YPB GROUP LTD

ABN 68 108 649 421

Prospectus

In relation to an offer to Eligible Shareholders to subscribe for:

up to \$15,000 worth of Shares in the Company at an issue price of \$0.30 per share (SPP Shares), pursuant to a Securities Purchase Plan; and
subject to shareholder approval, one (1) option for every four (4) SPP Shares subscribed $\bullet$ for by the Eligible Shareholder under the Securities Purchase Plan, at an offer price of A\$0.01 (SPP Options)

(together the SPP Offer) to raise up to \$6,050,000.

The SPP Offer is scheduled to close at 5.00pm (AEST) on 17 April 2015.

This Prospectus is a transaction-specific prospectus issued in accordance with section 713 of the Corporations Act 2001 (Cth). This document is important. Carefully read this Prospectus in full and consult your licensed financial adviser, accountant, stockbroker, lawyer or other professional adviser if you are in any doubt as to what to do.

The Securities offered by this Prospectus should be considered highly speculative.

Important Information

This Prospectus is an important document and requires your prompt attention. You should read it carefully. It is important that you consider the risk factors (see Sections 1.3 and 4) before deciding on your course of action as these could affect the financial performance of YPB Group Ltd (ABN 68 108 649 421) (YPB or the Company).

Lodgement

This Prospectus is dated 6 March 2015 and a copy of this Prospectus was lodged with ASIC on that date.

Neither ASX nor ASIC takes any responsibility for the contents of this Prospectus. The fact that the Company is admitted to the official list of the ASX and the fact that the SPP Shares or SPP Options may be granted official quotation by the ASX are not to be taken in any way as an indication of the merits of the Company, SPP Shares or the SPP Options offered under this Prospectus.

Expiry date

No SPP Shares or SPP Options will be issued on the basis of this Prospectus later than 13 months after the date of issue of this Prospectus. SPP Shares and SPP Options offered pursuant to this Prospectus will be issued on the Terms contained in this Prospectus and the SPP Offer.

Foreign jurisdictions - restrictions on distribution

The SPP Offer is being made in Australia and New Zealand only. This Prospectus does not constitute an offer in any place which, or to any person whom, it would not be lawful to make such an offer. The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and persons who come into possession of this Prospectus in such jurisdictions should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the SPP Shares or SPP Options or the SPP Offer, or otherwise to permit a public offering of the SPP Shares or SPP Options, in any jurisdiction outside Australia and New Zealand. See Section 2.17 for further information.

The SPP Shares and the SPP Options have not been, and will not be, registered under the US Securities Act 1933 (US Securities Act) and may not be offered or sold in the United States of America, or to, or for the account or benefit of, "US Persons" (as defined in Rule 902 under the US Securities Act) except under an available exemption from registration under the US Securities Act. The SPP Shares and the SPP Options may only be resold or transferred in the United States of America, or to, or for the account or benefit of, US Persons if registered under the US Securities Act or pursuant to an exemption from registration under the US Securities Act and in compliance with state securities laws. The Company is under no obligation and has no intention to register any of the SPP Shares or the SPP Options in the United States of America.

Representations

No person is authorised to give any information or make any representations in connection with the SPP Offer other than as contained in this Prospectus. Any information or representation in connection with the SPP Offer not contained in this Prospectus is not, and may not be relied on as having been, authorised by the Company (or any of its officers).

Forward looking statements

This Prospectus contains forward-looking statements which are identified by words such as 'may', 'could', 'believes', 'estimates', 'targets', 'expects', or 'intends' and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place. Such forward-looking statements are not quarantees of future performance and involve known and unknown risks. uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, Directors and management.

The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Prospectus will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements.

The Company has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus, except where required by law.

These forward looking statements are subject to various risk factors that could cause our actual results to differ materially from the results expressed or anticipated in these statements. These risk factors are set out in Section 4 of this Prospectus.

Disclaimer

This Prospectus contains general information only, and does not take into account the individual investment objectives, financial situation or particular needs of any person. Nothing in this Prospectus should be construed as a recommendation by the Company or any other person concerning an investment in the Company. You should read the entire Prospectus and, in particular, in considering the prospects for the Company, you should consider the risk factors that could affect the financial performance of the Company. You should carefully consider these factors in light of your personal circumstances (including financial and taxation issues), and if you are in any doubt as to what to do in relation to the SPP Offer, you should seek professional advice from a licensed financial adviser, accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest in the Company.

Electronic Prospectus

This Prospectus may be viewed by Eligible Shareholders online at http://www.ypbsystems.com/. The website and its contents do not form part of this Prospectus and are not to be interpreted as part of, nor incorporated into, this Prospectus. Eligible Shareholders who receive the electronic version of this Prospectus should ensure that they download and read the entire Prospectus.

