CODEIFAI LIMITED — M&A Activity 2015

Mar 15, 2015

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ASX: YPB

ASX/MEDIA ANNOUNCEMENT 16[th] March 2015

YPB Group signs binding LOI to acquire leading Security Consultancy Company

Highlights

• IPP acquisition brings enormous synergy to YPB

• Value accretive due to IPP’s existing revenue streams

• Acquisition can accelerate YPB’s drive into new revenue streams including passport security

The Board of Anti-counterfeiting technology Company YPB Group Limited (ASX: YPB) (YPB, the Company) is pleased to announce that it has entered into a binding Letter of Intent (LOI) to acquire leading security consultancy company, Intellectual Product Protection Group Limited (IPP Group).

IPP Group specialises in providing high security programs to governments, major brands and Fortune 500 companies. Its business is focused on the Asian region where many Fortune 500 companies have major manufacturing plants. The region is also a large source of counterfeit manufacturing. IPP Group is headquartered in Thailand and has offices in USA and Singapore.

Under the terms of the LOI, YPB proposes to acquire 100% of all the assets of IPP Group for a total consideration of up to US$500,000, comprising the following components;

• YPB fully paid ordinary shares to the value of US$300,000.00 escrowed for a period of 12 months, valued at the 30 day Value Weighted Average Price of YPB shares calculated from the date of execution of this LOI;.

• US$100,000.00 in cash at the closing of the transaction;

• US$100,000.00 in cash based on the IPP Group business achieving certain agreed milestones over the 12 month period immediately following the completion of the transaction.

Upon successful completion of the acquisition it is also proposed that IPP Group founder and President Tim Merchant will join the YPB board. Mr. Merchant has 30 years security industry experience, including with the US Government document security in passports and visas, and will bring substantial experience, capability and opportunity to YPB.

The acquisition of IPP Group is an ideal synergistic fit for YPB, which continues to expand the footprint of its anti-counterfeit technology to help governments, brands and consumers monitor and detect counterfeit goods and services, and minimise loss of earnings and damage from counterfeiting.

YPB will continue to pursue appropriate strategic acquisitions which compliment the Company’s business model to be a global leader in the provision of anti-counterfeit products and services.

YPB will benefit from IPP Group’s established networks in major Asian markets and will work with the IPP Group to integrate its team and service offerings into YPB’s portfolio of anti-counterfeit focused products and services.

IPP Group provides services and support across a number of areas including; planning and implementing brand protection programs, evaluations and recommendations of technology and methodology to protect intellectual property, audits of OEMs, contract manufacturers and other source suppliers, security designs and technical specifications for banknotes, ID and product packaging plus reverse engineering of technology.

IPP will bring specific expertise to YPB in the areas of anti-counterfeit technology used in passports and other government documents. It has current engagements with some of the worlds well known brands, and forensic service provision to brands.

The completion of the acquisition is subject to a due diligence period and successful completion of relevant documentation, which YPB aims to conclude by 30 April 2015.

YPB Executive Chairman and CEO Mr. John Houston said:

“We are delighted to enter in to this LOI to acquire the IPP Group business. IPP Group has an outstanding track record in providing security services and advice to governments and major brands and companies throughout Asia. Its depth of knowledge and expertise, and strong presence in the region, represents a compelling opportunity for YPB to strengthen its position at the forefront of the fight against counterfeit and illicit trade practices, and we look forward to successfully concluding the acquisition and welcoming Tim Merchant and the IPP Group team to YPB.”

For further information please contact;

Mr. John Houston Mr. Robert Whitton CEO Director and Company Secretary YPB Group Limited YPB Group Limited T: +61 458 401 088 T: +61418962212 E: john.houston@ypbsystems.com E: rob.whitton@ypbsystems.com

W: www.ypbsystems.com

Media and Investor Inquiries

Lead Manager

James Moses Greg Wood Media and Investor Relations Managing Director Mandate Corporate KS Capital T: +61 420 991 574 T: +61 416 076 377 E: james@manadatecorporate.com.au E: g.wood@kscapital.com.au

About YPB Group

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

YPB Group’s core products include;

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

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

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

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

About Intellectual Product Protection Group (IPP Group)

IPP Group is a security consulting company focused in the area of high security (government) and brand security. It has years of combined experience in designing security documents, security products and systems and provides governments, corporations and intellectual property owners with solutions for deterrence against fraud, simulations, counterfeits, and grey market and product diversions. IPP Group brings a totally unbiased perspective to its clients.

IPP has registered offices in the USA, Singapore, China and Thailand, and also has staff in the Philippines and Vietnam.

IPP focuses much of its service on the Asian region due to the fact that many Fortune 500 companies now outsource much of their manufacturing to the region. Services and support are offered in the following areas:

• Planning and implementing a brand protection programs

• Evaluation and recommendations of technology and methodology to protect intellectual property

• Audits of OEMs, contract manufacturers and other source suppliers

• Forensic laboratory examinations

• Product development

• Security designs and technical specifications for banknotes, ID and product packaging

• Independent and unbiased third party examinations of technology

• Reverse engineering of technology

• Evaluation of proposals and testing against technical specifications

• Creation and/or evaluation of requests for proposal

• Training on security ID for embassies, consulates, law enforcement agencies and banks

• Training on consumer brand security for brand owners, customs officials and law enforcement agencies