Lithex Resources Limited ACN 140 316 463

NOTICE OF ANNUAL GENERAL MEETING, EXPLANATORY STATEMENT, INDEPENDENT EXPERT’S REPORT AND PROXY FORM

Annual General Meeting to be held at Level 1, 330 Churchill Avenue, Subiaco, Western Australia on 25 November 2014 commencing at 2:30pm (WST).

The Independent Expert reporting on the Proposed Transaction concludes that the issue of Shares and Performance Shares pursuant to Resolution 4 is NOT FAIR, BUT REASONABLE to the non-associated Shareholders of the Company.

IMPORTANT NOTICE

Shareholders should read this Notice of Annual General Meeting and Explanatory Statement and the accompanying Independent Expert’s Report in full and if they have any questions, obtain professional advice before making any decisions in relation to the Resolutions to be put to Shareholders at the Annual General Meeting.

This Notice of Annual General Meeting and Explanatory Statement includes information and statements that are both historical and forward-looking. To the extent that any statements relate to future matters, Shareholders should consider that they are subject to risks and uncertainties. Those risks and uncertainties include factors and risks specific to the initial commercialisation of intellectual property as well as matters such as general economic conditions. Actual events or results may differ materially. None of the Company, its Existing Directors, the Proposed Directors, Mpire or their advisors can assure Shareholders that forecasts or implied results will be achieved.

Shareholders should refer to the Independent Expert’s Report contained inside this Notice.

CONTENTS ................................................................................................................ 2
CHAIRMAN’S LETTER............................................................................................... 3
EXPLANATORY STATEMENT ................................................................................ 14
1. INTRODUCTION ........................................................................................... 14
2. PROPOSED TRANSACTION ........................................................................ 15
3. ANNUAL GENERAL MEETING ..................................................................... 38
4. OTHER INFORMATION ................................................................................ 74
5. GLOSSARY ................................................................................................... 76
ANNEXURE A – LIVELYNK VENDOR AND EUGENI ‘ZHENYA’ TSVETNENKO –
RELEVANT INTERESTS AND VOTING POWER .................................................... 80
ANNEXURE B – PRO FORMA STATEMENT OF FINANCIAL POSITION .............. 81
ANNEXURE C – INDEPENDENT EXPERT’S REPORT .......................................... 83
ANNEXURE D – TERMS OF NEW OPTIONS ....................................................... 116
ANNEXURE E – AUDITED FINANCIAL STATEMENTS OF LIVELYNK ................ 118
ANNEXURE F – VALUATION OF NEW OPTIONS ................................................ 151
ANNEXURE G – VALUATION OF PERFORMANCE SHARES ............................. 152
ANNEXURE H – TERMS OF CLASS A AND CLASS B PERFORMANCE SHARES
............................................................................................................................... 153
ANNEXURE I – NOMINATION OF AUDITOR ........................................................ 159
ANNEXURE J – LIVELYNK EMPLOYEES ............................................................. 160
PROXY FORM ....................................................................................................... 161

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CHAIRMAN’S LETTER

Dear Fellow Shareholders,

As you would be aware, following an extended period of difficulty in generating value from our portfolio of exploration assets, we embarked upon a review of our mineral projects and future strategy at the beginning of 2014. This led to the decision to continue the rationalisation of our portfolio, and to seek other opportunities. The proposed acquisition of Livelynk Group Pty Ltd offers us the potential opportunity to realise future value upon the back of a growing business sector, ably led by professionals.

Contained within this document are the details of the Company’s proposed acquisition of Livelynk Group Pty Ltd ( Livelynk ), the owner of the Mpire Media business. The Company is seeking your approval to, amongst other things, consolidate the Company’s existing shares and options on issue on a 5 for 1 basis, acquire Livelynk through the issue of ordinary shares and performance shares, raise capital of up to $10,000,000 through the issue of up to 50,000,000 ordinary shares, and change the Company’s name to Tech Mpire Limited.

Mpire is an established business that provides online “performance-based marketing” technologies and services. Simply put, performance-based marketing offers advertisers the certainty of only paying for advertising that actually works.

Prior to the evolution of performance-based marketing, advertisers would pay to place advertisements online without being able to conclusively determine if these advertisements had led to any sales. With the introduction of performance-based marketing, advertisers can instead get access to real customers, who are genuinely interested in the advertisers’ products, and only pay an advertising fee when there is a sale.

Mpire has the skills, experience and backing of a huge network of affiliates, which enables it to take an advertiser’s product directly to the target audience and deliver results for the advertiser.

Mpire differentiates itself from other business in this space through its sales-tracking and attribution technology platform. This platform not only identifies which source generated a sale, it also provides return on investment focused real-time sales modeling to help advertisers optimise their sales flow and measure user retention.

Advertisers see huge commercial value in performance-based marketing given it reduces their media spend risk, which has led to performance-based marketing now representing 66% of total US online advertising spend.

The future for performance-based advertising businesses is strong, with the online advertising market predicted to grow from US$110 billion in 2013 to US$175 billion in 2017. This potential level of market growth, together with Mpire’s intention to commercialise its custom built software and deliver it as a SaaS product (software as a service) is what attracted Lithex to Mpire.

I recommend all shareholders carefully read this notice of meeting, and I look forward to seeing you at the Annual General Meeting.

Yours faithfully

Jason Peterson Chairman

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NOTICE OF ANNUAL GENERAL MEETING

Notice is given that an Annual General Meeting of Shareholders of Lithex Resources Limited ( Company ) will be held at Level 1, 330 Churchill Avenue, Subiaco, Western Australia on 25 November 2014, commencing at 2:30pm (WST).

The Explanatory Statement that accompanies and forms part of this Notice of Annual General Meeting describes in more detail the matters to be considered.

Business

1. Resolution 1 – Repeal of existing Constitution and adoption of new Constitution for Lithex Resources Limited

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as a special resolution :

“That, for the purposes of sections 136(1)(b) and 136(2) of the Corporations Act 2001 (Cth), and for all other purposes, the company repeal its current Constitution and the constitution comprising the document tabled at the meeting and signed by the Chairman of the meeting for the purposes of identification, be approved and adopted as the constitution of the Company effective from the date of the meeting in substitution for and to the exclusion of the existing constitution which is repealed in its entirety.”

2. Resolution 2 – Capital Consolidation

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, subject to Resolutions 3 to 11 (inclusive) being passed, in accordance with section 254H of the Corporations Act, and for all other purposes, approval be given for the Company to consolidate its existing securities on a 1 for 5 basis, with any fractional entitlements being rounded down, as set out in the Explanatory Statement.”

3. Resolution 3 – Change in nature and scale of activities of the Company

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, subject to Resolutions 2 and 4 to 11 (inclusive) being passed, in accordance with Listing Rule 11.1.2, and for all other purposes, approval is given for the Company to make a significant change to the nature and scale of its activities as set out in the Explanatory Statement.”

4. Resolution 4 – Issue of Securities – Vendor Consideration and Participation in Capital Raising

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution :

“That, subject to Resolutions 1 to 3 (inclusive) and 5 to 11 (inclusive) being passed, in accordance with item 7 of section 611 and section 208 of the Corporations Act, and in accordance with Listing Rule 7.1 and for all other purposes, approval be given:

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(a) for the issue of the following Consideration Shares to the Livelynk Vendor in consideration for all the shares in the capital of Livelynk pursuant to the Agreement:
(i) 23,500,000 Shares at a deemed issue price of $0.20 each;
(ii) 23,100,000 Class A Performance Shares;
(iii) 15,400,000 Class B Performance Shares;
(iv) up to 23,100,000 Shares upon the vesting of the Class A Performance Shares; and
(v) up to 15,400,000 Shares upon the vesting of the Class B Performance Shares;
(b) for the issue of up to 2,501,558 Shares to the Livelynk Vendor as part of the Capital Raising for a deemed issue price of $0.20 per Share as part repayment to the Livelynk Vendor of loans provided by the Livelynk Vendor to Mpire and for the further cash repayment by the Company to the Livelynk Vendor of the remainder of those loans up to a value of $1,500,311.50,

(all on a post-Capital Consolidation basis) including approval for the Livelynk Vendor, Mr Eugeni ‘Zhenya’ Tsvetnenko and their respective associates to acquire a Voting Power in the Company of up to 41.13% on the terms and conditions set out in the Explanatory Statement.”

Independent Expert’s Report

Shareholders should carefully consider the Independent Expert’s Report prepared by Stantons for the purposes of Shareholder approval required under section 611 (item 7) of the Corporations Act for this Resolution. The Independent Expert’s Report comments on the fairness and reasonableness of the issues under Resolution 4 to the non-associated Shareholders. The Independent Expert has determined that those issues are not fair but reasonable to the non-associated Shareholders.

5. Resolution 5 – Issue of Performance Shares to Proposed Directors - Mr Luke Taylor and Mr Jeff Botnick

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution :

“That, subject to Resolutions 1 to 4 (inclusive) and 6 to 11 (inclusive) being passed, subject to the completion of the Proposed Transaction in accordance with Listing Rule 7.1 and section 208 of the Corporations Act, and for all other purposes, approval be given:

(a) for the issue of 10,800,000 Class A Performance Shares and 7,200,000 Class B Performance Shares to Mr Luke Taylor (and/or his nominees), on the terms and conditions set out in the Explanatory Statement; and
(b) for the issue of 5,400,000 Class A Performance Shares and 3,600,000 Class B Performance Shares to Mr Jeff Botnick, on the terms and conditions set out in the Explanatory Statement,

(all on a post-Capital Consolidation basis).”

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6. Resolution 6 – Issue of Performance Shares to Livelynk Employees

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“ That, subject to Resolutions 1 to 5 (inclusive) and 7 to 11 (inclusive) being passed, subject to the completion of the Proposed Transaction in accordance with Listing Rule 7.1, and for all other purposes, approval be given for the issue of 945,000 Class A Performance Shares and 630,000 Class B Performance Shares to non-director employees of Livelynk on the terms and conditions set out in the Explanatory Statement (all on a post-Capital Consolidation basis) .”

7. Resolution 7 – Issue of Shares pursuant to the Capital Raising

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, subject to Resolutions 2 to 6 and 8 to 11 (inclusive) being passed, in accordance with Listing Rule 7.1, and for all other purposes, approval be given for the issue (on a post-Capital Consolidation basis) of up to 50,000,000 Shares at an issue price of $0.20 each to raise a minimum of $7,000,000 and up to a maximum of $10,000,000 under the Prospectus, on the terms and conditions set out in the Explanatory Statement.”

8. Resolution 8 – Change of Company name

To consider and if thought fit, to pass, with or without amendment, the following Resolution as a special resolution :

“That, subject to Resolutions 2 to 7 and 9 to 11 (inclusive) being passed, in accordance with section 157(1) of the Corporations Act, and for all other purposes, the Company change its name from “Lithex Resources Limited” to “Tech Mpire Limited”.”

9. Resolution 9 – Issue of New Options and Shares to Trident Capital for Introduction Fee

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, subject to Resolutions 2 to 8 and 10 and 11 (inclusive) being passed, subject to the completion of the Proposed Transaction in accordance with Listing Rule 7.1, and for all other purposes, approval be given:
(a) for the issue of up to 6,000,000 New Options to Trident Capital (and/or their nominees); and
(b) for the issue of up to 2,000,000 Shares to Trident Capital (and/or their nominees) at a deemed issue price of $0.20 each,

all on a post-Capital Consolidation basis, in payment of the introduction fee in connection with the Proposed Transaction, on the terms and conditions set out in the Explanatory Statement.”

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10. Resolution 10 – Issue of Shares to Niche Export Agency for introduction fee

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, subject to Resolutions 2 to 9 and 11 (inclusive) being passed, subject to the completion of the Proposed Transaction in accordance with Listing Rule 7.1, and for all other purposes, approval be given for the issue (on a postCapital Consolidation basis) of up to 625,000 Shares to Niche Export Agency (and/or their nominees) at a deemed issue price of $0.20 each in payment of the introduction fee in connection with the Proposed Transaction, on the terms and conditions set out in the Explanatory Statement.”

11. Resolution 11 – Issue of Shares to CPS Capital for Introduction Fee

To consider and, if thought fit, to pass the following Resolution as an ordinary resolution :

“That, subject to Resolutions 2 to 10 (inclusive) being passed, subject to the completion of the Proposed Transaction in accordance with Listing Rule 10.11 and section 208 of the Corporations Act, and for all other purposes, approval be given to the issue (on a post-Capital Consolidation basis) of 1,500,000 Shares at a deemed issue price of $0.20 each to CPS Capital (and/or its nominees) in payment of the introduction fee in connection with the Proposed Transaction, on the terms and conditions set out in the Explanatory Statement.”

12. Resolution 12 – Non-Executive Directors’ Remuneration

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, in accordance with Listing Rule 10.17 and Rule 6.5 of the Constitution, the maximum aggregate amount of remuneration that may be paid to the Company’s non-executive directors in any financial year be set at $250,000 to be paid in accordance with the terms and conditions set out in the Explanatory Statement.”

13. Resolution 13 – Ratification and Approval of Past Placement to Sophisticated Investors

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, in accordance with Listing Rule 7.4, and for all other purposes, the Shareholders hereby approve and ratify the issue of 14,152,950 Shares to sophisticated investors at an issue price of $0.02 (2 cents) each on 17 July 2014 to raise a total of $283,059.”

Annual Report for year ended 30 June 2014

To receive and consider the Annual Report of the Company for the year ended 30 June 2014 which includes the Financial Report of the Company, the declaration of the Directors, the Director’s Report, the Remuneration Report and the Auditor’s Report.

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14. Resolution 14 – Adoption of Remuneration Report

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, in accordance with section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s annual financial report for the financial year ended 30 June 2014.”

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

15. Resolution 15 – Approval of Auditor Appointment

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, in accordance with section 327B of the Corporations Act and for all other purposes, Ernst & Young having been nominated by a Shareholder and having consented in writing to act in the capacity of auditor, be appointed as auditor of the Company with immediate effect.”

16. Resolution 16 – Spill Resolution

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, in accordance with section 250V(1) of the Corporations Act and for all other purposes, approval is given for:
(a) the Company to hold another meeting of Shareholders within 90 days of the date of this Meeting (Spill Meeting);
(b) all Vacating Directors to cease to hold office immediately before the end of the Spill Meeting; and
(c) resolutions to appoint persons to offices that will be vacated pursuant to (b) to be put to vote at the Spill Meeting.”

Note: If less than 25% of the votes cast on Resolution 14 are voted against the adoption of the Remuneration Report, the Chair will withdraw this Resolution 16.

17. Resolution 17 – Election of Mr Jack James as a Director

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, in accordance with clause 6.2 of the Constitution, ASX Listing Rule 14.4 and for all other purposes, Mr Jack James, who was appointed as a Director on 12 December 2013 and in accordance with the Constitution holds office until this Annual General Meeting and who is eligible and offers himself for reelection, be re-elected as a Director.”

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18. Resolution 18 – Election of Mr Giuseppe Graziano as a Director

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, in accordance with clause 6.2 of the Constitution, ASX Listing Rule 14.4 and for all other purposes, Mr Giuseppe Graziano, who was appointed as a Director on 5 December 2013 and in accordance with the Constitution holds office until this Annual General Meeting and who is eligible and offers himself for re-election, be re-elected as a Director.”

19. Resolution 19 – Election of Mr Jason Peterson as a Director

To consider and, if thought fit, to pass, with or without amendment, the following Resolution as an ordinary resolution :

“That, in accordance with clause 6.2 of the Constitution, ASX Listing Rule 14.4 and for all other purposes, Mr Jason Peterson, who was appointed as a Director on 5 December 2013 and in accordance with the Constitution holds office until this Annual General Meeting and who is eligible and offers himself for re-election, be re-elected as a Director.”

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Voting Exclusion Statement

The following voting exclusion statement applies to the Resolutions under the Listing Rules or where applicable, the provisions of the Corporations Act in relation to the following persons ( Excluded Persons ). The Company will disregard any votes on the following Resolutions cast by the following Excluded Persons:

No.	Title	Excluded Persons
3	Change in nature and scale of activities of the Company	Any person who may obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed, and any associate of that person.
4	Issue of Securities – Vendor Consideration and Participation in Capital Raising	The Livelynk Vendor and its associates. Mr Eugeni ‘Zhenya’ Tsvetnenko and his associates.
5	Issue of Performance Shares to Mr Taylor and Mr Botnick	Mr Taylor and any of his nominees, and any of their associates. Mr Botnick and any of his associates.
6	Issue of Performance Shares to Livelynk Employees	The Livelynk Employees and any of their nominees, and any of their associates. Any person who may obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed, and any associate of that person.
7	Issue of Shares pursuant to the Capital Raising	Any person who may participate in the proposed issue and a person who may obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed, and any associate of that person.
9	Issue of New Options and Shares to Trident Capital for Introduction Fee	Trident Capital and/or any of its nominees, and any of their associates. Any person who may obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed, and any associate of that person.
10	Issue of Shares to Niche Export Agency for Introduction fee	Niche Export Agency and/or any of its nominees, and any of their associates. Any person who may obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed, and any associate of that person.
11	Issue of Shares to CPS Capital for introduction fee	CPS Capital Group and/or any of its nominees, and any of their associates. MrJason Petersonand/or hisnominee, and

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		any of their associates.
12	Non-Executive Directors’ Remuneration	Any of the Directors and any of their associates.
13	Ratification and approval of past placement to sophisticated investors	Any person who participated in the issue and any associates of that person.
14	Adoption of Remuneration Report	A vote on this Resolution must not be cast (in any capacity) by or on behalf of either of the following persons: (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or (b) a Closely Related Party of such a member.
16	Spill Resolution	A vote on this Resolution must not be cast (in any capacity) by or on behalf of either of the following persons: (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or (b) a Closely Related Party of such a member.

Please note, the Company need not disregard a vote if:

(a) it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
(b) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Also, a person (the voter ) described above may cast a vote on Resolutions 14 and 16 as a proxy if the vote is not cast on behalf of a person described above and either:

(a) the voter is appointed as a proxy by writing that specifies the way the proxy is to vote on Resolutions 14 and 16; or
(b) the voter is the Chairman and the appointment of the Chairman as proxy:
(i) does not specify the way the proxy is to vote on Resolutions 14 and 16; and
(ii) expressly authorises the Chairman to exercise the proxy even though Resolutions 14 and 16 are connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on Resolutions 5, 6, 11 or 12 if:

(a) the proxy is either:
(i) a member of the Key Management Personnel; or

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(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on the relevant Resolution.

However, the above prohibition does not apply if:

(a) the proxy is the Chair; and
(b) the appointment expressly authorises the Chair to exercise the proxy even though this relevant Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Explanatory Statement

The accompanying Explanatory Statement forms part of this Notice of Annual General Meeting and should be read in conjunction with it.