The SPP Offer to which the electronic Prospectus relates is only available to Eligible Shareholders receiving the electronic Prospectus in Australia and New Zealand (subject to Section 2.17). Eligible Shareholders having received a copy of this Prospectus in its electronic form may obtain a paper copy of the Prospectus (including any supplementary document and the Application Form) (free of charge) during the period of the SPP Offer by contacting the Company.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus, or any of those documents were incomplete or altered.

Defined terms and Glossarv

Certain capitalised words and expressions used in this Prospectus are defined in the Glossary at Section 6 (page 32) of this Prospectus.

Financial amounts

Financial amounts in this Prospectus are expressed in Australian dollars unless otherwise stated. Any discrepancies between totals and sums of components in tables contained in this Prospectus are due to rounding.

Photographs and diagrams

Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person endorses the Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale.

Privacy

The Company collects information about each Applicant provided on an Application for the purposes of processing the Application and, if the Application is successful, to administer the Applicant's security holding in the Company.

By submitting an Application, each Applicant agrees that the Company may use the information provided by that Applicant on that Application for the purposes set out in this privacy disclosure statement and may disclose it for those purposes to the Share Registry, the Company's related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to the ASX, ASIC and other regulatory authorities.

If an Applicant becomes a security holder of the Company, the Corporations Act requires the Company to include
information about the security holder (name, address and details of the securities held) in its public register information must remain in the register even if that person ceases to be a security holder of the Company. Information contained in the Company's register is also used to facilitate distribution payments and corporate communications (including the Company's financial results, annual reports and other information that the Company may wish to communicate to its security holders) and compliance by the Company with legal and regulatory requirements.

If you do not provide the information required on the Application, the Company may not be able to accept or process your Application.

An Applicant has a right to gain access to the information that the Company and the Share Registry holds about that person subject to certain exemptions under law. Access requests must be made in writing to the Company.

Important Information	2
Important Dates and Key Offer Statistics	5
1. Investment Overview	7
2. Details of the SPP Offer	10
3. Purpose and effect of the SPP Offer on the Company	16
4. Risk Factors	19
5. Additional Information	24
6. Director's Authorisation	31
7. Glossary	32
Corporate Directory	34

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NOTE: Capitalised terms used in this Prospectus are defined in the Glossary (Section 7).

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Important Dates and Key Offer Statistics

IMPORTANT DATES:

Record Date	5:00pm (AEDT) 20 February 2015
Announcement of proposed SPP	23 February 2015
Lodgement of Prospectus with ASIC and despatch of SPP Booklet	6 March 2015
SPP Offer Opening Date	9 March 2015
SPP Offer Closing Date	17 April 2015
Annual General Meeting	27 April 2015
Allotment Date of SPP Shares and SPP Options	28 April 2015
Despatch Date and Trading Date for SPP Shares and SPP Options	29 April 2015

Dates may change

The above dates are subject to change and are indicative only. The Company reserves the right to vary the dates and times of the
SPP Offer, including to close the SPP Offer early, extend the SPP Offer or accept late Applic this Prospectus or any Applicants, subject to the Corporations Act, the ASX Listing Rules and other applicable laws.

KEY OFFER STATISTICS:

Offer Price for each issued SPP Share	\$0.30
Offer Price for each SPP Option	\$0.01
Entitlement to SPP Options	One (1) SPP Option for every four (4) SPP Shares subscribed for under the SPP Offer

Number of Existing Shares on issue as at date of Prospectus	119,034,986
Maximum number of Shares to be issued under the SPP Offer	20,000,000
Total number of Shares on issue after completion of the SPP Offer ^1,2	139,034,986
Number of Existing Options on issue as at date of Prospectus	37,940,445
Maximum number of SPP Options to be issued under the SPP Offer	5,000,000
Total number of options on issue after completion of the SPP Offer ^1,3	42,940,445

Maximum SPP Offer proceeds ³	$\frac{1}{2}$ \$6,050,000 before expenses
-----------------------------------------	-------------------------------------------

_____ Exercise Price for each SPP Option	\$0.20
Expiry date of SPP Options . ---------------------------------------	Tuesday 31 October 2017

NOTES:

Assumes none of the Existing Options will be exercised between the date of this Prospectus and completion of the SPP Offer. 2. Assuming the SPP Offer is fully subscribed and no other Shares are issued between the date of this Prospectus and completion of

the SPP Offer.

Assuming SPP Offer is fully subscribed and the issue of the SPP Options is approved by shareholders.

HOW TO APPLY:

You may apply for SPP Shares and SPP Options only by following the instructions set out in the Section 2 and in the Application Form.

QUESTIONS:

Please contact Robert Whitton, Director & Company Secretary from 9.00am to 5.00pm (Sydney time) Monday to Friday on +61 2 8263 4000, if you have any questions about this Prospectus. If you are in any doubt as to what to do in relation to the SPP Offer, you should seek professional advice from a licensed financial adviser, accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest in the Company.

Investment Overview

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The information in this Section 1 is a summary only. It should be read in conjunction with the information in the remainder of this Prospectus.

