CODEIFAI LIMITED — Capital/Financing Update 2020

Jun 18, 2020

ASX ANNOUNCEMENT ASX:YPB | 19 June 2020

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Nature One Dairy – first revenue and now on Coles Shelves

• First order received under Master Service Agreement with NATURE ONE DAIRY® where YPB’s Connect solution has started to be printed on milk powder tins for local and export markets

• First products now exported and on supermarket shelves at Coles and Priceline Australia wide

• MSA with NATURE ONE DAIRY® covers 17 SKUs

• Initial contract valued at between $A70,000 and $A80,000 – revenue from NATURE ONE DAIRY® MSA will increase as more SKUs are awarded

Product authentication and consumer engagement solutions provider YPB Group Limited (ASX:YPB) (“YPB” or the “Company”) advises that the application of “Connect” codes to milk formula tins on production lines under the Master Service Agreement (“MSA”) signed last year with leading manufacturer of nutritionally enhanced milk powder products NATURE ONE DAIRY® (“NOD”) and product is now on shelves at Coles supermarkets across Australia.

Connect code application on NOD infant formula tins follows the 2019 signing of a 2+2 year sales contract and Master Services Agreement between the two parties (refer ASX announcement: 20 November 2019). Under the agreement, YPB provides its smartphone based, consumer engagement and serialized authentication solution, Connect to NOD.

YPB values the MSA at between A$70,000 and A$80,000 over the initial term of the contract to initially cover 17 stock keeping units (SKUs) of Nature One Dairy. YPB aims to secure more revenue producing SKUs following this first successful deployment by implementing Connect across NOD’s contract packaging operations out of their Carrum Downs facility.

NATURE ONE DAIRY® is YPB’s first dairy sector customer and it is a wholly-owned producer of nutritionally enhanced milk powders and it also contract manufactures for a number of Australian and international retailers. It’s factory is also one of the only Australian milk formula manufacturers that is accredited by the Certification and Accreditation Administration (CNCA) of the People’s Republic of China for export to that country, and accordingly one of the few Australian manufacturers with CNCA approval to restock domestic shelves in China.

The order provides critical validation of YPB’s strategy of targeting high need, mass market verticals such as milk formula and it will demonstrate that the Connect solution can become an integral component for a very wide range of consumer products.

YPB Group CEO, John Houston, said : “The first Connect code application under our MSA with NATURE ONE DAIRY® is a significant milestone for YPB and shows that Connect can seamlessly integrate into existing supply chains and provide immediate benefit to our partners, plus consumers will be able to scan the product on Coles and Priceline shelves.

Further, this development leaves YPB well placed to grow with NOD and progress the implementation of our solution into the remaining SKUs and also their contract packaging base. Herein lies the value and the bigger opportunity that is at play.”

Ends.

Mr John Houston Chief Executive Officer YPB Group Ltd

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For further information please contact:

Investor enquiries

investors@ypbsystems.com

This announcement has been authorised by the Board of YPB Group Limited.

About YPB Group

YPB Group Limited (ASX:YPB) is an Australia-based product authentication and consumer engagement solutions provider. YPB's proprietary smartphone enabled technology suite allows consumers to confirm product authenticity and, for brands, that triggers consumers’ engagement.

The combination of YPB’s smartphone authentication solutions and its SaaS Connect platform, creates ‘smart’ product packaging, opening cost-effective, digital and direct marketing channels between brands and their consumers. Connect gathers actionable data on consumer preferences. It can then host tailored marketing campaigns directly back to the scanning smartphone.

YPB’s technology is also trusted by the world’s largest passport issuing nation to ensure the authenticity of its passports. YPB is currently focused on the rapidly growing Australian, South East Asian, and Chinese markets. Its focus is dairy, cannabis, alcohol and cosmetics where the viral growth of fake products, particularly in Asia, affects brand value and endangers consumers. To learn more please visit: www.ypbsystems.com

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