CODEIFAI LIMITED — Capital/Financing Update 2019

Dec 9, 2019

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YPB Group Limited

ACN 108 649 421

Prospectus

Signed pursuant to section 351 of the Corporations Act 2001 (Cth)

For the conditional offers of up to:

• 1,000 Shares at an issue price of $0.01 per Share to raise approximately $10 (before expenses) ( Share Cleansing Offer ); and

_______ John Houston, Director 10 December 2019

• 1,000 Quoted Options at an issue price of $0.001 per Quoted Option ( Option Cleansing Offer, and together with the Share Cleansing Offer, the Offers ).

This Prospectus has been prepared primarily for the purpose of section 708A(11) of the Corporations Act to remove any trading restrictions on the sale of Securities issued by the Company prior to the Closing Date.

The Offers are not underwritten.

IMPORTANT NOTICE

This document is important and should be read in its entirety (including the Risk Factors in section 6 of this Prospectus). This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and options to acquire continuously quoted securities issued in accordance with section 713 of the Corporations Act. It does not contain the same level of disclosure as an initial public offering prospectus. If after reading this Prospectus you have any questions about the Securities being offered under this Prospectus or any other matter, then you should consult your stockbroker, accountant or other professional adviser. The Securities offered under this Prospectus should be considered highly speculative.

In making representations in this Prospectus regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and certain matters may reasonably be expected to be known to investors and professional advisers whom potential investors may consult.

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Table of Contents

	Table of Contents
1	IMPORTANT INFORMATION ............................................................................... 1
2	CORPORATE DIRECTORY .................................................................................. 4
3	DETAILS OF THE OFFERS .................................................................................. 5
4	EFFECT OF OFFERS ON THE COMPANY ....................................................... 10
5	RIGHTS AND LIABILITIES ATTACHING TO SECURITIES .............................. 12
6	RISK FACTORS .................................................................................................. 15
7	ADDITIONAL INFORMATION ............................................................................ 19
8	DEFINITIONS ...................................................................................................... 27

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1 Important information

1.1 Timetable and important dates*

Action	Date
Lodgement of Prospectus with ASIC and ASX	10 December 2019
Opening Date	10 December 2019
Closing Date	11 December 2019
Expected date of Official Quotation	12 December 2019

* The above dates are indicative only and may be subject to change. The Directors reserve the right to vary these dates, including the Closing Date, without prior notice but subject to any applicable requirements of the Corporations Act or the ASX Listing Rules. This may include extending the Offers or accepting late acceptances, either generally or in particular cases.

1.2

Conditional Offer

The Offers are conditional on the Company achieving the minimum subscription as set out in section 3.2.

1.3 General

Shareholders and potential investors should read this document in its entirety and, if in doubt, should consult their professional advisers. The Securities the subject of this Prospectus should be considered highly speculative.

This Prospectus is dated 10 December 2019 and a copy of this Prospectus was lodged with ASIC on that date.

ASIC and the ASX take no responsibility for the content of this Prospectus or the merits of the investment to which this Prospectus relates. The expiry date of the Prospectus is 13 months after the date the Prospectus was lodged with ASIC. No Securities will be allotted or issued on the basis of this Prospectus after the expiry date. Within 7 days of the date of this Prospectus, the Company will make an application to ASX for the Securities offered pursuant to this Prospectus to be admitted for quotation on ASX.

No person is authorised to give information or to make any representation in connection with this Prospectus which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus. Applications for Securities offered pursuant to this Prospectus can only be submitted on an original Application Form which accompanies this Prospectus.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these restrictions constitutes a violation of those laws. This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

In preparing this Prospectus, regard has been had to the fact that the Company is a disclosing entity for the purposes of the Corporations Act and that certain matters may reasonably be expected to be known to investors and their professional advisers. This Prospectus is a transaction specific prospectus for an offer of continuously quoted securities (as defined in the Corporations Act) and an offer of options to acquire continuously quoted securities and has been prepared in accordance with section 713 of the Corporations Act. Section 713 allows the issue of a more concise prospectus in relation to an offer of continuously quoted securities (and/or options to acquire them).

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1.4 Publicly available information

Information about the Company is publicly available and can be obtained from ASIC and ASX (including ASX’s website www.asx.com.au). The contents of any website or ASIC or ASX filing by the Company are not incorporated into this Prospectus and do not constitute part of the Offer.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all information that would be included in a prospectus for an initial public offering.

1.5 Risk Factors

Potential investors should be aware that subscribing for Securities in the Company involves a number of risks. The key risk factors of which investors should be aware are set out in section 6 of this Prospectus. These risks together with other general risks applicable to all investments in listed securities not specifically referred to, may affect the value of the Securities in the future. Accordingly, an investment in the Company should be considered highly speculative. Investors should consider consulting their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

1.6 Privacy Act

If you complete an application for Securities, you will be providing personal information to the Company. The Company collects, holds and will use that information to assess your application, service your needs as a holder of Securities, facilitate distribution payments and corporate communications to you as a holder of Securities and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company’s Share Registry. You can access, correct and update the personal information that we hold about you. Please contact the Company if you wish to do so at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Operating Rules.

You should note that if you do not provide the information required on the application for Securities, the Company may not be able to accept or process your application.

1.7 Investment advice

This Prospectus does not take into account your financial circumstances, financial objectives or particular needs (including your financial and taxation issues). Therefore, this Prospectus does not constitute investment advice. You should obtain professional investment advice before subscribing for Securities under this Prospectus.

1.8 Additional copies of Prospectus

Additional copies of this Prospectus are available at the registered office of the Company.

1.9 Electronic Prospectus

A copy of this Prospectus can be downloaded from the ASX website. Any person accessing the electronic version of this Prospectus for the purpose of making an investment in the Company must be an Australian resident and must only access the Prospectus from within Australia.

The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies the complete and unaltered version of this Prospectus. Any person may obtain a hard copy of this Prospectus free of charge by contacting the Company.

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1.10 Application for Securities

Please read the instructions in this Prospectus and on the accompanying Application Form regarding the acceptance of an Offer. By returning an Application Form or lodging an Application Form with your stockbroker or otherwise arranging for payment for Securities in accordance with the instructions on the Application Form, you acknowledge that you have received and read this Prospectus, you have acted in accordance with the terms of the relevant Offer detailed in this Prospectus and you agree to all of the terms and conditions as detailed in this Prospectus.

Applications for Securities offered pursuant to this Prospectus can only be submitted on an original Application Form which accompanies this Prospectus.