Key features of the SPP Offer $1.1$

SPP Shares	An offer to Eligible Shareholders of the Company to purchase additional fully paid ordinary shares in the Company under the terms and conditions contained in the SPP Offer and this Prospectus. Eligible Shareholders have the opportunity to subscribe for up to \$15,000 worth of additional shares at \$0.30 per share without brokers' costs, commission or stamp duty. Refer to Section 5.4 for a summary of the rights attaching to the SPP Shares.
SPP Options	An offer to Eligible Shareholders who subscribe for SPP Shares to purchase one (1) SPP Option for every four (4) SPP Shares successfully subscribed for under the SPP, at an offer price of \$0.01 per SPP Option. Refer to Section 5.5 for the terms and conditions of the SPP Options.
Shareholder Approval	The issue of SPP Options is subject to shareholder approval at the Company's Annual General Meeting on 27 April 2015. If shareholder approval is not obtained for the issue of the SPP Options, Eligible Shareholders who subscribe to the SPP Offer will be issued with SPP Shares but will not be issued any SPP Options, and that part of the Application Payment received by the Company in respect of the SPP Options will be returned to the Applicants.
Related Parties	The offer is open to all Eligible Shareholders, including related parties (such as Directors). It is the current intention of the Directors to participate in the offer.
Purpose	The purpose of this SPP Offer is to allowing existing shareholders an opportunity to increase their shareholding at an offer price consistent with that offered to sophisticated and institutional investors under the Placement.
Use of funds	The Company's present intention is to use the funds raised under the Offer (from payment of the offer price on the SPP Shares and SPP Options) as follows:
	Expenses of the Offer	\$280,000
	Working capital	\$5,770,000
	Total	\$6,050,000
	At this stage, the Company intends to apply funds raised to help fund the ongoing expansion of the Company's anti-counterfeit invisible tracer and scanner technology and Brand Reporter business, and to fund the expansion currently being undertaken in the USA and through South East Asia. There is no minimum amount sought to be raised by the SPP Offer. There is no guarantee that the SPP Offer will raise an adequate or sufficient level of funds to enable the Company to achieve its stated objectives.
Closing date of SPP Offer*	5.00pm (AEST) on 17 April 2015.

Note: The above closing date is subject to change and is indicative only.

$1.2$ Investment highlights

The Directors of the Company are of the view that an investment in the Company provides the following non-exhaustive list of key highlights:

$(a)$ YPB offers companies and brands especially in China. South East Asia. USA and Australia the ability to detect the incidence of counterfeit and protect their products by using YPB's tracer materials imbedded into their products and or packaging;
$(b)$ Participation in a company which is now well placed to address the needs of brands and companies as they fight counterfeit of their products especially in China and South East Asia:
$(c)$ Spend on anti-counterfeit measures is increasing according to published research and YPB is a company with a range of products and services which could form part of a company's spend to implement anti-counterfeit measures:
$(d)$ YPB is well established and certified in the People's Republic of China and operates directly in that country and also in USA following the acquisition in 2014 of "Brand Reporter":
$(e)$ YPB has an experienced and capable management team.

$1.3$ Key risks

The business, assets and operations of the Company will be subject to certain risk factors that have the potential to influence the operating and financial performance of the Company in the future. These risks can impact on the value of an investment in the securities of the Company.

The Board aims to manage these risks by carefully planning its activities and implementing risk control measures. Some of the risks are, however, highly unpredictable and the extent to which they can effectively be managed or mitigated may be limited.

Set out below is a summary, which is not exhaustive, of specific risks that the Company is and will be exposed to. Further risks associated with an investment in the Company are outlined in Section 4.

Specific Risks

$(a)$ Intellectual Property

In any business based on intellectual property or trade secret methodology, there is a risk that other individuals or companies may claim to have an interest in that intellectual property. In addition, third parties that hold patents for technology in the field of product authentication may make claims regarding the validity of the patents or the Company's products. In addition, developing or supporting new technology and intellectual property mav require significant capital expenditure by the Company.

$(b)$ Reliance on Key Personnel

The Company relies on the experience and knowledge of its management team, in particular John Houston. The Company is also dependent on its ability to recruit and retain suitably qualified personnel. In the event that such key personnel left the Company and it was unable to recruit suitable replacements, such loss could have a materially adverse effect on the Company.

$(c)$ Increased Competition

The anti-counterfeit and brand protection market is highly competitive. This competition has intensified as a result of improvements in technology. The actions of an existing competitor or the introduction of a new competitor in the anti-counterfeit market may make it difficult for the Company to grow its revenue, which in turn, may have an adverse effect on its profitability.

If the Company's technology proves to be less successful or more costly than its competitors' products, the business of the Company could be adversely affected.

$(d)$ Growth prospects and Company expansion plans

The Company's growth prospects are dependent upon a number of factors, including. customer take up and execution of rollout. If the Company fails to execute any expansion plan and cannot attract buyers for its products, its financial performance is likely to be negatively affected.