Resolutions 2 to 11 (inclusive) are inter-conditional and accordingly, should be considered collectively as well as individually. Unless all Resolutions 2 to 11 (inclusive) are passed, it will be deemed that none of Resolutions 2 to 11 (inclusive) are passed.

Shareholders are specifically referred to the Glossary in the Explanatory Statement which contains definitions of capitalised terms used in this Notice of Annual General Meeting and the Explanatory Statement.

Proxies

Please note that:

(a) a Shareholder entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy;
(b) a proxy need not be a member of the Company;
(c) a Shareholder may appoint a body corporate or an individual as its proxy;
(d) a body corporate appointed as a Shareholder’s proxy may appoint an individual as its representative to exercise any of the powers that the body may exercise as the Shareholder’s proxy; and
(e) Shareholders entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed proxy form provides further details on appointing proxies and lodging Proxy Forms. If a Shareholder appoints a body corporate as its proxy and the body corporate wishes to appoint an individual as its representative, the body corporate should provide that person with a certificate or letter executed in accordance with the Corporations Act authorising him or her to act as that company’s representative. The authority may be sent to the Company or its share registry in advance of the Annual General Meeting or handed in at the Annual General Meeting when registering as a corporate representative.

Voting entitlements

In accordance with Regulations 7.11.37 and 7.11.38 of the Corporations Regulations 2001 (Cth), the Board has determined that a person’s entitlement to vote at the Annual General Meeting will be the entitlement of that person set out in the register of Shareholders as at 4.00pm (WST) on 24 November 2014. Accordingly, transactions registered after that time will be disregarded in determining Shareholders’ entitlement to attend and vote at the Annual General Meeting.

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By order of the board of Directors

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………………………………………… Jason Peterson Director Lithex Resources Limited 6 October 2014

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EXPLANATORY STATEMENT

Important

Shareholders should read this Explanatory Statement and the accompanying Independent Expert’s Report in full and if they have any questions, obtain professional advice before making any decisions in relation to the Resolutions to be put to Shareholders at the Meeting.

This Explanatory Statement includes information and statements that are both historical and forward-looking. To the extent that any statements relate to future matters, Shareholders should consider that they are subject to risks and uncertainties. Those risks and uncertainties include factors and risks specific to the commercialisation of intellectual property as well as matters such as general economic conditions. Actual events or results may differ materially. None of the Company, its Existing Directors, the Proposed Directors or their advisers can assure Shareholders that forecasts or implied results will be achieved.

1. INTRODUCTION

This Explanatory Statement has been prepared for the information of Shareholders of Lithex Resources Limited in connection with Resolutions 1 to 19 to be considered at the Annual General Meeting to be held at Level 1, 330 Churchill Avenue, Subiaco, Western Australia on 25 November 2014 at 2:30pm (WST).

The purpose of this Explanatory Statement is to provide Shareholders with all information known to the Company which is material to a decision on how to vote on the Resolutions in the accompanying Notice of Annual General Meeting.

This Explanatory Statement should be read in conjunction with the Notice of Annual General Meeting.

References to “$”, “AUD”, “dollars” and “cents” in this Explanatory Statement are references to Australian currency unless otherwise stated.

References to “US$”, “USD” in this Explanatory Statement are references to the currency of the United States of America unless otherwise stated.

References to time in this Explanatory Statement relate to the time in Perth, Western Australia.

Capitalised terms which are not otherwise defined in this Explanatory Statement have the meanings given to those terms in the Glossary at section 5 of this Explanatory Statement.

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2. PROPOSED TRANSACTION

2.1 Background

The Company is an Australian mining company targeting the identification, exploration and development of graphite-rich provinces in Australia.

In light of difficult market conditions in the mining and exploration sector, the Company has been evaluating high quality and value adding investment opportunities outside the commodities industry to take advantage of global market trends and maximise Shareholder value.

As announced to ASX on 10 July 2014, the Company entered into a binding heads of agreement with Livelynk and Zhenya Holdings, under which the Company proposes to acquire 100% of all rights and title in all the issued capital of Livelynk. Livelynk is the operator of Mpire Media Group, an established performance-based online and mobile marketing solutions provider – as summarised in section 2.2.

On 17 July 2014, the Company announced that it had completed a placement to sophisticated investors to raise $283,059 by issuing Shares at $0.02 each. These funds have been and continue to be applied towards the costs associated with completing the Proposed Transaction.

On 5 August 2014 the Company announced a fully underwritten non-renounceable rights issue involving the issue of 27,126,491 new Shares at $0.02 to raise $542,530. The offer was closed on 10 September 2014 with valid acceptances received for 9,826,426 new shares. The shortfall of 17,300,046 new Shares placed by the underwriter, pursuant to the underwriting agreement, were issued on 9 October 2014.

On 30 September 2014, the Company announced that it had entered into a Share Sale and Purchase Agreement with the Livelynk Vendor ( Share Sale and Purchase Agreement ) to purchase 100% of all rights and title in all issued capital of Livelynk ( Proposed Transaction ).

Under the Proposed Transaction, and subject to Shareholders approving Resolutions 2 to 11 (inclusive), the Company will, among other things set out in those Resolutions:

consolidate its capital on a 1 for 5 basis;
issue 23,500,000 Shares and 23,100,000 Class A Performance Shares and 15,400,000 Class B Performance Shares (all on a post-Capital Consolidation basis) to the Livelynk Vendor in consideration of 100% of the issued capital of Livelynk;
undertake a capital raising seeking to raise not less than $7,000,000 and up to $10,000,000 under a Prospectus (see section 2.20 for the proposed use of these funds);
change its name to “Tech Mpire Limited”; and
restructure its Board, with Mr Peterson, Mr Graziano and Mr James stepping down as Directors, and Mr Taylor, Mr Botnick, Mr Tsvetnenko and Mr Belben to join the Board, following completion of the Proposed Transaction.

As a result of the Proposed Transaction, the Company will change its nature from a mining and mineral exploration company to an internet services company. In

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addition, the scale of the Company’s share capital base will significantly increase as a result of the Capital Raising and the issue of the Consideration Shares. Accordingly, ASX requires the Company to re-comply with Chapters 1 and 2 of the Listing Rules in order to complete the Proposed Transaction.

2.2 Agreements relating to the Proposed Transaction

Set out below are summaries of the key agreements entered into by the Company or other parties, which relate to or affect the Proposed Transaction.

Heads of Agreement

The Company, Livelynk and the Livelynk Vendor entered into the binding Heads of Agreement on 9 July 2014.

The key terms of the Heads of Agreement include the following:

(a) The total purchase price payable to the Livelynk Vendor is 23,500,000 Shares and 23,100,000 Class A Performance Shares and 15,400,000 Class B Performance Shares on a post-Capital Consolidation basis. The Consideration Shares will be subject to any escrow requirements of ASX.
(b) Completion is subject to the following conditions precedent:
(i) both parties being satisfied with their due diligence investigations of the other;
(ii) the Company obtaining all necessary shareholder approvals under the Corporations Act and the ASX Listing Rules in relation to the Acquisition, including (but not limited to) approvals required for the following:
- (A) re-compliance with the admission and quotation requirements of ASX and issue of shares under the Capital Raising;
- (B) change to the Company’s activities;
- (C) a consolidation of the Company’s existing capital and change of name;
- (D) issue of the Consideration Shares to the Livelynk Vendor; and
- (E) issue of the Performance Shares to the Livelynk Vendor and senior management;
(iii) the Company raising a minimum of $3,500,000 and up to a maximum of $5,000,000 at $0.20 per share under a capital raising prospectus; and
(iv) the Company receiving conditional approval from ASX to have its securities re-instated to trading on the ASX on terms acceptable to both the Company and the Livelynk Vendor.

Share Sale and Purchase Agreement

The Company and the Livelynk Vendor entered into the Sale and Purchase Agreement on 30 September 2014. Subject to various conditions, the Company has

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agreed to purchase 100% of the ordinary shares in Livelynk, and the Livelynk Vendor agreed to sell all of its ordinary shares in Livelynk to the Company.

Completion of the sale and purchase of 100% of the ordinary shares in Livelynk pursuant to the Share Sale and Purchase Agreement is due to occur 5 business days following the satisfaction or waiver of the latest condition to be satisfied or waived or such other date as may be agreed between the Company and the Livelynk Vendor. The conditions to be satisfied or waived are:

(a) The Company obtaining all required regulatory and Shareholder approvals.
(b) The Company completing the capital raising to raise not less than $7,000,000 and up to $10,000,000 as contemplated by Resolution 7.
(c) As the Company is required by ASX to re-comply with Chapters 1 and 2 of the Listing Rules, ASX providing the Company with a list of conditions reasonably acceptable to the Livelynk Vendor and the Company which, when satisfied, will result in ASX reinstating the Shares to quotation on ASX.
(d) The Company completing the Capital Consolidation as contemplated by Resolution 2.

The Company must use all reasonable endeavours to procure the satisfaction of the conditions (a), (b), (c) and (d) above. The Livelynk Vendor must use all reasonable endeavours to procure the satisfaction of condition (a) above.

The Share Sale and Purchase Agreement may be terminated in the following circumstances:

(a) By any party upon 2 business days’ notice where a condition has not been satisfied or waived, or where the other party has given notice that a condition cannot be satisfied, by 31 January 2015 (or such later date as agreed by the Livelynk Vendor and the Company) and the terminating party complied with its obligations to use all reasonable endeavours to procure the satisfaction of certain conditions (as specified above).
(b) By any party prior to completion of the agreement, in circumstances where the other party fails to comply with its material obligations under the agreement, or commits a material breach of its warranties prior to completion under the agreement, and the breach is not remedied within 10 business days or the non-defaulting party’s notice of the breach being given to the defaulting party.

At completion of the Share Sale and Purchase Agreement, the Company has agreed (subject to the passing of the Resolutions 2 to 11 (inclusive) by Shareholders) to issue Shares to the Livelynk Vendor, Trident Capital, Niche Export Agency and CPS Capital in accordance with Resolutions 4, 9, 10 and 11. The Company has also agreed (subject to the passing of the Resolutions by Shareholders) to issue Options to Trident Capital in accordance with Resolution 9 and Performance Shares to the Livelynk Vendor, Mr Taylor, Mr Botnick and Livelynk Employees in accordance with Resolutions 4, 5 and 6.

The Company and the Livelynk Vendor have agreed that at completion of the Proposed Transaction:

(a) $130,431.50 of a $630,743 amount loaned by the Livelynk Vendor to Mpire prior to 31 May 2014 ( Historical Loan ) will be converted into Capital Raising Shares in the Company at a deemed issue price of $0.20 each (on a post-

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Capital Consolidation basis) with the balance of the Historical Loan being repayable in cash in the event the Company starts to generate positive cash flows from its operating and investing activities following its acquisition of Livelynk (although no representation or forecast is given as to whether that will ever occur);

(b) a $369,880 amount ( Investment Loan ) loaned by the Livelynk Vendor to Livelynk to enable Livelynk to purchase all of the shares of Maroon Tech Limited, which conducts part of the business which the Company proposes to acquire pursuant to the Proposed Transaction ( Maroon Tech ), will be converted into Capital Raising Shares in the Company at a deemed issue price of $0.20 each (on a post-Capital Consolidation basis); and
(c) an amount of up to $1,000,000 loaned or to be loaned by the Livelynk Vendor to Mpire to provide working capital funding during the period from 1 June 2014 to completion of the Proposed Transaction ( Working Capital Loan ) will be repaid in full by the Company in cash from the Capital Raising,

which are all the subject of Resolution 4.

The Share Sale and Purchase Agreement contains additional provisions, including warranties and indemnities in respect of the status of Livelynk and Livelynk’s existing wholly owned subsidiaries, Mpire Media, Mpire Network, Maroon Tech (the latter of which Livelynk will have acquired by completion of the Proposed Transaction, if that occurs) and the Company, which are considered standard for agreements of this kind.

Loan Agreement

On 9 July 2014 the Company and Livelynk entered into the Loan Agreement under which the Company agreed to make available up to $1,200,000 to Livelynk under a loan facility.

The key terms of the agreement are as follows:

(a) Advancement of the loan moneys to Livelynk are contingent upon:
(i) the Company registering its security interest over the assets of Livelynk;
(ii) the completion of a rights issue to the Company’s Shareholders to raise up to approximately $542,000 (before costs) at $0.02 per share on a pre-consolidation basis ( Rights Issue ); and
(iii) the completion of a placement to new sophisticated investors to raise up to $283,000 (before costs),

which conditions have all been satisfied.

(b) The proceeds of the loan may only be applied to:
(i) meeting the ongoing working capital requirements of Livelynk; and
(ii) repaying any loan amounts received by Livelynk by any other lender in contemplation of the provision of the loan facility.
(c) Interest is repayable on the loan at 7% per annum.

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(d) The loan must be repaid by the earlier of:
(i) 31 March 2015; and
(ii) in the event of a default under the Loan Agreement by Livelynk and at the subsequent direction of the Company.

The Loan Agreement is otherwise on standards terms.

Deed of Variation

On 5 August 2014, the Company agreed to partially waive the condition precedent requiring the successful completion of the Rights Issue and allow Livelynk to drawdown up to $600,000 under the Loan Agreement.

Share Sale Agreement – Maroon Tech

Livelynk entered into a Share Sale Agreement with Alcubierre Holdings Pty Ltd ( Alcubierre ) on 15 September 2014 pursuant to which Livelynk has agreed to purchase and Alcubierre has agreed to sell the sole share on issue in Maroon Tech to Livelynk.

The consideration for that sale is $369,880, which Livelynk borrowed from the Livelynk Vendor pursuant to the Investment Loan.

Mr Eugeni ‘Zhenya’ Tsvetnenko is the sole shareholder and sole director of the Livelynk Vendor, which is the sole shareholder of Livelynk and he controls Lydian Enterprises Pty Ltd which also ultimately owns and controls Alcubierre.

Completion of the sale and purchase of the sole ordinary share in Maroon Tech pursuant to the Share Sale Agreement is due to occur 5 business days following the satisfaction or waiver of the latest condition to be satisfied or such other date as may be agreed between Livelynk and Alcubierre. The last condition to be satisfied is the Share Sale and Purchase Agreement between the Company and the Livelynk Vendor, being declared free of all conditions either by the satisfaction or waiver of the conditions to the Share Sale and Purchase Agreement by no later than 5.00pm (WST) on 31 January 2015 or such later date as agreed by Livelynk and Alcubierre in writing.

Letter of Engagement – Lead Manager

The Company has appointed Shaw ICS Advisory Pty Ltd ( Shaw ), pursuant to a Letter of Engagement, as the Lead Manager (broker and bookrunner) to the Capital Raising. The Letter of Engagement is conditional on completion of the Proposed Transaction and Livelynk is also a party to the Letter of Engagement.

The Company agreed to pay the following fees to Shaw pursuant to the Letter of Engagement:

(a) an offer management fee of 2% of the gross amount to be raised from any source under the Capital Raising; and
(b) a selling fee of 3% of the gross amount to be raised from any source under the Capital Raising.

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The Company also agreed to pay certain expenses of Shaw and provided warranties and indemnities in favour of Shaw, which also has the discretion to terminate the Letter of Engagement.

2.3 Existing activities

Following an extended period of difficulty in generating value from the Company’s portfolio of exploration assets, the Board embarked upon a review of the Company’s mineral projects and future strategy at the beginning of 2014. This led to the decision to continue the rationalisation of the Company’s portfolio, and to seek other opportunities.

The Existing Directors and Proposed Directors have not made a decision as how the Company’s remaining mineral exploration assets will be treated, in the event that Resolutions 2 to 11 (inclusive) are approved at the Annual General Meeting and if the events the subject of those Resolutions occur and the Proposed Transaction is completed (which may or may not occur).

The Company may seek to sell or otherwise dispose of the Company’s remaining mineral exploration assets, but no decision has yet been made to that effect and no prospective buyer or terms of sale or other disposal have been ascertained.

2.4 Overview of Livelynk’s group

Livelynk is the operator of the Mpire Media Group ( Mpire ). Mpire consists of Livelynk, Mpire Media and Mpire Network and upon completion of the Proposed Transaction (if that occurs) Mpire will also consist of Maroon Tech (refer to the summary of the Share Sale Agreement – Maroon Tech in section 2.2). Set out below is an overview of the corporate structure proposed upon completion of the Proposed Transaction:

==> picture [466 x 188] intentionally omitted <==

----- Start of picture text -----

Tech Mpire Limited
Proposed new name for
Lithex Resources Ltd
Livelynk Group Pty Ltd
(Australian Private Co.)
Mpire Media Pty Ltd Mpire Network Inc Maroon Tech Ltd
(Australian Private Co.) (Canadian Private Co.) (Irish Private Co.)
----- End of picture text -----

2.5 Overview of Mpire

Mpire, with its head office based in Perth, Australia, is an established digital performance-based marketing group with a reach to over 180 countries.

Please refer to Annexure E for recent audited consolidated financial statements of Livelynk.

Mpire provides advertisers (its customers), with simple, effective and scalable performance-based marketing solutions, to reach consumers across multiple digital

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channels. Mpire holds strong relationships with key affiliates that funnel consumers through its network. Mpire's affiliate partners benefit from a monetisation solution that meets both advertiser demand and the consumers “any device, anywhere, at any time” consumption.

Mpire typically charges a customer only when actual pre-defined results are achieved such as a service or product sale, software and mobile app installations, customer acquisitions, or other measurable goal. This performance-based business model reduces the media spend risk for Mpire’s clients and enables them to gain consumer acquisitions on a true win-win basis.

Simply put, performance-based marketing gives advertisers the certainty of only paying for advertising that gets the desired results.

Mpire Media was born from the group of companies controlled by successful entrepreneur, Zhenya Tsvetnenko ( Zhenya Group ). Mpire Media’s past performance, albeit as a bootstrapped service entity (providing services exclusively to the Zhenya Group), provides assurance that its performance-based business model has worked in the past.

Today, Mpire has more than 200 customers which it provides services to in more than 180 countries, an experienced team of approximately 20 employees worldwide, and offices in Australia (Perth), Ireland (Dublin) and Canada (Toronto).

Mpire Media was originally incorporated under the name Livelynk Pty Ltd in July 2007, later changing to Lavish Channel Pty Ltd in 2008, and finally to Mpire Media in 2009. It formed part of the Zhenya Group since incorporation and up until December 2009, it operated in the marketing industry as a digital out-of-home advertising operator, broadcasting a bespoke media channel to its national digital signage network.

Once rebranded as Mpire Media, the company’s principal activity was providing online performance-based marketing services to the Zhenya Group which was heavily involved in selling mobile products and services, to Australia, New Zealand, the United Kingdom, Canada and the United States.

Starting with an advertising spend of only $200 per month in 2006, Zhenya Tsvetnenko used performance-based marketing to grow his business to $2 million monthly advertising spend and $10 million monthly retail revenue within 18 months, with no external investment.

Mpire Media initially adopted the performance-based marketing model which had been successfully applied by Zhenya Tsvetnenko for a number of years. Under this performance-based model, the Zhenya Group had only paid for advertising that a consumer clicked on.