1.11 Overseas Shareholders

No action has been taken to permit the offer of Securities under this Prospectus in any jurisdiction other than Australia. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these restrictions constitutes a violation of those laws. This Prospectus does not constitute an offer in any place in which, or to any person to whom, it would not be lawful to make such an offer.

1.12 Forward Looking Statements

This Prospectus contains forward-looking statements which incorporate an element of uncertainty or risk, such as ‘intends’, ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’ or ‘expects’. These statements are based on an evaluation of current economic and operating conditions, as well as assumptions regarding future events. These events, as at the date of this Prospectus, are expected to take place, but there is no guarantee that such will occur as anticipated or at all given that many of the events are outside the Company’s control.

Accordingly, 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. Further, the Company may not update or revise any forward-looking statement if events subsequently occur or information subsequently becomes available that affects the original forward-looking statement. Past performance is not a guide to or indicator of future performance.

1.13 Interpretation

A number of terms and abbreviations used in this Prospectus have defined meanings which are set out in section 8.

All references in this Prospectus to $, AUD or dollars are references to Australian currency, unless otherwise stated.

All references to time in this Prospectus relate to the time in Sydney, New South Wales.

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2 Corporate Directory

Directors

John Houston – Executive Chairman, Founder

Gerard Eakin – Non-Executive Director George Su – Non-Executive Director Phillip Wade – Non-Executive Director

Company Secretary

Sebastian Andre

Registered Office and Principal Place of Business

Level 29

66 Goulburn Street

SYDNEY NSW 2000

T: (02) 8263 4000 F: (02) 8263 4111

Securities Exchange Listing

ASX Codes: YPB and YPBOA

Solicitors

Thomson Geer Lawyers

Level 25

1 O'Connell Street SYDNEY NSW 2000

Share Registry*

Boardroom Pty Limited

Level 12 225 George Street

SYDNEY NSW 2000

Auditor*

Hall Chadwick

Level 40, 2 Park Street

SYDNEY NSW 2000

*These entities have not been involved in the preparation of this Prospectus and have not consented to being named in this Prospectus. Their names are included for information purposes only.

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3 Details of the Offers

3.1 Offers

By this Prospectus, the Company is making offers to investors identified by the Directors for up to:

• (a) 1,000 Shares at an issue price of $0.01 per Share payable in full on application to raise $10 (before expenses); and

• (b) 1,000 Quoted Options at an issue price of $0.001 per Quoted Option payable in full on application to raise $1 (before expenses).

All of the Shares offered under this Prospectus will rank equally with Shares on issue at the date of this Prospectus. All of the Quoted Options offered under this Prospectus will rank equally with the Company's existing Quoted Options.

Application Forms will only be provided by the Company to the invited investors. All recipients of the Securities under the Offers will be sophisticated or professional investors (within the meaning of sections 708(8) and 708(11) of the Corporations Act, respectively), however no Securities will be issued under the Offers to Directors, related parties of the Company or any other person if the issue would breach the takeover prohibition in section 606 of the Corporations Act.

3.2

Condition of the Offers

Each Offer is conditional upon the Company achieving the minimum level of subscription that Offer, being 1,000 Shares to raise approximately $10 (in the case of the Share Cleansing Offer) and 1,000 Quoted Options to raise $1 (in the case of the Option Cleansing Offer).

Satisfaction of the above conditions is a requirement for the issue of Shares under the Share Cleansing Offer and Quoted Options under the Option Cleansing Offer. In the event that these conditions are not met within 4 months of the date of this Prospectus (or such period as varied by the ASIC), all Application Monies will be returned to Applicants without interest as soon as practicable thereafter and no Securities will be issued under the respective Offers.

3.3 Purpose of this Prospectus

The Company is seeking to raise only a nominal amount of $10 (before expenses) under Share Cleansing Offer and $1 (before expenses) under the Option Cleansing Offer and, accordingly, the purpose of this Prospectus is not to raise capital. The Directors intend to apply the proceeds from the Offers to expenses of the Offers.

The primary purpose of this Prospectus is to remove any trading restrictions that may be attached to Shares and Quoted Options issued by the Company prior to the Closing Date, including the issue of:

• (a) 100,000,000 Shares at an issue price of $0.006 per Share on 10 December 2019 ( Placement Shares ). The Placement Shares were issued to sophisticated and professional investors who participated in a placement announced on 6 December 2019 ( Placement ), to whom the Company is not required to issue a disclosure document under the Corporations Act;

• (b) 6,000,000 Shares at an issue price of $0.006 per Share to EverBlu Capital Pty Ltd ( Broker Shares ). The Broker Shares were issued to EverBlu Capital Pty Ltd as a fee for providing lead manager services to the Placement;

• (c) 24,300,000 Shares at an issue price of $0.005 per Share to S3 Consortium Pty Ltd ( S3 Consortium Shares ). The S3 Consortium Shares were issued to S3 Consortium Pty Ltd in lieu of cash payable for investor relations services rendered to the Company as approved by Shareholders at a general meeting of the Company held on 20 November 2019;

• (d) 32,285,714 Shares at an issue price of $0.008 per Share and 13,035,586 Shares at an issue price of $0.007 per Share ( EverBlu Shares ) and 35,714,285 Quoted Options ( EverBlu Options ) to EverBlu Capital Pty Ltd. The EverBlu Shares and EverBlu Options

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were issued to EverBlu Capital Pty Ltd in lieu of cash payable for services provided to the Company by EverBlu Capital Pty Ltd in respect of capital raising, corporate advisory and research services as approved by Shareholders at a general meeting of the Company held on 20 November 2019; and

• (e) 11,666,667 Shares at an issue price of $0.006 per Share to Golden Triangle Capital Pty Ltd ( Golden Triangle Shares ). The Golden Triangle Shares were issued to Gold Triangle Capital Pty Ltd for in lieu of cash payable for services provided to the Company by Golden Triangle Pty Ltd in respect of corporate advisory services.

The issue of the Placement Shares raised approximately $600,000 (before costs). These funds will be applied to:

• (a) technical development of Motif Micro and Connect;

• (b) general working capital; and

• (c) costs of the Placement.

The Placement Shares, Broker Shares, S3 Consortium Shares, EverBlu Shares and Golden Triangle Shares rank equally with existing Shares on issue. A summary of the terms of existing Shares is set out in section 5.1. The EverBlu Options rank equally with existing Quoted Options. A summary of the terms of the Quoted Options is set out in section 5.2.