$(e)$ Liability risk

Whilst the Company will take precautions both legal and physical, the nature of the Company business of providing products and services to the anti-counterfeit field, may give rise in certain circumstances to potential legal action by either customers or end users in the areas of product or public liability. If legal action was taken against the Company, it could have a material adverse effect on the financial performance of the business and to its reputation and brand name.

$(f)$ Reliance on key supplier relationships

The Company relies on various key supplier relationships for certain parts of its business. The loss or impairment of any of these relationships could have a material adverse effect on the Company's results of operations, financial condition and prospects, at least until alternative arrangements can be implemented. In some instances, however, alternative arrangements may not be available or may be less financially advantageous than the current arrangements.

In particular, the Company relies on third parties to provide intellectual property development and manufacturing services. Although there are long term contracts in place with stringent non-compete provisions, the Company is vulnerable to any change in output from these suppliers. Should any of these suppliers significantly reduce their supply to the Company, this will have an adverse effect of the growth prospects and financial performance of the Company.

$(g)$ Exchange rates

The Company is exposed to movements in foreign exchange rates. As the Company will report financial earnings in Australian dollars, and because the Company does not plan to hedge against movements in the exchange rate, significant fluctuations in exchange rates may impact on the Company's margins and earnings adversely.

$(h)$ Concentration of shareholding

John Houston (or entities controlled by him) holds approximately 60% of all Shares (prior to this offer) of the Company to the Official List of the ASX. As a result, John Houston has a significant influence over all matters that require approval by Shareholders, including the election and removal of Directors and approval of significant transactions (unless prevented from voting under the Corporations Act or Listing Rules). The ability of other Shareholders to influence corporate decisions of the Company will therefore be reduced.

Refer to Section 4 for further details.

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company and you should refer to the additional risk factors in Section 4 of this Prospectus before deciding whether to apply for Securities pursuant to this Prospectus.

You should read this Prospectus carefully and in its entirety, including Section 4, before deciding whether to apply for SPP Shares and SPP Options. If you are in doubt as to the course you should follow, you should consult your licensed financial adviser, accountant, stockbroker, lawyer or other professional adviser. The Securities offered by this Prospectus should be considered highly speculative.

$\overline{2}$ Details of the SPP Offer

$2.1$ Background

The Company is offering Eligible Shareholders the opportunity to subscribe, under a securities purchase plan, for up to A\$15,000 of SPP Shares and in respect of every four (4) SPP Shares subscribed for, an attaching option at an issue price of A\$0.01 (SPP Offer). Each SPP Option issued will have an exercise price of \$0.20 and expiry date of 31 October 2017, and are otherwise on terms set out in Section 5.5 of this Prospectus. The SPP Options will be in the same class as the Existing Options.

The SPP Offer Booklets sets out the terms of the securities purchase plan. The offer of the SPP Shares and SPP Options are further detailed in this Prospectus.

Under the SPP Offer, up to 20,000,000 SPP Shares and 5,000,000 SPP Options will be offered. If the SPP Offer is fully subscribed, the SPP Offer will raise up to a maximum of \$6,050,000 before expenses.

The offer of SPP Options is conditional on the Company obtaining shareholder approval for the issue of the SPP Options. The Company has scheduled the Annual General Meeting for 27 April 2015. If shareholder approval is not given for the issue of the SPP Options, Shareholders who subscribe to the SPP Offer will be issued with SPP Shares but will not be issued any SPP Options under this Prospectus, and any Application Payments received by the Company which relate to the SPP Options will be returned to Shareholders.

An Eligible Shareholder is a person who, at the Record Date, is recorded on the Register as holding Shares, and who has a registered address in Australia or New Zealand and complies with the requirements under the SPP.

Fractional entitlements to SPP Shares or SPP Options will be rounded down to the nearest whole number.

All Shares issued upon the future exercise of SPP Options (New Shares) under this Prospectus will rank equally with the SPP Shares and the Shares on issue at the date of this Prospectus. Please refer to Section 5.4 of this Prospectus for further information regarding the rights and liabilities attaching to the SPP Shares, which will apply equally to the New Shares.

If you are an Eligible Shareholder and did not receive your Application Form, please call the Share Registry on 1300 737 760 (for callers within Australia) or +61 2 9290 9600 (for callers outside Australia).

The SPP Offer $2.2$

An offer of up to \$15,000 worth of fully paid ordinary shares in the Company at a price of \$0.30 per share (SPP Shares), together with one (1) SPP Option for every four (4) shares subscribed for under the offer, at an offer price of \$0.01 per SPP Option.

$2.3$ No Shortfall

The Company will not make a shortfall offer of any SPP Shares or SPP Options not subscribed for under this Prospectus.

$2.4$ No Underwriting

The SPP Offers are not underwritten.

Offer Price for SPP Shares $2.5$

The Offer Price for SPP Shares under the SPP is \$0.30 per share.

$2.6$ Offer Price for SPP Options and Exercise Price

The Offer Price for each option is \$0.01. The Exercise Price for each SPP Option is \$0.20. Upon exercise of the SPP Option the holder will be entitled to one ordinary Share in the Company.

