                   |                    |            |
|                 | Australia         | \$<br>2,100,801.00 | 39%        |
|                 | Republic of Korea | \$<br>95,014.00    | 2%         |
|                 | India             | \$<br>470,250.00   | 9%         |
|                 | Thailand          | \$<br>23,048.00    | 0%         |
|                 | China             | \$<br>853,090.00   | 16%        |
|                 | Malaysia          | \$<br>18,000.00    | 0%         |
|                 | Vietnam           | \$<br>172,482.00   | 3%         |
|                 | Singapore         | \$<br>30,000.00    | 1%         |
| Europe          |                   |                    |            |
|                 | United Kingdom    | \$<br>268,005.00   | 5%         |
|                 | Ireland           | \$<br>116,140.00   | 2%         |
| Middle East and |                   |                    |            |
| Africa          |                   |                    |            |
|                 | United Arab       |                    |            |
|                 | Emirates          | \$<br>448,075.00   | 8%         |
|                 | MENA Region       | \$<br>657,300.00   | 12%        |
|                 | Ghana             | \$<br>25,000.00    | 0%         |
|                 | South Africa      | \$<br>149,864.00   | 3%         |
| TOTAL           |                   | \$<br>5,427,069.00 | 100%       |

Brand - Leisa's Secret

|       | A key strength of the Company is that it has current revenue and earnings while having        |  |
|-------|-----------------------------------------------------------------------------------------------|--|
|       | technologies in development that can ensure sustainable growth. The company has               |  |
|       | established relationships in three separate regions worldwide and has product                 |  |
|       | registrations and successful export business in a number of countries within these regions.   |  |
|       |                                                                                               |  |
|       | The new SystemLS™ lifestyle products are attracting strong interest in Australia and the      |  |
|       | USA already with Australia's largest supermarket chain Woolworths already accepting the       |  |
|       | innovative natural and organic products onto its retail shelves across the country.           |  |
|       |                                                                                               |  |
|       | Highest priorities in respect of the weight loss and weight maintenance range in 2014 are     |  |
|       | the expanding of distribution agreements in Europe, and to complete the new System            |  |
|       | LS™ product launch in the USA and Australia. Significant long term distribution               |  |
|       | contracts are in place for Asia and the Middle East and these alone should provide            |  |
|       | financial stability for the Issuer in 2014.                                                   |  |
|       |                                                                                               |  |
| 7.2.5 | The development of products by the Issuer is governed by the Therapeutic Goods                |  |
|       | Administration in Australia and by various health authorities in each country into which the  |  |
|       | company will be importing or exporting. The company must ensure that each of its              |  |
|       | products meet these strict regulations before it can be licensed to sell the products.        |  |
|       | As all of the products offered by the company are intended for human consumption the          |  |
|       | regulatory approvals in each region in which Rapid Nutrition operates are essential to its    |  |
|       | core business. To date the Issuer has had no difficulty in obtaining these approvals, and     |  |
|       | no regulatory authority has raised any material issues about the Issuer's products or taken   |  |
|       | any steps which could have lead to an approval being withdrawn. From time to time the         |  |
|       | approval process has however delayed entry into new markets.                                  |  |
|       | The Issuer currently has a manufacturing agreement in place with various facilities to meet   |  |
|       | the demands of the customers of Rapid Nutrition. The facilities each have specific            |  |
|       | accreditation in their region to produce the Rapid Nutrition products, and they give Rapid    |  |
|       | Nutrition the ability to supply the market with their product in various forms: tablets, hard |  |
|       | capsule or soft gelatine. This establishes a reliable source of products and helps ensure     |  |
|       | that health regulations are capable of being met quickly and cost-effectively.                |  |
|       | In addition to its current supplier, Rapid Nutrition has a number of additional accredited    |  |
|       | suppliers in Australia and the USA available who can come online if necessary to meet         |  |
|       | demand. Trial production runs have been used to confirm the suitability of these suppliers.   |  |
| 7.2.6 | There are a number of competitors and products in the weight-loss industry. The market is     |  |
|       | large and fragmented with only a small number of products holding any substantial market      |  |
|       | share. On a global basis the products with the largest market share in 2013 were Herbalife    |  |
|       | (Herbalife Ltd) with 21.2%, Slim Fast (Unilever Group) with 2.9%, Kellogg's Special K         |  |
|       | (Kellogg Co) with 2.7% and Herbalife ShapeWorks (Herbalife Ltd) with 2.1%. All other          |  |
|       |                                                                                               |  |

products had less than 2% of the market.

Because the market is so fragmented there is little risk of a competitor having sufficient market power to significantly restrict Rapid Nutrition's growth, and with such a large number of competitors Rapid Nutrition expects to be able to grow its business for many years before it draws any attention from larger competitors seeking to protect their market share.

Rapid Nutrition's leading range of scientifically formulated products has a competitive advantage in that it is based on a no nonsense approach that targets the main issues relating to weight loss; replacing meals, burning fats, staying energized and resisting carbohydrates and certain problem foods. Additionally, the Issuer ensures it stays ahead of market trends by utlising its extensive relationships in various Australian government bodies and key opinion leaders who proactively support the company.

Whilst some other programs encourage users to markedly alter their patterns of eating to a point that they may actually be losing out on essential vitamins and nutrients, the Issuer's flagship ranges can be used in conjunction with a balanced diet in order to cut down food intake. In addition to this, the products also help users to get the necessary vitamins and minerals they need to lose weight and stay healthy whilst doing so.

The Issuer's product ranges don't require customers to attend any meetings (as some others do), which can be a barrier for those who are time poor. The products allow users to put together their own weight-loss regime, based on their own needs and personal goals.

# <span id="page-59-0"></span>**7.3 Organisational Structure**

| 7.3.1 | The following description of the RNL's Group is to be read in conjunction with the     |
|-------|----------------------------------------------------------------------------------------|
|       | organisation chart below.                                                              |
|       |                                                                                        |
|       | The Issuer (a UK company) is the ultimate holding company of the RNL Group. The Issuer |
|       | has one wholly owned subsidiary, Rapid Nutrition Pty Ltd (an Australian company) which |
|       | operates the Rapid Nutrition Business.                                                 |
|       |                                                                                        |
|       | The Issuer, as the ultimate holding company with 100% effective ownership of the       |
|       | Australian company in the RNL Group, can control the subsidiary and is positioned to   |
|       | receive the benefit of the profits generated by the RNL Group as a whole.              |
|       |                                                                                        |

# <span id="page-60-0"></span>**7.4 Property, Plant and Equipment**

| 7.4.1 |                                  | The business holds no major items of property, plant or equipment. All other assets are set |  |
|-------|----------------------------------|---------------------------------------------------------------------------------------------|--|
|       | out in the accounts as provided. |                                                                                             |  |
|       |                                  |                                                                                             |  |
|       |                                  | Items of property, plant and equipment are stated at cost less accumulated depreciation     |  |
|       | and impairment losses.           |                                                                                             |  |
|       |                                  |                                                                                             |  |
|       |                                  | Depreciation is charged so as to write off the cost or valuation of assets over their       |  |
|       |                                  | estimated useful lives, using the straight line method, on the following bases:             |  |
|       |                                  |                                                                                             |  |
|       | Computer equipment               | 30%                                                                                         |  |
|       | Motor vehicles                   | 20%                                                                                         |  |
|       | Fixture, fittings and equipment  | 30%                                                                                         |  |
|       |                                  |                                                                                             |  |
|       | Trademark and Licenses:          |                                                                                             |  |
|       |                                  | Separately acquired trademarks and licences are shown at historical cost. Trademarks        |  |
|       |                                  | and licences acquired in a business combination are recognised at fair value at the         |  |
|       |                                  | acquisition date. Once utilisation commences, trademarks and licences have a finite useful  |  |
|       |                                  |                                                                                             |  |

| life and are carried at cost less accumulated amortisation. Amortisation is calculated using |
|----------------------------------------------------------------------------------------------|
| the straight-line method to allocate the cost of trademarks and licences over their          |
| estimated useful lives of 15 to 20 years.                                                    |
|                                                                                              |

# <span id="page-61-0"></span>**7.5 Capital Resources**

| 7.6.1 | Short Term: The Issuer continues to re-invest profits from the company's trading revenues to  |                 |                           |  |
|-------|-----------------------------------------------------------------------------------------------|-----------------|---------------------------|--|
|       | support organic expansion of its global distribution into neighbouring markets where the      |                 |                           |  |
|       | company is not already present. The company is now profitable and expects to have sufficient  |                 |                           |  |
|       | cashflow to enable organic growth to be sustained at current rates.                           |                 |                           |  |
|       | Long Term: A successful listing on the Entry Standard of the Frankfurt Stock Exchange will    |                 |                           |  |
|       | assist the company to access external financial resources for the purpose of accelerating the |                 |                           |  |
|       | growth of the Rapid Nutrition Business.                                                       |                 |                           |  |
| 7.6.2 |                                                                                               |                 |                           |  |
|       |                                                                                               |                 |                           |  |
|       | The sales revenue for the past 12 months (as shown in the audited financial report) has been  |                 |                           |  |
|       | derived from the following key markets:                                                       |                 |                           |  |
|       | Country                                                                                       | Product Brand   | Proportion<br>of<br>Sales |  |
|       |                                                                                               |                 | Revenue in AU\$           |  |
|       | Asia                                                                                          | Leisa's Secret® | \$273,000                 |  |
|       | Middle East                                                                                   | Leisa's Secret® | \$25,000                  |  |
|       | Eastern Europe                                                                                | Leisa's Secret® | \$80,000                  |  |
|       | Australia                                                                                     | Leisa's Secret® | \$96,897                  |  |
|       |                                                                                               | SystemLS™       |                           |  |
|       | Note: Figures below have been rounded for illustration purposes                               |                 |                           |  |
|       |                                                                                               |                 |                           |  |
|       | To date the majority of relationships have been developed remotely with limited or no face to |                 |                           |  |
|       | face discussions.                                                                             |                 |                           |  |
|       |                                                                                               |                 |                           |  |
|       | Establishing a presence in key regional markets would enable Rapid Nutrition to drive         |                 |                           |  |
|       | marketing activities in partnership with distribution companies in the most appropriate       |                 |                           |  |
|       | channels. In addition relationships with regulatory agencies would be closer and strengthened |                 |                           |  |
|       | enabling issues to be resolved in much shorter timeframes. Product training and technical     |                 |                           |  |
|       | support for distribution companies would be deliverable in a more responsive way along with   |                 |                           |  |
|       | the proactive task of identifying new product opportunities.                                  |                 |                           |  |
|       |                                                                                               |                 |                           |  |

The Company has examined a number of business models for securing, developing and maintaining international markets. The Company will in most circumstances maintain manufacturing rights and enter into marketing and distribution licence agreements on a territory by territory basis. To date the Company has entered into a number of such agreements in respect to countries in Europe, Middle East, Asia and Africa. Distribution agreements are for set terms and are in most cases subject to performance criteria in the form of minimum order quantities. It is intended to use Company staff and marketing agents to support local distributors. The table below summaries current distribution agreements.

| Territory       | Number of   | Number of countries | Term | Product Brand   |
|-----------------|-------------|---------------------|------|-----------------|
|                 | agreements  | cover               |      |                 |
| Europe          | 2           | 2                   | 5    | Leisa's Secret® |
| Middle          | 3           | 3                   | 5    | Leisa's Secret® |
| East            |             |                     |      |                 |
| Asia            | 3           | 3                   | 5    | Leisa's Secret® |
| Australasi<br>a | 1           | 1                   | N/A  | Leisa's Secret® |
|                 |             |                     |      |                 |
| Africa          | 1           | 1                   | 5    | Leisa's Secret® |
| North           | Under       | 1                   | N/A  | SystemLS™       |
| America         | negotiation |                     |      |                 |

The Company's highest priorities in respect of the weight loss and weight maintenance range in the immediate future are expanding distribution agreements in Europe, and completing market launches in the USA and Australia for its newly developed SystemLS™ product range.

The Middle East is one of the fastest growing markets for organic and natural products. Recent market trends provided evidence that the Gulf markets are witnessing a huge conversion to organic products on the back of increasing shifts towards a healthier lifestyle. Rapid Nutrition plans to capitalise on recent research and trends by introducing an 'Organic and Halal certified' Skincare Range that will see the company leverage its already well established Middle East distribution channels to market and sell the range.

Overall, Rapid Nutrition aims to become a major player in the natural healthcare market. The increasingly broad range of products will appeal to a society that is becoming ever more conscious about using quality natural products in order to achieve a healthier lifestyle.

**7.6.3** The company has established a strong track record of value creation driven by capital discipline and a focus on returns. The company credits this to key management being

| invested owners of the Issuer's shares and not just caretakers of assets. As a result the    |  |
|----------------------------------------------------------------------------------------------|--|
| group has strong support from management and founding shareholders to meet its current       |  |
| borrowing requirements. These are provided as unsecured loans and details are set out in the |  |
| accounts provided.                                                                           |  |

# <span id="page-63-0"></span>**7.6 Research and Development**

| 7.7.1 | Research costs are not viewed as separable from marketing and development costs. As           |  |
|-------|-----------------------------------------------------------------------------------------------|--|
|       | such, all of these costs are expensed as incurred and are not separately accounted for in the |  |
|       | Issuer's books of account.                                                                    |  |

# <span id="page-63-1"></span>**7.7 Trend Information**

| 7.8.1 | The company has been experiencing a significant increase in its cost of manufacturing of its      |
|-------|---------------------------------------------------------------------------------------------------|
|       | products in Australia as a result of the strengthening Australian dollar, together with a general |
|       | increase in Australian labour costs. In a strategic move to mitigate the cost increase of its     |
|       | products the company has relocated its manufacturing to the USA which has resulted in a           |
|       | substantial reduction in its cost of manufacturing as well as providing an increased turn         |
|       | around time for manufacturing.                                                                    |
|       |                                                                                                   |

# <span id="page-64-0"></span>**8. Persons Responsible, Directors, Senior Management and Corporate Governance**

# <span id="page-64-1"></span>**8.1 Directors' Responsibility**

| 8.1.1 | The Issuer's Directors, whose names are set out below, and the Issuer accept responsibility    |
|-------|------------------------------------------------------------------------------------------------|
|       | for the information contained in this Prospectus. To the best of the knowledge of the Issuer's |
|       | Directors and the Issuer (who have taken all reasonable care to ensure that such is the        |
|       | case) the information contained in this Prospectus is in accordance with the facts and         |
|       | contains no omission likely to affect its import.                                              |
|       | The Directors of the Issuer whose names appear in Section 8.2 of this Prospectus and the       |
|       | Issuer accept responsibility for the information contained in this Prospectus. To the best of  |
|       | the knowledge of the Directors and the Issuers (who have taken all reasonable care to          |
|       | ensure that such is the case), the information contained in this Prospectus is in accordance   |
|       | with the facts and contains no omission likely to affect its import.                           |
|       |                                                                                                |
|       |                                                                                                |

<span id="page-64-3"></span>

| 8.2.1 | Name:             | Mr Simon St Ledger (DOB 18 April 1973)                      |  |
|-------|-------------------|-------------------------------------------------------------|--|
|       | Business Address: | 40-46 Nestor Drive,                                         |  |
|       |                   | Meadowbrook Qld 4131                                        |  |
|       |                   | Australia                                                   |  |
|       | Function:         | Director and CEO                                            |  |
|       | Background:       | Rapid Nutrition's experienced corporate team has been       |  |
|       |                   | hand selected for their individual talents and expertise by |  |
|       |                   | CEO, and company founder, Simon St Ledger. He is the        |  |
|       |                   | force and visionary behind the brand.                       |  |
|       |                   | Simon's passion for health and fitness has been evident     |  |
|       |                   | throughout his life. He has immersed himself in the         |  |
|       |                   | health and fitness industry for the past two decades.       |  |
|       |                   | He is well versed in life science, the practice and theory, |  |
|       |                   | having been a personal trainer and dietary consultant.      |  |
|       |                   | He has managed national fitness equipment suppliers,        |  |
|       |                   | and played an advisory role to numerous health clubs        |  |
|       |                   | and organisations.                                          |  |
|       |                   | He also established the Australian National Weight Loss     |  |
|       |                   | Clinic. His insight and understanding of the health and     |  |
|       |                   | weight loss industry is unparalleled.                       |  |
|       |                   | It was his interest and passion which led to the research,  |  |