Section 708A(5) of the Corporations Act provides that a sale offer does not need disclosure to investors if:

• (a) the relevant securities are in a class of securities that were quoted securities at all times in the 3 months before the day on which the relevant securities were issued;

• (b) trading in that class of securities on a prescribed financial market on which they were quoted was not suspended for more than a total of 5 days during the shorter of the period during which the class of securities were quoted, and the period of 12 months before the day on which the relevant securities were issued;

• (c) the Company has not been exempted by ASIC from the continuous disclosure provisions at any time during the relevant period referred to in paragraph (b);

• (d) the Company or any person as director or auditor of the body has not been exempted from or received an instrument of modification in relation to the financial reporting provisions at any time during the relevant period referred to in paragraph (b); and

• (e) (relevantly) the Company gives the relevant market operator for the Company a notice that complies with section 708A(6) of the Corporations Act before the sale offer is made.

The Company was suspended from trading from 4 April 2019 (inclusive) to 7 May 2019 (inclusive) and 1 August 2019.

Accordingly, the Company has been suspended for more than 5 days during the past 12 months and therefore cannot rely on section 708A(5) of the Corporations Act.

However, section 708A(11) of the Corporations Act provides that a sale offer does not need disclosure to investors if:

• (a) the relevant securities are in a class of securities that are quoted securities of the body; and

• (b) either:

• (i) a prospectus is lodged with the ASIC on or after the day on which the relevant securities were issued but before the day on which the sale offer is made; or

• (ii) a prospectus is lodged with ASIC before the day on which the relevant securities are issued and offers of securities that have been made under the prospectus are

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still open for acceptance on the day on which the relevant securities were issued; and

• (c) the prospectus is for an offer of securities issued by the body that are in the same class of securities as the relevant securities.

3.4 Opening and Closing Dates of the Offers

The Offers will be opened at 9.00am (AEDT) on 10 November 2019 ( Opening Date ) and will remain open until 5.00pm (AEDT) on 11 November 2019 ( Closing Date ), subject to the right of the Directors to either close the Offers at an earlier time and date or to extend the Closing Date without prior notice, subject to the requirements of the ASX Listing Rules.

3.5 Application for Securities

To subscribe for Securities complete and return the relevant Application Form, which will be provided with a copy of this Prospectus by the Company at the Company's discretion, in accordance with the instructions set out in the Application Form.

Completed Application Forms and Application Monies must be received by the Company prior to 5.00pm (AEDT) on the Closing Date. Cheques must be made payable to “ YPB Group Limited ” and crossed “ Not Negotiable ”. All cheques must be in Australian currency. No brokerage or stamp duty is payable.

Application Forms should be delivered to:

Sebastian Andre: seb@smallcapcorporate.com.au or

Level 29, 66 Goulburn St, Sydney, 2000

An original, completed and lodged Application Form together with a cheque for the Application Monies (if applicable) constitutes a binding and irrevocable offer to subscribe for the number of Securities specified in each Application Form. The Application Form does not need to be signed to be valid.

If the Application Form is not completed correctly or if the accompanying payment is for the wrong amount, it may be treated by the Company as valid. The Directors’ decision as to whether to treat such an Application Form as valid and how to construe, amend or complete the Application Form is final, however, for Application Forms an Applicant will not be treated as having applied for more Securities than is indicated by the amount of the cheque for the Application Monies.

Applicants are encouraged to lodge their Application Forms as soon as possible, as the Offers may close early without notice.

3.6

Oversubscription

No oversubscriptions for the Offers will be accepted by the Company.

3.7

Allotment of Securities and Application money

Securities will be issued only after all Application Monies have been received and ASX has granted permission for the Securities to be quoted. It is expected that Securities will be issued on 10 December 2019 and trading of the Securities on ASX is expected to commence 12 December 2019. Holding statements for Securities issued under the Offers will be mailed as soon as practicable after their issue.

All Application Monies received before Securities are issued will be held in a special purpose account for the purpose of depositing Application Monies. This account will be established and kept by the Company in trust for each applicant. Any interest earned on the Application Monies will be for the benefit of the Company and will be retained by the Company irrespective of whether grant takes place and each applicant waives the right to claim any interest.

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The Directors will determine the allottees of all the Securities the subject of the Offers in their sole discretion. The Directors reserve the right to reject any application or to allot any applicant fewer Securities than the number applied for.

Where the number of Securities allotted is less than the number applied for, the surplus monies will be returned by cheque as soon as practicable after the Closing Date. Where no allotment is made, the amount tendered on application will be returned in full by cheque as soon as practicable after the Closing Date. Interest will not be paid on monies refunded.

3.8 Underwriting

The Offers are not underwritten.

3.9 ASX Quotation

Application for Official Quotation of the Securities offered pursuant to this Prospectus will be made within 7 days after the date of this Prospectus. If approval is not obtained from the ASX before the expiration of 3 months after the date of issue of the Prospectus (or such period as varied by ASIC), the Company will not issue any Securities and will repay all Application Monies for the Securities within the time prescribed under the Corporations Act, without interest. The fact that the ASX may grant Official Quotation to the Securities is not to be taken in any way as an indication of the merits of the Company or the Securities now offered for subscription.

3.10 Restrictions on the distribution of the Prospectus

The distribution of this Prospectus outside the Australia may be restricted by law. The Offers do not, and are not intended to, constitute an offer in any place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or to issue this Prospectus.

Residents of countries outside Australia should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed should they wish to make an application to take up Securities on the basis of this Prospectus. The return of a duly completed Application Form will be taken to constitute a representation and warranty that there has been no breach of such laws and that all approvals and consents have been obtained.

3.11 CHESS and issuer sponsorship

The Company operates an electronic CHESS sub-register and an electronic issue sponsored subregister. These two sub-registers will make up the Company’s register of Securities.

The Company will not issue certificates to security holders. Rather, holding statements (similar to bank statements) will be dispatched to security holders as soon as practicable after issue. Holding statements will be sent either by CHESS (for security holders who elect to hold Securities on the CHESS sub-register) or by the Company’s Share Registry (for security holders who elect to hold their Securities on the issuer sponsored sub-register). The statements will set out the number of Securities issued under this Prospectus and the Holder Identification Number (for security holders who elect to hold Securities on the CHESS sub register) or Shareholder Reference Number (for security holders who elect to hold their Securities on the issuer sponsored sub-register). Updated holding statements will also be sent to each security holder following the month in which the balance of their security holding changes, and also as required by the ASX Listing Rules and the Corporations Act.

3.12 Professional advice

The Directors recommend that potential investors, when making an informed assessment of what will be the assets and liabilities, financial position, profits and losses and prospects of the Company should read this Prospectus in its entirety.