Mpire Media enhanced this business model in two critical areas:

(a) it expanded the consumer reach of the Zhenya Group’s products by growing a network of affiliate partners; and
(b) it strengthened the performance targets so that advertising costs were only paid when a consumer subscribed to a product or service.

The introduction of these changes meant that the Zhenya Group’s products reached a much wider consumer audience, and greatly reduced its media spend risk because it was only paying Mpire Media for advertising if an actual conversion or purchase

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occurred, as opposed to paying simply for consumer interest that may not have resulted in a purchase.

Given that Mpire Media’s revenue and cost of sales was dependent on the achievement of successful results, it was crucial for Mpire Media to be able to accurately track the outcomes associated with each advertising campaign, from both a revenue and a cost perspective. Mpire Media initially made use of tracking software developed by external software providers, but found that the software didn’t provide the level of accuracy required or contain all the features it deemed necessary to accurately measure the return on its investment (i.e. the amount it paid to its affiliates). This led to the development of a proprietary attribution tracking software platform by Mpire Media’s in-house software development team.

When the US premium messaging services market in which the Zhenya Group operated started to decline in the second half of the 2013 financial year, the Zhenya Group decided to enter the European market. Maroon Tech was incorporated in Ireland in January 2013 and by June 2013, had set up an office and established a small marketing team.

Maroon Tech has adopted the proven performance-based business model developed by Mpire Media and a revised and improved “network” focused attribution tracking platform, nxus, was developed specifically for this new business. During the 2014 financial year, the advertising services for the Zhenya Group moved from Mpire Media to Maroon Tech.

Towards the end of the 2014 financial year, on the back of positive growth by the Maroon Tech business, it was decided to pursue avenues which would allow for the spin out of Mpire from the Zhenya Group to enable it to capitalise on these additional commercial opportunities and to further grow its client base outside of the Zhenya Group.

In March 2014, Mpire Network was incorporated to strategically target the North American market. As with Maroon Tech, Mpire Network has adopted the performance-based marketing model developed by Mpire Media and also uses nxus to manage and optimise its customers digital marketing campaigns.

Mpire has spent the last 5 years building its own affiliate network, and has developed strong relationships with key affiliates across the many sectors in which it operates. Over the course of 2014, it has had over 300 active affiliate partners who have sent more than 200 million consumers through its network.

Through Maroon Tech, Mpire targets the high growth, mobile marketing channel, while Mpire Network targets other key sectors such as finance, insurance, health and wellness, retail and leisure and gaming.

Mpire provides simple, effective and scalable performance-based marketing solutions to more than 200 customers to enable them to reach consumers across multiple digital channels in over 180 countries.

2.6 Overview of Performance-Based Marketing

The future for performance-based advertising businesses is very strong, with the online advertising market predicted to grow from US$110 billion in 2013 to US$175 billion in 2017.

Digital performance-based marketing represents part but not all of the online advertising and commerce chain. It differs from the traditional online display

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advertising, as the advertiser only incurs an advertising cost when a predefined “conversion” is achieved, such as a service or product sale, software and mobile app installations, customer acquisitions, or other measurable goal.

Simply put, in a performance-based marketing model, a customer is only charged an advertising fee when actual, pre-defined results are achieved.

"Performance" refers to the pricing model, which typically includes:

cost-per-click ( CPC ) - only pay for clicks on a banner or text ad;
cost-per-acquisition / action ( CPA ) - only pay for a "goal" typically a lead or a sale;
cost-per-install ( CPI ) - only pay per install of a mobile application.
cost-per-sale ( CPS ) - only pay for a sale as a percentage of the retail price;

This pricing model is in contrast to the traditional online advertising model of cost-permille ( CPM ), being the cost per 1000 views of the advert, which provides the lowest return on investment for the advertiser and typically only achieves consumer awareness. The advertiser will pay for the awareness regardless of the sales outcome.

A performance-based marketing model reduces the media spend risk being faced by merchants (advertisers) because they are only paying for results achieved. It delivers greater certainty that their advertising campaigns will be cost effective and ROI positive. These factors give advertisers greater control over their media budgets and the ability to scale their budgets with a higher degree of confidence.

Digital performance-based marketing produces the highest ROI of all marketing

activity, online and offline.

Mpire reduces the media spend risk for its clients and ensures performance-based results with transparent cost predictability. Mpire’s performance-based pricing model is in high demand with many top advertisers that recognise it as being highly effective for measurable returns on their marketing investment. This isn’t only because the model yields positive returns on marketing investments, it is also because it is a flexible and creative space to work that touches consumers throughout the marketing funnel. Mpire offers a solution that not only aims to reduce the financial risk of its customers but also to significantly drive sales growth and market share in the rapidly expanding global market.

Mpire operates a centralised, cross device omni-channel approach that enables it to reach consumers on “any device, anywhere, at any time”. This approach provides better returns for both retailers and publishers requiring a cross device and omnichannel strategy so they can be everywhere in the consumer path to purchase. Mpire can track engagement and transactions across the different channels and analyse the data throughout the journey. Its attribution measurement provides transparency into what drives consumer sales and helps publishers and advertisers create engaging and relevant content for consumers.

Mpire manages and optimises its customers' digital marketing campaigns using its proprietary technology platform, nxus.

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2.7 Overview of the Online Advertising Market

In 2013, the internet surpassed newspapers to become the world's second-largest advertising medium, behind television, according to ZenithOptimedia. The internet now captures one in five advertising dollars. The online advertising market is predicted to grow from US$110 billion in 2013 to US$175 billion in 2017.

Mobile advertising has now truly taken off and is growing six times faster than desktop internet. ZenithOptimedia forecasts mobile advertising to grow by an average of 50% per annum between 2013 and 2016, resulting in expenditure of US$45.0 billion in 2016.

In 2016, ZenithOptimedia expects the internet to account for 26.6% of global spending (30.7% in the US).

Performance-based advertising comprised 66% of total US online advertising spend in 2012, according to the IAB.

The Proposed Directors consider that Mpire’s performance-based model, charging on a results-only basis, is well positioned to take advantage of the opportunity to participate in the performance-based advertising market share and the potential online advertising growth (although no assurance or forecast can be given that those events will occur).

2.8 Overview of Affiliate Marketing and Affiliate Networks

One of the main digital performance marketing methodologies is affiliate marketing, in which a business rewards one or more affiliate partners for each visitor or customer brought by the affiliate's own marketing efforts.

The industry has three core players:

the Advertiser - typically a merchant or brand owner who wants to acquire consumers as part of their sales activities;
the Network - once seen as an intermediary with the task of merely tracking and ensuring affiliates are paid on time, the role of an affiliate network has evolved significantly and is now seen as key to this growing industry; and
the Affiliate - essentially the online sales force of the advertiser who funnel consumers to relevant advertiser campaigns by way of the network.

Any advertiser intent on driving a high volume of consumer sales, as opposed to only raising awareness, can benefit from affiliate marketing. Through affiliate marketing not only does the advertiser have the ability to measure the connection between the advertising and the intended action, as well the ability to optimise the campaign on that basis, but they also have the option to pay only when that performance action occurs. Pay-For-Performance can reduce an advertiser’s risk as it more closely aligns their desired outcome with the payment trigger.

Affiliate networks provide advertisers a continued recruitment of quality affiliates. While affiliates may appear to be similar on the surface, networks offer advertisers the added advantage of already having affiliates grouped by promotional category and providing insight into the different audiences and customers that they generate to achieve advertiser objectives.

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An affiliate network will generally offer a faster route to market given that it has an active database of affiliates able to promote the offers that are suitable to them. This enables a faster turnaround for the advertiser to launch online media campaigns than they would likely be capable of otherwise.

Affiliates funnel consumers to the advertiser’s products through a variety of methods including but are not limited to banner display (both on desktop and mobile), social media advertising (for example: Facebook), search engine marketing including both pay per click (PPC) and search engine optimization (SEO), pop up traffic and email marketing. Different types of products work better for different traffic sources. A network can provide relevant information in the form of aggregated statistics, which provide direction to the affiliate with regards to what traffic types work best on each particular campaign.

Affiliates benefit from networks as they can find a large range of appropriate campaigns in one location, and networks make it easy to access brand advertisers that would be difficult to otherwise engage as an individual or small company. Another major advantage for an affiliate with dealing with a network as opposed to an individual advertiser is payment expedition. Networks generally offer better payment terms to affiliates, which in turn allow them to reinvest into consumer acquisition, thus increasing the volume of sales they can generate, ultimately leading to higher revenue volumes and increased ROI for all parties.

Data has been a key focus for advertisers over the past few years and it is becoming increasingly important. Mpire, using its proprietary custom built software, nxus, analyses data from all transactions across its network giving valuable insights into each part of the user journey and purchase behaviour. The vast levels of data collected across the network provide advertisers with the opportunity to evaluate performance and gain insights into touch points and behaviours that ultimately lead to the final transaction. The uses of data collected from the affiliate network are almost endless and can benefit advertisers and affiliates alike when shared effectively.

2.9 Overview of Mpire’s technology and products

nxus attribution tracking software – SaaS enterprise solution for performance marketing

nxus is a Software-as-a-Service (SaaS) product developed to help performance marketers manage their business through efficient, simple-to-use tools and real-time attribution tracking and analytics.

Mpire has developed nxus over the last 2 years due to the need for a scalable and comprehensive network platform to build revenues, measure conversions, optimise digital spend, and accurately manage customers’ campaigns on a real time basis. nxus provides a suite of easy to use features, specialised tools and simplified workflows which allows Mpire to enhance the effectiveness and efficiency of performance marketing.

Mpire uses nxus to track engagement and transactions across multiple channels and analyse the data throughout the consumer life-cycle. nxus accurately records and analyses hundreds of millions of user events each month. Such data analysis enables Mpire to optimise and enhance the performance of its clients’ campaigns and increase their revenues which ultimately delivers substantially improved ROI. nxus’ attribution measurement features provide transparency into what drives consumer sales and helps publishers and advertisers create engaging and relevant content for consumers.

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nxus has been proven to be an effective tool as it is currently used to manage the entire life-cycle of Mpire’s affiliate networks, with approximately 40 million monthly clicks delivered in over 180 countries generating over 500,000 monthly attributions (sales).

A significant opportunity exists to deliver nxus as a SaaS product to third parties. It is Mpire's intention to commercialise nxus post completion of the Proposed Transaction, which if successful, will form a significant part of the growth potential of the business (although no forecast or assurance of growth is given).

2.10 Experienced Team

The proposed board and management team of Mpire collectively possess a wide range of experience and skill sets. It is proposed that the following key personnel will be appointed to the following positions in the Company upon completion of the Proposed Transaction.

Mr Luke Taylor

Proposed Managing Director/Chief Executive Officer of the Company

Diploma of Computer Animation & Graphics Diploma of Screen (Digital Film) Certificate III Multimedia Production

Mr Taylor is an analytical, innovative, and solution focused operational leader with a strong technology management background and over 12 years of experience that includes a successful international expansion. Mr Taylor utilises his expertise in digital marketing, internet and mobile technology to ensure effective project coordination. Mr Taylor has a proven ability to manage multifunctional teams both directly and remotely, and has a competitive attitude and a track record for successfully developing and deploying ROI driven strategies.

Mr Jeff Botnick

Proposed Executive Director/Chief Marketing Officer of the Company

Bachelor of Arts

Mr Botnick is a sales and marketing professional with over 12 years of experience across digital media, e-marketing and business development in the United States and Canada. Having managed and grown two of the largest performance based agencies in the USA, Mr Botnick has earned a strong reputation in performance marketing. Further, he has proven himself as an innovative and e ff ective team builder capable of driving results in both start-up and mature businesses.

Mr Eugeni ‘Zhenya’ Tsvetnenko

Proposed Non-Executive Director of the Company

Mr Tsvetnenko has over 8 years’ experience in the mobile premium messaging services including data, music, games, and news. He is a highly successful entrepreneur and is also the Executive Chairman of Digital CC Limited (ASX: DCC). Mr Tsvetnenko was awarded the prestigious Ernst & Young, Entrepreneur of the Year 2010 in the young category and the Western Australian Business News 40 under 40 awards 2011.

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Mr Stephen Belben

Proposed Non-Executive Chairman of the Company

Chartered Accountant, BAcc, BCom (Hons)

Mr Belben has been an executive and non-executive director of a number of public and private companies over the past 18 years, prior to which he was a partner in the Perth Office of Ernst & Young for 9 years. Whilst at Ernst &Young he was appointed the national leader of that firm's Minerals and Energy Industry Group responsible for the development of a major client base in that sector.

He has an accounting background having qualified as a Chartered Accountant in both South Africa and Australia. He has worked extensively in Africa, the United Kingdom and Australia with practical experience from both an advisor’s and management perspective in a variety of industries.

Mr Belben has completed a large number of transactions including a variety of IPOs, back door listings, capital and debt raisings and has acted in a number of executive and non-executive positions including chairman, director and company secretary, and has an extensive network of contacts in the capital markets and regulatory authorities.

Mrs Fiona Muir

Proposed Chief Financial Officer and Company Secretary of the Company

Chartered Accountant, BCom (Hons)

Mrs Muir is a Chartered Accountant with over 14 years’ experience in both commerce and professional practice in South Africa, Australia and the United Kingdom. She has extensive experience in corporate transactions having worked as the Chief Financial Officer of ASX listed Cape Lambert Resources Limited and Xceed Resources Limited. Fiona has also acted as Company Secretary for a number of ASX listed entities including DMC Mining Limited, Corvette Resources Limited, Matrix Metals Limited and Xceed Resources Limited.

2.11 Overview of intellectual property

Mpire’s primary asset is its intellectual property. Maroon Tech, which Livelynk proposes to acquire by completion of the Proposed Transaction, is the legal and beneficial owner of the key intellectual property assets of Mpire.

Registered Intellectual Property Rights of the Mpire Group

Business names:

Tech Mpire Limited
Livelynk Group Pty Ltd
Mpire Media Pty Ltd
Mpire Network Inc
Maroon Tech Limited
Trade names:
Mpire Media
Mpire Network
Maroon Tech
nxus

Registered designs:

Nil.

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Patents: Granted:

Nil.

Applications:

Nil.

Copyrights:

nxus software copyright
nxus trade mark
Domain names (listed below)

Unregistered Intellectual Property Rights of the Mpire Group

Mpire brand established by use
Mpire Media brand established by use
Mpire Network brand established by use
Maroon Tech brand established by use
nxus software copyright
Trade secrets
Confidentiality agreements

Domain Names

digimpire.com
getnxus.com
getnxus.mobi
inimagead.com
intermingle.me
intermingleme.com
maroon.mobi
maroontech.mobi
maroontechnologies.com
mn.gl
mpire-media.com
mpiread.com
mpireads.com
mpirecorporation.com
mpiredigital.com.au
mpirelabs.com
mpiremedia.com
mpiremedia.net
mpiremobile.com
mpirenet.com
mpirenetwork.com
mpirenetwork.com.au
mpirenetworks.com
mpiretech.com
mpiretech.com.au
mpiretechnologies.com
• nxus.io
nxus.mobi
techmpire.com
• techmpire.com.au
tracknxus.com

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• tracknxus.mobi

2.12 Independent Expert’s Report

For the purposes of item 7 of section 611 of the Corporations Act and to assist Shareholders in considering Resolution 4 in this Notice of Meeting, the Company has commissioned an independent expert on the fairness and reasonableness of the proposed 100% acquisition of Livelynk and issues of securities in the Company pursuant to Resolution 4. The Independent Expert concludes the proposed 100% acquisition of Livelynk and proposed issues of securities in the Company pursuant to Resolution 4 are not fair but reasonable to non-associated Shareholders.

Shareholders are strongly urged to consider the Independent Expert’s Report in detail. The Independent Expert’s Report is appended as Annexure C to this Explanatory Statement.

2.13 Indicative timetable

Set out in the table below is the expected timing for completion of the Proposed Transaction and the matters contemplated by the Resolutions, subject to compliance with all regulatory requirements. These dates are indicative only and are subject to change. The Directors reserve the right to amend the timetable without notice.

Event	Anticipated Date
Notice of Meeting sent to Shareholders	27 October 2014
Lodgement of Prospectus with ASIC	30 October 2014
Prospectus offer opens	7 November 2014
Last day for lodgement of Proxy Form	21 November 2014
Suspension of the Company’s securities from trading on ASX at the opening of trading Annual General Meeting to consider the Resolutions	25 November 2014
Capital Consolidation	December 2014 (refer to Section 3.4)
Prospectus offer closes	28 November 2014
Completion of the Proposed Transaction Issue of Consideration Shares Issue of Shares pursuant to the Capital Raising Issue of Performance Shares, Shares and New Options pursuant to Resolutions 5, 6, 9, 10 and 11	4 December 2014
Commencement of trading of Shares on ASX (subject to satisfaction of all conditions to re- compliance with Chapters 1 and 2 of the Listing Rules)	30 December 2014

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2.14 Advantages of the Proposed Transaction

The Directors are of the view that the following non-exhaustive list of advantages may be relevant to a Shareholder’s decision on how to vote on the Resolutions:

(a) the Directors believe that an investment in Livelynk will add significant value to the Shares;
(b) the Existing Shareholders can share in the expected future success of Livelynk;
(c) the appointment of the Proposed Directors will add experience and skill to the Board to assist with the growth of the Company;
(d) the Company will receive a significant cash injection and will be in a position to continue trading;
(e) a larger market capitalisation and enhanced Shareholder base resulting from the Proposed Transaction may provide a more liquid market for the Company’s shares than what currently exists; and
(f) the Independent Expert has concluded that the proposed 100% acquisition of Livelynk and issues of securities in the Company pursuant to Resolution 4 are not fair but reasonable to non-associated Shareholders (see Annexure C).

2.15 Disadvantages of the Proposed Transaction

The Directors are of the view that the following non-exhaustive list of disadvantages may be relevant to a Shareholder’s decision on how to vote on the Resolutions:

(a) the Proposed Transaction and the passing of the Resolutions will result in the dilution of Existing Shareholders’ interests in the Company;
(b) the Company will be changing the nature and scale of its activities to a performance-based online and mobile marketing solutions provider which may not be consistent with the objectives of Existing Shareholders; and
(c) the Company and its Shareholders will be exposed to risks in relation to Livelynk and its business including (but not limited to) those set out in section 2.16.

2.16 Key risks

Shareholders should be aware that if the Resolutions are approved, the Company will be changing the nature and scale of its activities which will, because of its nature, be subject to various risk factors. These risks are both specific to the industry in which the Company will operate and also relate to the general business and economic environment in which the Company will operate. An investment in the Company is not risk free. Existing Shareholders should consider the risk factors described below, together with information contained elsewhere in this Notice of Meeting. The following is not intended to be an exhaustive list of the risk factors to which the Company will be exposed on the acquisition of Livelynk.