# <span id="page-64-2"></span>**8.2 Directors' and Senior Management Details, Advisors and Conflicts**

|                   | development and manufacturing of premium weight loss                |
|-------------------|---------------------------------------------------------------------|
|                   | and health products from the ground up, giving rise to              |
|                   | what is now Rapid Nutrition Pty Ltd, just 13 years ago.             |
|                   | The company's first product range was the popular                   |
|                   | Leisa's Secret®.                                                    |
|                   | Simon secured seed capital as well<br>as institutional              |
|                   | investors, to expand the company and its range.                     |
|                   | He has presented and been approved for significant                  |
|                   | United States Government Grants in excess of \$7                    |
|                   | million. Simon has also recently been awarded as a                  |
|                   | 2012 Brisbane Young Entrepreneur Finalist in additional             |
|                   | to receiving the 2013 Queensland Premier Export                     |
|                   | Award.                                                              |
|                   | Simon's motivation and energy has seen him forge                    |
|                   | distribution pipelines world-wide, and secure multiple              |
|                   | international sales contracts and licensing and                     |
|                   | distribution agreements totalling over \$15 million.                |
|                   |                                                                     |
|                   |                                                                     |
|                   |                                                                     |
| Name:             | Mr Malcolm Sinclair (DOB 14 July 1969)                              |
| Business Address: | 40-46 Nestor Drive,                                                 |
|                   | Meadowbrook Qld 4131                                                |
|                   | Australia                                                           |
| Function:         | Director & Naturopath                                               |
| Background:       | Malcolm Sinclair N.D. is a leading expert in natural healthcare and |
|                   | herbal medicine specialising in Detox and Anti Ageing. A fifteen    |
|                   | year veteran of creating and prescribing natural medicines across   |
|                   | three successful health clinics in Victoria, Australia, Malcolm has |
|                   | founded and developed three private practices and has built a       |
|                   | loyal patient database numbered in excess of 10,000 clients.        |
|                   | Malcolm is a fellow and Full Member of the A.N.T.A and has been     |
|                   | requested by the ANTA on several occasions to comment via           |
|                   | various media organisations on newsworthy topical issues within     |
|                   | the health care industry.                                           |
|                   |                                                                     |
| Name:             | Mr Vaidyanathan Nateshan (DOB 30 Aug 1979)                          |
| Business Address: | 2701 Al Waleed Paradise                                             |
|                   | Cluster Rd, Building 1                                              |

|                   | Dubai, UAE                                                                             |
|-------------------|----------------------------------------------------------------------------------------|
| Function:         | Director – Asia & Middle East Operations                                               |
| Background:       | Vaidyanathan Nateshan<br>has worked his career through the                             |
|                   | operational and strategic aspects of disparate industries ranging                      |
|                   | from Oil and Gas, Information Technology, Business Consulting                          |
|                   | and Pharmaceuticals. In these years, he has come around to be                          |
|                   | identified as a business turnaround expert and a keen strategist.                      |
|                   | Having held senior management positions in multiple listed                             |
|                   | companies, he has served as a very useful interface between the                        |
|                   | expectations of the investor and the customer. Having travelled                        |
|                   | extensively, he has done business in over 30 countries<br>and                          |
|                   | executed and managed strategic alliances in over 12 countries,                         |
|                   | which includes managing a joint venture in China and setting up                        |
|                   | marketing operations in the Middle East. His ability to raise equity                   |
|                   | and debt in multiple countries is also well recognised.                                |
|                   | Through his career, Vaidyanathan has managed manufacturing,                            |
|                   | marketing and financial operations for companies in India, South                       |
|                   | East Asia and the Middle East. Vaidyanathan also advises large                         |
|                   | consulting firms on due diligence issues, drawing on his specific                      |
|                   | experiences with the healthcare sector.                                                |
|                   |                                                                                        |
| Name:             | Mr Nick Lindsay                                                                        |
| Business Address: | Elemental CoSec Limited                                                                |
|                   | 27 Old Gloucester Street                                                               |
|                   | London WC1N 3AX                                                                        |
|                   | United Kingdom                                                                         |
| Function:         | Company Secretary                                                                      |
| Background:       | Nick Lindsay is a corporate lawyer and a director of Elemental                         |
|                   | CoSec. Nick is responsible for the delivery of the governance,                         |
|                   | secretarial and corporate legal functions at Elemental CoSec and                       |
|                   | works with a range of UK and international public companies on                         |
|                   | their initial listings and ongoing compliance.                                         |
|                   |                                                                                        |
|                   |                                                                                        |
|                   | in London, providing company secretarial, administrative and                           |
|                   | corporate services to a range of companies, law firms and                              |
|                   | Elemental CoSec are one of the leading company secretarial firms<br>accountancy firms. |
|                   |                                                                                        |

| Business Address: | 186 N. Manhattan Ave.,                                                   |
|-------------------|--------------------------------------------------------------------------|
|                   | Masspaequa NY 11758                                                      |
| Function:         | Business Development & Advisor to Board                                  |
| Background:       | Mr. Maresca<br>has held several key positions in the securities          |
|                   | industry over the past decade.<br>He is a versatile management           |
|                   | professional with broad ranging experience in building start-ups,        |
|                   | turnaround and high growth financial operations through decisive         |
|                   | leadership, influence and action. Technology evangelist with multi       |
|                   | disciplinary expertise in investment banking, finance, management        |
|                   | controls, strategic acquisitions and mergers, business planning,         |
|                   | policy development, compliance and human resources. In the               |
|                   | course of his<br>career, Mr. Maresca has successfully taken              |
|                   | companies<br>public,<br>effectively<br>led<br>numerous<br>mergers<br>and |
|                   | acquisitions and raised funds for public and private ventures            |
|                   | poised for rapid expansion. Currently Mr. Maresca is the President       |
|                   | of Saratoga Equity a Private Equity firm in New York and Martin          |
|                   | Tommer Consulting which specializes in Technology and Life               |
|                   | Science Consulting.                                                      |
|                   | Mr. Maresca received his Bachelor of Science in Business                 |
|                   | Administration from Pace University, New York, New York, in              |
|                   | 1992,<br>with<br>concentrations<br>in<br>Accounting,<br>Finance,<br>and  |
|                   | Management. He holds a number of securities licenses and                 |
|                   | credentials. Frank is Married with 2 children ages 15 and 12 and         |
|                   | currently lives in Long Island New York.                                 |
|                   |                                                                          |
|                   |                                                                          |
| Name:             | Mr Matthew Bird                                                          |
| Business Address: | 800 3rd Ave, 17th Floor New York, NY 10022                               |
| Function:         | Public Relations & Advisor to Board                                      |
| Background:       | Mr. Bird is an accredited expert in Online Public Relations, Digital     |
|                   | Media, Financial Communications and Global Marketing. Over his           |
|                   | 15 year career he's responsible for the development of more than         |
|                   | \$400+ million in marketing and brand development revenues, rang         |
|                   | the NASDAQ Closing Bell and worked with more than 1,000                  |
|                   | companies including: Coca Cola, Orbitz, Yahoo!, Microsoft,               |
|                   | Disney, Ramada, Toyota and Ford. In 2009 he was a feature                |
|                   | speaker at MIT (MIT Sloan CFO Summit featured panelist) and              |
|                   |                                                                          |
|                   | has been seen on CNBC. Today Matt is the Founder and CEO of              |

|                   | worldwide leader in Retail & institutional investor targeted        |
|-------------------|---------------------------------------------------------------------|
|                   | communications. Additionally he's become an industry                |
|                   | spokesperson for next generation online financial communications    |
|                   | & social digital media education for IR & PR departments.           |
| Name:             | Mr Lenard Tan                                                       |
| Business Address: | 40-46 Nestor Drive                                                  |
|                   | Meadowbrook Qld 4131                                                |
|                   | Australia                                                           |
| Function:         | Merger & Acquisition Executive & Advisor to Board                   |
| Background:       | A Chartered Accountant, Lenard brings a wealth of 20 years of       |
|                   | international business experience. Beginning in the United States   |
|                   | and Canada as a Senior Auditor at Deloitte, he was also one of the  |
|                   | youngest Regional Managing Partners of Ernst & Young operating      |
|                   | in multiple countries, and one of the youngest Managing Directors   |
|                   | of Ernst & Young ICL from the Hong Kong base.                       |
|                   | Lenard was the Client Partner to Fortune 500 companies,             |
|                   | including Coca Cola, Exxon Mobil, BP, Bank of America, ING          |
|                   | Bank, Hilton Hotels. Former CFO of the AMC Group and                |
|                   | responsible for developing French IT security software publisher    |
|                   | brand awareness in Asia. Lenard also served as Director–Special     |
|                   | Projects & Financial Management for a world leading beverage &      |
|                   | hospitality groups in SE Asia. Listed in Barron's Who's Who for his |
|                   | outstanding achievement, superior leadership and exceptional        |
|                   | service, he was also a regular panelist on a CNBC talk show.        |
|                   |                                                                     |
| Name:             | Mrs Leisa St Ledger                                                 |
| Business Address: | 40-46 Nestor Drive                                                  |
|                   | Meadowbrook Qld 4131                                                |
|                   | Australia                                                           |
| Function:         | General Manager                                                     |
| Background:       | Leisa was a former police officer for eight years with extensive    |
|                   | knowledge in health and nutrition. Leisa is the founder and creator |
|                   | of Leisa's Secret® and the author of Do It Once – Diet Right. She   |
|                   | is the driving force behind the significant amount of media         |
|                   | attention the company and products have attracted which has         |
|                   | enabled the company to experience rapid growth within a very        |
|                   | short time, and ultimately drawn interest from large international  |
|                   | organisations. Leisa is an integral part of the success of the      |

|       |                                                                                              | Leisa's Secret® products and her personal involvement educating |  |  |  |
|-------|----------------------------------------------------------------------------------------------|-----------------------------------------------------------------|--|--|--|
|       | and inspiring her customers has allowed her to connect closely                               |                                                                 |  |  |  |
|       | with many of her customers and success stories.                                              |                                                                 |  |  |  |
|       |                                                                                              | Leisa is married to Simon St Ledger.                            |  |  |  |
| 8.2.2 | The Directors are not aware of any conflicts of interest regarding the persons set out in    |                                                                 |  |  |  |
|       | Section 8.2.1, as between their duties to the issuer and any other duties they may have, nor |                                                                 |  |  |  |
|       | their private interests other than as set out in section 8.5 below.                          |                                                                 |  |  |  |

# <span id="page-69-0"></span>**8.3 Remuneration and Benefits**

In relation to the last full financial year for those persons referred to in Section [8.2.1](#page-64-3) above:

| 8.3.1 | Directors' remuneration in its various forms was agreed by Board resolution, not formalised      |         |                |             |         |  |  |
|-------|--------------------------------------------------------------------------------------------------|---------|----------------|-------------|---------|--|--|
|       | by contracts at this stage, and these arrangements will continue until re-visited by either      |         |                |             |         |  |  |
|       | party. Thus, there has been no specification of termination benefits for directors at this time. |         |                |             |         |  |  |
|       | Amount of emoluments & compensation for audit period (11 Jan 2012 to 30 June                     |         |                |             |         |  |  |
|       | 2013)                                                                                            |         |                |             |         |  |  |
|       |                                                                                                  |         |                |             |         |  |  |
|       |                                                                                                  | Salary  | Superannuation | Consultancy | Total   |  |  |
|       |                                                                                                  |         |                | Fees        |         |  |  |
|       | Simon St Ledger 1 2                                                                              | 212,500 | 25,476         | -           | 237,976 |  |  |
|       | Vaidyanathan                                                                                     | -       | -              | 30,048      | 30,048  |  |  |
|       | Nateshan                                                                                         |         |                |             |         |  |  |
|       | Malcolm Sinclair 2                                                                               | -       | -              | 77,050      | 77,050  |  |  |
|       |                                                                                                  |         |                |             |         |  |  |
|       | 1<br>– Simon St Ledger's employment terms, as formalised by board resolution, specify a salary   |         |                |             |         |  |  |
|       | of \$150,000 per year. During the period 11 January 2012 – 30 June 2013, only \$111,906          |         |                |             |         |  |  |
|       | was paid. The remainder is outstanding at the period end.                                        |         |                |             |         |  |  |
|       | 2<br>– These directors have been provided with the use of vehicles owned by the consolidated     |         |                |             |         |  |  |
|       | entity for their personal use. Mr St Ledger's vehicle was acquired during the period for         |         |                |             |         |  |  |
|       | \$55,718, while Mr Sinclair's vehicle was acquired during the period for \$50,459.               |         |                |             |         |  |  |
|       |                                                                                                  |         |                |             |         |  |  |
| 8.3.2 | The Issuer has not entered into any service contracts with the persons set out in Section        |         |                |             |         |  |  |
|       | 8.2.1 which provide for benefits upon termination of employment beyond those which arise         |         |                |             |         |  |  |
|       | as a matter of the ordinary operation of law.                                                    |         |                |             |         |  |  |
|       |                                                                                                  |         |                |             |         |  |  |

### <span id="page-69-1"></span>**8.4 Board Practices**

| 8.4.1 | The Directors are reviewed at each annual general meaning and up for reappointment by |  |
|-------|---------------------------------------------------------------------------------------|--|
|       |                                                                                       |  |

|       | the Issuer's Shareholders, in accordance with the Company's articles of association.              |  |
|-------|---------------------------------------------------------------------------------------------------|--|
| 8.4.2 | The Audit Committee will assist the Board in discharging its responsibilities with regard to      |  |
|       | financial reporting, external and internal audits and controls, including reviewing the Issuer's  |  |
|       | annual financial statements, reviewing and monitoring the extent of the non-audit work,           |  |
|       | internal controls and risk management systems. The ultimate responsibility for reviewing          |  |
|       | and approving the annual report and accounts and the half-yearly reports will remain with         |  |
|       | the Board.                                                                                        |  |
|       | Audit, Remuneration, Nomination and Disclosure Committees                                         |  |
|       | As envisaged by the UK Corporate Governance Code, the Board has established Audit,                |  |
|       | Remuneration, Nomination and Disclosure Committees.                                               |  |
|       | (A) Audit Committee                                                                               |  |
|       | The Audit Committee has responsibility for, among other things, the monitoring of the             |  |
|       | financial integrity of the financial statements of the Group and the involvement of the           |  |
|       | Group's auditors in that process. It focuses in particular on compliance with accounting          |  |
|       | policies and ensuring that an effective system of internal financial controls is maintained.      |  |
|       | The ultimate responsibility for reviewing and approving the annual report and accounts and        |  |
|       | the half-yearly reports remains with the Board. The Audit Committee will normally meet at         |  |
|       | least three times a year at the appropriate times in the reporting and audit cycle.               |  |
|       |                                                                                                   |  |
|       | The terms of reference of the Audit Committee cover such issues as membership and the             |  |
|       | frequency of meetings, together with requirements for quorum and notice procedure and the         |  |
|       | right to attend meetings. The responsibilities of the Audit Committee covered in the terms of     |  |
|       | reference are: external audit, internal audit, financial reporting and internal controls and risk |  |
|       | management. The terms of reference also set out the authority of the committee to carry out       |  |
|       | its responsibilities.                                                                             |  |
|       |                                                                                                   |  |
|       | The Audit Committee's terms of reference require that it comprise two or more independent         |  |
|       | Non-Executive Directors, and at least one person who is to have significant, recent and           |  |
|       | relevant financial experience.                                                                    |  |
|       |                                                                                                   |  |
|       | The Audit Committee currently comprises three members two who are independent Non                 |  |
|       | Executive Directors (Malcolm Sinclair, Vaidyanathan Nateshan), and James Skinner a non            |  |
|       | executive corporate advisor. The committee is chaired by James Skinner.                           |  |
|       | (B) Remuneration Committee                                                                        |  |
|       | The Remuneration Committee has responsibility for the determination of the terms and              |  |
|       | conditions of employment, remuneration and benefits of each of the Chairman, Executive            |  |
|       | Directors, members of the executive and the company secretary, including pension rights           |  |
|       |                                                                                                   |  |
|       | and any compensation payments, and recommending and monitoring the level and structure            |  |
|       | of remuneration for senior management and the implementation of share option or other             |  |

performance-related schemes. The Remuneration Committee will meet at least twice a year.

The terms of reference of the Remuneration Committee cover such issues as membership and frequency of meetings, together with the requirements for quorum and notice procedure and the right to attend meetings. The responsibilities of the Remuneration Committee covered in its terms of reference are: determining and monitoring policy on and setting levels of remuneration, early termination, performance-related pay and pension arrangements; authorising claims for expenses from the Directors; reporting and disclosure of remuneration policy; share schemes (including the annual level of awards); obtaining information on remuneration in other companies; and selecting, appointing and terminating remuneration consultants. The terms of reference also set out the reporting responsibilities and the authority of the committee to carry out its responsibilities.

The Remuneration Committee comprises three members two of whom are independent Non-Executive Directors (Malcolm Sinclair, Vaidyanathan Nateshan) an independent nonexecutive adviser Terry Richards The committee is chaired by Malcolm Sinclair.

#### (C) *Nomination Committee*

The Nomination Committee is responsible for considering and making recommendations to the Board in respect of appointments to the Board, the Board committees and the chairmanship of the Board committees. It is also responsible for keeping the structure, size and composition of the Board under regular review, and for making recommendations to the Board with regard to any changes necessary.

The Nomination Committee's terms of reference deal with such issues as membership and frequency of meetings, together with the requirements for quorum and notice procedure and the right to attend meetings. The responsibilities of the Nomination Committee covered in its terms of reference include: review of the Board composition; appointing new Directors; reappointment and re-election of existing Directors; succession planning, taking into account the skills and expertise that will be needed on the Board in the future; reviewing time required from Non-Executive Directors; determining membership of other Board committees; and ensuring external facilitation of the evaluation of the Board. The Nomination Committee will meet at least twice a year.