Potential investors who have any questions about investing in the Company or are in any doubt about any matter relating to the Offers, should seek the advice of this professional advisers.

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3.13 Taxation implications

The Directors do not consider it appropriate to give Applicants advice regarding the taxation consequences of subscribing for Securities under this Prospectus.

The Company, its advisers and its officers do not accept any responsibility or liability for any such taxation consequences to Applicants. As a result, Applicants should consult their professional tax adviser in connection with subscribing for Securities under this Prospectus.

3.14 Major activities and financial information

A summary of the major activities and financial information relating to the Company is included in the 2018 Annual Report, which was lodged with the ASX on 1 April 2019 and Interim Report for the half year ending 30 June 2019 which was lodged with ASX on 30 August 2019.

The Company's continuous disclosure notices (i.e. ASX announcements) since 1 April 2019 are listed in section 7.3 of this Prospectus.

Copies of these documents are available free of charge from the Company. Directors strongly recommend that Shareholders and potential investors review these and all other announcements prior to deciding whether or not to participate in the Offers.

3.15 Withdrawal

The Company may at any time decide to withdraw this Prospectus and the Offers in which case the Company will return all Application Monies without interest at the earliest practicable time.

3.16 Enquiries

This document is important and should he read in its entirety. Persons who are in any doubt as to the course of action to be followed should consult their stockbroker, lawyer, accountant or other professional advisor without delay. Any questions concerning the Offers should be directed to the Company Secretary, Sebastian Andre 08 6555 2950.

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4 Effect of Offers on the Company

4.1 Effect of the Offers on capital structure

The capital structure of the Company on completion of the Offers and assuming both Offers are fully subscribed is set out below:

Shares currently on issue	Number of Shares
Shares on issue prior to the Share Cleansing Offer (including the issue of the Placement Shares, Broker Shares, S3 Consortium Shares, EverBlu Shares and Golden Triangle Shares)	1,694,369,386
Shares offered under this Prospectus	1,000
Total Shares on issue on completion of the Share Cleansing Offer*	1,694,370,386

*Assumes no other Options or other convertible securities are exercised or converted.

Options	Number
All Quoted Options currently on issue prior to the Option Cleansing Offer (including the issue of the EverBlu Options)	272,846,758
All unquoted Options currently on issue	70,555,555
Quoted Options offered under this Prospectus	1,000
Total Options on issue on completion of the Option Cleansing Offer	343,403,313

Fully Diluted Share Capital	Number of Shares
Shares on issue at the date of this Prospectus (including the issue of the Placement Shares, Broker Shares, S3 Consortium Shares, EverBlu Shares and Golden Triangle Shares)	1,694,369,386
Total Shares on issue at completion of the Offers	1,694,370,386
Total Shares on issue if all Options on issue on completion of the Offers are exercised1,2	2,037,773,699

1 This assumes no other Shares are issued between the date of this Prospectus and the date of exercise of the last Option on issue.

2 Does not include any issues of securities relating to the convertible debt instruments held on the Company’s balance sheet.

4.2 Financial effect of the Offers

The financial effect of the Share Cleansing Offer will, assuming that 1,000 Shares are issued pursuant to the Share Cleansing Offer, be that cash reserves (before costs) will increase by approximately $10.

The financial effect of the Option Cleansing Offer will, assuming that 1,000 Quoted Options are issued pursuant to the Option Cleansing Offer, be that cash reserves (before costs) will increase by approximately $1.

After paying for the expenses of the Offers of approximately $8,206 there will be no remaining funds.

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4.3 Effect of the Offers on control

The Company will not issue Securities under the Offers to Directors, related parties of the Company or any other person if the issue would breach the takeover prohibition in section 606 of the Corporations Act.

The potential dilutionary effect of the Offers is ~0.00%.

4.4

Dividend policy

Dependant on the financial results of the Company, the Directors will consider the payment of dividends to Shareholders. However, investors should note that it is the Directors' intentions to utilise retained earnings and free cash flows to fund ongoing growth of the Company in priority to the payment of dividends.

Investors should be aware that no guarantee is given by the Company or the Directors as to the performance of the Company or as to the timing or amount of any dividend payment.

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5 Rights and liabilities attaching to Securities

5.1 Rights and liabilities attaching to Shares

The following is a summary of the more significant rights and liabilities attaching to Shares to be issued pursuant to this Prospectus. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice. Full details of the rights and liabilities attaching to Shares are set out in the Corporations Act, ASX Listing Rules and the Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours.

The rights, privileges and restrictions attaching to Shares can be summarised as follows:

(a) Voting rights

Subject to the rights or restrictions for the time being attached to any other class or classes of Shares (at present there are none), at meetings of Shareholders:

• (i) each Shareholder entitled to vote may vote in person or by proxy, attorney or representative (and a partly paid share only has a fractional vote);

• (ii) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and

• (iii) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him or her, or in respect of which he or she is appointed a proxy, attorney or representative, has one vote for the Share.

(b) Rights on winding up

Subject to the rights of holders of Shares with special rights in a winding up (at present there are none), on a winding up of the Company all assets that may be legally distributed (by a liquidator with the sanction of a special resolution of the Shareholders) among Shareholders will be distributed in proportion to the number of fully paid Shares held by them.

(c) Transfer of Shares

Generally, Shares in the Company are freely transferrable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provision of a law of Australia, and the transfer not being in breach of the Corporations Act or the ASX Listing Rules.

• (d) Future increases in capital

The issue of Shares is under the control of the Directors. Subject to restrictions on the issue of Shares to Directors or their associates, the ASX Listing Rules, the Constitution and the Corporations Act, the Directors may issue or otherwise dispose of Shares on such terms and conditions as they see fit.

(e) Variation of rights

The Constitution provides that, if at any time the share capital of the Company is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of the issue of the shares of that class), whether or not the Company is being wound up, may be varied or abrogated with the consent in writing of the holders of three quarters of the issued shares of that class, or if authorised by a special resolution passed at a separate meeting of the holders of the shares of that class.

(f) Dividend rights

Subject to the rights of holders of shares issued with special, preferential or qualified rights, the profits of the Company which the Directors determine to distribute by way of

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dividend are divisible among the holders of Shares in proportion to the number of Shares held by them (and a partly paid Share is counted as a fraction of a fully paid Share, equal to the amount paid on it, divided by the total issue price of the Share for the purposes of payment of a dividend).

• (g) General meetings

Shareholders are entitled to be present in person, or by proxy, attorney or representative, to attend and vote at general meetings of the Company. Shareholders may requisition meetings in accordance with section 249D of the Corporations Act and the Constitution.