$2.7$ Eligible Shareholders

The SPP is offered only to those Shareholders with registered addresses in Australia and New Zealand at the Record Date who meet the criteria in the SPP Offer Booklet.

Shareholders who were not recorded on the Register at the Record Date are not eligible to participate in the SPP Offer.

All Shareholders who were recorded on the Register at the Record Date with an address outside of Australia and New Zealand are Non-Participating Foreign Holders. The Company has decided that it is unreasonable to make an offer to Non-Participating Foreign Holders, having regard to the number of Non-Participating Foreign Holders, the number and value of the SPP Shares and SPP Options they would be offered and the cost of complying with the legal and regulatory requirements in the places where they are resident.

2.8 ASX quotation

The Company will apply for the quotation of all SPP Shares and SPP Options on ASX within 7 days after the date of this Prospectus. If official quotation of the SPP Shares or SPP Options is not granted by the ASX within 3 months after the date of this Prospectus (or any longer period permitted by law), the SPP Offer will be cancelled and all Application Payments will be returned (without interest) to Applicants as soon as practicable.

2.9 Non-renounceable

The SPP Offer is non-renounceable, which means that Eligible Shareholders cannot sell or otherwise transfer all or any part of their Entitlement.

2.10 How to accept the SPP Offer

If you are an Eligible Shareholder, an Application Form accompanies this Prospectus.

Each Eligible Shareholder may participate in the SPP in A\$3,025 increments for the SPP Shares and SPP Options. The minimum price for each parcel of SPP Shares is A\$3,000, up to a maximum of A\$15,000. For every four (4) SPP Shares an attaching SPP Option must be subscribed for at an offer price of \$0.01. Accordingly the minimum price for participation in the SPP Offer is \$3,025 and the maximum is \$15,125.

The following table sets out how the A\$15,000 subscription limit required by the ASIC Class Order 09/425 will be applied:

If you receive more than one offer under the SPP.	You may only apply for up to a maximum amount of A\$15,000 of SPP Shares. You will be deemed to apply for one (1) SPP Option for every four (4) SPP Shares applied for under the SPP. You are entitled to apply for a maximum of 12,500 SPP Options.
If you are recorded with one or more other persons as joint holder of	A joint holding is considered to be a single registered holding for the purpose of the SPP. Joint holders are only entitled to participate in the SPP in respect of that single holding.
Shares.	If the same joint holders receive more than one offer under the SPP due to multiple identical holdings, the joint holders may only apply for one maximum amount of A\$15,000 of SPP Shares (plus attaching SPP Options).
If you hold SPP Shares as a custodian or	"Custodians" as defined in ASIC Class Order 09/425

nominee for one or more beneficiaries.	If you hold Shares as a "custodian" (as defined in ASIC Class Order 09/425), then you may apply for a maximum amount of A\$15,000 of SPP Shares for each participating beneficiary, provided that you complete the Application Form and a Custodian Certificate, and submit them together with the Application Payment to the Share Registry before the Closing Date.
	Please contact the Share Registry to obtain the form of the Custodian Certificate which you are required to submit.
	All other custodians and nominees
	If you hold Shares as a trustee or nominee for another person, but are not a "custodian" as defined in ASIC Class Order 09/425, you cannot participate for beneficiaries in the manner described above.
	You may only apply for up to a maximum amount of A\$15,000 of SPP Shares, (with a maximum of \$125 SPP Options), regardless of the number of participating beneficiaries.

To accept the SPP Offer: $(a)$

Pay by BPAY®1

If you wish to pay by BPAY, you do not need to return your Application Form. Refer to the section titled "Make your payment" on the Application Form for further details.

Payment must be received via BPAY before the Closing Date, which is currently 5.00pm (AEST) on Friday 17 April 2015. By paying by BPAY you will be deemed to have completed an Application Form for the number of SPP Shares and SPP Options that your Application payment equates to.

Please make sure to use the specific Biller Code and unique Customer Reference Number on your Application Form. If you received more than one Application Form, you will need to complete individual BPAY transactions using the Customer Reference Number specific to each individual Application Form that you receive. If you are an Eligible Shareholder and you inadvertently use the same Customer Reference Number for more than one of your Entitlements, you will be deemed to have applied for only your Entitlement to which that Customer Reference Number applies.

Pay by cheque

If you wish to pay by cheque, complete the accompanying Application Form in accordance with the instructions set out in the form. Cheques must be in Australian currency only, made payable to Boardroom Pty Ltd ITF YPB Group Ltd SPP Account and crossed "Not Negotiable". Applicants must not forward cash. Receipts for payment will not be issued.

Application Form, together with Application Payment, should be sent by post using the enclosed reply paid envelope to the Company's Share Registry, to arrive no later than the Closing Date, which is currently 5.00pm (AEST) on Friday 17 April 2015.