The terms of reference of the Nomination Committee require that it comprise of three independent persons two or more of whom are independent Directors..

The Nomination Committee comprises two members who are independent Non-Executive Directors (Malcolm Sinclair, Vaidyanathan Nateshan), and James Skinner who is an independent corporate advisor. The committee is chaired by Vaidyanathan Nateshan.

|       | (D) Disclosure Committee                                                                         |  |  |  |  |
|-------|--------------------------------------------------------------------------------------------------|--|--|--|--|
|       | The Disclosure Committee is responsible for, among other things, helping the Company             |  |  |  |  |
|       | make timely and accurate disclosure of all information that it is required to disclose under its |  |  |  |  |
|       | legal and regulatory obligations arising as a result of the listing of the Ordinary Shares on    |  |  |  |  |
|       | the Frankfurt Stock Exchange. The Disclosure Committee will meet at such times as shall          |  |  |  |  |
|       | be necessary or appropriate.                                                                     |  |  |  |  |
|       | The Disclosure Committee's terms of reference deal with such issues as membership and            |  |  |  |  |
|       | frequency of meetings, together with the requirements for quorum and notice procedure and        |  |  |  |  |
|       | the right to attend meetings. The responsibilities in the terms of reference of the Disclosure   |  |  |  |  |
|       | Committee relate to the following: determining the disclosure treatment of material              |  |  |  |  |
|       | information; identifying insider information; assisting in the design, implementation and        |  |  |  |  |
|       | periodic evaluation of disclosure controls and procedures; monitoring compliance with the        |  |  |  |  |
|       | Company's disclosure procedures and share dealing policies; resolving questions about the        |  |  |  |  |
|       | materiality of information; insider lists; reviewing announcements dealing with significant      |  |  |  |  |
|       | developments in the Company's business; and considering the requirements for                     |  |  |  |  |
|       | announcements in case of rumours relating to the Company.                                        |  |  |  |  |
|       | The Disclosure Committee comprises the Managing Director (Simon St Ledger), an                   |  |  |  |  |
|       | independent non-executive corporate advisor (James Skinner) , and the independent non            |  |  |  |  |
|       | executive investor relations advisor (Terry Richards). The Committee is chaired by James         |  |  |  |  |
|       | Skinner.                                                                                         |  |  |  |  |
|       |                                                                                                  |  |  |  |  |
| 8.4.3 | The Issuer complies with the U K Corporate Governance Code.                                      |  |  |  |  |
|       |                                                                                                  |  |  |  |  |
|       | The Australian Subsidiary complies with all aspect of the corporate governance regime that       |  |  |  |  |
|       | applies to it in Australia.                                                                      |  |  |  |  |
|       |                                                                                                  |  |  |  |  |
|       | Neither the Issuer, nor the Australian Subsidiary has been the subject of any regulatory         |  |  |  |  |
|       | orders or inquiries.                                                                             |  |  |  |  |

# <span id="page-72-0"></span>**8.5 Related Party Transactions**

| 8.5.1 | Simon St Ledger is a director of the Issuer and controls a major shareholder of the Issuer.   |  |
|-------|-----------------------------------------------------------------------------------------------|--|
|       | He has from time to time not drawn his full salary entitlement, and the undrawn amount has    |  |
|       | been allocated to a loan account with the Issuer. As at the date of this Prospectus that loan |  |
|       | account has a zero balance.                                                                   |  |
|       |                                                                                               |  |

Simon St Ledger and entities related to him have made a €500,000 loan facility available to the Issuer, to be drawn on as required should additional working capital be required. The facility is unsecured, would accrue interest at a rate of 6.5% per annum, has a five year term from the date of draw down and is repayable only at such time as the Board determines that the Issuer's cash-flow is sufficient to make such payments. As at the date of this Prospectus that facility has not been utilised.

Working capital finance has from time to time been provided by J&J Smith, a shareholder of the Issuer. That loan balance currently stands at A\$984,000. That finance is unsecured, accrues interest at a rate of 6.5% per annum, has a five year term and is repayable during the loan term only at such time as the Board determines that the Issuer's cash-flow is sufficient to make such payments. This loan is unrelated to the working capital facility made available by Simon St Ledger and entities related to him.

Other than as set out above there are no related party transactions in the periods covered by the financial statements which are incorporated in this Prospectus.

# <span id="page-74-0"></span>**9. Reasons for the Offer, Use of Funds**

# <span id="page-74-1"></span>**9.1 Reasons for Offer and Use of Funds**

| 9.1.1 | This Offer seeks to raise the funds required to assist the Rapid Nutrition Business to pay for |                                                                                          |
|-------|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|
|       | the costs of entering the US market and for accelerating the growth of the business overall    |                                                                                          |
|       | as set out below.                                                                              |                                                                                          |
|       | Listing on the Entry Standard is a key milestone in the Growth Plan, as it will assist the     |                                                                                          |
|       | Issuer to accelerate the Group's growth by funding increased product marketing, larger         |                                                                                          |
|       | inventory holdings (in order to reduce cost of goods sold).                                    |                                                                                          |
|       | The Issuer will use the proceeds of the Offer in the following order:                          |                                                                                          |
|       | a)                                                                                             | recoup the costs of listing on the Entry Standard, (including structuring the affairs of |
|       | the Group for this purpose);                                                                   |                                                                                          |
|       | b)<br>invest in global marketing activity in order to accelerate the growth strategy for       |                                                                                          |
|       | faster market penetration; and                                                                 |                                                                                          |
|       | c)                                                                                             | Increase inventory holdings in order to reduce manufacturing COGS to increase            |
|       | profits which will lead for shareholders.                                                      |                                                                                          |
|       | Upon full subscription of this offer the issuer will have raised €1,960,000. Allowing for      |                                                                                          |
|       | completion of the immediate growth plans as laid out above.                                    |                                                                                          |
|       |                                                                                                |                                                                                          |
|       | Use of Funds                                                                                   | Estimated Net Amount €                                                                   |
|       |                                                                                                | Maximum Subscription                                                                     |
|       | •<br>Inventory - Increase inventory                                                            | €1,000,000                                                                               |
|       | holdings in order to reduce                                                                    |                                                                                          |
|       | manufacturing COGS.                                                                            |                                                                                          |
|       | •<br>Cost of offer and listing process                                                         | €300,000                                                                                 |
|       |                                                                                                |                                                                                          |
|       | •<br>Marketing – accelerated media                                                             | €660,000                                                                                 |
|       | strategy for faster market penetration                                                         |                                                                                          |
|       | and revenue.                                                                                   |                                                                                          |
|       | Total                                                                                          | €1,960,000                                                                               |

# <span id="page-75-0"></span>**10. Selected Financial Information**

#### <span id="page-75-1"></span>**10.1 Revenue Summary**

|                                                                                        | Period from 1 July 2013 to<br>31 March 2014<br>(Auditor's review) | Period from 11<br>January 2012 to 30<br>June 2013<br>(audited) | Period from 1 July<br>2010 to 10 January<br>2012<br>(audited) |
|----------------------------------------------------------------------------------------|-------------------------------------------------------------------|----------------------------------------------------------------|---------------------------------------------------------------|
|                                                                                        | AU\$                                                              | AU\$                                                           | AU\$                                                          |
| Revenue                                                                                | 1,561,124                                                         | 474,897                                                        | 66,234                                                        |
| Cost of sales                                                                          |                                                                   |                                                                |                                                               |
| Opening inventory                                                                      | (160,967)                                                         | (33,623)                                                       | (33,623)                                                      |
| Direct costs                                                                           | (457.778)                                                         | (451,001)                                                      | (20,025)                                                      |
| Closing inventory                                                                      | 123,886                                                           | 160,967                                                        | 33,623                                                        |
| Gross profit                                                                           | 1,066,265                                                         | 151,240                                                        | 46,209                                                        |
| Gain on foreign exchange                                                               | 316,652                                                           | 329,634                                                        | -                                                             |
| Administrative expenses                                                                | (312,736)                                                         | (817,466)                                                      | (97,379)                                                      |
| Operating loss                                                                         | 1,070,181                                                         | (336,592)                                                      | (51,170)                                                      |
| Unrealised gain on financial assets                                                    | 1,478,990                                                         | 2,835,585                                                      | -                                                             |
| Profit/(loss) before tax                                                               | 2,549,171                                                         | 2,498,993                                                      | (51,170)                                                      |
| Tax expense                                                                            | (313,781)                                                         | (728,000)                                                      | -                                                             |
| Net profit/(loss) for the period<br>attributable to members of the<br>Company          | 2,235,390                                                         | 1,770,993                                                      | (51,170)                                                      |
| Other comprehensive income                                                             | -                                                                 | -                                                              | -                                                             |
| Total comprehensive income for<br>the period attributable to<br>members of the Company | 2,235,390                                                         | 1,770,993                                                      | (51,170)                                                      |
| Basic & diluted earnings per                                                           |                                                                   |                                                                |                                                               |
| share                                                                                  | 0.016                                                             | 0.013                                                          |                                                               |

#### <span id="page-76-0"></span>**10.2 Asset and Liability Summary**

| 10.2.1 |                               |                                             |                           |                                      |
|--------|-------------------------------|---------------------------------------------|---------------------------|--------------------------------------|
|        |                               | 31 March 2014<br>(Auditor's review)<br>AU\$ | 30 June 2013<br>(audited) | 10 January 2012<br>(audited)<br>AU\$ |
|        |                               |                                             | AU\$                      |                                      |
|        | Current assets                |                                             |                           |                                      |
|        | Cash and cash equivalents     | 1,945                                       | 13,274                    |                                      |
|        | Trade and other receivables   | 1,911,623                                   | 353,803                   | 371                                  |
|        | Inventory                     | 123,886                                     | 160,967                   | 33,623                               |
|        | Financial assets              | 4,960,860                                   | 3,165,218                 |                                      |
|        | Other assets                  | 576,687                                     | 576,687                   |                                      |
|        | Total current assets          | 7,575,001                                   | 4,269,949                 | 33,994                               |
|        | Non-current assets            |                                             |                           |                                      |
|        | Property, plant and equipment | 49,555                                      | 78,947                    | 4,509                                |
|        | Intangible assets             | 2,105                                       | 2,105                     | -                                    |
|        | Total non-current assets      | 51,660                                      | 81,052                    | 4,509                                |
|        | Total assets                  | 7,626,661                                   | 4,351,001                 | 38,503                               |
|        | Current liabilities           |                                             |                           |                                      |
|        | Trade and other payables      | 763,177                                     | 276,811                   | 68,361                               |
|        | Borrowings                    | 1,247,212                                   | 1,014,876                 | 4,656                                |
|        | Other payables                | 9,729                                       | 568                       | 2,944                                |
|        | Total current liabilities     | 2,020,118                                   | 1,292,255                 | 75,961                               |
|        | Non-current liabilities       |                                             |                           |                                      |
|        | Borrowings                    | 74,517                                      | 75,891                    | -                                    |
|        | Deferred tax liabilities      | 1,041,781                                   | 728,000                   | -                                    |
|        | Total non-current liabilities | 1,116,298                                   | 803,891                   | -                                    |
|        | Total liabilities             | 3,136,416                                   | 2,096,146                 | 75,961                               |
|        | Net assets                    | 4,490,245                                   | 2,254,855                 | (37,458)                             |
|        | Equity                        |                                             |                           |                                      |
|        | Shares                        | 26,972,594                                  | 26,972,594                | 373,863                              |
|        | Merger reserve                | (26,077,411)                                | (26,077,411)              | -                                    |
|        | Retained earnings             | 3,595,062                                   | 1,359,672                 | (411,321)                            |
|        | Total equity and reserves     | 4,490,245                                   | 2,254,855                 | (37,458)                             |

# <span id="page-77-0"></span>**10.3 Employees**

| 10.3.1 | Over the twelve month period leading up to the date of this Prospectus the Issuer                  |  |  |  |  |  |
|--------|----------------------------------------------------------------------------------------------------|--|--|--|--|--|
|        | employed three full-time staff (including the executive directors) and between 4 and 10            |  |  |  |  |  |
|        | temporary and casual staff . The majority of the activities of the Issuer are outsourced to        |  |  |  |  |  |
|        | third parties, so full-time staff are principally engaged in internal administrative activities of |  |  |  |  |  |
|        | the issuer and in management of third party contractors. Casual staff are retained primarily       |  |  |  |  |  |
|        | to assist with establishing retail distribution and various sales channels in new markets.         |  |  |  |  |  |
|        | Casual staff also co-ordinate the local production of products and assist with maintaining         |  |  |  |  |  |
|        | international relationships as required.                                                           |  |  |  |  |  |
| 10.3.2 | Staff other than the directors do not hold any shares, options or other rights to participate      |  |  |  |  |  |
|        | in the capital of the Issuer, and there is no current or proposed arrangement which would          |  |  |  |  |  |
|        | create any such rights.                                                                            |  |  |  |  |  |
|        |                                                                                                    |  |  |  |  |  |

# <span id="page-78-0"></span>**11. Operating and Financial Review of Rapid Nutrition**

*The following review of the Group's financial condition and operating results should be read in conjunction with the financial information included elsewhere in this document.*

# <span id="page-78-1"></span>**11.1 Overview**

| 11.1.1. | The Company's current trading is summarised in Section 1of this document. Descriptions of the        |  |
|---------|------------------------------------------------------------------------------------------------------|--|
|         | Company's financial condition, changes in that condition and results of operations for each          |  |
|         | financial year and interim period required to be disclosed in this document under the                |  |
|         | Prospectus Rules are further referred to in paragraph Section 11.3 below. The audited annual         |  |
|         | accounts for the period ended 30 June 2013 are included in this document in Section 13.1. The        |  |
|         | Company's unaudited interim results for the period ended 31 March 2014 are included in this          |  |
|         | document in Section 13.                                                                              |  |
|         | The Company has been highly active over the past 12 months ensuring key milestones are               |  |
|         | achieved as announced to the market place. As a result, a strong foundation has been laid that       |  |
|         | will result in a significant impact on the performance and positioning of the company over the       |  |
|         | next 12 months.                                                                                      |  |
|         | These performance indicators are based on the following which has been successfully secured:         |  |
|         | •<br>5 year distribution contract in Turkey ( approximate value € 4.1 million)                       |  |
|         | •<br>Unanimously approved for a US government grant to establish US headquarters                     |  |
|         | (approximate value € \$6 million) which the company has the option to utilise if it deems            |  |
|         | favourable.                                                                                          |  |
|         | •<br>Completed R&D on its new science-based health supplements product line, which has               |  |
|         | attracted a significant interest from major retailers, resulting in the company securing             |  |
|         | distribution through Australia's largest supermarket retailer which will add substantial             |  |
|         | revenue for the company over the next 12 months. The board anticipates a similar                     |  |
|         | result for the US market launch.                                                                     |  |
|         | •<br>The company has also formalised a USD\$10 million media agreement to supports its US<br>launch. |  |
|         | All these milestones further validates the company and shows the company's continued                 |  |
|         | commitment in the eyes of its employees, customers, shareholders, partners and future                |  |
|         | investors.                                                                                           |  |
|         | Furthermore the newly expanded product portfolio along with the secured media spend                  |  |
|         | strengthens the company's product position in the market place to outside parties such as            |  |
|         | distributors, suppliers and retailers.                                                               |  |
|         | Furthermore the media is expected to drive shareholder value through additional sales,               |  |

strategic partnerships and market pace awareness.

# <span id="page-79-0"></span>**11.2 Changes in financial condition since interim period ending 31 March 2014**

**11.2.1.** There has been no significant change in the financial or trading position of the Issuer which has occured since 31 March 2014, being the date to which the latest unaudited interim financial statements of the Rapid Nutrition Group were prepared.

# <span id="page-79-1"></span>**11.3 Summary of Operating and Financial Review**

**11.3.1.** This period has seen Rapid Nutrition take a significant step forward by converting to a public company which has been successfully admitted to the GXG Stock Exchange. As part of the listing process the company has also implemented a high level or corporate compliance by engaging and assembling an experienced corporate team, board of directors and advisors as well as an independent company secretary. These are all essential elements for laying a strong foundation for the company's future success and overall global growth strategy. By putting in place the necessary infrastructure of a new public company has resulted in the company incurring significantly more expenses 'above and beyond' its normal operational costs. Added to this the company has been in the research and development stage over the past 12 months for its new System LS™ lifestyle range which will be launched in the US and Australia in October 2013.

Rapid Nutrition also incurred a significant logistics hurdle with its Asia operations where FDA requirements for natural healthcare products changed, just after the company had shifted its manufacturing to the US and completed a large production run for Asia. This was a major set back in the company's anticipated revenue for the period, with the company having to hold back several thousand customer inquiries and anticipated orders in Asia as a result. The company is currently working through the process and has put in place several 'risk management' procedures to ensure this is avoided in any future production.