5.2 Rights and liabilities attaching to Quoted Options

• (a) Entitlement

Each Quoted Option entitles the holder to subscribe for one Share.

• (b) Exercise price

The exercise price for the Quoted Options will be $0.025 per Quoted Option.

• (c) Expiry Date

30 April 2020.

• (d) Exercise period

Quoted Options may be exercised at any time prior to the expiry date. Any Quoted Options not exercised by the expiry date will automatically lapse.

• (e) How to exercise

The holder is required to deliver a duly completed notice of exercise to the Company at any time prior to the expiry date.

• (f) Timing of issue of Shares on exercise

Within 5 business days (being a day for which banks are open in New South Wales other than weekends or public holidays) after receipt of a valid notice of exercise, the Company will issue the new Shares pursuant to the exercise of the Quoted Options.

• (g) Shares issued on exercise

Shares issued on exercise of Quoted Options will rank equally with all existing Shares.

• (h) Quotation

The Company will seek to have the Quoted Options quoted on the ASX.

• (i) Reconstruction of capital

If at any time the issued capital of the Company is reconstructed (including consolidation, subdivision, reduction or return), all rights of a holder of Quoted Options are to be changed to the extent necessary in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

• (j) Participation in new issues

There are no participation rights or entitlements inherent in the Quoted Options and holders of Quoted Options will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Quoted Options without exercising the Quoted Options. Holders of these Quoted Options will be afforded the period of at least 5 business days prior to and inclusive of the record date (to determine entitlements to the new issue) to exercise their Quoted Options.

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• (k) Change in exercise price

If there is a bonus issue to Shareholders, the number of ordinary shares over which a Quoted Option is exercisable may be increased by the number of shares which the holder of the Quoted Option would have received if the Quoted Option had been exercised before the record date for the bonus issue.

In the event that a pro rata issue (except a bonus issue) is made to shareholders, the exercise price of the Quoted Options may be reduced in accordance with ASX Listing Rule 6.22.2.

(l) Transferability

The Quoted Options are transferable.

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6 Risk Factors

Activities in the Company, as in any business, are subject to risks, which may impact on the Company's future performance.

The Directors consider that the following summary, which is not exhaustive, represents some of the specific risk factors, which investors need to be aware of in evaluating the Company's business and the risks of increasing their investment in the Company. The Securities offered under this Prospectus are speculative. An investment in the Company is not risk free and the Directors strongly recommend potential investors to carefully consider the following risk factors in addition to the other information presented in the Prospectus.

The Directors recommend that Shareholders and potential investors examine the contents of this Prospectus together with previous ASX disclosures and public documents of the Company, including its most recent audited financial statements, and rely on advice of their professional advisers before deciding whether or not to apply for Securities pursuant to this Prospectus.

• (a) Specific risk factors

(i) Intellectual property

To market and protect its market position, it is important for the Company to protect the intellectual property in its brand and the technology. Although some of the technology is patented, there may be situations where it cannot be protected or is subject to unauthorised disclosure, infringement, or challenge by a third party. This may require significant cost and effort to defend or to obtain the necessary protections to prevent such conduct (as the case may be).

There is a risk that other individuals or companies may claim to have an interest in intellectual property or trade secrets used by the Company. Intellectual property or trade secrets may be challenged by other parties and defending such actions may adversely impact the Company’s earnings. In addition, if the Company is required to develop or support new technology and intellectual property, it may require significant capital expenditure by the Company.

The Company has previously or in future will acquire trade secrets and other intellectual property rights that are important assets. The Company may therefore rely on a combination of confidentiality and license agreements with its consultants and third parties with whom it has relationships, as well as domain name, trade secret, copyright and patent laws, to protect its brand and other intellectual property rights. However, various events outside of the Company’s control could pose a threat to its intellectual property rights, as well as to its products and technologies.

• (ii) 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.

• (iii) 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 anticounterfeit 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.

• (iv) Growth prospects and Company expansion plans

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The Company's growth prospects are dependent upon a number of factors, including, customer take up and execution of rollout. There is a risk that the Company may encounter potential issues arising from operating in foreign jurisdictions, including marketing restrictions, regulations regarding anti-theft, and protecting its intellectual property. These risks will vary in importance depending on the countries the Company chooses to enter into. 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.

(v) Reliance on access to internet

The Company will depend on the ability of its users to access the internet. Access is provided by various classes of entities in the broadband and internet access marketplace. Should any of these entities disrupt, restrict or affect the cost of access to the Company's products, usage of the Company's products may be negatively impacted.

(vi) Programming errors

The Company's products will contain complicated programming and its objectives are to quickly develop and launch new and innovative products and features. The Company's products may therefore contain, now or in the future, errors, bugs or vulnerabilities. Any errors, bugs or vulnerabilities discovered could result in (amongst other consequences) damage to the Company's brand, loss of customers, falls in revenues or liability for damages, any of which could adversely affect the Company's business and operating results.

(vii) 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.

(viii) 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.

(ix) Product selection

An important element of the Company's business is an ability to assess and identify products that appeal to the Company's target market. Newer anticounterfeit and brand protection technologies and products are increasing the number of choices available to customers. This may make the Company's products less attractive and any misjudgements in demand or changes in customer preferences could result in reduced sales, increase inventory and/or lower gross margins. In addition, existing products or products in the future developed by the Company may experience performance problems rendering

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them difficult or impossible to sell, or subject to product recall which could have a material adverse impact on the Company's financial performance.

(x) Delivery risk

Due to the nature of the Company's product being manufactured in the PRC, the potential exists for delays or cancellations in the delivery of products without any practical recourse being available to the Company to recover lost earnings. Any such delay or cancellation would have an adverse impact on the Company's earnings and profits.

(xi) 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.

(xii) Funding

While the Company believes it will have sufficient funds after completion of the Offer to meet all of its growth and capital requirements for the near term, the Company may seek to exploit opportunities of a kind that will require it to raise additional capital from equity or debt sources. There can be no assurance that the Company will be able to raise such capital on favourable terms or at all. If the Company is unable to obtain such additional capital, it may be required to reduce the scope of its anticipated activities, which could adversely affect its business, financial condition and operating results.

(xiii) Concentration of shareholding

John Houston (or entities controlled by him) will hold approximately 9% of all Shares of the Company (upon completion of the Offers and assuming that the Options on issue are not exercised). 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 ASX Listing Rules). The ability of other Shareholders to influence corporate decisions of the Company will therefore be reduced.