It is anticipated that the Company’s Shares and listed Options will be suspended or placed into a trading halt prior to market open on the date of the Meeting. In the event that Resolutions 2 to 11 (inclusive) are approved at the Meeting, it is anticipated that the Company’s securities will remain suspended until completion of the Proposed

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Transaction, Capital Raising and Capital Consolidation, recompliance by the Company with Chapters 1 and 2 of the Listing Rules and compliance with any further conditions ASX imposes on such reinstatement. There is a risk that the Company will not be able to satisfy one or more of those requirements and that its listed Shares and Options may consequently remain suspended from quotation.

Based on the information available, the principal risks facing the Company concerning Mpire upon completion of the Proposed Transaction will be as set out below.

(a) Faults with products/service

Mpire operates in the internet services arena. Internet-based services frequently contain undetected errors when first introduced or when new versions or enhancements are released. Mpire has on occasion found defects in its service and new errors in its existing service may be detected in the future. If that occurs, Mpire could lose future sales or customers or incur consequential liabilities. Consequently, there is a risk that users of the services provided may identify errors or defects which could harm the Mpire’s reputation and business.

(b)

Protection of Intellectual Property Rights

If Mpire fails to protect its intellectual property rights adequately, competitors may gain access to its technology which would harm the business. Mpire currently has no issued patents or trademarks and may be unable to obtain patent protection in the future. If any patents are issued in the future, they may not provide Mpire with any competitive advantages, or may be challenged by third parties.

Legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain. Effective patent, trademark, copyright and trade secret protection may not be available to Mpire in every country in which its service is available. Accordingly, despite its efforts, Mpire may not be able to prevent third parties from infringing upon or misappropriating its intellectual property.

The Company may be required to spend significant resources to monitor and protect the intellectual property rights acquired through the proposed acquisition of Livelynk. It may initiate or otherwise be involved in litigation against third parties for infringement, or to establish the validity, of its rights. Any litigation, whether or not it is successful, could result in significant expense to the Company and divert the efforts of its personnel. In addition, unauthorised use of the “Mpire” brand in counterfeit products or services could not only result in potential revenue loss, but also have an adverse impact on its brand value and perceptions of its product qualities.

(c)

Regulatory environment

Mpire currently has offices in Canada, Ireland and Australia and is subject to the laws and regulations of those countries. In addition, Mpire provides performance-based online and mobile marketing solutions to advertisers and affiliates based in over 180 countries. Users, competitors, members of the general public or regulators could allege breaches of the legislation in the relevant jurisdictions. This could result in remedial action or litigation, which could potentially lead to Mpire being required to pay compensation or a fine.

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Mpire’s operations may become subject to regulatory requirements, such as licensing and reporting obligations, which would increase the costs and resources associated with its regulatory compliance. Any such increase in the costs and resources associated with regulatory compliance could impact upon the Company’s profitability. In addition, if regulators took the view that Mpire had failed to comply with regulatory requirements, this could lead to enforcement action resulting in public warnings, infringement notices or the imposition of a pecuniary penalty. This could lead to significant reputational damage and adversely impact upon the financial position and financial performance of the Company.

Mpire intends to offer its services throughout the world and has users of those services in most countries and jurisdictions of the world. Regulatory changes could see Mpire being required to hold a licence in some of these jurisdictions or otherwise comply with local regulations. This could preclude Mpire from offering certain services in these jurisdictions until such a licence has been obtained, or may require Mpire to comply with a range of regulatory requirements. Any such increase in the costs and resources associated with the regulatory compliance in these jurisdictions could adversely impact upon the financial position and financial performance of the Company.

(d) Competition and new technologies

The industry in which the Company will be involved, post its acquisition of Livelynk, is subject to increasing domestic and global competition which is fast-paced and fast-changing. While the Company will undertake all reasonable due diligence in its business decisions and operations, it will have no influence or control over the activities or actions of its competitors, whose activities or actions may positively, or negatively affect the operating and financial performance of Mpire’s projects and business. For instance, new technologies could overtake the advancements made by Mpire which could negatively impact on the financial position and financial performance of the Company.

(e) Dependence on the internet

Expansion in the sales of Mpire’s services depends on the continued acceptance of the internet as a communications and commerce platform for individuals and enterprises. The internet could become less viable as a business tool due to delays in the development or adoption of new standards and protocols to handle increased demands of internet activity, security, reliability, cost, ease-of-use, accessibility and quality-of-service.

The performance of the internet and its acceptance as a business tool has been harmed by “viruses,” “worms” and similar malicious programs, and the internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure. If for any reason the internet does not remain a widespread communications medium and commercial platform, the demand for Mpire’s services would be significantly reduced, which would harm the Company.

(f) Hacker attacks

Mpire relies upon the availability of its web services to provide services to advertisers and affiliates and attract new advertisers and affiliates. Hackers could render the website unavailable through a disrupted denial of service or other disruptive attacks.

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Although Mpire has strategies in place to minimise such attacks, these strategies may not be successful. Unavailability of the website could lead to a loss of revenues whilst Mpire is unable to provide its services. Further, it could hinder Mpire’s abilities to retain existing customers or attract new customers, which would have a material adverse impact on growth of the business.

(g) Fraud

Mpire makes use of inbuilt fraud identification and alert systems which minimises its risk of fraud. However, incidents of fraud and ineffective advertising reported in the online advertising market can undermine trust in the efficacy of online advertising, which may have a negative impact on Mpire’s business.

The risk of fraud may drive increasing calls for regulation of the market in key high-value jurisdictions, which may result in Mpire incurring additional regulatory overhead or being required to develop or implement greater levels of controls within its advertising network.

(h)

Privacy concerns

Regulations in various jurisdictions limit tracking and collection of personal identification and information. If Mpire breaches such regulations, the Company’s business, reputation, financial position and financial performance may be detrimentally affected. External events may also cause regulators to amend regulations in respect of the collection and use of user information. Any amended regulations may introduce controls which make the operation of certain types of tracking technologies unusable which could damage the Company’s financial position and financial performance by adding costs to Mpire through the requirement to develop and implement new technologies.

(i) Limited trading history

Mpire Media was incorporated in 2007 and formed part of a group of companies controlled by Zhenya Tsvetnenko ( Zhenya Group ). Prior to the incorporation of Mpire Network in March 2014, Mpire mainly provided online marketing services to the Zhenya Group. Subsequent to the incorporation of Mpire Network, Mpire has been building its third party customer base, which will continue to be its focus. Given the limited trading history under the revised business model, there is uncertainty in relation to Mpire’s business, and investors should consider Mpire’s prospects in light of its limited trading history under its revised business model. In addition, there is no guarantee that Mpire will be able to successfully commercialise and generate revenue from its SaaS (software as a service) products or its general business in the future. Consequently, there can be no forecast or confirmation as to the Company’s future performance following completion of the Proposed Transaction.

(j) Reliance on key personnel

The recent developments of Mpire have been in large part due to the talent, effort and experience of its senior management team, in particular the leadership of Luke Taylor, Chief Executive Officer, and Jeff Botnick, Chief Marketing Officer. Although these individuals have entered into Executive Services Agreements with Mpire, there is no assurance that such contracts will not be terminated. If such contracts are terminated or breached, or if these individuals no longer continue in their current roles, or if any Proposed

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Director ceases to be a director of the Company after their appointment, a new Chief Executive Officer and Chief Marketing Officer will need to be employed and new directors would need to be appointed which may adversely affect the business.

Mpire is also substantially dependent on the continued service of its existing development personnel because of the complexity of its services and technologies. There is no assurance that Mpire will be able to retain the services of these persons.

(k)

Domain Name Risk

Mpire’s business depends on advertisers and affiliates being attracted to its web services. Mpire has registered domain names for the purposes of its websites. However, should these domain names not be renewed or control thereof be otherwise lost, it would lose all website traffic directed to that domain which would adversely affect Mpire’s ability to generate revenue.

(l)

Customer service risk

Advertisers may need to engage with Mpire’s customer service personnel in certain circumstances, such as if they have a question about the services or if there is a dispute between an advertiser and Mpire. Mpire needs to recruit and retain staff with interpersonal skills sufficient to respond appropriately to customer services requests. Poor customer service experiences may result in the loss of advertisers. If Mpire loses key customer service personnel, fails to provide adequate training and resources for customer service personnel, or if the computer systems relied on by customer service personnel are disrupted by technological failures, this could lead to adverse publicity, litigation, regulatory inquiries and/or a decrease in advertisers, all of which may negatively impact on Mpire’s revenue.

(m)

Liquidity and dilution risk

Following the Capital Consolidation, there will be approximately 27,126,487 Shares (subject to rounding and before the issues the subject of the Resolutions) on issue with between approximately 39% and 47.7% of the total Shares on issue following re-compliance with Chapters 1 and 2 being offered to the public pursuant to this Prospectus (assuming no Performance Shares vest and no Options are exercised). Upon reinstatement of the Company’s securities to quotation on the ASX, a significant portion of the Shares on issue will be subject to escrow restrictions imposed by the Listing Rules. Some investors may consider that there is an increased liquidity risk as a large portion of the issued capital may not be able to be traded freely for a period of up to 24 months.

(n)

Future Capital Needs

Further funding of projects may be required by the Company to support the ongoing activities and operations of Mpire, including the need to develop new services or enhance its existing service, enhance its operating infrastructure and to acquire complementary businesses and technologies. Accordingly, the Company may need to engage in equity or debt financings to secure additional funds. There can be no assurance that such funding will be available on satisfactory terms or at all. Any inability to obtain funding will adversely affect the business and financial condition of the Company and consequently its performance.

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(o) Foreign exchange risks

Mpire provides performance-based online and mobile marketing solutions to advertisers and affiliates based in over 180 countries. Consequently, it generates revenue and incurs costs and expenses in more than one currency. Accordingly, the depreciation and/or the appreciation of the United States Dollar, for example, relative to the Australian Dollar would result in a foreign currency loss/gain. Any depreciation of the foreign currencies relative to the Australian Dollar may result in lower than anticipated revenue, profit and earnings. Mpire will be affected on an ongoing basis by foreign exchange risks and will have to monitor this risk on an ongoing basis.

(p) Insurance coverage

The Company faces various risks in connection with Mpire and may lack adequate insurance coverage or may not have the relevant insurance coverage. Mpire maintains insurance coverage for its employees, as well as professional indemnity, product liability and third party liability insurance, however it does not maintain business interruption insurance or insurance against claims for certain property damage. The Company will need to review its insurance requirements periodically. If Mpire incurs substantial losses or liabilities and its insurance coverage is unavailable or inadequate to cover such losses or liabilities, the Company’s financial position and financial performance may be adversely affected.

(q) Economic

General economic conditions, introduction of tax reform, new legislation, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s and Mpire’s business activities, financial position and financial performance, as well as on their ability to fund those activities.

2.17 Investment speculative

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the securities.

2.18 Pro forma statement of financial position

The pro forma statement of financial position of the Company, assuming Resolutions 2 to 11 (inclusive) are passed and implemented, is set out in Annexure B.

2.19 Pro forma capital structure

The pro forma capital structure of the Company, assuming Resolutions 2 to 11 (inclusive) are passed and the Proposed Transaction, Consolidation and Capital Raising completes, is as follows:

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Capital structure	Pre-Completion	Post- Completion Minimum Subscription for the Capital Raising ($7,000,000)1	Post- Completion Maximum Subscription for the Capital Raising ($10,000,000)1

Existing Shares	135,632,437	27,126,487	27,126,487
Consideration Shares (including Shares and Performance Shares pursuant to Resolution 4)		62,000,000	62,000,000
Capital Raising		35,000,000	50,000,000
New Shares to Advisers		4,125,000	4,125,000
New Performance Shares pursuant to Resolutions 5 and 6		28,575,000	28,575,000
Total Shares	135,632,437	156,826,487	171,826,487
Existing Options3	60,412,754	12,082,551	12,082,551
New Options to Advisers4		6,000,000	6,000,000
Fully diluted Share capital2	196,045,191	174,909,038	189,909,038

Notes:

Assumes the following:
completion of the Capital Consolidation on a 1 for 5 basis. Please note that final figures are subject to rounding;
no additional Shares are issued between the date of this Notice and completion of the Proposed Transaction, including pursuant to an exercise of existing Options. See section 3.3 for further information; and
all Performance Shares vest into Shares (which may not occur, as it is dependent on the terms set out in Annexure H).
Assumes the following:
completion of the Capital Consolidation on a 1 for 5 basis. Please note that final figures are subject to rounding;
no additional Shares are issued between the date of this Notice and completion of the Proposed Transaction, other than pursuant to the exercise of all existing Options which would result in the issue of an additional 18,082,551 Shares on a post-Capital Consolidation basis (subject to rounding). See section 3.3 for further information; and
all Performance Shares vest into Shares (which may not occur, as it is dependent on the terms set out in Annexure H).
The Existing Options comprise of the following, on a pre-Capital Consolidation basis:
36,882,754 listed Options exercisable at $0.08 on or before 31 December 2015;
1,000,000 unlisted Options exercisable at $0.20 on or before 31 March 2015;
3,500,000 unlisted Options exercisable at $0.20 on or before 10 May 2016;
7,130,000 unlisted Options exercisable at $0.20 on or before 30 June 2015;

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1,000,000 unlisted Options exercisable at $0.30 on or before 30 June 2015;
250,000 unlisted Options exercisable at $0.25 on or before 12 June 2015;
250,000 unlisted Options exercisable $0.25 on or before 12 December 2015;
400,000 unlisted Options exercisable at $0.15 on or before 29 May 2015; and
10,000,000 unlisted Options exercisable at $0.16 on or before 31 December 2016.
As contemplated by the Share Sale and Purchase Agreement. See section 2.2 for further information.

2.20 Proposed use of funds

The Company intends to use the funds raised from Capital Raising, as follows:

Use of funds	Maximum Subscription $	Minimum Subscription $

Costs of the offer	(846,653)	(693,747)
Estimated repayment of Working Capital Loan to the Livelynk Vendor (subject to change)	(725,809)	(725,809)
Development costs: Mobile Affiliate Network	(443,821)	(520,593)
Expansion of sales and marketing team: Affiliate Network	(3,560,021)	(3,357,802)
Development costs: Affiliate Network Platform SaaS	(513,525)	(74,341)
Development costs: Performance Advertising Platform SaaS	(307,123)	-
Establishment of sales and marketing team: SaaS Products	(1,080,000)	-
Working capital	(2,022,736)	(1,127,396)
Total	(9,499,688)(1)	(6,499,688)(2)

Notes:

Full subscription of 50,000,000 Shares at $0.20 per Share (2,501,558 Shares of which will be issued pursuant to Resolution 4 as payment of debts owing from Mpire to the Livelynk Vendor to the value of $500,311.50 at $0.20 per Share, rather than for cash consideration).
Minimum subscription of 35,000,000 Shares at $0.20 per Share (2,501,558 Shares of which will be issued pursuant to Resolution 4 as payment of debts owing from Mpire to the Livelynk Vendor to the value of $500,311.50 at $0.20 per Share, rather than for cash consideration).

The above table is a statement of the Board’s current intention as at the date of this Notice. However, Shareholders should note that, as with any budget, the allocation of funds set out in the above table may change depending on a number of factors, including the outcome of operational and development activities, regulatory developments, market and general economic conditions and environmental factors. In light of this, the Board reserves the right to alter the way the funds are applied.

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3. ANNUAL GENERAL MEETING

3.1 Action to be taken by the Existing Shareholders

In order to proceed with the Proposed Transaction, the Company must convene an Annual General Meeting of Existing Shareholders for the purposes of passing Resolutions 2 to 11 (inclusive) in compliance with the requirements of the Listing Rules and the Corporations Act.

The Notice of Meeting convening the Annual General Meeting is included at the front of this booklet. Existing Shareholders are encouraged to attend and vote in favour of each of Resolutions 2 to 11 (inclusive) to be put at the Annual General Meeting.

If an Existing Shareholder is not able to attend and vote at the Annual General Meeting, each Existing Shareholder is encouraged to complete the proxy form at the back of this booklet and return it to the Company at the address stated on the proxy form not later than 48 hours before the time specified for the commencement of the Annual General Meeting.

3.2 Annual General Meeting Resolutions

Certain voting restrictions are imposed in relation to some of the Resolutions as detailed in the accompanying Notice of Meeting under the heading “Voting Exclusion Statement”.

A brief explanation of each Resolution is set out below in this section 3.

3.3 Resolution 1: Repeal of existing Constitution and adoption of new Constitution for Lithex Resources Limited

Resolution 1 is a Special Resolution which seeks to repeal the existing Constitution and adopt a new Constitution. The Company’s current constitution has not been renewed or amended since 12 January 2010. The Company wishes to issue Performance Shares as contemplated in Resolutions 4 to 6 (inclusive). The Company’s existing constitution does not permit the issue of performance shares. Accordingly, the Company seeks to repeal the constitution and replace it with an updated constitution to facilitate the issue of the Performance Shares.

A copy of the proposed new constitution will be sent to any Shareholder on written request made to:

Mr Peter Webse Company Secretary Address: Level 2, 1 Walker Avenue, West Perth, WA, 6005 Postal Address: PO Box 271, West Perth, WA, 6872 Email: [email protected]

A copy will also be available for inspection at the Meeting.

Resolution 1 is a special resolution . Accordingly, at least 75% of votes cast by shareholders present and eligible to vote (in person or by proxy) at the meeting must be in favour of this resolution for it to be passed.

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Summary of the Rights and Liabilities Attaching to Shares and Other Material Provisions of the Proposed New Constitution

The new Constitution is broadly consistent with the provisions of the existing Constitution with many of the changes minor or administrative in nature. The key differences between the existing Constitution and the proposed new Constitution are summarized below. This summary is not intended to be an exhaustive explanation of all changes effected by the adoption of the proposed new Constitution.

Shareholders are invited to contact the Company Secretary if they have any questions regarding the proposed new Constitution.

(a) Performance Shares

At present, the Company's only classes of securities on issue are Ordinary Shares and Options. The Company wishes to create new classes of securities with the introduction of Performance Shares Class A and Performance Shares Class B as contemplated by Resolutions 4 to 6 (inclusive). Clause 2.2 of the new Constitution provides for the issue of Performance Shares. A summary of the rights and liabilities attaching to Performance Shares Class A and Performance Shares Class B are set out in annexure H.

(b) Proportional Takeover Approval Provision

A proportional takeover bid is a takeover bid where the offer made to each Shareholder is only for a proportion of that Shareholder’s shares.

Pursuant to section 648G of the Corporations Act, schedule 5 of the Company’s proposed new Constitution includes a provision whereby a proportional takeover bid for Shares may only proceed after the bid has been approved by a meeting of Shareholders held in accordance with the terms set out in the Corporations Act.

Schedule 5 of the new Constitution will cease to have effect on the third anniversary of the date of the adoption of last renewal of the clause.