Whilst the board acknowledges the annual accounts may not reflect strong results, the board also firmly believes that the annual accounts are not a meaningful performance indicator of the foundation which has been laid over the past 12 months and what lays ahead over the next 12 months.

As reflected in the 6 months unaudited interim financials the company is seeing significant improvement in its position and growth in sales revenue with several international orders being received in addition to the company securing a 5-year international distribution contract in Turkey. As a result the company was recognised by the Australian Government as the Queensland state winner of the prestigious 'Premier of Queensland Export Awards for 2013'. Additionally, the company's newly developed SystemLS™ product range has gained

<span id="page-80-0"></span>

|                                                                                                                                                                                  |                                                                                                | acceptance into Woolworths, Australia's largest supermarket retailer consisting of 820 stores. |  |  |  |  |  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|--|--|--|--|--|
| 11.4<br>Liquidity and Capital Resources                                                                                                                                          |                                                                                                |                                                                                                |  |  |  |  |  |
| 11.4.1.                                                                                                                                                                          |                                                                                                | There has been no significant change to the liquidity and capital resources position of the    |  |  |  |  |  |
|                                                                                                                                                                                  | Group since 31 March 2014, the date to which the unaudited interim financial statements of the |                                                                                                |  |  |  |  |  |
| Group are prepared.                                                                                                                                                              |                                                                                                |                                                                                                |  |  |  |  |  |
|                                                                                                                                                                                  |                                                                                                | The Company does not have any restriction on the use of its capital resources.                 |  |  |  |  |  |
|                                                                                                                                                                                  |                                                                                                | Treasury activities take place under procedures and policies approved and monitored by the     |  |  |  |  |  |
| Board.                                                                                                                                                                           |                                                                                                |                                                                                                |  |  |  |  |  |
| The capitalisation and indebtedness (distinguishing between guaranteed and unguaranteed,<br>secured and unsecured indebtedness) of the Group are set out below. Unless indicated |                                                                                                |                                                                                                |  |  |  |  |  |
|                                                                                                                                                                                  |                                                                                                |                                                                                                |  |  |  |  |  |
| audited accounting records                                                                                                                                                       |                                                                                                |                                                                                                |  |  |  |  |  |
| Indebtedness                                                                                                                                                                     |                                                                                                |                                                                                                |  |  |  |  |  |
| As at                                                                                                                                                                            |                                                                                                |                                                                                                |  |  |  |  |  |
| 30 June                                                                                                                                                                          |                                                                                                |                                                                                                |  |  |  |  |  |
| 2013                                                                                                                                                                             |                                                                                                |                                                                                                |  |  |  |  |  |
|                                                                                                                                                                                  |                                                                                                |                                                                                                |  |  |  |  |  |
|                                                                                                                                                                                  | 30 June 2013                                                                                   | 10 January 2012                                                                                |  |  |  |  |  |
|                                                                                                                                                                                  | \$                                                                                             | \$                                                                                             |  |  |  |  |  |
|                                                                                                                                                                                  |                                                                                                |                                                                                                |  |  |  |  |  |
| Loans from                                                                                                                                                                       |                                                                                                |                                                                                                |  |  |  |  |  |
| related parties                                                                                                                                                                  | 6,644                                                                                          | 4,656                                                                                          |  |  |  |  |  |
| Other Loans                                                                                                                                                                      | 984,000                                                                                        | -                                                                                              |  |  |  |  |  |
| Current Hire                                                                                                                                                                     |                                                                                                |                                                                                                |  |  |  |  |  |
| Purchase Liability                                                                                                                                                               | 31,502                                                                                         | -                                                                                              |  |  |  |  |  |
| Less: Current                                                                                                                                                                    |                                                                                                |                                                                                                |  |  |  |  |  |
| Hire Purchase                                                                                                                                                                    | (7,270)                                                                                        | -                                                                                              |  |  |  |  |  |
| Interest                                                                                                                                                                         |                                                                                                |                                                                                                |  |  |  |  |  |
|                                                                                                                                                                                  | 1,014,876                                                                                      | 4,656                                                                                          |  |  |  |  |  |
|                                                                                                                                                                                  | 30 June 2013                                                                                   | 10 January 2012                                                                                |  |  |  |  |  |
|                                                                                                                                                                                  | \$                                                                                             | \$                                                                                             |  |  |  |  |  |
|                                                                                                                                                                                  |                                                                                                |                                                                                                |  |  |  |  |  |
| Loans from                                                                                                                                                                       |                                                                                                |                                                                                                |  |  |  |  |  |
| related parties                                                                                                                                                                  | 6,644                                                                                          | 4,656                                                                                          |  |  |  |  |  |
| Other Loans                                                                                                                                                                      | 984,000                                                                                        | -                                                                                              |  |  |  |  |  |
| Current Hire                                                                                                                                                                     | 31,502                                                                                         | -                                                                                              |  |  |  |  |  |

| (7,270)<br>-<br>1,014,876<br>4,656                                                        |  |
|-------------------------------------------------------------------------------------------|--|
|                                                                                           |  |
|                                                                                           |  |
|                                                                                           |  |
|                                                                                           |  |
|                                                                                           |  |
| The amount in other loans is a short term loan provided by J&J Smith, shareholders in the |  |
| Company. The loan is unsecured and subject to interest at 6.5% annually.                  |  |
|                                                                                           |  |

# <span id="page-82-0"></span>**12. Capitalisation and Indebtedness Statement**

# <span id="page-82-1"></span>**12.1 Working Capital Statement**

| 12.1.1 | In the opinion of the Issuer, taking into account the availability of further unsecured      |  |
|--------|----------------------------------------------------------------------------------------------|--|
|        | shareholder loans, the Group has sufficient working capital to meet its present              |  |
|        | requirements, that is for at least the next 12 months following the date of this Prospectus. |  |
| 12.1.2 | The Issuer has negotiated shareholder loan facilities of €500,000 which it can draw on as    |  |
|        | required should there be any shortfall in its working capital. These facilities are          |  |
|        | unsecured, will accrue interest at a rate of 6.5% per annum from the time of draw down,      |  |
|        | have a five year term and are repayable during the loan term only at such time as the        |  |
|        | Board determines that the Issuer's cash-flow is sufficient to make such payments. In the     |  |
|        | opinion of the Board this facility adequately addresses any matters raised by the auditors   |  |
|        | regarding the potential adequacy of the Issuer's Working Capital.                            |  |
|        |                                                                                              |  |

# <span id="page-82-2"></span>**12.2 Capitalisation and Indebtedness**

| 30 June 2013 | 10 January 2012 |
|--------------|-----------------|
| \$           | \$              |
| 6,644        | 4,656           |
| 984,000      | -               |
| 31,502       | -               |
| (7,270)      | -               |
| 1,014,876    | 4,656           |
|              |                 |

# <span id="page-83-0"></span>**13. Historical Financial Information**

# <span id="page-83-1"></span>**13.1 Condensed Consolidated Statement of Financial Position as at 31 March 2014**

The consolidated statement of financial position and notes represent those of Rapid Nutrition PLC and its subsidiary ("the consolidated group" or "group"). Financial information for the subsidiary for the period 1 July 2010 to 10 January 2012 have been included as the group has chosen to adopt the pooling of interests method to account for the merger of Rapid Nutrition PLC and its subsidiary.

Note - the Issuer can extend its accounting period for up to 18 months pursuant to section 392 of the UK Companies Act 2006 "*Alteration of accounting reference date*" and accordingly the audited accounts for the first accounting period of the Issuer extend from 11 January 2012 to 30 June 2013.

All references to monetary amounts in this section [13](#page-83-0) are to Australian Dollars.

The directors of Rapid Nutrition PLC and its controlled entity ("the Group") confirm that, to the best of our knowledge:

- a) The condensed set of consolidated financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting"' and all relevant pronouncements of the *Companies Act 2006.*
- b) The condensed set of consolidated financial statements give a true and fair view of the Group's financial position as at 31 March 2014 and of its performance for the interim period ended on that date.
- c) There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

By order of the Board,

Simon St. Ledger

Managing Director

13 May 2014

# **CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME**

# **FOR THE PERIOD ENDED 31 MARCH 2014**

|                                                                                     | Note | Period from 1<br>July 2013 to 31<br>March 2014<br>(Auditor's<br>review)<br>\$ | Period from 1<br>July 2012 to 31<br>March 2013<br>(Audited)<br>\$ |
|-------------------------------------------------------------------------------------|------|-------------------------------------------------------------------------------|-------------------------------------------------------------------|
| Revenue                                                                             | 3    | 1,561,124                                                                     | 474,344                                                           |
| Cost of sales                                                                       |      |                                                                               |                                                                   |
| Opening inventory                                                                   |      | (160,967)                                                                     | (16,758)                                                          |
| Direct costs                                                                        |      | (457,778)                                                                     | (277,077)                                                         |
| Closing inventory                                                                   |      | 123,886                                                                       | 160,967                                                           |
| Gross profit                                                                        |      | 1,066,265                                                                     | 314,476                                                           |
| Gain/(Loss) on foreign exchange                                                     |      | 316,652                                                                       | (68,089)                                                          |
| Administrative expenses                                                             |      | (312,736)                                                                     | (413,433)                                                         |
| Operating profit/(loss)                                                             |      | 1,070,181                                                                     | (167,046)                                                         |
| Unrealised gain on financial assets                                                 |      | 1,478,990                                                                     | 1,108,833                                                         |
| Profit/(loss) before tax                                                            |      | 2,549,171                                                                     | 941,787                                                           |
| Tax expense                                                                         |      | (313,781)                                                                     | (218,556)                                                         |
| Net profit/(loss) for the period attributable to<br>members of the Company          |      | 2,235,390                                                                     | 723,231                                                           |
| Other comprehensive income                                                          |      | -                                                                             | -                                                                 |
| Total comprehensive income for the period<br>attributable to members of the Company |      | 2,235,390                                                                     | 723,231                                                           |
|                                                                                     |      |                                                                               |                                                                   |
| Basic & diluted earnings per share                                                  | 4    | 0.016                                                                         | 0.05                                                              |

# **CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION**

# **AS AT 31 MARCH 2014**

|                               | Note | 31 March 2014<br>(Auditor's<br>review) | 30 June 2013<br>(Audited) |
|-------------------------------|------|----------------------------------------|---------------------------|
|                               |      | \$                                     | \$                        |
| Current assets                |      |                                        |                           |
| Cash and cash equivalents     |      | 1,945                                  | 13,274                    |
| Trade and other receivables   |      | 1,911,623                              | 353,803                   |
| Inventory                     |      | 123,886                                | 160,967                   |
| Financial assets              | 5    | 4,960,860                              | 3,165,218                 |
| Other assets                  |      | 576,687                                | 576,687                   |
| Total current assets          |      | 7,575,001                              | 4,269,949                 |
| Non-current assets            |      |                                        |                           |
| Property, plant and equipment |      | 49,555                                 | 78,947                    |
| Intangible assets             |      | 2,105                                  | 2,105                     |
| Total non-current assets      |      | 51,660                                 | 81,052                    |
| Total assets                  |      | 7,626,661                              | 4,351,001                 |
| Current liabilities           |      |                                        |                           |
| Trade and other payables      |      | 763,177                                | 276,811                   |
| Borrowings                    |      | 1,247,212                              | 1,014,876                 |
| Other payables                |      | 9,729                                  | 728,568                   |
| Total current liabilities     |      | 2,020,118                              | 2,020,255                 |
| Non-current liabilities       |      |                                        |                           |
| Borrowings                    |      | 74,517                                 | 75,891                    |
| Deferred tax liabilities      |      | 1,041,781                              | -                         |
| Total non-current liabilities |      | 1,116,298                              | 75,891                    |
| Total liabilities             |      | 3,136,416                              | 2,096,146                 |
| Net assets                    |      | 4,490,245                              | 2,254,855                 |
| Equity                        |      |                                        |                           |
| Shares                        |      | 26,972,594                             | 26,972,594                |
| Merger reserve                |      | (26,077,411)                           | (26,077,411)              |
| Retained earnings             |      | 3,595,062                              | 1,359,672                 |
| Total equity and reserves     |      | 4,490,245                              | 2,254,855                 |

### **CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY**

#### **FOR THE PERIOD TO 31 MARCH 2014**

|                                                                                          | Ordinary<br>Share Capital | Merger<br>Reserve | Retained<br>Earnings | Total Equity |
|------------------------------------------------------------------------------------------|---------------------------|-------------------|----------------------|--------------|
|                                                                                          | \$                        | \$                | \$                   | \$           |
| Opening balance 1 July<br>2012                                                           | 26,972,594                | (26,077,411)-     | (768,955)            | (126,228)    |
| Comprehensive Income                                                                     |                           |                   |                      |              |
| Profit for the period                                                                    | -                         | -                 | 723,231              | 723,231      |
| Total comprehensive income for the period                                                | -                         | -                 | 723,231              | 723,231      |
| Transactions with owners, in their capacity as owners<br>Shares issued during the period |                           | -                 | -                    | 576,695      |
| Balance as at 31 March 2013                                                              | 26,972,594                | (26,077,411)      | 1,359,672            | 2,254,855    |
|                                                                                          | 26,972,594                | (26,077,411)      | 1,359,672            | 2,254,855    |
| Opening balance 1 July 2013<br>Comprehensive Income                                      |                           |                   |                      |              |
| Profit for the period                                                                    | -                         | -                 | 2,235,390            | 2,235,390    |
| Total comprehensive income for the period                                                | -                         | -                 | 2,235,390            | 2,235,390    |
| Balance as at 31 March 2014                                                              | 26,972,594                | (26,077,411)      | 3,595,062            | 4,490,245    |

# **CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS**

# **FOR THE PERIOD TO 31 MARCH 2014**

|                                                          | Period from 1<br>July 2013 to<br>31 March<br>2014<br>(Auditor's<br>review) | Period from 1<br>July 2012 to<br>31 March<br>2013<br>(Audited) |
|----------------------------------------------------------|----------------------------------------------------------------------------|----------------------------------------------------------------|
|                                                          | \$                                                                         | \$                                                             |
| Cash flows from operating activities                     |                                                                            |                                                                |
| Receipts from customers                                  | 3,304                                                                      | 161,348                                                        |
| Payments to suppliers and employees                      | (204,386)                                                                  | (598,694)                                                      |
| Net cash used by operating activities                    | (201,082)                                                                  | (437,346)                                                      |
| Cash flows from investing activities                     |                                                                            |                                                                |
| Purchase of plant and equipment                          | -                                                                          |                                                                |
| Payments for intangibles                                 | -                                                                          |                                                                |
| Net cash used by investing activities                    | -                                                                          |                                                                |
| Cash flows from financing activities                     |                                                                            |                                                                |
| Proceeds from issue of shares                            | -                                                                          | -                                                              |
| Costs of issue of shares                                 | -                                                                          | -                                                              |
| Proceeds from borrowings                                 | 189,753                                                                    |                                                                |
| Repayment of borrowings                                  | -                                                                          | (21,528)                                                       |
| Proceeds from related party borrowings                   | -                                                                          | -                                                              |
| Net cash used by financing activities                    | 189,753                                                                    | (21,528)                                                       |
| Increase/(decrease)in cash and cash equivalents          | (11,329)                                                                   | (458,874)                                                      |
| Cash and cash equivalents at the beginning of the period | 13,274                                                                     | 524,030                                                        |
| Cash and cash equivalents at the end of the period       | 1,945                                                                      | 65,156                                                         |

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD ENDED 31 MARCH 2014**

#### **1. Accounting Policies**

#### *Basis of preparation*

The statutory financial statements of Group plc are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of consolidated financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting', as adopted by the European Union.

#### *Going concern*

This report has been prepared on the going concern basis, which contemplates the continuation of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

As at 31 March 2014, the Group had a cash balance of \$1,945 while its net cash outflow for operating activities was \$201,082 in the period then ended.

The Directors recognise that the ability of the Group to continue as a going concern and to pay its debts as and when they fall due may be dependent on settlement of substantial receivable balances, continued support of shareholders through short term loans, and successful realisation of revenue growth via their plans for successful launch of their new product lines. On this basis, the Directors believe there are sufficient funds to meet the Group's working capital requirements for the coming year.

Given the current cash position, the Group is dependent on its current trade receivables in order to pay its debts as and when they fall due, and support working capital requirements.

The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that may be necessary should the Group be unable to continue as a going concern.

#### *Changes in accounting policy*

For the current, interim financial period, the Group has noted no amendments to International Accounting Standards that will be effective for the first time. As such, the same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest statutory audited financial statements.

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD ENDED 31 MARCH 2014**

# **2. Operating Segments**

Operating segments must be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

As a new group, currently in its growth phase, the Board (the Group's chief operating decision maker) believe that, at 31 March 2014, there was only one business segment, the life science and health food products market.

The revenue and results of this segment are those of the Group as a whole and are set out in the statement of profit or loss and other comprehensive income. The segment assets and liabilities of this segment are those of the Group and are set out in the condensed consolidated statement of financial position.