(b) Risks associated with investing in the stock market

(i) Price fluctuations

The Securities are to be quoted on the ASX, where the price may rise or fall relative to the Offer Price. The Securities issued or sold under this Prospectus carry no guarantee in respect of profitability, dividends, return of capital, or the price at which they may trade on the ASX. The value of the Securities will be determined by the share market and will be subject to a range of factors, many or all of which may be beyond the control of the Company and the management team.

(ii) Economic factors

Changes in economic and business conditions in Australia or internationally may affect the fundamentals of the Company's target markets or its costs structure and profitability. Adverse changes in the level of inflation, interest rates, consumer spending, and employment rates, are outside the control of the Company and the management team and may have an adverse effect on the financial performance and/or financial position of the Company.

• (iii) Government regulation

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The Company is exposed to changes in the laws and regulations of the PRC initially, then other countries where the Company will operate. In future, laws may be enacted which effect greater regulation upon the anti-counterfeit industry which may increase the Company's costs to comply with the relevant government regulations. In addition, taxation legislation may change which could impact the Company's profitability.

• (iv) Taxation

Future changes to tax law or changes to the way in which taxation laws are interpreted in the various jurisdictions in which the Company operates or makes underlying investments may correspondingly impact the taxation liability of the Company or the value of its assets.

There are tax implications arising from purchasing and selling Securities, receiving distributions from the Company, and participation in any on-market Share buybacks. Accordingly, investors should seek their own independent taxation advice before applying for Securities under the Offers.

• (v) Insurance risks

Although insurance is maintained by the Company, no assurance can be given that adequate insurance will continue to be available to the Company in the future on commercially acceptable terms.

In addition, the Company may incur liabilities to third parties (in excess of any insurance cover or statutory reserves) arising from negative environmental impacts or other damages or injury. There is a risk of an occurrence of a significant event leading to losses that are not fully covered by insurance.

(vi) Other external factors:

Other external factors that may affect the value of the Securities include (but are not limited to):

• (A) changes in investor sentiment toward particular market sectors;

• (B) changes in interest rates and the rate of inflation;

• (C) the demand for, and supply of, capital;

• (D) changes in exchange rates;

• (E) changes to accounting standards; and

• (F) the nature of competition in the industries in which the Company operates.

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7 Additional information

7.1 Market price of Shares

The Company is a disclosing entity for the purposes of the Corporations Act and its Shares and Quoted Options are enhanced disclosure securities quoted on ASX.

The highest and lowest market sale prices of the Company’s Shares on the ASX during the 3 months immediately preceding the date of lodgement of this Prospectus with ASIC and the most recent date of the respective sales were:

	Price	Date
Highest	$0.01	20 September 2019
Lowest	$0.005	13 September 2019
Most recent	$0.006	9 December 2019

The highest, lowest and last market sale prices of Quoted Options on ASX during the three months immediately preceding the date of lodgement of this Prospectus with ASIC and the most recent dates of those sales were:

	Price	Date
Highest	$0.001	21 November 2019
Lowest	$0.001	21 November 2019
Most recent	$0.001	9 December 2019

7.2 Continuous disclosure obligations

The Company is a “disclosing entity” (as defined in section 111AC of the Corporations Act) for the purposes of section 713 of the Corporations Act and, as such, is subject to regular reporting and disclosure obligations. Specifically, like all listed companies, the Company is required to continuously disclose any information it has to the market which a reasonable person would expect to have a material effect on the price or the value of the Company’s securities.

This Prospectus is a “transaction specific prospectus”. In general terms a “transaction specific prospectus” is only required to contain information in relation to the effect of the issue of securities on the Company and the rights attaching to the securities. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company, which has been notified to the ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. Investors should therefore have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest.

Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of the ASX as applicable from time to time throughout the 3 months before the issue of this Prospectus which required the Company to notify the ASX of information about specified events or matters as they arise for the purpose of the ASX making that information available to the stock market conducted by the ASX.

Information that is already in the public domain has not been reported in this Prospectus other than that which is considered necessary to make this Prospectus complete.

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The Company, as a disclosing entity under the Corporations Act, states that:

• (a) it is subject to regular reporting and disclosure obligations;

• (b) copies of documents lodged with ASIC in relation to the Company (not being documents referred to in section 1274(2)(a) of the Corporations Act) may be obtained from, or inspected at, the offices of ASIC; and

• (c) it will provide a copy of each of the following documents, free of charge, to any person on request between the date of issue of this Prospectus and the Closing Date:

• (i) the annual financial report most recently lodged by the Company with ASIC;

• (ii) any half-year financial report lodged by the Company with ASIC after the lodgement of the annual financial report referred to in section 7.2(c)(i) and before the lodgement of this Prospectus with ASIC; and

• (iii) any continuous disclosure documents given by the Company to the ASX in accordance with the ASX Listing Rules as referred to in section 674(1) of the Corporations Act after the lodgement of the annual financial report referred to in section 7.2(c)(i) and before the lodgement of this Prospectus with ASIC.

There is no information which has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules that investors or their professional advisers:

• (a) would reasonably require for the purpose of making an informed assessment of:

• (i) the assets and liabilities, financial position and performance, profits and losses and prospects of the Company; and

• (ii) the rights and liabilities attaching to the Securities the subject of this Prospectus; and

• (b) would reasonably expect to find in this Prospectus.

7.3 Copies of Documents

Copies of all documents lodged with ASIC in relation to the Company can be inspected at the registered office of the Company or an ASIC office during normal office hours.

The Company will provide free of charge to any person who requests it during the period of the Offers, a copy of:

• (a) the Annual Report of the Company for the year ended 31 December 2018 containing the financial statements of the Company for the financial year ended 2018, being the last financial year for which financial statements were lodged with ASIC in relation to the Company on 1 April 2019;

• (b) the half year Interim Report of the Company for the half year ended 30 June 2019 containing the interim financial statements of the Company for the half year ended 30 June 2019 which was lodged with ASX on 30 August 2019;

• (c) the following continuous disclosure notices given by the Company to notify the ASX of information relating to the Company during the period from the date of lodgement of the Annual Report of the Company referred to in paragraph (a) and before the date of issue of this Prospectus are as follows:

Date of announcement	Headline
10/12/2019	Appendix 3B
06/12/2019	YPB Group receives commitments for A$600,000
04/12/2019	Trading Halt