Information required by section 648G of the Corporations Act

(i) Effect of proposed proportional takeover provisions

Where offers have been made under a proportional off-market bid in respect of a class of securities in a company, the registration of a transfer giving effect to a contract resulting from the acceptance of an offer made under such a proportional off-market bid is prohibited unless and until a resolution to approve the proportional off-market bid is passed.

(ii) Reasons for proportional takeover provisions

A proportional takeover bid may result in control of the Company changing without Shareholders having the opportunity to dispose of all their Shares. By making a partial bid, a bidder can obtain practical control of the Company by acquiring less than a majority interest. Shareholders are exposed to the risk of being left as a minority in the Company and the risk of the bidder being able to acquire control of the Company without payment of an adequate control premium. These amended provisions allow Shareholders to decide whether a

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proportional takeover bid is acceptable in principle, and assist in ensuring that any partial bid is appropriately priced.

(iii)

Knowledge of any acquisition proposals

As at the date of this Notice of Meeting, no Director is aware of any proposal by any person to acquire, or to increase the extent of, a substantial interest in the Company other than as described in this Explanatory Statement, the Notice and the attached Annexures.

(iv) Potential advantages and disadvantages of proportional takeover

provisions

The Directors consider that the proportional takeover provisions have no potential advantages or disadvantages for them and that they remain free to make a recommendation on whether an offer under a proportional takeover bid should be accepted.

The potential advantages of the proportional takeover provisions for Shareholders include:

(A) the right to decide by majority vote whether an offer under a proportional takeover bid should proceed;
(B) assisting in preventing Shareholders from being locked in as a minority;
(C) increasing the bargaining power of Shareholders which may assist in ensuring that any proportional takeover bid is adequately priced; and
(D) each individual Shareholder may better assess the likely outcome of the proportional takeover bid by knowing the view of the majority of Shareholders which may assist in deciding whether to accept or reject an offer under the takeover bid.

The potential disadvantages of the proportional takeover provisions for Shareholders include:

(A) proportional takeover bids may be discouraged;
(B) lost opportunity to sell a portion of their Shares at a premium; and
(C) the likelihood of a proportional takeover bid succeeding may be reduced.

3.4 Resolution 2: Capital Consolidation

Subject to Resolutions 3 to 11 (inclusive) being passed, Resolution 2 is an ordinary resolution which proposes that the issued capital of the Company be altered by consolidating the existing securities on a 1 for 5 basis. The effective record date for determining the consolidation of the Company’s capital will be 4 business days after the date of the Meeting. Any fractional entitlements as a result of holdings not being evenly divisible by 5 will be rounded down to the nearest whole number.

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The estimated effect which the Capital Consolidation will have on the Company’s capital structure is set out in the table in section 2.19 (which is subject to rounding).

Section 254H of the Corporations Act

Section 254H of the Corporations Act enables a company to convert all securities into a smaller number of securities by a resolution passed at a general meeting. The conversion proposed by Resolution 2 is permitted under section 254H of the Corporations Act.

The Capital Consolidation will only occur if the Board is reasonably satisfied that all of the conditions to completion of the Proposed Transaction (including all requirements for the Company to re-comply with Chapters 1 and 2 of the Listing Rules) have been, or are likely to be, satisfied or waived.

The consolidation will not result in any change to the substantive rights and obligations of existing security holders of the Company. The purpose of the consolidation of the existing issued capital of the Company is to reduce the number of existing securities on issue, which is considered to be a more appropriate capital structure for the Company going forward, and to enable the Company to satisfy Chapters 1 and 2 of the Listing Rules and obtain re-quotation of its securities on ASX. For example, a Shareholder currently holding 10,000 Shares, will as a result of the consolidation, hold 2,000 Shares. The Company’s balance sheet and tax position will remain unaltered as a result of the consolidation.

At the date of this Notice, the Company has 135,632,437 Shares on issue. The consolidation on a 1 for 5 basis will reduce the number of Shares on issue to approximately 27,126,487 Shares (subject to rounding).

It is possible that the Options referred to below will be exercised prior to Capital Consolidation occurring. If all of these Options are exercised then there will be an additional 60,412,754 Shares on issue which would be consolidated into approximately 12,082,551 Shares (subject to rounding) under the Capital Consolidation. Aggregated with the number of Shares on issue at the date of this Notice, there would be approximately 39,209,043 Shares (subject to rounding) consolidated under the Capital Consolidation.

	Number of Shares	Number of Shares
	Pre Consolidation	Post Consolidation
Balance at the date of this
Notice of Meeting	135,632,437	27,126,487

Options

At the date of this Notice, the Company has 60,412,754 Options on issue. At the time the issued capital of the Company is consolidated, assuming they are not exercised, these Options will exist and therefore will be consolidated.

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Balance at the date of this Notice of Meeting	Number of Options Pre-Capital Consolidation Number of Options Post-Capital Consolidation 60,412,7541 12,082,5512
	60,412,754 12,082,551

Note:

Refer to Section 2.18 for the pre-Capital Consolidation Option classes.
The Options on a post-Capital Consolidation basis would comprise of the following (subject to rounding):
(a) 7,376,550 listed options exercisable at $0.40 on or before 31 December 2015,
(b) 200,000 unlisted Options exercisable at $1.00 on or before 31 March 2015;
(c) 700,000 unlisted Options exercisable at $1.00 on or before 10 May 2016;
(d) 1,426,000 unlisted Options exercisable at $1.00 on or before 30 June 2015;
(e) 200,000 unlisted Options exercisable at $1.50 on or before 30 June 2015;
(f) 50,000 unlisted Options exercisable at $1.25 on or before 12 June 2015;
(g) 50,000 unlisted Options exercisable at $1.25 on or before 12 December 2015;
(h) 80,000 unlisted Options exercisable at $0.75 on or before 29 May 2015; and
(i) 2,000,000 unlisted Options exercisable at $0.80 on or before 31 December 2016.

Holding statements and Option Certificates

Following the Capital Consolidation, all holding statements for Existing Shares and quoted Options and Option certificates for unquoted Options will cease to have any effect, except as evidence of entitlement to a certain number of Shares or Options (on a post-Capital Consolidation basis). After the Capital Consolidation becomes effective, the Company will arrange for new holding statements for Shares and quoted Options and certificates for unquoted Options to be issued to Shareholders or Option Holders as applicable.

Timetable for Capital Consolidation

If Resolution 2 and all other Ordinary Resolutions are passed, the Capital Consolidation will take effect in accordance with the timetable set out in paragraph 5 of Appendix 7A of the Listing Rules. The anticipated timetable for the Capital Consolidation is set out below:

Event	Anticipated Date
Company notifies ASX that Shareholders have approved the Capital Consolidation	25 November 2014
Last day to register transfers on a pre-Capital Consolidation basis (although the Company is anticipated to remain suspended at this stage)	26 November 2014
Trading would normally commence in the reorganised Shares and Options on a deferred settlement basis (as the Company’s securities are anticipated to be suspended from trading, deferred settlement trading will not occur)	27 November 2014
Last day for the Company to register transfers on a pre-	1 December 2014

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Capital Consolidation basis
First day for the Company to send notice to each security holder of the change in their details of holdings First day for the Company to register securities on a post- Capital Consolidation basis First day for issue of new holding statements	2 December 2014
Issue date Last day for the Company to send notice to each security holder of the change in their details of holdings and to enter securities into the holders’ security holdings Last day for issue of new holding statements or certificates for consolidated Shares and Options	8 December 2014

The above dates are indicative only and are subject to change.

3.5 Resolution 3: Change in nature and scale of activities of the Company

Subject to Resolutions 2 and 4 to 11 (inclusive) being passed, Resolution 3 is an ordinary resolution which proposes a change to the nature and scale of the Company’s activities.

The proposed acquisition of Livelynk by the Company will result in the Company changing its nature from a mining and mineral exploration company to an internet services company. The Livelynk business and a non-exhaustive summary of the potential risks associated with it are detailed in section 2 of this Explanatory Statement. In addition, the scale of the Company’s share capital will significantly increase as a result of the Capital Raising and the issue of the Consideration Shares and other issues of securities proposed by the Resolutions. Accordingly, Resolution 3 is an ordinary resolution which seeks approval for the change to the nature and scale of the Company’s activities resulting from the Proposed Transaction.

Listing Rule 11.1

Under Listing Rule 11.1, if a company wishes to make a change to the nature or scale of its activities it must provide ASX with full details regarding the change and, if ASX requires, it must obtain shareholder approval to the proposed change.

The Company is seeking Shareholder approval to the Proposed Transaction under

Listing Rule 11.1.2.

In addition, ASX has informed the Company that, as a result of the Proposed Transaction, Livelynk is effectively undertaking a “backdoor listing” on the ASX using the Company as a vehicle. Therefore, to complete the Proposed Transaction, ASX requires the Company to re-comply with Chapters 1 and 2 of the Listing Rules as if the Company were applying for admission to the ASX.

ASX may suspend quotation of the Shares until the Company has satisfied the requirements of Listing Rule 11.1. If Shareholders approve the Proposed Transaction by passing Resolutions 2 to 11 (inclusive), trading in the Company’s securities will be suspended until the Company re-complies with the requirements of Chapters 1 and 2 of the Listing Rules in accordance with Listing Rule 11.1.3. It is anticipated that re-

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quotation of the Company’s securities will occur on or about 30 December 2014, subject to ASX’s discretion.

If Resolutions 2 to 11 (inclusive) are approved and implemented, re-quotation of the Company’s securities will be subject to the Company meeting these requirements. The Company intends to meet these requirements as soon as practicable after the Meeting.

If Shareholders reject any of Resolutions 2 to 11 (inclusive), or completion of the Proposed Transaction does not occur (including as a result of ASX not approving the reinstatement of the Company’s securities to quotation), the Company will not issue the securities contemplated in Resolutions 2 to 11 (inclusive).

Accordingly, Shareholders should carefully consider all of the information contained in this Explanatory Statement before making a decision as to whether to vote in favour of the change in the nature and scale of the Company’s activities. In particular, Shareholders should carefully consider the advantages, disadvantages and risks of the Proposed Transaction set out in Section 2.

3.6 Resolution 4: Issue of Securities – Vendor Consideration and Participation in Capital Raising

Subject to Resolutions 1 to 3 (inclusive) and 5 to 11 (inclusive) being passed, Resolution 4 is an ordinary resolution which seeks approval be given:

(a) in accordance with Listing Rule 7.1 and Sections 208 and 611 (item 7) of the Corporations Act for the issue of the following Shares and Performance Shares to the Livelynk Vendor in consideration for 100% of the securities of Livelynk (see section 2 for further information) pursuant to the Agreement:
(i) 23,500,000 Shares at a deemed issue price of $0.20 each;
(ii) 23,100,000 Class A Performance Shares;
(iii) 15,400,000 Class B Performance Shares;
(iv) up to 23,100,000 Shares upon the vesting of the Class A Performance Shares; and
(v) up to 15,400,000 Shares upon the vesting of the Class B Performance Shares;
(b) in accordance with Listing Rule 7.1 and Sections 208 and 611 (item 7) of the Corporations Act for the issue of up to 2,501,558 Shares to be issued to the Livelynk Vendor as part of the Capital Raising for a deemed issue price of $0.20 per Share as part repayment to the Livelynk Vendor of loans provided by the Livelynk Vendor to Mpire and for the cash repayment by the Company of the remainder of those loans, as follows:
(i) $130,431.50 of the $630,743 owing to the Livelynk Vendor pursuant to the Historical Loan will be converted into 652,158 Capital Raising Shares in the Company at a deemed issue price of $0.20 each (on a post-Capital Consolidation basis) with the balance of the Historical Loan being repayable in cash in the event the Company starts to generate positive cash flows from its operating and investing activities following its acquisition of Livelynk (although no representation or forecast is given as to whether that will ever occur);

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(ii) the $369,880 owing to the Livelynk Vendor pursuant to the Investment Loan will be converted into 1,849,400 Capital Raising Shares in the Company at a deemed issue price of $0.20 each (on a post-Capital Consolidation basis); and
(iii) the amount of up to $1,000,000 loaned or to be loaned by the Livelynk Vendor to Mpire pursuant to the Working Capital Loan to provide working capital funding during the period from 1 June 2014 to completion of the Proposed Transaction will be repaid in full in cash from the Capital Raising.

The Consideration Shares and the Capital Raising Shares will be allocated to the Livelynk Vendor on a post-Consolidation basis in accordance with Annexure A.

The Shares proposed to be issued to the Livelynk Vendor as conversion of the debt owed or to be owed to the Livelynk Vendor by the Company pursuant to Resolution 4, as described in section 3.6(b) above, will form part of, and are not additional to, the Shares proposed to be issued under the Capital Raising, the subject of Resolution 7.

Listing Rule 7.1

Listing Rule 7.1 provides that a company must not (subject to specified exceptions), without the approval of shareholders, issue or agree to issue during any 12 month period any equity securities, (such as an option), if the number of those securities exceeds 15% of the number of ordinary securities on issue at the commencement of that 12 month period.

Listing Rule 10.12 (Exception 6) provides an exception to Listing Rule 10.11 where a person is a related party by reason only of the transaction which is the reason for the issue of the securities and the application to it of section 228(6) of the Corporations Act. As Mr Tsvetnenko and the Livelynk Vendor are only related parties by reason of the transaction, approval is being sought under Listing Rule 7.1 instead of under Listing Rule 10.11.

Given that none of the exceptions contained in Listing Rule 7.2 apply to the issue of the Consideration Shares and Capital Raising Shares the subject of Resolution 4, Shareholder approval is sought under Listing Rule 7.1 to approve the issue of those Consideration Shares and Capital Raising Shares to the Livelynk Vendor.

Listing Rule 7.2 (Exception 4) provides an exception to Listing Rule 7.1 where a person receives the securities on the conversion of the convertible securities, if at the time the convertible securities were issued, the entity complied with the Listing Rules. “Convertible securities” are defined in the Listing Rules as “securities which are convertible by the holder or otherwise by their terms of issue, into equity securities”. If the issue of a convertible security has complied with Listing Rule 7.1 (or has been covered by an exception in Listing Rule 7.2), then the issue of securities upon conversion or exercise of the convertible security should not again be subject to the restrictions in Listing Rule 7.1. Otherwise, the rights attached to the convertible security may not be able to be effectively exercised by the related party if the listed entity were required to obtain security holder approval before issuing securities upon conversion or exercise. Accordingly, approval is only being sought for the issue of those convertible securities the subject of Resolution 4, as approval for issue of shares upon the vesting of the convertible securities is not required given Listing Rule 7.2 (Exception 4).

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The effect of Resolution 4 will be to allow the Directors to issue the Consideration Shares and Capital Raising Shares during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s annual 15% placement capacity.

The following information is provided in relation to Resolution 4 pursuant to and in accordance with Listing Rule 7.3:

(a) Maximum number of securities to be issued

Entity	Consideration Shares (excluding Performance Shares)	Capital Raising Shares	Consideration Shares (Performance Shares Class A)	Consideration Shares (Performance Shares Class B)	Total


Livelynk Vendor	23,500,000	2,501,558	23,100,000	15,400,000	64,501,558

(See Annexure A for further details)

(b) Date by which the entity will issue the securities

It is proposed that the Consideration Shares and Capital Raising Shares the subject of Resolution 4 will be issued at completion of the Proposed Transaction in accordance with the timetable set out in section 2.13. In any event, however, the Consideration Shares and Capital Raising Shares the subject of Resolution 4 will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules), save for the Shares to be issued upon vesting of the Performance Shares Class A and the Performance Shares Class B which Performance Shares will vest respectively into Shares upon the satisfaction of the relevant performance milestones set out in Annexure H.

(c)

Issue price of the securities

No cash consideration is payable for the Consideration Shares as they are being issued in consideration of the Livelynk Vendor’s securities in Livelynk. No cash consideration is payable for the Capital Raising Shares the subject of Resolution 4 as they are being issued as repayment of certain loan amounts owed by Mpire to the Livelynk Vendor as described above. The deemed issue price of the Shares comprised of the Consideration Shares and Capital Raising Shares is $0.20 each.

The Class A and Class B Performance Shares are being issued for nil cash consideration, and the deemed issue price is $0.00 per Performance Share.

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(d) Names of the persons to whom the entity will issue the securities (if known) or basis upon which those persons will be identified as selected.

Zhenya Holdings (being the Livelynk Vendor).

(e) Terms of the Securities

The Consideration Shares (excluding the Performances Shares Class A and Performances Shares Class B) and the Capital Raising Shares to be issued to the Livelynk Vendor will rank equally in all respects with Existing Shares on issue. The Share Sale and Purchase Agreement relating to the issue of the Consideration Shares is summarised in section 2.2.

Full terms of the Performance Shares are set out in Annexure H.

If the Board determines, in its sole discretion, that the performance conditions set out below have been satisfied prior to the relevant expiry date then that class of Performance Shares will vest and be converted into Shares on a one for one basis.

Class	Performance Condition	Expiry Date
Class A	Mpire achieving revenue of $15,000,000 in the 18 month period commencing on the day the Company is re-admitted to quotation on ASX after recompliance with Chapters 1 and 2 of the Listing Rules.	18 months from re-admission of the Company to the ASX
Class B	Mpire achieving revenue of $25,000,000 in the 24 month period commencing on the day the Company is re-admitted to quotation on ASX after recompliance with Chapters 1 and 2 of the Listing Rules.	24 months from re-admission of the Company to the ASX

(f) Intended use of the funds raised

No funds will be raised from the issue of the Consideration Shares and the Capital Raising Shares as they are being issued respectively as consideration for the Livelynk Vendor’s securities in Livelynk and as conversion of debts owed by Mpire to the Livelynk Vendor into Shares as repayment of those debts.

Section 208 of the Corporations Act

Mr Tsvetnenko owns 100% of the issued capital of the Livelynk Vendor and is a related party of the Livelynk Vendor by virtue of this relationship. Mr Tsvetnenko and the Livelynk Vendor are also related parties of the Company for the purposes of section 228(6) of the Corporations Act as described above.

As required by section 219 of the Corporations Act, the following information is provided in relation to Resolution 4:

(a) Related party to whom the financial benefit is to be given

The Livelynk Vendor and Mr Tsvetnenko.

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(b) Nature of the financial benefit

It is proposed that the Livelynk Vendor, being Zhenya Holdings will receive up to $1,500,311.50 in cash as loan repayments pursuant to the Historical Loan and Working Capital Loan plus the Consideration Shares and the Capital Raising Shares described in Resolution 4 as per the table below:

Entity	Consideration Shares (excluding Performance Shares)	Capital Raising Shares	Consideration Shares (Performance Shares Class A)	Consideration Shares (Performance Shares Class B)	Total



Livelynk Vendor	23,500,000	2,501,558	23,100,000	15,400,000	64,501,558

(c) Terms of the securities

The terms of the Consideration Shares and Capital Raising Shares are described above (and at Annexure H for the Performance Shares).

(d)

Valuation of the financial benefits

The deemed issue price of the Consideration Shares and the Capital Raising Shares (excluding the Performances Shares Class A and Performances Shares Class B) is $0.20 each.