### **3. Revenue**

|                   | Period from 1<br>July 2013 to<br>31 March<br>2014<br>\$ | Period 1 July<br>2012 to 31<br>March 2013<br>\$ |
|-------------------|---------------------------------------------------------|-------------------------------------------------|
| Direct Sales      | 12,277                                                  | 2,735                                           |
| Distributor Sales | 1,548,847                                               | 444,609                                         |
| Licensing Fees    | -                                                       | -                                               |
|                   | 1,561,124                                               | 447,344                                         |

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD ENDED 31 MARCH 2014**

### **4. Earnings per Share**

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during theperiod.

The following reflects earnings and share data used in the earnings per share calculation.

|                                   | Period from 1<br>July 2013 to 31<br>March 2014 | Period from 1 July<br>2012 to 31 March<br>2013 |
|-----------------------------------|------------------------------------------------|------------------------------------------------|
|                                   | \$                                             | \$                                             |
| Profit for the period             | 2,235,390                                      | 723,231                                        |
| Weighted average number of shares | 136,402,380                                    | 136,402,380                                    |

There were no instruments (e.g. redeemable preference shares or share options) in issue as at 31 March 2014 that could potentially dilute earnings per share in the future.

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD ENDED 31 MARCH 2014**

#### **5. Financial assets**

*Financial assets measured at fair value through profit or loss*

Financial assets held for trading:

- Investments in equity instruments held for trading

|                                   | 31 March<br>2014 | 30 June 2013 |
|-----------------------------------|------------------|--------------|
|                                   | \$               | \$           |
| Held for Trading Motivideo Shares | 4,960,860        | 3,165,218    |

Shares held for trading are traded for the purpose of short term profit taking. Changes in fair value are included in the statement of profit or loss and other comprehensive income.

### *Reconciliation of period end balance:*

| Unrealised gains:                    | \$        |
|--------------------------------------|-----------|
| Value brought forward at 1 July 2013 | 3,165,218 |
| Gain to 31 March 2014                | 1,478,990 |
| Foreign exchange gain                | 316,652   |
| Value at period end                  | 4,960,860 |

We have been engaged by the Company to review the condensed set of consolidated financial statements in the interim financial report for the nine months ended 31 March 2014, prepared for the purpose of inclusion with the Company's prospectus to the Frankfurt Stock Exchange. These interim financial statements have been prepared for the purpose of complying with item 20.1 of Annex I of the Prospectus Regulation.

The financial statements comprise the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity, the condensed consolidated balance sheet, the condensed consolidated cash flow statement and related notes 1 to5. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

# *Directors' responsibilities*

The interim financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note1, the statutory financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of consolidated financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", as adopted by the European Union.

# *Our responsibility*

Our responsibility is to express to the Company a conclusion on the condensed set of consolidated financial statements in the interim financial report based on our review.

### *Scope of Review*

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

# *Conclusion*

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the interim financial report for the nine months ended 31 March 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

# *Emphasis of matter – Inherent uncertainty regarding continuation as a going concern*

Without modifying our opinion, we draw attention to Note 2 in the financial statements, which indicates that the Group experienced net cash outflows of \$201,082 in the period, while it had cash and cash equivalents at the end of the period of \$1,945.

Given those noted findings, we believe that the Group's ability to continue as a going concern is dependent on the Group receiving monies owed by trade receivables, financial support through shareholder loans, and successfully realising revenue growth via the Group's plans to launch their new product lines in the coming year.

Without the above funding arrangements coming to fruition, certain events may cast doubt on the Group's ability to continue as a going concern.

# *Declaration*

For the purposes of Prospectus Rule 5.5.3R(2)(f), we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affects its import. This declaration is included in the prospectus in compliance with item 1.2 of Annex I and item 1.2 of Annex III of the Prospectus Directive Regulation.

**Nicholas Hollens - Senior Statutory Auditor** For and on behalf of KSI (WA) – Statutory Auditors

35 Outram Street West Perth WA 6005 Australia

13 May 2014

# RAPID NUTRITION PLC

# AUDITED FINANCIAL STATEMENTS

# FOR THE PERIOD 1 JULY 2010 - 30 JUNE 2013

# **STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME**

### **FOR THE PERIODS 11 JANUARY 2012 – 30 JUNE 2013; 1 JULY 2010 – 10 JANUARY 2012**

|                                                                                     | Note | Period from 11<br>January 2012 to<br>30 June 2013 | Period from 1<br>July 2010 to 10<br>January 2012<br>\$ |
|-------------------------------------------------------------------------------------|------|---------------------------------------------------|--------------------------------------------------------|
|                                                                                     |      | \$                                                |                                                        |
|                                                                                     |      |                                                   |                                                        |
| Revenue                                                                             | 4    | 474,897                                           | 66,234                                                 |
| Cost of sales                                                                       |      |                                                   |                                                        |
| Opening inventory                                                                   |      | (33,623)                                          | (33,623)                                               |
| Direct costs                                                                        |      | (451,001)                                         | (20,025)                                               |
| Closing inventory                                                                   |      | 160,967                                           | 33,623                                                 |
| Gross profit                                                                        |      | 151,240                                           | 46,209                                                 |
| Gain on foreign exchange                                                            |      | 329,634                                           | -                                                      |
| Administrative expenses                                                             |      | (817,466)                                         | (97,379)                                               |
| Operating loss                                                                      | 5    | (336,592)                                         | (51,170)                                               |
| Unrealised gain on financial assets                                                 |      | 2,835,585                                         | -                                                      |
| Profit/(loss) before tax                                                            |      | 2,498,993                                         | (51,170)                                               |
| Tax expense                                                                         | 7    | (728,000)                                         | -                                                      |
| Net profit/(loss) for the period attributable to<br>members of the Company          |      | 1,770,993                                         | (51,170)                                               |
| Other comprehensive income                                                          |      | -                                                 | -                                                      |
| Total comprehensive income for the period<br>attributable to members of the Company |      | 1,770,993                                         | (51,170)                                               |
| Basic & diluted earnings per share                                                  | 27   | 0.01                                              |                                                        |

All of the activities of the Group are classed as continuing.

All of the total comprehensive income for the period is attributable to the owners of the Group.

# **STATEMENT OF FINANCIAL POSITION**

# **AS AT 30 JUNE 2013; 10 JANUARY 2012**

|                               | Note | 30 June 2013<br>\$ | 10 January 2012<br>\$ |
|-------------------------------|------|--------------------|-----------------------|
| Current assets                |      |                    |                       |
| Cash and cash equivalents     | 11   | 13,274             | -                     |
| Trade and other receivables   | 10   | 353,803            | 371                   |
| Inventory                     | 12   | 160,967            | 33,623                |
| Financial assets              | 13   | 3,165,218          | -                     |
| Other assets                  | 14   | 576,687            | -                     |
| Total current assets          |      | 4,269,949          | 35,994                |
| Non-current assets            |      |                    |                       |
| Property, plant and equipment | 8    | 78,947             | 4,509                 |
| Intangible assets             | 9    | 2,105              | -                     |
| Total non-current assets      |      | 81,052             | 4,509                 |
| Total assets                  |      | 4,351,001          | 38,503                |
| Current liabilities           |      |                    |                       |
| Trade and other payables      | 15   | 276,811            | 68,361                |
| Borrowings                    | 17   | 1,014,876          | 4,656                 |
| Current tax liabilities       | 16   | 728,000            |                       |
| Other payables                |      | 568                | 2,944                 |
| Total current liabilities     |      | 2,020,255          | 75,961                |
| Non-current liabilities       |      |                    |                       |
| Borrowings                    | 18   | 75,891             | -                     |
| Total non-current liabilities |      | 75,891             | -                     |
| Total liabilities             |      | 2,096,146          | 75,961                |
| Net assets                    |      | 2,254,855          | (37,458)              |
| Equity                        |      |                    |                       |
| Shares                        | 19   | 26,972,594         | 373,863               |
| Merger reserve                |      | (26,077,411)       | -                     |
| Retained earnings             | 20   | 1,359,672          | (411,321)             |
| Total equity and reserves     |      | 2,254,855          | (37,458)              |

These financial statements were approved and authorised for release by the Directors on 7 October 2013 and are signed on its behalf by:

**S St Ledger**

Director Company registration number: 07905640

### **STATEMENT OF CHANGES IN EQUITY**

#### **FOR THE PERIOD 1 JULY 2010 TO 11 JANUARY 2012**

|                                                           | Ordinary<br>Share Capital | Merger<br>Reserve | Retained<br>Earnings | Total Equity |
|-----------------------------------------------------------|---------------------------|-------------------|----------------------|--------------|
|                                                           | \$                        | \$                | \$                   | \$           |
| Opening balance 1 July 2010                               | 318,477                   | -                 | (360,151)            | (41,674)     |
| Comprehensive income                                      |                           |                   |                      |              |
| Profit for the period                                     | -                         | -                 | (51,170)             | (51,170)     |
| Other comprehensive income                                | -                         | -                 | -                    | -            |
| Total comprehensive income for the period                 | -                         | -                 | (51,170)             | (51,170)     |
|                                                           |                           |                   |                      |              |
| Transactions with owners, in their capacity as owners     |                           |                   |                      |              |
| Share for share exchange on acquisition of the subsidiary | -                         | -                 | -                    | -            |
| Shares issued during the period                           | 57,277                    | -                 | -                    | 57,277       |
| Shares issued cost                                        | (1,891)                   | -                 | -                    | (1,891)      |
| Balance as at 10 January 2012                             | 373,863                   | -                 | (411,321)            | (37,458)     |

#### **STATEMENT OF CHANGES IN EQUITY**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013**

|                                                           | Ordinary<br>Share Capital | Merger<br>Reserve | Retained<br>Earnings | Total Equity |
|-----------------------------------------------------------|---------------------------|-------------------|----------------------|--------------|
|                                                           | \$                        | \$                | \$                   | \$           |
| Opening balance 11 January 2012                           | 373,863                   | -                 | (411,321)            | (37,458)     |
| Comprehensive Income                                      |                           |                   |                      |              |
| Profit for the period                                     | -                         | -                 | 1,770,993            | 1,770,993    |
| Total comprehensive income for the period                 | -                         | -                 | 1,770,993            | 1,770,993    |
|                                                           |                           |                   |                      |              |
| Transactions with owners, in their capacity as owners     |                           |                   |                      |              |
| Share for share exchange on acquisition of the subsidiary | 26,077,411                | (26,077,411)      | -                    | -            |
| Shares issued during the period                           | 576,695                   | -                 | -                    | 576,695      |
| Shares issued cost                                        | (55,375)                  | -                 | -                    | (55,375)     |
| Balance as at 30 June 2013                                | 26,972,594                | (26,077,411)      | 1,359,672            | 2,254,855    |

# **STATEMENT OF CASH FLOWS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

|                                                             | Note   | Period from<br>11January<br>2012 to 30<br>June 2013 | Period from 1<br>February<br>2011 to 10<br>January 2012 |
|-------------------------------------------------------------|--------|-----------------------------------------------------|---------------------------------------------------------|
|                                                             |        | \$                                                  | \$                                                      |
|                                                             |        |                                                     |                                                         |
| Cash flows from operating activities                        |        |                                                     |                                                         |
| Receipts from customers                                     |        | 121,464                                             | 66,771                                                  |
| Payments to suppliers and employees                         |        | (1,015,412)                                         | (63,349)                                                |
| Net cash used by operating activities                       | 23     | (893,948)                                           | 3,422                                                   |
|                                                             |        |                                                     |                                                         |
| Cash flows from investing activities                        |        |                                                     |                                                         |
| Purchase of plant and equipment                             | 8      | (8,525)                                             | -                                                       |
| Payments for intangibles                                    |        | (2,105)                                             | -                                                       |
| Net cash used by investing activities                       |        | (10,630)                                            | -                                                       |
| Cash flows from financing activities                        |        |                                                     |                                                         |
| Proceeds from issue of shares                               |        | -                                                   | 57,277                                                  |
| Costs of issue of shares                                    |        | (55,375)                                            | (1,891)                                                 |
| Proceeds from borrowings                                    |        | 985,988                                             | -                                                       |
| Proceeds from related party borrowings                      |        | -                                                   | (71,645)                                                |
| Net cash used by financing activities                       |        | 930,613                                             | (16,259)                                                |
| Increase/(decrease)in cash and cash                         |        |                                                     |                                                         |
| equivalents                                                 |        | 26,035                                              | (12,837)                                                |
| Cash and cash equivalents at the beginning of the<br>period |        | (12,761)                                            | 76                                                      |
| Cash and cash equivalents at the end of the<br>period       | 11, 15 | 13,274                                              | (12,761)                                                |

### **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

The consolidated financial statements and notes represent those of Rapid Nutrition PLC and its subsidiary ("the consolidated group" or "group"). The consolidated financial statements have been prepared for the period 11 January 2012 to 30 June 2013 to reflect Rapid Nutrition PLC's first financial period following incorporation. Comparative figures for the period 1 July 2010 to 10 January 2012 have been included as the group has chosen to adopt the pooling of interests method to account for the merger of Rapid Nutrition PLC and its subsidiary.

The audited financial figures for the period 11 January 2012 to 30 June 2013 have been audited and are those as filed with Companies House for statutory compliance purposes. The audited comparative figures for the period 1 July 2010 to 10 January 2012 have been prepared specifically for the purposes of this financial report, for inclusion in the company's prospectus.

# **1. Significant accounting policies**

#### **1.1 Basis of accounting**

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements are drawn up under the historical cost convention.

IFRS, issued by the International Accounting Standards Board (IASB) set out accounting policies that the IASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of the financial statements are presented below and have been consistently applied unless otherwise stated.

#### **1.2 Going concern**

This report has been prepared on the going concern basis, which contemplates the continuation of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

For the period ended 30 June 2013, the Group had a cash balance of \$13,274 while it incurred expenses during the period of \$1,268,458. The Directors believe there are sufficient funds to meet the Group's working capital requirements for the coming year.

However, the Directors recognise that the ability of the Group to continue as a going concern and to pay its debts as and when they fall due may be dependent on the ability of the Group to secure additional funding through shareholder loans, entering into negotiations with third parties regarding the sale of assets of the Group, or successful realisation of revenue growth via their plans for successful launch of their new product lines.

Given the current cash position, there is uncertainty about whether the Group can continue as a going concern.

Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from those stated in the financial report.

The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that may be necessary should the Group be unable to continue as a going concern.

### **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **1.3 Principles of Consolidation**

The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Rapid Nutrition PLC at the end of the reporting period. A controlled entity is any entity over which Rapid Nutrition PLC has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In preparing the consolidated financial statements, all intragroup balances and transactions between entities in the consolidated group have been eliminated in full on consolidation.

In the company statement of financial position investment in subsidiaries is accounted for at the nominal value of the shares issued on acquisition.

#### *Pooling of Interests on Incorporation of Parent Entity*

On incorporation of the entity, subsidiaries have been consolidated using the pooling of interests method on the basis that the entities being combined are ultimately controlled by the same parties, both before and after the combination.

Under this method the assets and liabilities of the acquiree are recorded at book value and intangible assets and contingent liabilities are only recognised if they were previously recognised by the acquiree. No goodwill is recorded and expenses of the combination are written off immediately in profit or loss.

#### *Subsequent Business Combination*

Business combinations occur where an acquirer obtains control over one or more businesses.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exceptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to business combinations are expensed to the statement of comprehensive income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

### **1.4 Revenue recognition**

Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the group's activities, as described below. The group bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

### **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### *Sales of goods – wholesale*

The group manufactures and sells a range of life science (including weight loss) products in the wholesale market. Sales of goods are recognised when a group entity has delivered products to the wholesaler, the wholesaler has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the wholesaler's acceptance of the products. Delivery does not occur until the products have been shipped to the specified location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed or the group has objective evidence that all criteria for acceptance have been satisfied. The life science products are often sold with volume discounts; customers have a right to return faulty products in the wholesale market. Sales are recorded based on the price specified in the sales contracts, net of the estimated volume discounts and returns at the time of sale. Accumulated experience is used to estimate and provide for the discounts and returns. The volume discounts are assessed based on anticipated annual purchases.

#### *Internet revenue*

Revenue from the provision of the sale of goods on the internet is recognised at the point that the risks and rewards of the inventory have passed to the customer, which is the point of dispatch. Transactions are settled by credit or payment card. Provisions are made for internet credit notes based on the expected level of returns, which in turn is based upon the historical rate of returns.

#### **1.5 Finance income**

Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

#### **1.6 Property, plant and equipment**

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, using the straight line method, on the following bases:

| Computer equipment              | 30% |
|---------------------------------|-----|
| Motor vehicles                  | 20% |
| Fixture, fittings and equipment | 30% |

#### **1.7 Intangible Assets**

#### *Trademarks and licences*

Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business combination are recognised at fair value at the acquisition date. Once utilisation commences, trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks and licences over their estimated useful lives of 15 to 20 years.