If you are a "custodian" as defined in ASIC Class Order 09/425, you must also submit a Custodian Certificate with your Application Form and Application Payment. Please contact

^<sup>1 Registered to BPAY Pty Limited ABN 69 079 137 518 - Eligible Shareholders based outside of Australia cannot apply using BPAY unless they have an Australian bank account.

the Share Registry to obtain the form of the Custodian Certificate which you are required to submit.

General

If you wish to make payment using electronic funds transfer or an alternate method please call the Share Registry on 1300 737 760 (for callers within Australia) or +61 2 9290 9600 (for callers outside Australia) for assistance.

By either returning the Application Form with payment or making payment received by BPAY you provide authorisation to be registered as a holder of SPP Shares and SPP Options subscribed for by you and agree to be bound by the Company's constitution.

The Application Forms and Application Payments received after the Closing Date may not be accepted, subject to the Directors' absolute discretion.

$(b)$ If you do nothing

If you do not wish to accept all or part of your Entitlement, you do not have to do anything in respect of the Entitlement you are not accepting, and any Entitlement not taken up will automatically lapse. You will receive no payment for your lapsed Entitlement.

2.11 Application is binding

Receipt of Application Payment by BPAY, or of Application Payment by cheque / electronic funds transfer and a completed and lodged Application Form, constitutes a binding acceptance of the Company's offer of SPP Shares and SPP Options on the Terms of the SPP Offer and an acknowledgement by the Applicant that it has received and read this Prospectus, it has acted in accordance with the Terms of the Offer, and that it agrees to all of the Terms of the Offer.

Each Application, once lodged, cannot be withdrawn. If shareholder approval for the issue of the SPP Options is not obtained at the Annual General Meeting there is no right to withdraw an Application, instead the Company will scale back the Application to apply only to the SPP Shares and not SPP Options.

The Application does not need to be signed to be binding. If an Application Form is not completed correctly, the Company, in its absolute discretion, can reject it or treat it as valid. The Company's decision as to whether to accept or reject an Application or how to interpret an incorrectly completed Application Form is final.

$2.12$ Application Payment

The Company is entitled to retain any interest paid on any Application Payment, whether or not allotment and issue of the SPP Shares or SPP Options takes place. If quotation of the SPP Shares or SPP Options is not granted by the ASX within the time required by law, no SPP Shares or SPP Options will be allotted and Application Payments will be refunded to Applicants without interest within the time prescribed under the Corporations Act.

If shareholder approval is not obtained for the issue of the SPP Options, Eligible Shareholders who subscribe to the SPP Offer will be issued with SPP Shares but will not be issued any SPP Options, and any Application Payment received by the Company in respect of the SPP Options will be returned to Shareholders.

SPP Offer Closing Date 2.13

Your completed Application Form and payment must reach the Share Registry no later than the Closing Date, which is currently 5.00pm (AEST) on Friday 17 April 2015.

The Company reserves the right, subject to the Corporations Act, the ASX Listing Rules and any requirements of the ASX, to accept late Applications or to extend the Closing Date without prior notice.

If the Closing Date is varied, subsequent dates may also be varied accordingly. Unless the Company decides to accept late Applications or extend the Closing Date, Applications received after 5.00pm (AEST) on Friday 17 April 2015 may be rejected and those Application Payments refunded without interest.

2.14 Brokerage, commission and stamp duty

No brokerage, commission or stamp duty is payable by Applicants under the SPP Offer.

2.15 Allotment of the SPP Shares and SPP Options

Allotment and issue of SPP Shares and SPP Options will only be made following the Annual General Meeting and once the Application Payments have been received and the ASX has granted permission for quotation of the SPP Shares and SPP Options.

If Shareholders do not approve the issue of SPP Options, the Company will allocate the SPP Shares and the Company will return all application monies received in respect of the SPP Options.

If such permission is granted, it is expected the SPP Shares and SPP Options will be allotted pursuant to the SPP Offer on Tuesday 28 April 2015 and holding statements for such SPP Shares and SPP Options will be despatched on Wednesday 29 April 2015.

It is the responsibility of Applicants to determine their allocation of SPP Shares and SPP Options prior to trading in the SPP Shares and SPP Options. Applicants who sell SPP Shares and SPP Options before they receive their holding statement do so at their own risk.

CHESS 2.16

Under CHESS, Applicants will not receive a certificate but will receive a statement of their holding of SPP Shares and SPP Options. If an Applicant is broker sponsored, a CHESS statement will be issued to that Applicant which sets out the number of SPP Shares and SPP Options issued under this Prospectus, provides details of the Applicant's holder identification number and the participant identification number of the sponsor. If an Applicant is registered in the Company's issuer sponsored sub register, its statement will be despatched by the Share Registry and will contain the number of SPP Shares and SPP Options issued to it under this Prospectus and its security holder reference number.

2.17 Foreign selling restrictions

$(a)$ General

The SPP Offer is being made in Australia and New Zealand only. This Prospectus does not constitute an offer in any place which, or to any person whom, it would not be lawful to make such an offer.