The value of the benefit of the Performance Shares is set out in Annexure G and their deemed issue price is $0.00 per Performance Share.

The valuation of the funds to be paid by the Company to the Livelynk Vendor in cash as loan repayments pursuant to the Historical Loan and Working Capital Loan is up to $1,500,311.50.

(e)

Current security interests

At the date of this Notice, Zhenya Holdings and Mr Tsvetnenko and their associates do not have any Relevant Interests or Voting Power in the securities of the Company. If all Performance Shares vest and are converted into Shares and no other Shares are issued by the Company other than pursuant to the Resolutions, assuming the minimum Capital Raising of $7 million is raised, Zhenya Holdings’ and Mr Tsvetnenko’s and their associates’ aggregated Voting Power in the Company will be 41.13% as set out in Annexure A.

(f) Dilution

If all Shares are issued pursuant to the Resolutions in this Notice, all Performance Shares vest into Shares, the minimum raising of $7 million is raised under the Capital Raising and no other Shares are issued by the Company (including pursuant to the conversion of any Options), then the issue of all of the Consideration Shares and the 2,501,558 Capital Raising Shares the subject of Resolution 4 would dilute Shareholders by approximately 41.13%.

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(g) Remuneration and emoluments

The proposed remuneration and emoluments to be paid by the Company to Mr Tsvetnenko, in his capacity as a proposed Non-Executive Director of the Company are set out below (inclusive of superannuation), which may be subject to increases from time to time in compliance with applicable laws:

Related Party	Current Financial Year	Previous Financial Year

Mr Eugeni ‘Zhenya’ Tsvetnenko	$52,560	Nil

The Livelynk Vendor is not proposed to receive remuneration or emoluments from the Company.

(h) Share trading history

The trading history of the Shares on ASX in the 12 months before the date of this Notice is set out below:

	Price	Date
Highest	$0.049	11 July 2014
Lowest	$0.014	26 June 2014
Last	$0.028	2 October 2014

(i)

Opportunity costs to the Company

The Directors do not consider that there are any opportunity costs to the Company or benefits foregone by the Company in issuing the Consideration Shares or Capital Raising Shares to the Livelynk Vendor or in paying the amount of up to $1,500,311.50 in cash loan repayments under Resolution 4.

(j)

Intended use of funds raised

No funds will be raised from the issue of the Consideration Shares and the Capital Raising Shares or from the loan repayments under Resolution 4.

(k)

Directors’ interests

No Existing Director has a material personal interest in the outcome of Resolution 4.

(l)

Directors’ recommendations

Each of the Existing Directors recommends that Shareholders vote in favour of Resolution 4 on the basis that, in their opinion, the proposed issue of the Consideration Shares and the Capital Raising Shares the subject of Resolution 4 are fair and reasonable as consideration respectively for the Company acquiring 100% of the issued capital of Livelynk and as part conversion of debts owed by Mpire to the Livelynk Vendor into Shares in the Company and the repayment of cash advances made by the Livelynk Vendor is reasonable in the circumstances.

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(m) Other information

Other than as set out in this Explanatory Statement, there is no further information that is known to the Company or any of the Existing Directors which Shareholders would reasonably require in order to decide whether or not it is in the Company’s best interests to pass Resolution 4.

Section 611 (item 7) of the Corporations Act

Resolution 4 seeks Shareholder approval under item 7 of section 611 of the Corporations Act to the acquisition by the Livelynk Vendor, Eugeni, ‘Zhenya’ Tsvetnenko and their associates of Voting Power of up to 41.13% in the Company, via their acquisition of a Relevant Interest in up to 64,501,558 Shares pursuant to Resolution 4 (including after vesting of all the Performance Shares) as shown in Annexure A.

Except as provided by Chapter 6 of the Corporations Act, section 606(1) of the Corporations Act prohibits a person from acquiring a Relevant Interest in voting shares in a company if, after the acquisition, that person or any other person would have a Voting Power in excess of 20% of the voting shares in that company.

Item 7 of section 611 of the Corporations Act provides that section 606(1) of the Corporations Act does not apply to an acquisition of a Relevant Interest in the voting shares in a company if the company has agreed to the acquisition by resolution passed at a general meeting at which no votes are cast in relation to the resolution by the person to whom the shares are to be issued or by an associate of that person.

Under section 610 of the Corporations Act, a person’s Voting Power is determined by the percentage of the total voting shares in the Company held by the person and the person’s associates.

The Company is seeking the approval of Shareholders under item 7 of section 611 of the Corporations Act for the purposes of section 606 of the Corporations Act because, following the time of issuing the Shares pursuant to Resolution 4 (assuming the Performance Shares vest into Shares but no further Shares are issued or Options exercised) the Livelynk Vendor, Mr Tsvetnenko and their associates are anticipated to hold Voting Power in the Company of approximately 41.13% if the minimum of $7,000,000 is raised under the Capital Raising, and 37.54% if the maximum of $10,000,000 is raised under the Capital Raising as set out in Annexure A.

The Livelynk Vendor, Mr Tsvetnenko and their associates are precluded from voting on Resolution 4.

Relevant Interests and Voting Power

This section sets out the effect of the issue of Shares pursuant to Resolution 4 on Relevant Interests and Voting Power of the Livelynk Vendor, Mr Tsvetnenko and their associates in relation to the Company.

(a) Identity of persons who will receive Shares in the Company pursuant to Resolution 4 and their associates

If Resolution 4 is passed, and all Shares are issued pursuant to that Resolution, the Livelynk Vendor will be issued with the numbers of Shares (and the Livelynk Vendor and Mr Tsvetnenko will thereby acquire a Relevant Interest in the number of Shares) set out in Annexure A.

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If Resolutions 4 is passed and on completion of the Proposed Transaction and Capital Raising, the persons who will hold a Relevant Interest in the Shares, along with their associates, are the Livelynk Vendor and Eugeni ‘Zhenya’ Tsvetnenko (due to him controlling and being the sole director and shareholder of the Livelynk Vendor).

Mr Tsvetnenko is the sole director and sole shareholder of Zhenya Holdings, which is the sole Shareholder of Livelynk (as trustee for the Zhenya Holdings Trust, of which Mr Tsvetnenko and the children of Mr Tsvetnenko are the beneficiaries). Mr Tsvetnenko and the Livelynk Vendor are also associates of each other pursuant to the Corporations Act as they are acting in concert, in relation to the Company’s affairs. Mr Tsvetnenko is also a director of Livelynk and is proposed to be a Non-Executive Director of the Company from completion of the Proposed Transaction.

The following parties are associates of the Livelynk Vendor and Mr Tsvetnenko (in addition to the entities comprising Mpire being associates of the Livelynk Vendor and Mr Tsvetnenko):

Lydian Enterprises Pty Ltd ACN 139 802 921 as trustee for Lydian Trust: Mr Tsvetnenko controls Lydian Enterprises Pty Ltd which also ultimately controls Magna Fortis Pty Ltd ACN 149 529 902, Alcubierre Holdings Pty Ltd ACN 161 698 871, Tsvet Pty Ltd ACN 140 057 718 and House of Zhivago Pty Ltd ACN 150 075 255.
The following entities are also ultimately controlled by Mr Tsvetnenko; Cellularis Pty Ltd ACN 132 124 942, Cellular Dreams (Canada) Pty Ltd ACN 121 698 182, Cellular Dreams (USA) Pty Ltd ACN 121 698 208, Cellular Dreams (NZ) Pty Ltd ACN 121 698 226, Interfun Pty Ltd ACN 132 960 742, Mobile Ecstasy Pty Ltd ACN 132 956 079, Mobilicious Pty Ltd ACN 132 104 922, Mpire Media Holdings Pty Ltd ACN 137 173 730, On the Dollar Pty Ltd ACN 132 556 408, Skycell International Pty Ltd ACN 120 509 426, Surreal Minds Pty Ltd ACN 132 956 088, Toy Investments Pty Ltd ACN 132 555 232, Trendy Investments Pty Ltd ACN 130 972 771, Zhenya Enterprises Pty Ltd ACN 120 137 804, Zhenya Publishing Pty Ltd ACN 132 576 295, and Zhenya Records Pty Ltd ACN 128 765 382.
(b) Impact of the Proposed Transaction and Capital Raising pursuant to Resolution 4 on the Voting Power of the Livelynk Vendor, Mr Tsvetnenko and their associates in the Company’s Shares

Company’s capital structure

As at the date of this Notice, the Company has 135,632,437 Shares on issue. Following the Capital Consolidation proposed in Resolution 2, the number of Shares will decrease to approximately 27,126,487 Shares (subject to rounding).0F[1]

Assuming all Shares are issued pursuant to the Resolutions, the capital structure of the Company will consist of the following voting securities:

1 As noted in section 2.19, there is a possibility that up to 18,082,551 Shares (on a post-Capital Consolidation basis) will be issued pursuant to the exercise of existing and proposed Options. Voting Power has been calculated on the basis that none of these Options will be exercised to ensure that the maximum Voting Power is determined.

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89,751,492 Shares (assuming that $7,000,000 (minimum subscription) is raised under the Capital Raising); or
104,751,492 Shares (assuming that $10,000,000 (full subscription) is raised under the Capital Raising).

Current Voting Power of the Livelynk Vendor

The Livelynk Vendor, Eugeni ‘Zhenya’ Tsvetnenko and their associates do not have any existing Relevant Interest or Voting Power in any Shares.

Relevant Interests and maximum Voting Power of the Livelynk Vendor upon completion of the Proposed Transaction

Once all of the Shares and Performance Shares referred to in the Resolutions have been issued, the maximum number of Shares in which the Livelynk Vendor, Eugeni ‘Zhenya’ Tsvetnenko and their associates will have a Relevant Interest and their maximum Voting Power is set out in Annexure A.

The Relevant Interests and maximum Voting Power of the Livelynk Vendor, Eugeni ‘Zhenya’ Tsvetnenko and their associates in Annexure A are provided assuming no options are exercised and based on the Company raising:

$7,000,000 under the Capital Raising (the minimum raising); and
$10,000,000 under the Capital Raising (the proposed full subscription amount).

Based on the Company raising $7,000,000 under the Capital Raising, the Livelynk Vendor and Eugeni ‘Zhenya’ Tsvetnenko would hold a Relevant Interest in up to 64,501,558 Shares and the Livelynk Vendor, Eugeni ‘Zhenya’ Tsvetnenko and their associates would hold Voting Power of 41.13% of the Shares in the Company, in each case upon the issue of all Shares pursuant to the Resolutions and assuming all Performance Shares vest into Shares but no Options are exercised. That Voting Power is also the maximum extent of the increase in the Voting Power in the Company of the Livelynk Vendor and Mr Tsvetnenko and their associates.

Based on the Company raising $10,000,000 under the Capital Raising, the Livelynk Vendor and Eugeni ‘Zhenya’ Tsvetnenko would hold a Relevant Interest in up to 64,501,558 Shares, and the Livelynk Vendor, Eugeni ‘Zhenya’ Tsvetnenko and their associates would hold Voting Power of 37.54% of the Shares in the Company, in each case upon the issue of all Shares pursuant to the Resolutions and assuming all Performance Shares vest into Shares but no Options are exercised.

ASX escrow requirements

Subject to the re-quotation of the Shares and quoted Options on ASX, all or part of the Performance Shares, Shares and Options to be issued pursuant to the Resolutions may be classified by ASX as restricted securities, and, if so, would be required to be held in escrow for up to 24 months from the date of re-quotation. During the period in which these securities are prohibited from being transferred, trading in Shares may be less liquid which may impact on the ability of a Shareholder to dispose of their Shares in a timely manner. As at the date of this Notice of Meeting, ASX has not made a determination in this regard.

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Details of any agreement between the Livelynk Vendor and/or Mr Tsvetnenko and the Company (and/or any of their associates), that is conditional (directly or indirectly) on approval of the Proposed Transaction

The Company is not aware of any agreement between the Livelynk Vendor and/or Mr Tsvetnenko and the Company (and/or any of their associates) that is conditional on approval of the Proposed Transaction other than those set out in this Explanatory Statement.

Intentions as to the future of the Company

Other than an disclosed elsewhere in this Explanatory Statement and changes pursuant to the Proposed Transaction and the Resolutions, the Company understands that the Livelynk Vendor, Mr Tsvetnenko and their associates (and the Proposed Directors):

(a) have no current intention of making any changes to the business of the Company following the acquisition of Livelynk other those changes to the nature and scale of activities of the Company as referred to in this Explanatory Statement;
(b) do not propose to inject further capital into the Company other than by way of the Capital Raising as referred to in this Explanatory Statement;
(c) do not propose that any assets be transferred from the Company to the Livelynk Vendor, Mr Tsvetnenko or their associates;
(d) have no intention of making changes regarding the future employment of the present employees of the Company, other than as set out in this Explanatory Statement;
(e) have no intention to change the composition of the Board other than the proposal as described in this Explanatory Statement for the Proposed Directors to replace the Existing Directors on the Board; and
(f) have no intention to otherwise redeploy the fixed assets of the Company.

Financial and dividend policies of the Company

There is no immediate intention of the Existing Directors, the Proposed Directors or the Livelynk Vendor to change the financial or dividend policies of the Company.

The identity, associations (with the Livelynk Vendor) and qualifications of any person who is intended to or will become a Director

It is proposed that Mr Tsvetnenko, Mr Taylor, Mr Botnick and Mr Belben will join the Board following completion of the Proposed Transaction. Following the appointment of the Proposed Directors, Mr Graziano, Mr James and Mr Peterson will resign as Directors.

Refer to Section 2.10 of this Explanatory Statement for the biographies of the Proposed Directors.

Proposal is not fair, but reasonable

The report of the Independent Expert concludes that the proposed issue of Shares pursuant to Resolution 4 and the Proposed Transaction described in this Explanatory

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Statement, are not fair but reasonable to non-associated Shareholders. Shareholders are urged to consider the Independent Expert’s Report in detail (see Annexure C).

3.7 Resolution 5: Issue of Performance Shares to Proposed Directors Mr Taylor and Mr Botnick

Subject to Resolutions 1 to 4 (inclusive) and 6 to 11 (inclusive) being passed, Resolution 5 is an ordinary resolution which seeks approval under Listing Rule 7.1 and section 208 of the Corporations Act to issue Performance Shares (in the amounts specified in the table at paragraph 3.7(b) below) to Mr Taylor (or his nominee) and Mr Botnick.

Section 208 of the Corporations Act

Section 208(1)(a) of the Corporations Act prohibits a company from giving a financial benefit (including an issues of performance shares) to a related party of the company without the approval of shareholders by a resolution passed at a general meeting at which no votes are cast in relation to the resolution in respect of any shares held by the related party or by an associate of the related party.

Mr Taylor and Mr Botnick are related parties of the Company under section 228(6) of the Corporations Act as it is proposed that they will be appointed as directors of the Company following completion of the Proposed Transaction. Accordingly, Shareholder approval is sought under section 208 of the Corporations Act to permit the issue of the Performance Shares under Resolution 5 to Mr Taylor and Mr Botnick.

As required by section 219 of the Corporations Act, the following information is provided in relation to Resolution 5:

(a) Related party to whom the financial benefit is to be given

Mr Taylor (or his nominee) and Mr Botnick.

(b) Nature of the financial benefit

It is proposed that Mr Taylor, Mr Botnick will be issued Performance Shares as per the table below:

Entity	Performance Shares Class A	Performance Shares Class B	Total

Mr Taylor	10,800,000	7,200,000	18,000,000
Mr Botnick	5,400,000	3,600,000	9,000,000
Total	16,200,000	10,800,000	27,000,000

(c) Terms of the securities

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Class	Performance Condition	Expiry Date
Class A	Mpire achieving revenue of $15,000,000 in the 18 month period commencing on the day the Company is re-admitted to quotation on ASX after recompliance with Chapters 1 and 2 of the Listing Rules.	18 months from re-admission of the Company to the ASX
Class B	Mpire achieving revenue of $25,000,000 in the 24 month period commencing on the day the Company is re-admitted to quotation on ASX after recompliance with Chapters 1 and 2 of the Listing Rules.	24 months from re-admission of the Company to the ASX

Full terms of the Performance Shares are set out in Annexure H.

(d) Valuation of the financial benefits

The value of the financial benefit of the Performance Shares is set out in Annexure G.

(e)

Current security interests

Mr Taylor and Mr Botnick are to receive the Performance Shares the subject of Resolution 5.

At the date of this Notice, Mr Taylor and Mr Botnick do not have any Relevant Interests in the securities of the Company. If all Performance Shares vest and are converted into Shares and no other Shares are issued by the Company other than those contemplated by the Resolutions and assuming no Options are exercised, Mr Taylor’s and Mr Botnick’s Voting Power in the Company will be in accordance with table below:

					Total Shares upon vesting of Performance Shares2
				Performanc e Shares Class B
	Existing Shares1	Consideration Shares	Performance Shares Class A			Voting Power2
Entity



Mr Taylor and his associates	Nil	Nil	10,800,000	7,200,000	18,000,000	11.48%
Mr Botnick and his associates	Nil	Nil	5,400,000	3,600,000	9,000,000	5.74%

Notes:

The Existing Shares are set out on a post-Capital Consolidation basis and are subject to rounding.
Assumes that Mr Taylor and Mr Botnick do not apply for Shares under the Capital Raising.

The total numbers of Shares on issue upon which these Voting Power percentages are calculated:

are subject to the rounding effects of the Capital Consolidation;
assume that no Shares are issued from the date of this Notice until completion of the Proposed Transaction (including pursuant to the exercise of existing Options) other than those Shares proposed to be issued pursuant to the Resolutions in this Notice of Meeting;

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assume that the Performance Shares vest into Shares; and
assume that the minimum Capital Raising of $7 million is raised.

(f)

Dilution

If all Shares are issued pursuant to the Resolutions in this Notice (assuming the minimum raising of $7,000,000 is raised pursuant to the Capital Raising) and no other Shares are issued by the Company (including pursuant to the conversion of any Options), then the issue of the Shares upon vesting of the Performance Shares the subject of Resolution 5 would dilute Shareholders by approximately 17.22%.

(g)

Remuneration and emoluments

The proposed remuneration and emoluments to be paid by the Company to Mr Taylor, in his capacity as Proposed Managing Director/Chief Executive Officer of the Company, and to Mr Botnick, in his capacity as Proposed Executive Director/Chief Marketing Officer of the Company, are set out below (inclusive of superannuation and equivalent foreign payments), which may be subject to increases from time to time in compliance with applicable laws:

Related Party	Current Financial Year	Previous Financial Year

Mr Luke Taylor	Proposed remuneration with the Company to be agreed but current Mpire salary includes $219,000 salary per annum plus 1% of any net profit of certain Mpire entities above targeted net profit (if any)	Nil
Mr Jeff Botnick	Proposed remuneration with the Company to be agreed but current Mpire salary includes US$265,000 salary per annum plus 7.5% of any gross profits (after actual media costs) of certain Mpire entities plus benefits to the value of approximately $6,000 per annum	Nil

No representation or forecast is made as to whether Mpire or the Company will generate any revenues or profits in the future.