#### **1.8 Research and Development**

Research costs are not viewed as separable from development costs. As such, all of these costs are expensed as incurred.

### **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **1.9 Financial Assets**

#### *Classification*

The group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

#### (a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

#### (b) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The group's loans and receivables comprise 'trade and other receivables' and 'cash and cash equivalents' in the balance sheet.

#### (c) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting period.

#### *Recognition and measurement*

Regular purchases and sales of financial assets are recognised on the trade-date – the date on which the group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are presented in the income statement within 'other (losses)/gains – net' in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the income statement as part of other income when the group's right to receive payments is established.

Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognised in other comprehensive income. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments recognised in equity are included in the income statement as 'gains and losses from investment securities'.

Interest on available-for-sale securities calculated using the effective interest method is recognised in the income statement as part of finance income. Dividends on available-for-sale equity instruments are recognised in the income statement as part of other income when the group's right to receive payments is established.

### **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **1.10 Cash & Cash Equivalents**

In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated balance sheet, bank overdrafts are shown within borrowings in current liabilities.

#### **1.11 Inventories**

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the firstin, first-out (FIFO) method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Costs of inventories include the transfer from equity of any gains/losses on qualifying cash flow hedges for purchases of raw materials.

#### **1.12 Trade Receivables**

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

#### **1.13 Trade Payables**

Trade and other payables are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services. They are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method. Current liabilities represent those amounts falling due within one year.

### **1.14 Goods and Services Tax (GST)**

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).

Receivables and payables are stated inclusive of the amount of GST receivable and payable. The net amount of GST recoverable from, or payable to, the ATO is included with the receivables or payables in the statement of financial position.

#### **1.15 Borrowings**

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

### **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **1.16 Income Tax**

Income tax expense or benefit represents the sum of current corporation tax payable and provision for deferred income taxes.

Current income tax payable is based on taxable profit for the period or year. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Group's liability for current corporation tax is calculated using tax rates and laws that have been enacted or substantively enacted at the period-end date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the date of the statement of financial position where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions:

Deferred tax assets are recognised only to the extent that the Directors consider that it is probable that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the period-end date.

#### **1.17 Foreign Currencies**

#### *Functional and presentation currency*

Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the Group operates ('the functional currency'). The financial statements are presented in Australian dollars, which is the Group's functional and presentation currency.

#### *Transactions and balances*

Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the dates of the transactions.

Foreign currency monetary assets and liabilities at the reporting date are translated at the exchange rate existing at the reporting date. Exchange differences are recognised in the statement of comprehensive income in the period in which they arise.

#### **1.18 Contributed Equity**

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

If the Company reacquires its own equity instruments, e.g. as the result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognise directly in equity.

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **1.19 Segment Reporting**

Operating segments were reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions.

#### **1.20 New Accounting Standards for Application in Future Periods**

(a) New and amended standards adopted by the group

There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial period beginning on 11 January 2012 that would be expected to have a material impact on the group.

(b) New standards and interpretations not yet adopted

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the financial statements of the group, except the following set out below:

IAS 27 Separate Financial Statements (as revised in 2011). As a consequence of the new IFRS 10 and IFRS 12 (refer below), what remains in IAS 27 is limited to accounting for subsidiaries, joint arrangements and associates in separate financial statements. The group has not yet evaluated the impact of this change for their forthcoming accounting period.

IAS 28 Investments in Associates and Joint Ventures (as revised in 2011). As a consequence of the new IFRS 11 and IFRS 12, IAS 28 has been renamed IAS 28 Investments in Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to associates. This amendment will have no impact on the Group, as it does not have joint ventures. The revised standard is effective for annual periods beginning on or after 1 January 2013.

IFRS 13, 'Fair value measurement', aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP.

IAS 19, 'Employee benefits', was amended in June 2011. The impact on the group will be as follows: to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). The group is yet to assess the full impact of the amendments.

IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in November 2009 and October 2010. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: 1) those measured as at fair value and 2) those measured at amortised cost. The determination is made at initial recognition.

# **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity's own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The group is yet to assess IFRS 9's full impact and intends to adopt IFRS 9 no later than the accounting period beginning on or after 1 January

2015. The group will also consider the impact of the remaining phases of IFRS 9 when completed by the Board.

IFRS 10, Consolidated financial statements', builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent group. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The group is yet to assess IFRS 10's full impact and intends to adopt IFRS 10 no later than the accounting period beginning on or after 1 January 2013.

IFRS 11 Joint Arrangements IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointlycontrolled Entities — Non-monetary Contributions by Venturers. IFRS 11 removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method. The group is currently assessing the impact that this standard will have on the financial position and performance. This standard is effective for annual periods beginning on or after 1 January 2013.

IFRS 12, 'Disclosures of interests in other entities', includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The group is yet to assess IFRS 12's full impact and intends to adopt IFRS 12 no later than the accounting period beginning on or after 1 January 2013. There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the group.

# **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

### **2. Parent Information**

In according with section 408 of the UK Companies Act 2006, the company is availing itself of the exemption from presenting its individual statement of profit or loss and other comprehensive income. The company's profit / (loss) for the financial period as determined in accordance with IFRS's is \$2,835,585. The company had no cashflow in the period, and therefore no cashflow statement has been prepared.

|                                 | 30 June 2013 |
|---------------------------------|--------------|
|                                 | \$           |
| Statement of Financial Position |              |
| Non-Current Assets              |              |
| Investment in subsidiaries      | 26,509,688   |
| Current Assets                  |              |
| Investments                     | 3,165,218    |
| Other Assets                    | 576,687      |
| Total Assets                    | 30,251,593   |
|                                 |              |
| Current Liabilities             | -            |
| Non-Current Liabilities         | -            |
| Total Liabilities               | -            |
|                                 |              |
| Issued Capital                  | 27,086,383   |
| Reserves                        | 329,625      |
| Retained Earnings               | 2,835,585    |
| Total Equity                    | 30,251,593   |

#### **Guarantees**

Rapid Nutrition PLC has not entered into any guarantees, in the financial period, in relation of the debts of its subsidiary.

#### **Contingent Liabilities**

At 30 June 2013, Rapid Nutrition PLC did not have any contingent liabilities.

#### **Contractual Commitments**

At 30 June 2013, Rapid Nutrition PLC had not entered into any contractual commitments for the acquisition of property, plant or equipment.

#### **Consolidation of subsidiaries**

Following the incorporation of Rapid Nutrition PLC, Rapid Nutrition Pty Ltd was acquired through a share for share exchange. The subsidiary has been consolidated using the pooling of interest method on the basis that the entities being combined are ultimately controlled by the same parties, both before and after the combination. Under this method the assets and liabilities of the acquiree are recorded at book values and intangible assets and contingent liabilities are only recognised if they were previously recognised by the acquiree. No goodwill is recorded and expenses of the combination are immediately written off in the profit or loss.

# **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **2. Parent Information (continued)**

|                                                                                                  | Net Assets<br>Acquired |
|--------------------------------------------------------------------------------------------------|------------------------|
|                                                                                                  | \$                     |
| The carrying value of the subsidiary's net assets at the date of combination<br>were as follows: |                        |
| Rapid Nutrition Pty Ltd                                                                          | 20,956                 |

The shares in Rapid Nutrition Pty Ltd were exchange for 226,947,077 Ordinary £0.10 shares in Rapid Nutrition PLC.

# **3. Operating Segments**

Operating segments must be identified on the basis of internal reports about components of the consolidated entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

As a new group, currently in its growth phase, the Board (the group's chief operating decision maker) believe that, at 30 June 2013, there was only one business segment, the life science and health food products market.

The revenue and results of this segment are those of the consolidated entity as a whole and are set out in the statement of profit or loss and other comprehensive income. The segment assets and liabilities of this segment are those of the consolidated entity and are set out in the statement of financial position.

### **4. Revenue**

|                   | Period from<br>11January<br>2012 to 30<br>June 2013<br>\$ | Period from 1<br>July 2010 to<br>10 January<br>2012<br>\$ |
|-------------------|-----------------------------------------------------------|-----------------------------------------------------------|
| Direct Sales      | 115,051                                                   | 16,234                                                    |
| Distributor Sales | 359,846                                                   | -                                                         |
| Licensing Fees    | -                                                         | 50,000                                                    |
|                   | 474,897                                                   | 66,234                                                    |

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

# **5. Operating loss**

The following items have been included in arriving at the operating loss:

|                                               | Period from<br>11 January<br>2012 to 30<br>June 2013<br>\$ | Period from 1<br>July 2010 to<br>10 January<br>2012<br>\$ |
|-----------------------------------------------|------------------------------------------------------------|-----------------------------------------------------------|
| Gains on foreign exchange                     | 329,634                                                    | -                                                         |
| Depreciation on property, plant and equipment | 34,210                                                     | 9,024                                                     |
| Directors' remuneration                       | 212,500                                                    | -                                                         |
| Directors' consulting fees                    | 107,098                                                    | -                                                         |
| Auditor's remuneration                        |                                                            |                                                           |
| -<br>As auditors                              | 7,000                                                      | -                                                         |
| -<br>As tax agents                            | 2,000                                                      | -                                                         |

All remuneration payable to the auditors has been disclosed above. No other non-audit services have been provided. No benefits in kind are payable to the auditors.

# **6. Employees**

|                                              | Period from<br>11 January<br>2012 to 30<br>June 2013<br>\$ | Period from 1<br>July 2010 to<br>10 January<br>2012<br>\$ |
|----------------------------------------------|------------------------------------------------------------|-----------------------------------------------------------|
| Staff costs for the Group during the period: |                                                            |                                                           |
| Wages and salaries                           | 142,892                                                    | -                                                         |
| Director's remuneration                      | 212,500                                                    | -                                                         |
| Superannuation                               | 29,068                                                     | -                                                         |
|                                              | 384,460                                                    | -                                                         |

The average monthly number of staff (including executive Directors) employed by the Group during the period amounted to:

|                  | Period from<br>11 January<br>2012 to 30<br>June 2013 | Period from 1<br>July 2010 to<br>10 January<br>2012 |
|------------------|------------------------------------------------------|-----------------------------------------------------|
| Management staff | 4                                                    | 1                                                   |

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

# **7. Taxation**

|                                             | Period from<br>11 January<br>2012 to 30<br>June 2013<br>\$ | Period from 1<br>July 2010 to<br>10 January<br>2012<br>\$ |
|---------------------------------------------|------------------------------------------------------------|-----------------------------------------------------------|
| Current Tax                                 |                                                            |                                                           |
| Current tax on profits in the period        | -                                                          | -                                                         |
| Deferred Tax                                |                                                            |                                                           |
| Origination of temporary timing differences | 728,000                                                    | -                                                         |
| Income Tax Expense                          | 728,000                                                    | -                                                         |

The deferred tax charge shown relates to the unrealised gain recognised on financial assets held at 30 June 2013. It is due to temporary timing differences between the recognition of the gain and the charging of tax.

#### **Factors affecting current tax charge**

The effective rate of tax for the period is lower than the standard rate of corporation tax in the UK of 24.1% (2012: 26.4%). The differences are explained below:

|                                                                                                          | Period from<br>11 January<br>2012 to 30<br>June 2013 | Period from 1<br>July 2010 to<br>10 January<br>2012 |
|----------------------------------------------------------------------------------------------------------|------------------------------------------------------|-----------------------------------------------------|
|                                                                                                          | \$                                                   | \$                                                  |
| Profit/(Loss) before taxation                                                                            | 2,498,993                                            | (51,170)                                            |
| Profit on ordinary activities multiplied by the standard<br>rate of tax in the UK of 24.1% (2012: 26.4%) | 602,614                                              | (12,332)                                            |
| Excluded loss (incurred solely in Australia)                                                             | 81,167                                               | 12,332                                              |
| Income adjustments                                                                                       | (683,781)                                            | -                                                   |
| Total current tax                                                                                        | -                                                    | -                                                   |

HM Revenue & Customs have announced a reduction in the rate of corporation tax to 23% for accounting periods starting after 1 April 2013. It has also announced that the rate of corporation tax will be reduced to 21% for accounting periods starting after 1 April 2014.

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

# **8. Property, plant and equipment**

|                                       | Motor<br>Vehicles<br>\$ | Computer<br>Equipment<br>\$ | Fixtures,<br>fittings and<br>equipment<br>\$ | Total<br>\$ |
|---------------------------------------|-------------------------|-----------------------------|----------------------------------------------|-------------|
| Cost                                  |                         |                             |                                              |             |
| As at 11 January 2012                 | 70,751                  | 8,026                       | 10,860                                       | 89,637      |
| Additions                             | 106,177                 | 2,471                       | -                                            | 108,648     |
| At 30 June 2013                       | 176,928                 | 10,497                      | 10,860                                       | 198,285     |
| Depreciation                          |                         |                             |                                              |             |
| As at 11 January 2012                 | 70,751                  | 8,026                       | 6,351                                        | 85,128      |
| Charge for the period                 | 30,083                  | 1,050                       | 3,077                                        | 34,210      |
| At 30 June 2013                       | 100,834                 | 9,076                       | 9,428                                        | 119,338     |
| Net book amount at 30 June<br>2013    | 76,094                  | 1,421                       | 1,432                                        | 78,947      |
|                                       | Motor<br>Vehicles<br>\$ | Computer<br>Equipment<br>\$ | Fixtures,<br>fittings and<br>equipment<br>\$ | Total<br>\$ |
| Cost                                  |                         |                             |                                              |             |
| As at 1July 2010                      | 70,751                  | 8,026                       | 10,860                                       | 89,637      |
| At 10 January 2012                    | 70,751                  | 8,026                       | 10,860                                       | 89,637      |
| Depreciation                          |                         |                             |                                              |             |
| As at 1 July 2010                     | 64,137                  | 7,788                       | 4,179                                        | 76,104      |
| Charge for the period                 | 6,614                   | 238                         | 2,172                                        | 9,024       |
| At 10 January 2012                    | 70,751                  | 8,026                       | 6,351                                        | 85,128      |
| Net book amount at 10<br>January 2012 | -                       | -                           | 4,509                                        | 4,509       |

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

# **9. Intangible Assets**

|                       | 30 June 2013<br>\$ | 10 January<br>2012<br>\$ |
|-----------------------|--------------------|--------------------------|
| Intellectual property | 2,105              | -                        |

At 30 June 2013, the group's main product launch for which the above intellectual property was acquired had not yet taken place, thus no amortisation has yet been charged.

### **10. Trade and other receivables – current**

|                   | 30 June 2013<br>\$ | 10 January<br>2012 |
|-------------------|--------------------|--------------------|
|                   |                    | \$                 |
| Trade receivables | 353,803            | 371                |

# **11. Cash and cash equivalents**

|              | 30 June 2013<br>\$ |   |
|--------------|--------------------|---|
| Cash at bank | 13,264             | - |

Cash at bank is included as cash and cash equivalents in connection with the statement of cash flows.

When in overdraft, this balance is included in trade and other payables.

### **12. Inventory**

|                | 30 June 2013<br>\$ |        |
|----------------|--------------------|--------|
| Finished goods | 160,967            | 33,623 |

# **NOTES TO THE FINANCIAL STATEMENTS**

# **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

# **13. Financial assets**

*Financial assets measured at fair value through profit or loss*

Financial assets held for trading:

- Investments in equity instruments held for trading

|                                   | 30 June 2013 | 10 January 2012 |
|-----------------------------------|--------------|-----------------|
|                                   | \$           | \$              |
| Held for Trading Motivideo Shares | 3,165,218    | -               |

Shares held for trading are traded for the purpose of short term profit taking. Changes in fair value are included in the statement of profit or loss and other comprehensive income.

# *Reconciliation of year end balance:*

| Unrealised gains:                                 | \$        |
|---------------------------------------------------|-----------|
| -<br>Gain on admission to GXG trading at EUR 0.19 | 1,077,522 |
| -<br>Gain to 30 June 2013                         | 1,758,062 |
| Foreign exchange gain                             | 329,634   |
| Value at period end                               | 3,165,218 |

### **14. Other assets**

|               | 30 June 2013 | 10 January 2012 |
|---------------|--------------|-----------------|
|               | \$           | \$              |
| Unpaid shares | 576,687      | -               |

# **NOTES TO THE FINANCIAL STATEMENTS**

# **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

### **15. Trade and other payables – current**

|                 | 30 June 2013 | 10 January 2012 |  |
|-----------------|--------------|-----------------|--|
|                 | \$           | \$              |  |
| Trade payables  | -            | 78              |  |
| Overdraft       | -            | 12,761          |  |
| Credit card     | 599          | 30,539          |  |
| Deferred income | 67,435       | 24,983          |  |
| Accruals        | 37,810       | -               |  |
| Accrued wages   | 170,967      | -               |  |
|                 | 276,811      | 68,361          |  |

# **16. Current tax liabilities**

|                        | 30 June 2013<br>\$ | 10 January 2012<br>\$ |
|------------------------|--------------------|-----------------------|
| Deferred tax liability | 728,000            | -                     |

The liability to deferred tax has been classified as current as, should the corresponding assets be sold, the tax liability will crystallise immediately.