The SPP Offer is not being extended to, and no SPP Shares or SPP Options will be issued pursuant to the SPP Offer to, Non-Participating Foreign Holders. This Prospectus is sent to those Non-Participating Foreign Holders for information purposes only.

The distribution of this Prospectus in jurisdictions outside Australia and New Zealand, may be restricted by law and persons who come into possession of this Prospectus in such jurisdictions should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

$(b)$ New Zealand securities law requirements

The Offer of SPP Shares and SPP Options to New Zealand investors is a regulated offer made under Australian and New Zealand law. In Australia, this is Chapter 8 of the Corporations Act 2001 and Regulations. In New Zealand, this is Part 5 of the Securities Act 1978 and the Securities (Mutual Recognition of Securities Offerings - Australia) Regulations 2008.

This SPP Offer and the content of this Prospectus are principally governed by Australian rather than New Zealand law. In the main, the Corporations Act 2001 and Regulations (Australia) set out how the SPP Offer must be made.

There are differences in how securities are regulated under Australian law. For example, the disclosure of fees for collective investment schemes is different under the Australian regime.

The rights, remedies, and compensation arrangements available to New Zealand investors in Australian securities may differ from the rights, remedies, and compensation arrangements for New Zealand securities.

Both the Australian and New Zealand securities regulators have enforcement responsibilities in relation to this SPP Offer. If you need to make a complaint about this Offer, please contact the Financial Markets Authority, Wellington, New Zealand. The Australian and New Zealand regulators will work together to settle your complaint.

The taxation treatment of Australian securities is not the same as for New Zealand securities. If you are uncertain about whether this investment is appropriate for you, you should seek the advice of an appropriately qualified financial adviser.

The SPP Offer may involve a currency exchange risk. The currency for the securities is not New Zealand dollars. The value of the securities will go up or down according to changes in the exchange rate between that currency and New Zealand dollars. These changes may be significant.

If you expect the securities to pay any amounts in a currency that is not New Zealand dollars, you may incur significant fees in having the funds credited to a bank account in New Zealand in New Zealand dollars.

If the securities are able to be traded on a securities market and you wish to trade the securities through that market, you will have to make arrangements for a participant in that market to sell the securities on your behalf. If the securities market does not operate in New Zealand, the way in which the market operates, the regulation of participants in that market, and the information available to you about the securities and trading may differ from securities markets that operate in New Zealand.

2.18 Risks

Investors should carefully read the risk factors in Sections 1.3 and 4 of the Prospectus. An investment in SPP Shares and SPP Options involves various risks, a number of which are specific to the Group and the industry in which it operates.

An investment in SPP Shares and SPP Options should be regarded as speculative.

2.19 Taxation

It is the responsibility of all Applicants to satisfy themselves of the particular tax consequences that apply to them, by consulting their own professional financial and taxation advisers. Neither the Group nor any of its officers, employees or agents, nor its taxation or other advisers accepts any liability or responsibility in respect of taxation consequences connected with the SPP Offer.

2.20 Professional advice

If you are in any doubt as to what to do in relation to the SPP Offer, you should seek professional advice from a licensed financial adviser, accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest in the Company.

Purpose and effect of the SPP Offer on the Company

$3.1$ Purpose of the SPP Offer

On 23 February 2015 the Board announced that it had completed a Placement to strategic and institutional investors of \$3.1 million. The Placement was successful in attracting the Company's first institutional investor and a significant high-net-worth investor. In order to allow existing shareholders an opportunity to increase their shareholding at the same pricing offered under the Placement, the Company has invited Eligible Shareholders to participate in the SPP Offer.

The funds raised will be used to help fund the ongoing expansion of the Company's anticounterfeit invisible tracer and scanner technology and Brand Reporter business, and to fund the expansion currently being undertaken in the USA and through South East Asia.

Use of funds $3.2$

If the SPP Offer is fully subscribed, the Company's present intention is to use the funds raised under the SPP Offer (from payment of the Offer Price for the SPP Shares and SPP Options) as follows:

\$280,000	Expenses of the SPP Offer
\$5,770,000	Working capital
\$6,050,000	Total

At this stage, the Company intends to apply funds raised from payment of the Exercise Price of the SPP Options for working capital purposes.

This is a statement of present intention only. The Company and the Directors reserve the right to change the way and the proportion in which funds are applied, particularly if the SPP Offer is not fully subscribed or if not all of the SPP Options are exercised.

There is no minimum subscription under the SPP Offer and no quarantee that the SPP Offer will raise an adequate or sufficient level of funds to enable the Company to achieve its stated objectives.

$3.3$ Effect on capital structure of the Company

The following table sets out the Company's current capital structure and its fully diluted capital structure immediately following the successful completion of the SPP Offer, assuming that:

the SPP Offer is fully subscribed: $(a)$
$(b)$ Shareholders approve the issue of SPP Options; and
$(c)$ no other Shares are issued between the date of this Prospectus and completion of the SPP Offer, including as a result of exercising any Existing Options.