(h)

Opportunity costs to the Company

The Directors do not consider that there are any opportunity costs to the Company or benefits foregone by the Company in issuing the Performance Shares to Mr Taylor and Mr Botnick under Resolution 5.

(i)

Intended use of funds raised

No funds will be raised from the issue of the Performance Shares or on vesting of the Performance Shares into Shares. The consideration for issues of the Performance Shares pursuant to Resolution 5 is performance based remuneration for Messrs Taylor and Botnick. The deemed issue price per Performance Share is $0.00.

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(j) Directors’ interests

No Existing Director has a material personal interest in the outcome of Resolution 5.

(k) Directors’ recommendations

Each of the Existing Directors recommends that Shareholders vote in favour of Resolution 5 on the basis that, in their opinion, the proposed issue of Performance Shares is fair and reasonable.

(l) Other information

Listing Rule 7.1

Given that none of the exceptions contained in Listing Rule 7.2 apply to the Performance Shares the subject of Resolution 5, Shareholder approval is sought under Listing Rule 7.1 to approve the issue of those Performance Shares.

The effect of Resolution 5 will be to allow the Directors to issue the Performance Shares during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s annual 15% placement capacity.

Listing Rule 10.12 (Exception 6) provides an exception to Listing Rule 10.11 where a person is a related party by reason only of the transaction which is the reason for the issue of the securities and the application to it of section 228(6) of the Corporations Act. As Mr Taylor and Mr Botnick are only related parties by reason of the transaction, approval is being sought under Listing Rule 7.1 instead of Listing Rule 10.11.

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The following information is provided in relation to Resolution 5 pursuant to and in accordance with Listing Rule 7.3:

(a) Maximum number of securities to be issued

Entity	Performance Shares Class A	Performance Shares Class B	Total Performance Shares



Mr Luke Taylor (or his nominee described at paragraph (d) below)	10,800,000	7,200,000	18,000,000
Mr Jeff Botnick	5,400,000	3,600,000	9,000,000

(b) Date by which the entity will issue the securities

It is proposed that the Performance Shares the subject of Resolution 5 will be issued at completion of the Proposed Transaction in accordance with the timetable set out in section 2.13. In any event, however, those Performance Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules), save for the Shares to be issued upon vesting of the Performance Shares Class A and the Performance Shares Class B which Performance Shares will vest respectively into Shares upon the satisfaction of the relevant performance milestones set out in Annexure H. It is anticipated, but not guaranteed, that the Performance Shares will be issued on one date.

(c) Issue price of the securities

No cash consideration is payable for the Performance Shares the subject of Resolution 5 as they are being issued as performance based remuneration for Messrs Taylor and Botnick.

The Class A and Class B Performance Shares are being issued for nil cash consideration, and their deemed issue price is $0.00 per Performance Share.

(d) Names of the persons to whom the entity will issue the securities (if known) or basis upon which those persons will be identified as selected

Mr Luke Taylor in his own capacity or as trustee for the Taylor Family Trust and Mr Jeff Botnick.

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(e) Terms of the issue

Refer to the disclosures above in this Section 3.7.

(f) Intended use of the funds raised

Refer to the disclosures above in this Section 3.7.

3.8 Resolution 6: Issue of Performance Shares to Livelynk Employees

Subject to Resolutions 1 to 5 (inclusive) and 7 to 11 (inclusive) being passed, Resolution 6 is an ordinary resolution which seeks approval under Listing Rule 7.1 to issue Performance Shares (in the amounts specified in the table at paragraph 3.8(a) below) to the Livelynk Employees (listed in Annexure J).

Given that none of the exceptions contained in Listing Rule 7.2 apply to the Performance Shares the subject of Resolution 6, Shareholder approval is sought under Listing Rule 7.1 to approve the issue of those Performance Shares.

The effect of Resolution 6 will be to allow the Directors to issue the Performance Shares during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s annual 15% placement capacity.

The following information is provided in relation to Resolution 6 pursuant to and in accordance with Listing Rule 7.3:

(a)

Maximum number of securities

Entity	Performance Shares Class A	Performance Shares Class B	Total

Livelynk Employees	945,000	630,000	1,575,000

(b) Date by which the entity will issue the securities

It is proposed that the Performance Shares will be issued in accordance with the timetable set out in section 2.13. In any event, however, the Performance Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is anticipated, but not guaranteed, that the Performance Shares will be issued on one date.

(c) Issue price of the securities

The Performance Shares will be issued for nil cash consideration as they are being issued as a performance incentive to the Livelynk Employees. The Performance

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Shares will be issued at a deemed issue price of $0.00 per Performance Share. Accordingly, no funds will be raised from the issue of the Shares.

(d) Names of the persons to whom the entity will issue the securities (if known) or basis upon which those persons will be identified as selected

As set out in Annexure J.

(e) Terms of the Securities

Class	Performance Condition	Expiry Date
Class A	Mpire achieving revenue of $15,000,000 in the 18 month period commencing on the day the Company is re-admitted to quotation on ASX after recompliance with Chapters 1 and 2 of the Listing Rules.	18 months from re- admission of the Company to the ASX
Class B	Mpire achieving revenue of $25,000,000 in the 24 month period commencing on the day the Company is re-admitted to quotation on ASX after recompliance with Chapters 1 and 2 of the Listing Rules.	24 months from re- admission of the Company to the ASX

Full terms of the Performance Shares are set out in Annexure H.

(f) Intended use of funds raised

No funds will be raised from the issue of the Performance Shares to the Livelynk Employees or from the conversion of the Performance Shares into Shares.

3.9 Resolution 7: Issue of Shares pursuant to the Capital Raising

Subject to Resolutions 2 to 6 and 8 to 11 (inclusive) being passed, Resolution 7 is an ordinary resolution which seeks approval for the issue of up to 50,000,000 Shares at an issue price of $0.20 each to raise a minimum of $7,000,000 and up to $10,000,000. The issue will be made by way of a public offer under a prospectus to be issued pursuant to section 710 of the Corporations Act.

Listing Rule 7.1

Listing Rule 7.1 provides that, subject to certain exceptions, prior approval of shareholders is required for an issue of securities by a company if those securities, when aggregated with the securities issued by the company during the previous 12 months (without approval and which were not subject to an exception), exceed 15% of the number of shares on issue at the commencement of that 12 month period.

Resolution 7 seeks the approval of the issue of up to 50,000,000 Shares under the Prospectus for the purpose of satisfying the requirements of Listing Rule 7.1. If Resolution 7 is approved, the Shares issued under the Prospectus will not reduce in the Company’s 15% placement capacity for the purposes of Listing Rule 7.1.

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As required by Listing Rule 7.3, the following information is provided in relation to Resolution 7:

(a) Maximum number of securities the entity is to issue

50,000,000 Shares, on a post-Capital Consolidation basis.

(b) Date by which the entity will issue the securities

It is proposed that the Shares will be issued pursuant to the Capital Raising in accordance with the timetable set out in section 2.13. In any event, however, the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is anticipated, but not guaranteed, that the Shares proposed to be issued pursuant to the Capital Raising will be issued on one date.

(c) Issue price of the securities

$0.20 each.

(d) Names of the persons to whom the entity will issue the securities (if known) or basis upon which those persons will be identified or selected

The Shares are proposed to be issued to applicants who apply for Shares under the Prospectus.

(e) Terms of the securities

The Shares will rank equally in all respects with the Existing Shares, however they will be issued after the Capital Consolidation. Full terms and conditions of the Capital Raising will be set out in the Prospectus.

(f) Intended use of the funds raised

Funds raised by the issue of the Shares under the Capital Raising are intended to be used in accordance with the table set out in section 2.20.

3.10 Resolution 8: Change of Company name

Subject to Resolutions 2 to 7 and 9 to 11 (inclusive) being passed, Resolution 8 is a special resolution which seeks approval to change the name of the Company.

Consistent with the new focus and direction of the Company, upon completion of the Proposed Transaction the Company proposes to change its name from “Lithex Resources Limited” to “Tech Mpire Limited”. This change will not, in itself, affect the legal status of the Company or any of its assets or liabilities.

Shareholder approval is required for Resolution 8 by special resolution under section 157(1)(a) of the Corporations Act.

Mpire has reserved the name “Tech Mpire Limited” with ASIC. On or about the date of completion of the Proposed Transaction, the Company will make an application to ASIC for the change of its name to “Tech Mpire Limited”. The new name will take effect upon a new certificate of registration being issued by ASIC. The Company will not change its name if completion of the Proposed Transaction does not occur.

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3.11 Resolution 9: Issue of New Options and Shares to Trident Capital

Subject to Resolutions 2 to 8 and 10 and 11 (inclusive) being passed, Resolution 9 is an ordinary resolution which seeks approval for the issue of 6,000,000 New Options and 2,000,000 Shares to Trident Capital on a post-Capital Consolidation basis. The New Options will have an exercise price of $0.25 and will expire on 30 June 2017. No cash consideration is payable for the New Options and Shares. The New Options and Shares are primarily being issued to Trident Capital in consideration for introducing Livelynk as an acquisition target to the Company.

Listing Rule 7.1

Listing Rule 7.1 provides that where a company approves an issue of securities, the company’s 15% capacity will be replenished and the company will be able to issue further securities up to that limit.

Resolution 9 seeks the approval of the issue of 6,000,000 New Options and 2,000,000 Shares to Trident Capital for the purpose of satisfying the requirements of Listing Rule 7.1. If Resolution 9 is approved, the New Options and Shares issued to Trident Capital will not reduce the Company’s 15% placement capacity for the purposes of Listing Rule 7.1.

As required by Listing Rule 7.3, the following information is provided in relation to Resolution 9:

(a) Maximum number of securities the entity is to issue

6,000,000 New Options and 2,000,000 Shares on a post-Capital Consolidation basis in accordance with the following table:

Entity	New Options	Shares	Total
Trident Capital (or its nominee)	6,000,000	2,000,000	8,000,000

(b) Date by which the entity will issue the securities

It is proposed that the New Options and Shares will be issued at completion of the Proposed Transaction in accordance with the timetable set out in section 2.13. In any event, however, the New Options and Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is anticipated, but not guaranteed, that the Shares and New Options proposed to be issued pursuant to Resolution 9 will be issued on one date.

(c) Issue price of the securities

No cash consideration will be received by the Company for the New Options and Shares as they are being issued to Trident Capital in payment of its introduction fee for introducing Livelynk as an acquisition target to the

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Company. The Shares will be issued at a deemed issue price of $0.20 per Share. The Options will be free issued.

(d) Names of the persons to whom the entity will issue the securities (if known) or basis upon which those persons will be identified or selected

The New Options and Shares to be issued under Resolution 9 will be issued to, Trident Capital (and/or its nominees). No New Options or Shares will be issued under Resolution 9 to related parties of the Company.

(e) Terms of the securities

Each New Option will have an exercise price of $0.25, an expiry date of 30 June 2017, and will otherwise be issued on the terms set out in Annexure D. Shares issued upon any exercise of the New Options will rank equally in all respects with Existing Shares (on a post-Capital Consolidation basis). The Shares will rank equally in all respects with Existing Shares (on a post-Capital Consolidation basis).

ASX escrow requirements

Subject to the re-quotation of the Shares on ASX, all or part of the Shares and New Options issued pursuant to Resolution 9 may be classified by ASX as restricted securities, and, if so, would be required to be held in escrow for up to 24 months from the date of re-quotation. During the period in which these Shares and Options are prohibited from being transferred, trading in Shares may be less liquid which may impact on the ability of a Shareholder to dispose of their Shares in a timely manner. As at the date of this Notice of Meeting, ASX has not made a determination in this regard.

3.12 Resolution 10: Issue of Shares to Niche Export Agency

Subject to Resolutions 2 to 9 and 11 (inclusive) being passed, Resolution 10 is an ordinary resolution which seeks approval for the issue of 625,000 Shares to Niche Export Agency for no cash consideration in payment of its fee for introducing Livelynk as an acquisition target to the Company.

Listing Rule 7.1

Resolution 10 seeks the approval of the issue of 625,000 Shares to Niche Export Agency for the purpose of satisfying the requirements of Listing Rule 7.1. If Resolution 10 is approved, the Shares issued to Niche Export Agency will not reduce the Company’s 15% placement capacity for the purposes of Listing Rule 7.1.

As required by Listing Rule 7.3, the following information is provided in relation to Resolution 10:

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(a) Maximum number of securities the entity is to issue

625,000 Shares, on a post-Capital Consolidation basis, in accordance with the following table:

Entity	Number of Shares
Niche Export Agency (and/or its nominees)	625,000

(b) Date by which the entity will issue the securities

It is proposed that the Shares will be issued at completion of the Proposed Transaction in accordance with the timetable set out in section 2.13. In any event, however, the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is anticipated, but not guaranteed, that the Shares proposed to be issued pursuant to Resolution 10 will be issued on one date.

(c) Issue price of the securities

No cash consideration will be received by the Company for the Shares as they are being issued to Niche Export Agency in payment of its introduction fee for introducing Livelynk as an acquisition target to the Company. The Shares will be issued at a deemed issue price of $0.20 per Share.

(d) Names of the persons to whom the entity will issue the securities (if known) or basis upon which those persons will be identified or selected

The Shares to be issued under Resolution 10 will be issued to Niche Export Agency (and/or its nominees). No Shares will be issued under Resolution 10 to related parties of the Company.

(e)

Terms of the securities

The Shares will rank equally in all respects with Existing Shares (on a postCapital Consolidation basis).

(f)

ASX escrow requirements

Subject to the re-quotation of the Shares on ASX, all or part of the Shares issued may be classified by ASX as restricted securities, and, if so, would be required to be held in escrow for up to 24 months from the date of requotation. During the period in which these Shares are prohibited from being transferred, trading in Shares may be less liquid which may impact on the ability of a Shareholder to dispose of their Shares in a timely manner. As at the date of this Notice of Meeting, ASX has not made a determination in this regard.

3.13 Resolution 11: Issue of Shares to CPS Capital

Subject to Resolutions 2 to 10 (inclusive) being passed, Resolution 11 is an ordinary resolution which seeks approval for the issue of 1,500,000 Shares to CPS Capital for no cash consideration in payment of its introduction fee for introducing Livelynk as an acquisition target to the Company.

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Section 208 of the Corporations Act

Mr Jason Peterson is an Existing Director of the Company and a director of CPS Capital. Mr Peterson is a shareholder of the Company and owns 26% of the issued capital in CPS Capital. Mr Peterson is a related party of the Company for the purposes of section 228(2)(a) and CPS Capital is a related party of the Company for the purposes of section 228(4). The Company is seeking the approval of Shareholders to Resolution 11 in accordance with section 208(1) of the Corporations Act and Listing Rule 10.11.

As required by section 219 of the Corporations Act, the following information is provided in relation to Resolution 11:

(a) Related party to whom the financial benefit is to be given

CPS Capital (and/or its nominees) and Mr Peterson (and/or his nominees).

(b)

Nature of the financial benefit

It is proposed that CPS Capital (and/or its nominees) will be issued 1,500,000 Shares on a post-Capital Consolidation basis, in accordance with the following table:

Entity CPS Capital (and/or its nominee(s))	Number of Shares
	1,500,000

(c) Terms of the securities

The Shares will rank equally in all respects with Existing Shares (on a postCapital Consolidation basis).

(d)

Valuation of the financial benefits

The deemed issue price of the Shares is $0.20 each.

(e)

Current security interests

At the date of this Notice, Mr Peterson and CPS Capital have the following interests in the securities of the Company as set out in the following table:


	Existing Shares1	Shares pursuant to Resolution 11		Voting Power2	Voting Power3
Entity			Total Shares2


CPS Capital	Nil	1,500,000	1,500,000	1.67%	1.43%
Mr Peterson	2,045,173	-	2,045,173	2.28%	1.95%
TOTAL	2,045,173	1,500,000	3,545,173	3.95%	3.38%

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Notes:

The Existing Shares are set out on a post-Capital Consolidation basis and are subject to rounding.
Assumes that Mr Peterson and CPS Capital do not apply for Shares under the Capital Raising.
The total numbers of Shares on issue upon which these Voting Power percentages are calculated:
are subject to the rounding effects of the Capital Consolidation;
assume that no Shares are issued from the date of this Notice until completion of the Proposed Transaction (including pursuant to the exercise of existing Options) other than those Shares proposed to be issued pursuant to the Resolutions in this Notice of Meeting;
assume the Performance Shares do not vest into Shares; and
assume the minimum raising of $7 million is raised pursuant to the Capital Raising and that no Performance Shares are vested.
Assumes that Mr Peterson and CPS Capital do not apply for Shares under the Capital Raising.
The total numbers of Shares on issue upon which these Voting Power percentages are calculated:
are subject to the rounding effects of the Capital Consolidation;
assume that no Shares are issued from the date of this Notice until completion of the Proposed Transaction (including pursuant to the exercise of existing Options) other than those Shares proposed to be issued pursuant to the Resolutions in this Notice of Meeting;
assume the Performance Shares do not vest into Shares; and
assume the maximum raising of $10 million is raised pursuant to the Capital Raising and that no Performance Shares are vested.

(f) Dilution

If all Shares are issued pursuant to the Resolutions in this Notice and no other Shares are issued by the Company (including pursuant to the conversion of any Options or vesting of Performance Shares), then the issue of the Shares to CPS Capital as contemplated by Resolution 11 would dilute Shareholders by approximately 1.67% assuming the minimum of $7 million is raised pursuant to the Capital Raising and 1.43% assuming the maximum of $10 million is raised pursuant to the Capital Raising.

(g) Remuneration and emoluments

The remuneration and emoluments from the Company to Mr Jason Peterson and CPS Capital for the previous financial year and the proposed remuneration and emoluments for the current financial year are set out below:

Related Party	Current Financial Year	Previous Financial Year

Mr Jason Peterson	$20,000	$23,333
CPS Capital	$32,551.79	-

(h) Opportunity costs to the Company

The Directors do not consider that there are any opportunity costs to the Company or benefits foregone by the Company in issuing the Shares to CPS Capital under Resolution 11.

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(i) Intended use of funds raised

No funds will be raised from the issue of the Shares to CPS Capital.

(j) Directors’ interests

Mr Peterson has a material personal interest in Resolution 11 by virtue of his shareholding in CPS Capital as set out above. Accordingly, Mr Peterson (and/or his nominee) and any of his associates will be excluded from voting on Resolution 11 as set out in the Voting Exclusion Statement. No Existing Director, save for Jason Peterson, has a material personal interest in the outcome of Resolution 11.

(k) Directors’ recommendations

Each of the Existing Directors (other than Jason Petersen) recommends that Shareholders vote in favour of Resolution 11 on the basis that, in their opinion, the proposed issue of the Shares to CPS Capital is fair and reasonable compensation for the introduction fee in connection with the Proposed Transaction.