### **17. Borrowings**

|                                      | 30 June 2013<br>\$ | 10 January 2012<br>\$ |
|--------------------------------------|--------------------|-----------------------|
| Loans from related parties           | 6,644              | 4,656                 |
| Other Loans                          | 984,000            | -                     |
| Current Hire Purchase Liability      | 31,502             | -                     |
| Less: Current Hire Purchase Interest | (7,270)            | -                     |
|                                      | 1,014,876          | 4,656                 |

The amount in other loans is a short term loan provided by J&J Smith, shareholders in the Company. The loan is unsecured and subject to interest at 6.5% annually.

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

# **18. Non-current Borrowings**

|                                  | 30 June 2013<br>\$ | 10 January 2012<br>\$ |
|----------------------------------|--------------------|-----------------------|
| Hire purchase Liability > 1 year | 86,550             |                       |
| Hire purchase interest > 1 year  | (10,659)           | -                     |
|                                  | 75,891             | -                     |

# **19. Contributed equity**

As mentioned in Note 2 and shown in the Statement of Changes in Equity shown on page 11, Rapid Nutrition PLC is applying the "pooling of interests" method of accounting for its business combination with Rapid Nutrition Pty Ltd. In accordance with the principles that underpin this methodology, the comparative figures for this period's financial statements are those of the subsidiary company, alone. As shown below, this has given rise to a change in share capital as the new parent entity, Rapid Nutrition PLC, came into existence at the start of the current period – 11 January 2012 – and completed a share for share exchange to acquire Rapid Nutrition Pty Ltd. This transaction eliminated the share capital of the subsidiary from the current period's consolidated figures, replacing it with that of the parent.

|                                                           | 30 June<br>10 January<br>2013<br>2012 |            | 30 June<br>2013 |          | 10 January<br>2012 |  |
|-----------------------------------------------------------|---------------------------------------|------------|-----------------|----------|--------------------|--|
|                                                           | Securities                            | Securities | \$              | \$       |                    |  |
| Contributed Equity<br>(Rapid Nutrition Pty<br>Ltd)        | -                                     | -          | -               | 432,277  |                    |  |
| Ordinary shares of £1<br>each (Rapid Nutrition<br>PLC)    | 6                                     | -          | 8               | -        |                    |  |
| Ordinary shares of<br>£0.10 each (Rapid<br>Nutrition PLC) | 231,884,040                           | -          | 27,086,375      | -        |                    |  |
| Cost of issued shares                                     | -                                     | -          | (113,789)       | (58,414) |                    |  |
|                                                           | 231,884,046                           | -          | 26,972,594      | 373,863  |                    |  |

The holder of the ordinary shares is entitled to one vote per share at any meeting of the Company whether in person or by proxy. The holder is entitled to receive dividends declared from available profits and to the surplus of assets on a winding up.

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

# **20. Retained Earnings**

|                         | 30 June 2013<br>\$ | 10 January 2012<br>\$ |
|-------------------------|--------------------|-----------------------|
| Balance brought forward | (411,321)          | (415,294)             |
| Profit for the period   | 1,770,993          | 3,973                 |
| Balance carried forward | 1,359,672          | (411,321)             |

# **21. Related party transactions**

| Name (relationship)       | Transaction                    | Amount     |      |         |      |  | Amount due from/(to)<br>related party |  |
|---------------------------|--------------------------------|------------|------|---------|------|--|---------------------------------------|--|
|                           |                                | 2013       | 2012 | 2013    | 2012 |  |                                       |  |
|                           |                                | \$         | \$   | \$      | \$   |  |                                       |  |
| Rapid Nutrition           | Revenue                        | 359,846    | -    | -       | -    |  |                                       |  |
| (India)                   | Trade<br>receivable            | -          | -    | 285,997 | -    |  |                                       |  |
| M&M Management<br>Pty Ltd | Ordinary<br>Shares held        | 5,482,707  | -    | -       | -    |  |                                       |  |
|                           | Unpaid<br>portion of<br>shares | -          | -    | 576,687 | -    |  |                                       |  |
| JBG Corp Pty Ltd          | Ordinary<br>Shares held        | 12,110,277 | -    | -       | -    |  |                                       |  |
| Health-E-Nominees         | Consultancy<br>Expenses        | 14,001     | -    | -       | -    |  |                                       |  |

#### **Nature of related parties**

One of the directors of Rapid Nutrition Private Limited (India) is Vaidyanathan Nateshan, current director of Rapid Nutrition PLC. M&M Management Pty Ltd and JBG Corp Pty Ltd are companies controlled by the director of Rapid Nutrition, Simon St Ledger and his related parties.

### **Transactions with related parties**

All transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties.

# **NOTES TO THE FINANCIAL STATEMENTS**

# **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **22. Related party transactions (continued)**

#### **Key Management Personnel**

All transactions with key management personnel (the directors) during the period 11 January 2012 to 30 June 2013 are disclosed below:

|                       | Salary  | Superannuation | Consultancy<br>Fees | Total   |
|-----------------------|---------|----------------|---------------------|---------|
| Simon St Ledger 1 2   | 212,500 | 25,476         | -                   | 237,976 |
| Vaidyanathan Nateshan | -       | -              | 30,048              | 30,048  |
| Malcolm Sinclair 2    | -       | -              | 77,050              | 77,050  |

During the period, there were no advances, credits or guarantees subsisting on behalf of the directors.

#### **23. Commitments and contingencies**

At 30 June 2013 the Group did not have any contingencies.

At 30 June 2013 the Group had the following obligations under non-cancellable finance leases:

|                                    | 30 June 2013<br>\$ | 10 January<br>2012<br>\$ |
|------------------------------------|--------------------|--------------------------|
| Finance lease commitments          |                    |                          |
| Payable – minimum lease payments   |                    |                          |
| -<br>Not later than 12 months      | 24,232             | -                        |
| -<br>Between 12 months and 5 years | 75,891             | -                        |

The finance leases are on motor vehicles which commenced in June 2012. They are 5 year leases with equal payments throughout the lease term, and one balloon payment at the end.

# **NOTES TO THE FINANCIAL STATEMENTS**

### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **24. Reconciliation of operating profit to net cash outflow from operations**

|                                    | Period from<br>11January<br>2012 to 30<br>June 2013<br>\$ | Period from 1<br>July 2010 to<br>10 January<br>2012<br>\$ |
|------------------------------------|-----------------------------------------------------------|-----------------------------------------------------------|
| Operating loss                     | (336,592)                                                 | (51,170)                                                  |
| Depreciation                       | 34,210                                                    | 9,024                                                     |
| Gain on foreign exchange           | (329,625)                                                 | -                                                         |
| (Increase)/decrease in Receivables | (353,432)                                                 | 537                                                       |
| Increase/(decrease) in Payables    | 218,835                                                   | 45,031                                                    |
| (Increase)/decrease in Inventory   | (127,344)                                                 | -                                                         |
| Net cash outflow from operations   | (893,948)                                                 | 3,422                                                     |

#### **25. Financial risk management**

The Group's financial instruments consist mainly of deposits with banks, accounts receivable and payable & loans from related parties.

The Group's financial instruments at 30 June 2013 were classified as follows:

|                               | Note   | 30 June 2013<br>\$ | 10 January 2012<br>\$ |
|-------------------------------|--------|--------------------|-----------------------|
| Financial assets              |        |                    |                       |
| Cash and cash equivalents     | 11     | 13,264             | -                     |
| Trade and other receivables   | 10     | 353,803            | 371                   |
| Financial assets              | 13     | 3,165,218          | -                     |
| Total financial assets        |        | 3,532,285          | 371                   |
| Financial liabilities         |        |                    |                       |
| -<br>Trade and other payables | 16     | 276,811            | 68,361                |
| -<br>Borrowings               | 18, 19 | 1,090,767          | 4,656                 |
|                               |        | 1,367,578          | 73,017                |

#### **Fair value versus carrying amounts**

All items shown in the preceding table as either financial assets or financial liabilities are short term instruments whose carrying value is equivalent to the fair value. There is not considered to be a material difference between the fair value and the carrying value.

### **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **25. Financial risk management (continued)**

#### **Specific Financial Risk Exposures and Management**

The Group's activities expose it to a number of financial risks that include market risk, credit risk and liquidity risk.

#### **(a) Market Risk**

#### **i) Foreign exchange risk**

The Group's main financial asset – shares held at fair value through the profit and loss – are denominated in Euros, so the risk of any adverse movement in the foreign currency exchange rates is borne by the Group.

As at 30 June 2013, if the Euro had strengthened/weakened by 5% against the Australian dollar with all other variables held constant, comprehensive income for the period and assets would have been \$158,261 higher/lower, as a result of foreign exchange gains/losses on transaction of the financial asset.

#### **ii) Interest rate risk**

The Group had interest-bearing liabilities during the period, but is not exposed to interest rate risk because the interest rates on their liabilities are set by private agreement, not by reference to market rates. The group does not have any liabilities to financial institutions at 30 June 2013. As such, sensitivity analysis with regard to movements in interest rates would not be meaningful.

#### **(b)Credit risk**

Exposure to credit risk relating to financial assets arises from the potential non-performance of counter-parties of contract obligations that could lead to financial losses to the group.

#### *Credit risk exposures*

The Group had no significant concentrations of credit risk. For loans receivable and payable, please refer to Note 10 – Trade and Other Receivables & Note 17 - Borrowings. Loans are unsecured and have no fixed repayment date.

#### **(c) Liquidity risk**

Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The group manages this risk through careful cash management policies. In order to meet its short term obligations, the group has the support of several key shareholders who are willing to provide funds to the group on an as-needed basis.

#### **26. Share Based Payments**

No share options have been granted to employees or directors. No shares were granted to suppliers as shared based payments during this or the preceding financial period.

# **NOTES TO THE FINANCIAL STATEMENTS**

#### **FOR THE PERIOD 11 JANUARY 2012 TO 30 JUNE 2013; 1 JULY 2010 TO 10 JANUARY 2012**

#### **27. Earnings per share**

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the year. Due to the alteration in the group's capital structure at 11 January 2012, when Rapid Nutrition PLC was incorporated, comparative figures have not been calculated as they are not considered comparable to the current year.

The following reflects earnings and share data used in the earnings per share calculation.

|                                   | Period from<br>11January<br>2012 to 30<br>June 2013<br>\$ |
|-----------------------------------|-----------------------------------------------------------|
| Profit for the year               | 1,770,993                                                 |
| Weighted average number of shares | 136,402,380                                               |

There were no instruments (e.g. redeemable preference shares or share options) in issue as at 30 June 2013 that could potentially dilute earnings per share in the future.

#### **28. Subsequent Events**

Other than the following, the directors are not aware of any significant events since the end of the reporting period.

The Group is in the process of finalising arrangements that will secure a \$10m media spend to support the Group's new product launch in October 2013.

### **29. Company Details**

The registered office of Rapid Nutrition PLC is:

2 nd Floor 145-157 St. John Street London England EC1V 4PW

The principal place of business is:

40-46 Nestor Drive Meadowbrook QLD 4131 Australia

### **INDEPENDENT AUDITORS' REPORT**

#### **FOR THE PERIOD 1 JULY 2010 TO 30 JUNE 2013**

We have audited the consolidated financial statements of Rapid Nutrition PLC for the three year period 1 July 2010 to 30 June 2013. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The figures presented for the period 1 July 2010 to 10 January 2012 have been prepared specifically for the purpose of inclusion with the Company's prospectus to the Frankfurt Stock Exchange. They represent the results of Rapid Nutrition Pty Ltd as a single entity, in line with the provisions for presenting comparatives for companies combined into a group under the pooling of interests method of accounting for a common control business combination.

The figures presented for the period 11 January 2012 to 30 June 2013 are those produced to meet statutory filing obligations in the UK. They have been filed with Companies House.

These financial statements have been prepared for the purpose of complying with item 20.1 of Annex I of the Prospectus Regulation.

#### **Respective responsibilities of the directors and auditors**

The directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

#### **Scope of the audit of the financial statements**

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all financial and non-financial information in the Directors' Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

#### **Opinion on financial statements**

In our opinion the financial statements:

- give a true and fair view of the state of the company's affairs as at 30 June 2013 & 10 January 2012, and of its performance for the three years ended 30 June 2013;
- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
- have been prepared in accordance with the requirements of the Companies Act 2006.

### **INDEPENDENT AUDITORS' REPORT**

#### *Emphasis of matter – Inherent uncertainty regarding continuation as a going concern*

Without modifying our opinion, we draw attention to the following financial information: in the period from 11 January 2012 to 30 June 2013, the Group experienced net cash outflows from operating activities of \$893,948, while it had cash and cash equivalents at the end of the period totalling \$13,274. Given those noted findings, we believe that the group's ability to continue as a going concern is dependent on the group securing additional funding through shareholder loans, or successful realisation of revenue growth via the Group's plans to launch their new product lines in the coming year.

As a result, there is a material uncertainty related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern, and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

Our opinion is not qualified in respect of this matter.

#### **Matters on which we are required to report by exception**

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit; or
- the directors were not entitled to take advantage of the small companies' exemption in preparing the directors' report.

#### **Declaration**

For the purposes of Prospectus Rule 5.5.3R(2)(f), we are responsible for this report as part of the prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affects its import. This declaration is included in the prospectus in compliance with item 1.2 of Annex I and item 1.2 of Annex III of the Prospectus Directive Regulation.

Nicholas Hollens – Senior Statutory Auditor For and on behalf of KSI (WA) – Statutory Auditors 1304 Hay St West Perth WA 6005 Australia

Date: 13 May, 2014

13 May 2014Simon St Ledger Rapid Nutrition PLC 40-46 Nestor Drive Meadowbrook QLD 4131 Australia

Dear Simon,

# **Rapid Nutrition PLC**

In support of your submission to the Frankfurt Stock Exchange, in relation to the audit reports for the above named company for the periods ended 30 June 2013 and 10 January 2012, we confirm the following:

- 1. As described in the audit reports, the Senior Statutory Auditor for these engagements was Nicholas Hollens, who is the individual responsible for the audit report and opinion expressed therein.
- 2. As described in the audit reports, our responsibility was to audit and express an opinion on the financial statements, in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.
- 3. As described in the audit reports, the directors of the Company are responsible for the preparation of the financial statements and being satisfied that they give a true and fair view of the company's position at the period end date, and performance for the period up to that date.

We provide the above in compliance with the requirements of Annex I, 1.1-1.2 and PR 5.5.3(2)(f).

We consent to your including this statement and our audit reports in your submission to the stock exchange.

Yours faithfully

**Nicholas Hollens** *Principal* KSI (WA)

# <span id="page-126-0"></span>**14. Dividend Policy and Legal Proceedings**

# <span id="page-126-1"></span>**14.1 Dividend Policy**

| 14.1.1 | The Issuer has no dividend policy at the submission date of this document. The Board will   |  |
|--------|---------------------------------------------------------------------------------------------|--|
|        | determine what, if any, dividends are to be distributed to shareholders from time to time   |  |
|        | taking into account the profitability and strategic direction of the Issuer, and such other |  |
|        | matters as the Board may consider relevant. The Board has no restrictions on its ability to |  |
|        | determine a dividend policy.                                                                |  |
| 14.1.2 | No dividends have been paid by the Issuer as of the submission date of this document.       |  |

# <span id="page-126-2"></span>**14.2 Legal and Arbitration Proceedings**

| 14.2.1 | There are no governmental, legal or arbitration proceedings (including any such             |  |
|--------|---------------------------------------------------------------------------------------------|--|
|        | proceedings which are pending or threatened of which the Issuer is aware), during a period  |  |
|        | covering at least the 12 months preceding the date of this Prospectus which may have, or    |  |
|        | have had in the recent past, significant effects on the Issuer's and/or the Rapid Nutrition |  |
|        | Group's financial position or profitability.                                                |  |
|        |                                                                                             |  |

# <span id="page-127-1"></span><span id="page-127-0"></span>**15.1 Share Capital**

| 15.1.1 | Share Capital        |             |            |            |            |
|--------|----------------------|-------------|------------|------------|------------|
|        |                      | 30 June     | 10 January | 30 June    | 10 January |
|        |                      | 2013        | 2012       | 2013       | 2012       |
|        |                      | Securities  | Securities | \$         | \$         |
|        | Contributed Equity   |             |            |            |            |
|        | (Rapid Nutrition Pty | -           | -          | -          | 432,277    |
|        | Ltd)                 |             |            |            |            |
|        | Ordinary shares of   |             |            |            |            |
|        | £1 each (Rapid       | 6           | -          | 8          | -          |
|        | Nutrition PLC)       |             |            |            |            |
|        | Ordinary shares of   |             |            |            |            |
|        | £0.10 each (Rapid    | 231,884,040 | -          | 27,086,375 | -          |
|        | Nutrition PLC)       |             |            |            |            |
|        | Cost of issued       |             |            |            |            |
|        | shares               | -           | -          | (113,789)  | (58,414)   |
|        |                      | 231,884,046 | -          | 26,972,594 | 373,863    |

### <span id="page-127-2"></span>**15.2 History of Share Capital**

**15.2.1** The share capital of the Issuer was finalised shortly after the company was incorporated and has not changed materially since that time.

