CODEIFAI LIMITED — Capital/Financing Update 2014

Dec 23, 2014

GLOBAL LEADER IN ANT! COUNTERFEIT TECHNOLOGY Level 29,66 Goulburn Street, Sydney NSW 2000 T:+612 8263 4000 F;+6128263 4111

ASX: YPB

ASX ANNOUNCEMENT 24 December 2014

NON-RENOUNCEABLE PRO-RATA OPTIONS RIGHTS ISSUE

Anti-counterfeiting technology Company YPB Group Limited (ASX: YPB) (YPB, the Company) is pleased to announce a non-renounceable pro-rata options entitlement rights issue (Rights Issue).

The Rights Issue will offer eligible YPB shareholders the opportunity to apply for 1 new option to subscribe for ordinary shares (New Option) for every 4 existing ordinary shares held at an offer price of A$0.01 per New Option. Each New Option may be exercised at any time from the date of its issue until 31 October 2017 at an exercise price of A$0.20 each.

It is anticipated that up to 27,230,420 New Options may be issued pursuant to the Rights Issue, which would raise approximately A$272,300 before expenses.

The Rights Issue is not underwritten.

The Rights Issue was outlined in YPB's ASX listing prospectus dated 27 May 2014. The Rights Issue honours the undertaking made at that time by the Board, and offers eligible shareholders the opportunity to share in the continued growth of the Company. Funds raised under the Rights Issue will be used to strengthen the Company's balance sheet, and to fund general working capital.

Eligibility

Shareholders holding YPB shares as at 7.00pm (Sydney time) on Friday 2 January 2015 (Record Date) will be entitled to apply for 1 New Option for every 4 YPB share held on the Record Date. Fractional entitlements to New Options under the Rights Issue will be rounded down to the nearest whole number.

The Rights Issue is open to YPB shareholders with registered addresses in Australia, New Zealand, People's Republic of China, Hong Kong or Singapore as at the Record Date. YPB shareholders at the Record Date with a registered address outside Australia, New Zealand, People's Republic of China, Hong Kong and Singapore will not be eligible to participate in the Rights Issue.

Holders of existing YPB options on issue wishing to participate in the Rights Issue with respect to those existing options must ensure that their completed exercise notice and payment is received by YPB's share registry by 5.00pm (Sydney time) on Wednesday 31 December 2014 to ensure the share registry has sufficient time to process such exercise before the Record Date, or they will not be able to participate in the Rights Issue.

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Prospectus

The Rights Issue is offered pursuant to the prospectus dated 24 December 2014 lodged today.

The Prospectus and Entitlement and Acceptance Forms will be sent to eligible YPB shareholders on or about Wednesday 7 January 2015.

Closing Date and Allotment

Applications under the Rights Issue must be received by YPB's share registry by no later than 5.00pm (Sydney time) on Friday 16 January 2015.

It is anticipated that allotment of the New Options will occur on Friday 23 January 2015 and despatch of holding statements will take place on Friday 30 January 2015.

The Company will seek quotation on the ASX of the New Options issued pursuant to the Prospectus.

All future dates specified In this announcement are Indicative and may be subject to change.

Robert Whitton Company Secretary

For further information please contact;

Mr John Houston CEO YPB Group Limited T: +61 458 401 088 E: iohn.houston(S).vpbsvstems.com

Mr Greg Wood Managing Director K S Capital T:+61 416 076 377 E: g.wood@kscapital.com.au

W: www.ypbsystems.com

Media and Investor Inquiries

James Moses Media and Investor Relations Mandate Corporate T: +61 420 991 574 E: james@mandatecorporate.com.au

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About YPB Group

YPB Group (ASX:YPB) in Chinese means "you pin bao" or in English "excellent brand protection" and is an anti-counterfeiting technology developer and provider. YPB has a unique, cost effective, invisible and indestructible anti-counterfeit solution that allows companies and governments to protect the value of their brands and minimise loss of earnings from counterfeiting. YPB and is certified and licensed in The People's Republic of China.

YPB Group's core products include;

Covert Forensic Tracers - Patented, these are hidden, invisible particles fused into a product or packaging during or after the manufacture process. The Tracers are inexpensive can be used in all key product manufacturing and packaging industries including plastics, paper, inks, textiles and coatings. They cannot be seen or removed, are non-toxic and meet Food Contact specifications. They consist of infrared, UV light energy and X-ray sensitive particles detectable by YPB's scanner technology.

YPB owns two patents over its Tracer products and is the only Company currently licensed in China that supplies invisible tracers.

Scanner - YPB's proprietary scanner detects YPB's forensic Tracers, they are low cost and can be used at any point in the supply chain - from manufacture through to point-of-sale.

Brand Reporter - A Patent Pending technology platform designed for Governments, Brands and consumers to identify, manage, track and report counterfeit of divergent products within supply chains or at point of sale in a simple and easily deployed application suite available on smartphones and iPhones.

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