	Shares	Options
Existing Shares on issue as at the date of this Prospectus	119,034,986
Shares to be issued under the SPP Offer	20,000,000
Existing Options on Issue as at the date of this Prospectus		37,940.445
SPP Options		5,000,000
Balance after SPP Offer	139,034,986	42.940.445

Fully diluted Share capital assuming all Existing	181.975.431
Options and all SPP Options are exercised

The Company's actual position on completion of the SPP Offer may differ from the position illustrated in the pro-forma capital structure table above if the SPP Offer is not fully subscribed or the issue of the SPP Options is not approved by shareholders.

If the SPP Offer is not fully subscribed, fewer SPP Options will be issued (and, consequently, fewer New Shares which could be issued on exercise of those SPP Options) than shown in the table above. If the issue of SPP Options are not approved by shareholders, then the Company will issue the SPP Shares but will not issue any SPP Options and consequently there would be no New Shares to be issued upon exercise of the SPP Options. After the Closing Date, the Company will announce to the ASX the actual number of SPP Shares and SPP Options to be issued under the Offer.

Effect on financial position of the Company 3.4

$(a)$ General

If the SPP Offer is successfully completed and all Eligible Shareholders take up their full Entitlements, the broad effect on the Company's financial position will be to increase Shareholders' funds and net assets by up to a maximum of \$6,050,000 before payment of the expenses of the SPP Offer.

$(b)$ Proforma balance sheet

To illustrate the effect of the SPP Offer on the Company, the following pro-forma consolidated balance sheet of the Company has been prepared based on the unaudited management accounts of the Company as at 31 January 2015 and adjusted to reflect the following pro-forma transactions:

$(i)$ The issue of 10,000,000 shares at \$0.30 and 10,000,000 31 October 2017 Options at \$0.01 raising a gross amount of \$100,000 on 23 February 2015 under the Placement.
The position as if the SPP Offer was fully taken up and shareholder approval of $(i)$ the issue of the SPP Options was obtained and the issue effected on 28 April 2015.
$(iii)$ The effect of 20,000,000 SPP Shares and 5,000,000 SPP Options issued subsequent to the Placement.
Receipt of up to a maximum of \$6,050,000 under the SPP Offer from the issue of $(iv)$ the SPP Shares and SPP Options.
$(v)$ Payment of approximately \$280,000 representing the expenses of the SPP Offer.

If the SPP Offer is not fully subscribed, the amount of all of the impacted items shown in the unaudited proforma balance sheet will be reduced, however, no other items in the Company's balance sheet will be affected.

The actual financial position on completion of the SPP Offer may also differ from the position illustrated in the pro-forma capital structure and pro-forma balance sheet due to movements in profit / (loss) and in the asset and liability levels during the period between 1 February 2015 and the date when the SPP Offer is completed.

	Consolidated Statement of financial position 31 January $2015^{(1)}$ \$'000	Pro-Forma Statement of financial position Post SPP ⁽²⁾ \$'000
CURRENT ASSETS
Cash assets	4,763	10,533
Trade and Other Receivables	46	46
Inventories	145	145
Other current assets	92	92
TOTAL CURRENT ASSETS	5,046	10,816
NON CURRENT ASSETS
Intangible assets	14,591	14,591
Property, plant & equipment	27	27
TOTAL NON CURRENT ASSETS	14,618	14,618
TOTAL ASSETS	19,664	25,434
CURRENT LIABILITIES
Trade and other payables	256	256
TOTAL CURRENT LIABILITIES	256	256
NON-CURRENT LIABILITIES
Borrowings	2,931	2,931
TOTAL LIABILITIES	3,187	3,187
NET ASSETS	16,477	22,247
EQUITY
Issued capital	24,396	30,446
Accumulated losses	(7, 919)	(8, 199)
Reserves
TOTAL EQUITY	16,477	22,247

Pro-Forma Consolidated Statement of Financial Position

⁽¹⁾ Based on internal unaudited management accounts adjusted for placement on 23 February 2015.

⁽²⁾ Assuming Full Subscription under the SPP.

$\overline{\mathbf{A}}$ Risk Factors

$4.1$ Introduction

The Securities offered under this Prospectus are considered highly speculative. An investment in the Company is not risk free and the Directors strongly recommend potential investors to consider the risk factors described below, together with information contained elsewhere in this Prospectus, before deciding whether to apply for Securities and to consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

There are specific risks which relate directly to the Company's business. In addition, there are other general risks, many of which are largely beyond the control of the Company and the Directors. The risks identified in this Section, or other risk factors, may have a material impact on the financial performance of the Company and the market price of the SPP Shares and the SPP Options.

The following is not intended to be an exhaustive list of the risk factors to which the Company is exposed. The types of risks the Company is exposed to can change over time and vary with changes in economic, technological, environmental and regulatory conditions both generally and within the industry within which the Company operates.