# <span id="page-127-3"></span>**15.3 Article of Association**

| 15.3.1 | The Articles of Association of the Issuer are available for inspection at the registered office of |
|--------|----------------------------------------------------------------------------------------------------|
|        | the Issuer.                                                                                        |
|        | Significant provisions of the Articles of Association include the following:                       |
|        | Provisions regarding directors and managers of the Issuer                                          |
|        | The number of directors must be at least two and may not exceed 10; and Directors may be           |
|        | appointed by the Directors or by an ordinary resolution at a meeting of the members. Directors     |
|        | are not required to retire by rotation at any annual general meeting or general meeting of the     |
|        | Company.                                                                                           |
|        |                                                                                                    |

The Directors have full authority to conduct the affairs of the Issuer in compliance with the provisions of the Articles of Association. The members of the Issuer may direct the Directors to take or refrain from taking certain action. However, such special resolution does not invalidate any action already taken by one or more Directors.

Decisions of the Directors are to be taken at a Directors meeting or in the form of a written resolution; and the Directors may delegate certain powers to other parties as they see fit, including one or more of the Directors.

The Directors may appoint local boards or management groups to manage the affairs of the Issuer, and this would include appointing the board of any wholly owned subsidiary.

# **Existing share rights, preferences and restrictions**

Your attention is drawn to the risks outlined in Section [2.2](#page-25-0) of this Prospectus, especially in relation to the limitation on the rights of electronic shareholders, whose shares are held by the UK Custodian.

Subject to limitations of electronic trading platforms and custodian arrangements, each shareholder of the Issuer who has fully paid Shares has the following rights as determined by the Articles of Association and the laws of England and Wales:

- (a) Right to attend and speak at a general meetings;
- (b) Right to vote at a meeting of members;
- (c) Right to receive dividends.

The Issuer has only issued ordinary shares, and as such there are no preferences or restrictions that distinguish the shares in the company, except to the extent that the existing shareholders have voluntarily entered into a holding lock that prevents them from selling their Shares on market for the 12 month period after the listing of the Issuer unless authorised by the Issuer.

# **Conditions governing shareholder meetings**

The following should be read in conjunction with each of the sections relating to CREST and Clearstream and the resultant variation of shareholder rights, including Sections [5.1.2.5](#page-33-0) to [5.1.2.12](#page-35-0) of this Prospectus.

Subject to some specific cases where notice periods may vary including provisions of the Act which require "special notice", the Directors may call a general or extraordinary meeting to obtain a vote of the members in the following circumstances with the requisite amount of notice:

(a) for an annual general meeting at least 21 days notice;

(b) for any other general meeting other than an adjourned meeting, the directors must give shareholders at least 14 days notice.

In the case where there are less than 2 directors, or one or more of the directors are unable or unwilling to call a meeting of members, 2 members may call such a meeting for the purpose of appointing one or more directors.

To attend and vote at a meeting of members, a shareholder must: (a) be a "Qualifying Person", who is defined as "an individual who is a Member, or a person authorised under section 323 of Companies Act 2006 to act as a representative of a Member (such Member being a corporation) in relation to a meeting, or a person appointed as proxy of a Member in relation to a meeting"; and (b) not have any amounts owing to the Issuer.

# **Change of control provisions – City Code on Takeovers and Mergers**

In addition to the Articles and associated resolutions which determine how a change of control may happen, as a public company incorporated and registered in England and Wales and with its place of central management and control in the UK, the Issuer is currently subject to the provisions of the City Code on Takeovers and Mergers (**Takeover Code**) issued and administered by the UK panel on Takeovers and Mergers (**Takeover Panel**).

The Takeover Code contains certain provisions concerning mandatory takeover bids. Under Rule 9 of the Takeover Code, if any person (with its concert parties) acquires an interest in the Shares carrying 30% or more of the voting rights in a company, the acquirer and its concert parties would be required, except with the consent of the Takeover Panel, to make a cash offer for the remaining shares in the company at a price not less than the highest price paid by the acquirer or any of its concert parties during the previous 12 months. A cash offer would also be required if a person (with is concert parties) holding shares carrying between 30% and 50% of the voting rights in a company increases its percentage interest in the total voting rights in the company.

### **Disclosure of shareholding provisions**

A member is not required to notify the Issuer of the percentage of voting rights in the Issuer held by that member unless required to do so by the rules of any stock exchange, equity market or other similar organisation on which the Issuer has any of its securities listed or under any applicable law, enactment or regulation.

**15.3.2** The Issuer is not subject to any specific purposes or objects which would limit the scope of its activities or power to act.

# <span id="page-130-0"></span>**15.4 Material Contracts**

| 15.4.1 |   | The Issuer has entered into two agreements with shareholders to provide working capital by<br>way of loans. The key provisions of those agreements is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |  | Simon St Ledger and entities related to him have made a €500,000 loan facility<br>available to the Issuer, to be drawn on as required should additional working capital be<br>required. The facility is unsecured, would accrue interest at a rate of 6.5% per annum,<br>has a five year term from the date of draw down and is repayable only at such time as<br>the Board determines that the Issuer's cash-flow is sufficient to make such payments.<br>As at the date of this Prospectus that facility has not been utilised.                                                                                                                                                                                                                                                                               |
|        |  | Working capital finance has from time to time been provided by J&J Smith, a<br>shareholder of the Issuer. That loan balance currently stands at A\$984,000. That<br>finance is unsecured, accrues interest at a rate of 6.5% per annum, has a five year<br>term of which four years remain and is repayable during the loan term only at such time<br>as the Board determines that the Issuer's cash-flow is sufficient to make such<br>payments. This loan is unrelated to the facility made available by Simon St Ledger and<br>entities related to him.                                                                                                                                                                                                                                                      |
|        |   | The key contracts for the Issuer are its distribution agreements and manufacturing agreements.<br>No individual document is sufficiently important to constitute a major or essential contract for<br>the Issuer, however collectively they support the commercial activities of the Issuer.<br>Distribution Agreements Summary<br>The Company appoints key regional and international Distributors as its exclusive or non-exclusive<br>distributor within the Territory for the sale or resale of the Product. The Distributor accepts the<br>appointment upon the terms contained in the Agreement.<br>The Company and the Distributor<br>acknowledge that the Distributor is an independent business and is not authorized to enter into any<br>contract or create any obligation on behalf of the Company. |
|        |   | The Distributor Obligations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|        |  | obtain all necessary approvals and consents from government offices for the sale and<br>use of the Product within the Territory;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|        |  | maintain an adequate sales organization technical staff and business facility within the<br>Territory;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|        |  | devote its best reasonable efforts to promoting and selling the Product within the<br>Territory;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|        |  | refrain from engaging directly or indirectly in the sale of any items or products which<br>are direct competition with the Product;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|        |  | maintain active contacts with Customers within the Territory;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|        |  | maintain active contacts within the Territory and to ascertain potential new Customers<br>and to provide market information to the Company as the Distributor may possess or<br>have access to regarding the future developments within the Territory which could<br>affect the sale of the Product within the Territory;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|        |  | provide market information to the Company which the Distributor may come to possess<br>or have access to in respect of existing and potential customers of the Product and<br>with regard to the activities of competitors within the Territory;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

- participate in the development of a sales plan by the Company within the Territory and to develop in conjunction with the Company a marketing strategy within the Territory;
  - provide a written report to the Company at least each six months setting out the information reasonably requested by the Company and all other information available to the Distributor regarding the market situation within the Territory;
  - notify the Company of any change of majority shareholding of the Distributor;
  - meet the minimum performance criteria set out in Schedule 1; and
  - conduct its operations in the normal course of business.

#### **The Distributor must not:**

- make any representations or to enter into any contact on behalf of the Company;
- make any representations as to performance of the Product except as set out in technical information provided by the Company;

| Territory        | Number of<br>agreements | Number of countries<br>cover | Term | Product Brand   |
|------------------|-------------------------|------------------------------|------|-----------------|
| Europe           | 2                       | 2                            | 5    | Leisa's Secret® |
| Middle<br>East   | 3                       | 3                            | 5    | Leisa's Secret® |
| Asia             | 3                       | 3                            | 5    | Leisa's Secret® |
| Australasia      | 1                       | 1                            | N/A  | Leisa's Secret® |
| Africa           | 1                       | 1                            | 5    | Leisa's Secret® |
| North<br>America | 1                       | 1                            | N/A  | SystemLS™       |

#### **Manufacturing Agreements Summary**

The Company appoints key regional and international Contract Manufacturers as its exclusive or non-exclusive Manufacturer within the Territory the manufacture of the company's products. The Manufacturer accepts the appointment upon the terms contained in the Agreement. The Company and the Manufacturer acknowledge that the Manufacturer is an independent business and is not authorized to enter into any contract or create any obligation on behalf of the Company.

The Manufacturer adheres to a code of ethics and practices representing the highest standards of testing , manufacture, cleanliness and efficiency, which are reflected in the quality of every product that leaves the manufacturing facility.

GMP, Quality and Safety policy is as follows:

To maintain a high standard of individual integrity and performance in the manufacture of all products, that will:

- Assure the identity, purity and potency of purchased raw materials.
- Produce a product that will consistently meet specifications, be true to label and be free

| from contamination.<br><br>product registration.                                                                                                                                                                         | To ensure that all regulatory requirements are always met.<br> To provide a service to clients that meets client expectations. |  To create and keep full records of production that will allow complete traceability of<br>finished product through production to starting materials and vendors.<br> To constantly seek quality improvement while remaining within the boundaries set by |                              |  |  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|--|--|
|  Maintaining health and safety standards and caring for the welfare of employees and<br>customers are of great importance. The company is committed to complying with all<br>Occupational Health and Safety Legislation. |                                                                                                                                 |                                                                                                                                                                                                                                                             |                              |  |  |
|                                                                                                                                                                                                                           |                                                                                                                                 |                                                                                                                                                                                                                                                             |                              |  |  |
| Country                                                                                                                                                                                                                   | Number of                                                                                                                       | Term                                                                                                                                                                                                                                                        | Product Brand                |  |  |
|                                                                                                                                                                                                                           | agreement                                                                                                                       |                                                                                                                                                                                                                                                             |                              |  |  |
| Australia                                                                                                                                                                                                                 | 4                                                                                                                               | Ongoing                                                                                                                                                                                                                                                     | Leisa's Secret®              |  |  |
|                                                                                                                                                                                                                           |                                                                                                                                 |                                                                                                                                                                                                                                                             |                              |  |  |
| Ireland                                                                                                                                                                                                                   | 1                                                                                                                               | Ongoing                                                                                                                                                                                                                                                     | Leisa's Secret®              |  |  |
| USA<br>Middle East                                                                                                                                                                                                        | 6<br>1                                                                                                                          | Ongoing<br>5 years                                                                                                                                                                                                                                          | SystemLS™<br>Leisa's Secret® |  |  |

# <span id="page-132-0"></span>**15.5 Third Party Information and Statement by Experts and Declarations of Interests**

| 15.5.1 |                                                                                             | KSI(WA) has given and has not withdrawn consent to the inclusion in section 13 of this        |  |  |  |  |  |
|--------|---------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|--|--|--|--|--|
|        |                                                                                             | Prospectus of the :                                                                           |  |  |  |  |  |
|        | 1.<br>Condensed Set of Consolidated Financial Statements for the period from 1 July 2013    |                                                                                               |  |  |  |  |  |
|        | to 31 March 2014and the associated auditor's Independent Review Report ;                    |                                                                                               |  |  |  |  |  |
|        | 2.                                                                                          | Audited Comparative Figures for the period from 1 July 2010 to 30 June 2013 and the           |  |  |  |  |  |
|        |                                                                                             | associated independent auditor's report; and                                                  |  |  |  |  |  |
|        | 3.                                                                                          | Auditor's Letter of 17 April 2014,                                                            |  |  |  |  |  |
|        | and references to them in the form and context in which they appear, and has authorised use |                                                                                               |  |  |  |  |  |
|        |                                                                                             | of those documents in this Prospectus for the purpose of the Prospectus Rules.                |  |  |  |  |  |
|        |                                                                                             |                                                                                               |  |  |  |  |  |
| 15.5.2 |                                                                                             | Where information contained in this document originates from a third party source, it is      |  |  |  |  |  |
|        |                                                                                             | identified where it appears in this document together with the name of its source. Such third |  |  |  |  |  |
|        | party information has been accurately reproduced and, so far as the Issuer is aware and is  |                                                                                               |  |  |  |  |  |
|        |                                                                                             | able to ascertain from information published by the relevant third party, no facts have been  |  |  |  |  |  |
|        |                                                                                             | omitted which would render the reproduced information inaccurate or misleading.               |  |  |  |  |  |

# <span id="page-132-1"></span>**15.6 Documents on Display**

| 15.6.1 | For the period that the Offer under this Prospectus remains open, the following documents (or |  |  |  |  |
|--------|-----------------------------------------------------------------------------------------------|--|--|--|--|
|        | copies thereof) will be available for inspection at the Issuer's registered                   |  |  |  |  |
|        | office:                                                                                       |  |  |  |  |
|        | (a) The memorandum and articles of association of the Issuer;                                 |  |  |  |  |

| (b) All reports, letters and other documents, historical financial information, valuations and  |
|-------------------------------------------------------------------------------------------------|
| statements prepared by any expert at the Issuer's request, and any part of which is             |
| included or referred to in this Prospectus, if any; and                                         |
| (c) The historical financial information of the Issuer, the Australian Subsidiary and the Rapid |
| Nutrition Group.                                                                                |
|                                                                                                 |
|                                                                                                 |

### <span id="page-134-0"></span>**16. Definitions**

**Act** means the Companies Act 1985 (as amended) and the Companies Act 2006 to the extent in force.

**ACN** means Australian Company Number.

**Application Form** means the application form which accompanies this Prospectus.

**Assurance** means assurance services provided by the Consulting Business.

**Business Hours** means 9am to 4pm Monday to Friday in London, but excluding any public

holidays, bank holidays or other official holidays of a similar nature.

**Clearstream** means Clearstream Holding AG.

**Company** means Rapid Nutrition PLC, UK Company Number 7905640.

**Corporate Governance Code** means the UK Corporate Governance Code published by the Financial Reporting Council.

**CREST** means the real time gross settlement system and central securities depository for the UK operated by Euroclear UK & Ireland Limited.

**Directors** or **Board** means the directors of the Issuer at the date of this Prospectus, whose names are set out in Section [8.](#page-64-0)

**Entry Standard** means the Frankfurt Stock Exchange – Entry Standard.

**FCA** means the UK Financial Conduct Authority.

**FSMA** has the meaning provided on page 2.

**IFRS** means the International Financial Reporting Standards.

**ISIN** means the international securities identification number.

**Issuer** means Rapid Nutrition PLC, UK Company Number 7905640.

**Motivate and Motivate Health Technology Inc** means Motivate Health Technology Inc, a Delaware, USA company.

**Offer** means the offer of Shares contained in this Prospectus.

**Offer Close Date** is the date described as such in the Offer for Subscription table on page 4 of this prospectus.

**Offer Open Date** is the date described as such in the Offer for Subscription table on page 4 of this Prospectus.

**Offer Price** is the price described as such in the Offer for Subscription table on page 4 of this Prospectus.

**Offer Proceeds** means any funds raised through issue of Shares pursuant to the Offer.

**Offer Shares** means the shares available under the Offer.

**Proceeds** means the application monies received by the Issuer in relation to an application which is accepted by the Issuer.

**Prospectus Rules** means the prospectus rules issued by the Financial Conduct Authority pursuant to Part VI of FSMA.

**Rapid Nutrition Business** means the business operated by the Rapid Nutrition Group. **Rapid Nutrition Group** means Rapid Nutrition PLC and Rapid Nutrition Pty Ltd.

**Rapid Nutrition PLC** means Rapid Nutrition PLC, UK Company Number 7905640.

**Rapid Nutrition Pty Ltd** means Rapid Nutrition Pty Ltd, Australian Company Number 098 389 836.

**Receiving Agent** means the entity described as such in the Corporate Directory.

**Share** or **Shares** means an ordinary share or shares in the Issuer as the context requires. **South East Asia** or **SE Asia** means the geographic region including:

- (a) Brunei;
- (b) Burma;
- (c) Cambodia;
- (d) Christmas Island;
- (e) East Timor;
- (f) Indonesia;
- (g) Laos;
- (h) Malaysia;
- (i) Philippines;
- (j) Singapore;
- (k) Thailand; and
- (l) Vietnam.

**Subsidiary** means Rapid Nutrition Pty Ltd

**Takeover Code** means the City Code on Takeovers and Mergers.

**UK** means the United Kingdom.

**UK Custodian** means the entity that holds the registered title to the Shares on behalf of Clearstream.

**UK Companies Act** means the *UK Companies Act 2006* as amended from time to time.