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Date of announcement	Headline
02/12/2019	YPB signs second early adopter of key MotifMicro technology
28/11/2019	US Patent Office formally allows key technology claims
21/11/2019	Chairman update to EGM 20 November 2019
21/11/2019	Results of Meeting
20/11/2019	YPB wins first dairy sector contract with Nature One Dairy
12/11/2019	MotifMicro Passes Critical FDA-standard Certification
01/11/2019	Quarterly Activities Report
01/11/2019	Appendix 4C – quarterly
21/10/19	Notice of General Meeting/Proxy Form
30/09/2019	YPB clarifies value of smartphone readability technology
27/09/2019	Prospectus
26/09/2019	Appendix 3B
18/09/2019	Trading Halt
16/09/2019	Investor Presentation
16/09/2019	YPB signs first client for Motif Micro
12/09/2019	Motif Micro Major Technical Breakthrough
10/09/2019	Combiphar Agreement Extended and Expanded
30/08/2019	Half Yearly Report and Accounts
26/08/2019	Resignation of Joint Company Secretary
16/08/2019	Results of Meeting
06/08/2019	Prospectus
06/08/2019	Appendix 3B
02/08/2019	Reinstatement to Official Quotation
02/08/2019	YPB ProtectCodes Milestone Update
01/08/2019	Amended Appendix 4C - quarterly
01/08/2019	YPB Group receives commitments for A$1.6m
01/08/2019	Suspension from Official Quotation
01/08/2019	Quarterly Activities Report
01/08/2019	Appendix 4C – quarterly

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Date of announcement	Headline
30/07/2019	Trading Halt
29/07/2019	YPB exceeds 100 million ProtectCode issued milestone
19/07/2019	YPB signs first cannabis consumables client
18/07/2019	Notice of Extraordinary General Meeting/Proxy Form
17/07/2019	Expiry of unlisted options
01/07/2019	YPB Business Update
26/06/2019	FGF: Termination of YPB Token Facilitation Agreement
26/06/2019	Token project terminated
25/06/2019	Appointment of Joint Company Secretary
24/06/2019	Response to ASX Query
24/06/2019	Initial Director's Interest Notice
18/06/2019	YPB co-launches Vintail with Seppeltsfield QWI
17/06/2019	Results of Meeting
17/06/2019	Chairman's Address to Shareholders
04/06/2019	AGM update – withdrawal of resolutions
04/06/2019	Director Resignation
30/05/2019	Voluntary escrow release
28/05/2019	YPB Connect platform update – 75 million ProtectCodes issued
27/05/2019	One of the world's largest cotton garment makers adopts YPB
20/05/2019	Notice of Annual General Meeting/Proxy Form
16/05/2019	New Director to join YPB Board
08/05/2019	Reinstatement to Official Quotation
08/05/2019	Response to ASX Query
29/04/2019	Appendix 4C – Quarterly
12/04/2019	Response to ASX Query
10/04/2019	FGF: Response to ASX Query Letter
04/04/2019	Suspension from Official Quotation
04/04/2019	Pause in Trading

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Date of announcement	Headline
03/04/2019	Update on YPB token
03/04/2019	FGF: LINCD TO ASSIST YPB WITH TOKEN CREATION
01/04/2019	Appendix 4G
01/04/2019	Corporate Governance Statement 2018

The ASX maintains files containing publicly available information for all listed companies. The Company’s file is available for inspection at the ASX during normal office hours.

The announcements are also available through the Company's website at www.ypbsystems.com. This includes copies of the Company's corporate governance policies.

7.4 Determination by ASIC

ASIC has not made a determination which would prevent the Company from relying on section 713 of the Corporations Act in issuing the Securities under this Prospectus.

7.5 Corporate Governance

The Company reports on its compliance with ASX Corporate Governance Principles and Recommendations (3[rd] Edition) in its annual reports and, where the Company's practices do not comply with the Corporate Governance Principles and Recommendations, the Company has reported as to the reason for this. For copies of the Company's corporate governance policies and charters, please visit the Company's registered office or the Company's website.

7.6 Directors' interests

• (a) Directors' holdings

Set out in the table below are details of Directors' holdings in the securities of the Company at the date of this Prospectus:

Director	No. of Shares	No. of Options
John Houston1	152,541,801	22,222,222
Gerard Eakin	35,828,464	1,000,000
George Su	5,623,989	Nil
Phillip Wade	Nil	Nil

1 Note: John Houston's shares are held by The Bimm Corporation Pty Ltd and JF Houston Pty Ltd .

• (b) Director remuneration

In the two years preceding lodgement of this prospectus with ASIC, no person has paid or agreed to pay any amount or has given any benefit to any Director to induce them to become, or qualify as a Director or for services provided by the Director, in connection with:

• (i) the formation or promotion of the Company; or

• (ii) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offers; or

• (iii) the Offers of Securities under this Prospectus,

except as set out below or elsewhere in this Prospectus.

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The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by Shareholders at a general meeting of Shareholders. Total Directors' fees paid to all Non-Executive Directors is not to exceed $500,000 per annum.

Director	Remuneration
John Houston (Executive Director)	$313,000
Gerard Eakin	$40,000
Su (George) Su	$40,000
Phillip Wade	$40,000

• (c) Deeds of Access, Indemnity and Insurance

The Company has entered into a Deed of Access, Indemnity and Insurance with each of its Directors and its Company Secretary, Mr Sebastian Andre. Under the terms of these deeds, the Company indemnifies each Director to the extent permitted by the Corporations Act against any liability as a result of the Director acting as a Director of the Company. The Company is required under the deeds to maintain insurance policies for the benefit of the relevant Director for the term of appointment and for a period of 7 years after retirement, termination or resignation substantially similar to the policies existing at the time of entering into the deeds, except to the extent that such insurance cannot be procured at a reasonable cost or is otherwise unavailable to the Company. The deeds also provide for the Director to have a right of access to Board papers and minutes.

7.7 Directors' participation in the Offer

Nothing in this Prospectus will be taken to preclude Directors, officers or employees of the Company from applying for Securities under this Prospectus.

7.8 Disclosure relating to George Su

Mr Su is a Non-Executive Director for Carbon Energy Limited (in Liquidation) a company that had liquidators appointed on 11 June 2019 and was removed from the ASX on 29 August 2019 for non-payment of its annual listing fee.

7.9 Interests of experts and advisers

Other than as set out below or elsewhere in this Prospectus, no expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of the Prospectus, nor any firm in which any of those persons is or was a partner, nor any company with which any of those persons is or was associated, has or had within 2 years before the lodgement of this Prospectus with ASIC, any interest in:

• (a) the formation or promotion of the Company; or

• (b) property acquired or proposed to be acquired by the Company in connection with its formation or promotion or the Offers; or

(c) the Offers,

and no amounts have been paid or agreed to be paid (in cash or Securities or otherwise) to any expert, promoter or any other person named in this Prospectus as performing a function in a professional advisory or other capacity in connection with the preparation or distribution of this Prospectus, or to any firm in which any of those persons is or was a partner, or to any company with which any of those persons is or was associated, for services rendered by that person, or by the firm or the Company, in connection with the formation or promotion of the Company or the Offers.

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Thomson Geer Lawyers has acted as the solicitors to the Company in relation to the Offers. The Company estimates it will pay Thomson Geer Lawyers $5,000 (excluding GST and disbursements) for these services.

7.10 Details of substantial shareholders

Based on publicly available information as at 10 December 2019, the following people have a relevant interest in 5% or more of the Shares on issue immediately prior to lodgement of this Prospectus:

Holder	Shareholding (%)*
John Houston _John Houston's shares are held by The Bimm Corporation Pty Ltd_ and JF Houston Pty Ltd **_Trust A/C>.**	9%

*Note: these are approximate percentages and due to rounding, percentages indicated may not precisely reflect the absolute figures.

7.11 Consents

The following consent has been given in accordance with the Corporations Act and has not been withdrawn as at the date of lodgement of this Prospectus with ASIC.

Thomson Geer Lawyers has given, and has not withdrawn its written consent to being named in this Prospectus as solicitors to the Company. Thomson Geer Lawyers has not authorised or caused the issue of this Prospectus or the making of the Offers. Thomson Geer Lawyers make no representation regarding, and to the extent permitted by law exclude any responsibility for, any statements in or omissions from any part of this Prospectus.

7.12 Expenses of Offers

The total expenses of the Offers are estimated to be approximately $8,206 (excluding GST and disbursements) and are expected to be applied towards the items set out in the table below:

Item	Amount
ASIC and ASX fees	$3,206
Legal fees	$5,000
Total	$8,206

7.13 Litigation

As at the date of this Prospectus, the Company is not involved in any material legal proceedings and the Directors are not aware of any material legal proceedings pending or threatened against the Company.

7.14 Directors' statement

The Directors state that they have made all reasonable enquiries and have reasonable grounds to believe that any statements made by the Directors in this Prospectus are true and not misleading and that in respect to any other statements made in the Prospectus by persons other than the Directors, the Directors have made reasonable enquiry and have reasonable grounds to believe the person making the statement or statements were competent to make such statements, those persons have given the consent required by section 716 of the Corporations Act to the issue of this Prospectus and have not withdrawn that consent, before lodgement of this Prospectus with ASIC.

This Prospectus is prepared on the basis that:

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• (a) certain matters may be reasonably expected to be known to professional advisers of any kind with whom Applicants may reasonably be expected to consult; and

• (b) information is known to Applicants or their professional advisers by virtue of any legislation or laws of the Commonwealth of Australia or any State of Australia.

7.15 Directors’ authorisation

This Prospectus is issued by the Company and its issue has been authorised by a resolution of the Directors.

In accordance with section 720 of the Corporations Act, each Director has consented to the lodgement of this Prospectus with ASIC and has not withdrawn that consent.

Dated 10 December 2019

Signed for and on behalf of YPB Group Limited:

==> picture [99 x 41] intentionally omitted <==

John Houston Chairman

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8 DEFINITIONS

$ means Australian dollars.

AEDT means Australian Eastern Daylight Time as observed in Sydney, Australia.

Annual Report means the annual financial report of the Company for the financial year ended 31 December 2019.

Applicant means an investor who applies for Securities pursuant to an Offer.

Application Form means an application form either attached to or accompanying this Prospectus.

Application Monies means the amount of money in dollars and cents payable for Securities at $0.01 per Share pursuant to the Share Cleansing Offer, and $0.001 per Quoted Option pursuant to the Option Cleansing Offer.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the stock market operated by it, as the context requires.

ASX Listing Rules means the listing rules of the ASX.

ASX Settlement Operating Rules means the settlement rules of the securities clearing house which operates CHESS.

Board means the board of Directors unless the context indicates otherwise.

Broker Shares is as defined in section 3.3(b).

CHESS means Clearing House Electronic Sub-Register System.

Closing Date means 11 December 2019 (unless extended).

Company means YPB Group Limited (ACN 108 649 421).

Company Secretary means Mr Sebastian Andre.

Constitution means the constitution of the Company as at the date of this Prospectus.

Corporations Act means the Corporations Act 2001 (Cth).

Corporate Governance Principles and Recommendations means the Corporate Governance Principles and Recommendations (Third Edition).

Deeds of Access, Indemnity and Insurance means the deed entered into by the Company and its officers as set out in section 7.6(c).

Directors means the directors of the Company as at the date of this Prospectus.

EverBlu Capital Pty Ltd means EverBlu Capital Pty Ltd (ACN 612 793 683).

EverBlu Options is as defined in section 3.3(d).

EverBlu Shares is as defined in section 3.3(d).

Executive Director means an executive Director of the Company.

Golden Triangle Capital Pty Ltd means Golden Triangle Capital Pty Ltd (ACN 622 693 243).

Golden Triangle Shares is as defined in section 3.3(e).

Hall Chadwick means Hall Chadwick (NSW) Pty Ltd (ACN 103 221 352).

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Interim Report means the half-yearly financial report of the Company for the half-year period ended 30 June 2019.

Non-Executive Director means a non-executive Director of the Company.

Offers means the Share Cleansing Offer and the Option Cleansing Offer, and Offer is a reference to any one of them.

Offer Price means in relation to the Share Cleansing Offer, $0.01 per Share and in relation to the Option Cleansing Offer, $0.001 per Quoted Option.

Official Quotation means official quotation on the ASX.

Opening Date means 10 December 2019.

Option means an option to acquire a Share.

Option Cleansing Offer means the offer to investors to be identified by the Directors of 1,000 Options at an issue price of $0.001 each pursuant to this Prospectus to raise $1.

Placement is as defined in section 3.3(a).

Placement Shares is as defined in section 3.3(a).

Prospectus means this prospectus.

Quoted Options means an Option with the terms and conditions set out in section 5.2.

Risk Factors means the risk factors set out in section 6.

S3 Consortium Pty Ltd means S3 Consortium Pty Ltd (ACN 135 239 968).

S3 Consortium Shares is defined in section 3.3(c).

Securities means Shares or Options.

Share means a fully paid ordinary share in the capital of the Company.

Share Cleansing Offer means the offer to investors to be notified by the Directors of 1,000 Shares at an issue price of $0.01 each pursuant to this Prospectus to raise $10.

Share Registry means Boardroom Pty Limited.

Shareholder means a shareholder of the Company.

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