(l) Other information

Listing Rule 10.11

Listing Rule 10.11 provides that a company must not issue equity securities to a “related party” without the approval of holders of ordinary securities. Further, Listing Rule 7.2 (Exception 14) states that approval pursuant to Listing Rule 7.1 is not required if shareholder approval is obtained under Listing Rule 10.11.

Shareholder approval is being sought under Listing Rule 10.11 to permit the issue of Shares under Resolution 11 to CPS Capital and consequently Shareholder approval is not required under Listing Rule 7.1.

The issue of Shares under Resolution 11 will not reduce the capacity of the Company to issue securities in the next 12 months under Listing Rule 7.1.

As required by Listing Rule 10.13, the following information is provided in relation to Resolution 11:

(a) Maximum number of securities to be issued

1,500,000 Shares, on a post-Capital Consolidation basis, in accordance with the following table:

Entity	Number of Shares
CPS Capital (and/or its nominees)	1,500,000

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(b) Date by which the entity will issue the securities

(c)

Relationship that requires Shareholder approval

Mr Peterson is a director of the Company and a director and shareholder of CPS Capital. Mr Peterson is a related party of the Company under section 228(2)(a) of the Corporations Act. CPS Capital is a related party of the Company under section 228(4) of the Corporations Act.

(d)

Issue price of the securities

No cash consideration will be received by the Company for the Shares as they are being issued to CPS Capital in payment of its introduction fee for introducing Livelynk as an acquisition target to the Company. The Shares will be issued at a deemed issue price of $0.20 per Share.

(e) Names of the persons to whom the entity will issue the securities (if known) or basis upon which those persons will be identified or selected

The Shares to be issued under Resolution 11 will be issued to CPS Capital.

(f)

Terms of the securities

The Shares will rank equally in all respects with Existing Shares (on a postCapital Consolidation basis).

CPS Capital and its associates are precluded from voting on Resolution 11 (inclusive of Mr Peterson and his associates).

ASX escrow requirements

Subject to the re-quotation of the Shares on ASX, all or part of the Shares issued may be classified by ASX as restricted securities, and, if so, would be required to be held in escrow for up to 24 months from the date of re-quotation. During the period in which these Shares are prohibited from being transferred, trading in Shares may be less liquid which may impact on the ability of a Shareholder to dispose of their Shares in a timely manner. As at the date of this Notice of Meeting, ASX has not made a determination in this regard.

3.14 Resolution 12: Non-Executive Directors’ Remuneration

ASX Listing Rule 10.17 provides that an entity must not increase the total aggregate amount of directors’ fees payable to all of its non-executive directors without the approval of holders of its ordinary securities.

Clause 6.5 of the Constitution requires that the total aggregate fixed sum per annum to be paid to the Non-Executive Directors will not exceed the sum determined by the Shareholders in general meeting.

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The maximum aggregate amount of fees payable to all of the Company’s NonExecutive Directors is currently set at $200,000. It is proposed that the fee pool for Non-Executive Directors be set at $250,000 per annum (an increase of $50,000):

(a) to provide sufficient scope for possible Board expansion and ongoing flexibility over the next two years;
(b) to accommodate any expansion of the Company’s operations domestically and internationally which may impose additional governance obligations on the Company (although no forecast or assurance is given of whether such expansion will occur); and
(c) to allow for the Board to set fees in light of the future workload of NonExecutive Directors.

The fee pool is inclusive of statutory entitlements (including superannuation) and any fees which a Non-Executive Director agrees to sacrifice for other benefits. It does not include reimbursement of genuine out of pocket expenses, genuine “special exertion” fees paid in accordance with the Constitution, or securities issued to a Non-Executive Director under ASX Listing Rule 10.11 or 10.14 with approval of Shareholders.

In the past 3 years, the Company has issued Non-Executive Directors an aggregate of 4,500,000 Shares and no Options with prior Shareholder approval under ASX Listing Rules 10.11 and 10.14.

Given the interest of the Company’s Non-Executive Directors in this Resolution, the Board makes no recommendation to Shareholders regarding this Resolution.

3.15 Resolution 13: Ratification and approval of past placement to sophisticated investors

On 17 July 2014 the Company announced that it had completed a capital raising by way of the Placement of 14,152,950 Shares at a price of $0.02 per Share to sophisticated investors to raise a total of $283,059.

Description of Cash Outflows
1. Cost of Offer	$18,682
2. Working Capital	$264,377
Total funds raised under the Offer	$283,059

The Company is seeking the approval of Shareholders to ratify the issue already made to sophisticated investors under the Placement pursuant to Resolution 13.

Accordingly, the Company seeks to obtain Shareholder approval for the purposes of Listing Rule 7.4 to ratify the issue of the above mentioned Shares to sophisticated investors as part of the Placement.

Listing Rule 7.1 prohibits a company, except in certain cases and subject to Listing Rules 7.1A and 7.4, from issuing new Shares equivalent in number to more than 15% of its ordinary Share capital in any 12 month period without the prior approval of its shareholders.

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Listing Rule 7.4 provides that an issue of Shares made without prior approval under Listing Rule 7.1 can be treated as having been made with that approval if Shareholders subsequently approve it and the issue did not breach Listing Rule 7.1.

If Resolution 13 is approved it will have the effect of refreshing the Company’s ability to issue further Shares without the need to obtain further Shareholder approval (subject to the Listing Rules and the Corporations Act).

For the purposes of Listing Rule 7.5 the Company provides the following information:

(a) Number of Securities issued

14,152,950 Shares were issued on 17 July 2014.

(b) Issue price of the Securities issued

The Shares were issued at a price of $0.02 per Share.

(c) Terms of the issued Securities

The Shares issued under the Placement are fully paid ordinary shares and rank equally with other Shares on issue.

(d) Recipients of the issued Securities

The Placement Shares were issued to sophisticated investors that are not related to the Company.

(e) Use of funds

The funds raised from the issue of the Placement Shares will be used for the purposes set out above.

The Directors recommend that you vote in favour of Resolution 13.

3.16 Annual Report for the year ended 30 June 2014

The Corporations Act requires the Annual Report of the Company for the year ended 30 June 2014, which includes the Financial Report of the Company, the Directors’ Report, the declaration of the Directors, the Remuneration Report and the Auditor’s Report, to be laid before the Annual General Meeting. The financial statements and reports are contained in the Annual Report. Shareholders who have elected to receive the Annual Report have been provided with a copy. The Annual Report is also available on ASX’s website.

While no resolution is required in relation to this item, Shareholders will be given the opportunity to ask questions and make comments on the financial statements and reports.

3.17 Resolution 14: Adoption of Remuneration Report

Resolution 14 is an ordinary resolution that seeks Shareholder approval to adopt the directors’ remuneration report for the year ending 30 June 2014.

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders.

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However, such a resolution is advisory only and does not bind the directors or the company.

The remuneration report sets out the company’s remuneration arrangements for the directors and senior management of the company. The remuneration report is part of the directors’ report contained in the annual financial report of the Company for the financial year.

The chair of the meeting must allow a reasonable opportunity for the Company’s Shareholders to ask questions or make comments on the remuneration report at the annual general meeting.

Under changes to the Corporations Act which came into effect on 1 July 2011, a company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company ( Spill Resolution ) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings.

If more than 50% of votes cast are in favour of the Spill Resolution, the company must convene a shareholder meeting ( Spill Meeting ) within 90 days of the second annual general meeting.

All of the directors of the company who were in office when the directors' report (as included in the company’s annual financial report for the most recent financial year) was approved, other than the managing director of the company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting.

Following the Spill Meeting those persons whose election or re-election as directors of the company is approved will be the directors of the company.

At the Company’s previous annual general meeting the votes cast against the remuneration report considered at that annual general meeting were more than 25%. Accordingly, the Spill Resolution will be relevant for this Annual General Meeting if at least 25% of the votes cast on the Remuneration Report resolution (Resolution 14) are voted against the adoption of the Remuneration Report. Refer to Resolution 16 for further information.

Shareholders appointing a proxy for this Resolution should note the following:

(a) If you appoint a member of the Key Management Personnel as your proxy (other than the Chair) whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such a member as your proxy you must direct the proxy how they are to vote on this Resolution. Undirected proxies granted to these persons will not be voted and will not be counted in calculating the required majority if a poll is called on this Resolution.
(b) If you appoint the Chair as your proxy (where he is also a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, or a Closely Related Party of such a member) you do not need to direct your proxy how to vote on this Resolution. However, if you do not direct the Chair how to vote, you must mark the acknowledgement on the Proxy Form to expressly authorise the Chair to exercise his discretion in

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exercising your proxy even though this Resolution is connected directly or indirectly with the remuneration of Key Management Personnel.

(c) If you appoint any other person as your proxy you do not need to direct your proxy how to vote, and you do not need to tick any further acknowledgement on the proxy form.

3.18 Resolution 15: Approval of Auditor Appointment

Resolution 15 is an ordinary resolution that seeks Shareholder approval to the appointment of Ernst & Young as the Company’s auditor.

In accordance with section 327B of the Corporations Act, Rothsays resigned as Auditors of the Company on 23 September 2014. A nomination from a Shareholder for Ernst & Young to be appointed was received. Ernst & Young have consented to their appointment as Auditor of the Company. Shareholder approval of the appointment of Ernst & Young as the new auditor of the Company is sought pursuant to Resolution 15. In accordance with the Corporations Act, a copy of the notice of nomination of Ernst & Young received by the Company is attached as Annexure I.

The Corporations Act requires that Shareholders approve the appointment of a new auditor.

Ernst & Young has given written consent to act as the Company’s auditor.

If Resolution 15 is passed, Ernst & Young’s role as the Company’s auditor will continue in effect.

The Directors recommend the approval of the change of auditors.

3.19 Resolution 16: Spill Resolution

The Corporations Act requirements for this Resolution to be put to a vote are set out in section 3.17.

The effect of this Resolution being passed is the Company will be required to hold another meeting of Shareholders within 90 days of the date of this Meeting (Spill Meeting) and the Vacating Directors will cease to hold office immediately before the end of the Spill Meeting. The business of the Spill Meeting will be to put to vote resolutions to appoint persons to offices vacated by the Vacating Directors.

In the event a Spill Meeting is required a separate notice of meeting will be distributed to Shareholders with details about those persons that will seek election as directors of the Company at the Spill Meeting.

Shareholders appointing a proxy for this Resolution should note the voting restrictions set out in section 3.17 of this Explanatory Statement apply in the same manner to this Resolution.

3.20 Resolutions 17, 18 and 19: Election of Jack James, Giuseppe Graziano and Jason Peterson as Directors

Resolutions 17, 18 and 19 are Ordinary Resolutions that seek Shareholder approval to re-elect each of the Directors.

Clause 6.2 of the Constitution allows the Directors to appoint at any time a person to be a Director either to fill a casual vacancy or as an addition to the existing Directors,

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but only where the total number of Directors does not at any time exceed the maximum number specified by the Constitution of ten.

Pursuant to ASX Listing Rule 14.4, any Director so appointed holds office only until the following annual general meeting and is then eligible for election by Shareholders but shall not be taken into account in determining the Directors who are to retire by rotation (if any) at that meeting.

Mr Jack James, having been appointed as a Non-Executive Director on 12 December 2013 will retire from the Company’s Board in accordance with clauses 6.2 and 6.3 of the Constitution and ASX Listing Rule 14.4 and being eligible, seeks election from Shareholders as contemplated by Resolution 17.

Mr Giuseppe Graziano, having been appointed as a Non-Executive Director on 5 December 2013 will retire from the Company’s Board in accordance with clauses 6.2 and 6.3 of the Constitution and ASX Listing Rule 14.4 and being eligible, seeks election from Shareholders as contemplated by Resolution 18.

Mr Jason Peterson, having been appointed as the Company’s Non-Executive Chairman on 5 December 2013 will retire from the Company’s Board in accordance with clauses 6.2 and 6.3 of the Constitution and ASX Listing Rule 14.4 and being eligible, seeks election from Shareholders as contemplated by Resolution 19.

Further information in relation to the Directors is set out at section 4.2.

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4. OTHER INFORMATION

4.1 Scope of disclosure

The law requires that this Explanatory Statement sets out all other information that is reasonably required by the Existing Shareholders in order to decide whether or not it is in the Company’s interests to pass the Resolutions and which is known to the Company.

The Company is not aware of any relevant information that is material to the decision on how to vote on the Resolutions other than as is disclosed in this Explanatory Statement or previously disclosed to Existing Shareholders by the Company by notification to the ASX.

4.2 Existing Directors’ profiles

Mr Jason Peterson

Mr Peterson has 19 years’ experience in the financial advisory sector, which he obtained whilst working in both local and international stock broking companies. Mr Peterson holds a bachelor of commerce degree and a graduate diploma of finance. Mr Peterson specialises in corporate structuring, capital raisings and providing strategic advice to small and medium size companies. Mr Peterson is a director of the stockbroking and corporate advisory business, CPS Capital.

Mr Giuseppe (Joe) Graziano

Mr Graziano has 25 years’ experience providing a wide range of business, financial and taxation advice to ASX listed companies with a focus on mining services, banking and logistics. Mr Graziano is a chartered accountant with experience in capital raisings and ASX compliance.

Mr Jack James

Mr James is a chartered accountant with over 15 years’ experience. Mr James has experience in restructuring, insolvency and business strategy. Mr James has been a director of an Australian top-tier accounting firm. Mr James founded the professional services firm, Palisade Business Consulting.

4.3 Voting intentions and interests of Existing Directors

The Existing Directors of the Company are set out in the table below. As at the date of this Explanatory Statement, the Existing Directors intend to vote in favour of the Resolutions, other than those Resolutions in which they have a material personal interest in or are otherwise excluded from voting on.

Except as otherwise disclosed in this Notice of Annual General Meeting and Explanatory Statement, the Existing Directors have no interest in the outcome of the Resolutions except as Existing Shareholders of the Company. In this regard, the table below sets out the details of the Existing Shares held (directly or indirectly) by the Existing Directors and their associates and the percentage ownership in the Existing Shares of the Company.

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Name of Existing Director	No. of Existing Shares held2	No. of Options held	Percentage interest in Existing Shares1	Voting Power


Joe Graziano	1,500,000	-	1.11%	1.11%
Jack James	1,500,000	-	1.11%	1.11%
Jason Peterson	10,225,869	9,087,080	7.53%	7.53%
TOTAL	13,225,869	9,087,080	9.75%	9.75%

Notes:

Based on the total number of 135,632,437 Shares of the Company as at the date of this Notice.
Held directly or indirectly by the Director or a related party of the Director.

4.4 Taxation

The Proposed Transaction and/or the passing of the Resolutions (including the Capital Consolidation) may give rise to income tax implications for the Company and Existing Shareholders.

Existing Shareholders are advised to seek their own taxation advice on the effect of the Resolutions on their personal position and neither the Company, nor any Existing Director or advisor to the Company accepts any responsibility for any individual Existing Shareholder’s taxation consequences on any aspect of the Proposed Transaction or the Resolutions.

4.5 ASIC and ASX’s Role

The fact that the Notice of Meeting, Explanatory Statement and other relevant documentation has been received by ASX and ASIC is not to be taken as an indication of the merits of the Resolutions or the Company. ASIC, ASX and their respective officers take no responsibility for any decision a Shareholder may make in reliance on any of that documentation.

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5. GLOSSARY

In this Notice of Meeting and Explanatory Statement, the following terms have the following meanings:

Advisers

Annexure

ASIC

ASX

collectively, Trident Capital, CPS Capital and Niche Export Agency.

an annexure to this Explanatory Statement.

the Australian Securities and Investments Commission.

ASX Limited (ACN 008 624 691).

Board the board of Directors.

Capital Consolidation

Capital Raising

Capital Raising Shares

Closely Related Party

the consolidation of the Existing Shares and Options of the Company on the basis of 1 for 5, as proposed under Resolution 2 and detailed in section 3.4.

the proposed issue of a minimum of 35,000,000 or up to 50,000,000 Shares under the Prospectus at an offer price of $0.20, as referred to in section 3.9.

the 2,501,558 Shares to be issued to the Livelynk Vendor under the Capital Raising in connection with the Proposed Transaction.

of a member of the Key Management Personnel means:

(a) a spouse or child of the member;
(b) a child of the member’s spouse;
(c) a dependent of the member or the member’s spouse;
(d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;
(e) a company the member controls; or
(f) a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of ‘closely related party’ in the Corporations Act.

Chairman

Company

Consideration Shares

Constitution

the Chairman of the Company.

Lithex Resources Limited (ACN 140 316 463).

the 23,500,000 Shares and 23,100,000 Class A Performance Shares and 15,400,000 Class B Performance Shares to be issued to the Livelynk Vendor under the Proposed Transaction.

the constitution of the Company.

Corporations Act the Corporations Act 2001 (Cth).

CPS Capital

Director

Ernst & Young

CPS Capital Group Pty Ltd (ACN 088 055 636) AFSL 294848.

a director of the Company.

means Ernst & Young Global Limited.

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Existing Directors Mr Giuseppe (Joe) Graziano, Mr Jack James and Mr Jason Peterson. Existing Shares the 135,632,437 issued ordinary fully paid Shares in the capital of the Company. Existing Shareholder a holder of an Existing Share. Explanatory Statement this explanatory statement incorporated in the Notice of Meeting. Heads of Agreement means the heads of agreement between the Company, Livelynk and the Livelynk Vendor dated 9 July 2014. Historical Loan has the meaning given to that term in Section 2.2. Independent Expert John Van Dieren of Stantons International (Perth). Independent Expert’s Report the report of the Independent Expert attached to Annexure C to and forming part of the Explanatory Statement. Investment Loan has the meaning given to that term in Section 2.2. Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group. Listing Rules the official Listing Rules of ASX. Livelynk Livelynk Group Pty Limited (ACN 134 429 637). Livelynk Employees means the persons set out in Annexure J. Livelynk Vendor Zhenya Holdings. Managing Director the managing director of the Company who may, in accordance with the ASX Listing Rules, continue to hold office indefinitely without being re-elected to the office. Maroon Tech Maroon Tech Ltd (Company No. 522300) (a company incorporated in Ireland).

Meeting or Annual General Meeting the annual general meeting of the Company to be held on 25 November 2014 at 2:30pm (WST). Mpire collectively Livelynk, Mpire Media, Maroon Tech and Mpire Network. Mpire Media Mpire Media Pty Ltd (ACN 126 813 214). Mpire Network Mpire Network Inc (Ontario Corp No. 002411178) (a company incorporated in Canada). New Option an Option on the terms set out in Annexure D. Niche Export Agency Niche Export Agency Pty Ltd (ACN 104 662 900) as trustee for the Nitsche Family Trust.

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Notice or Notice of Meeting the notice of meeting incorporating this Explanatory Statement. Option an option to acquire a Share.

Option an option to acquire a Share. Ordinary Resolutions Resolutions 2 to 7 (inclusive) and 9 to 19 (inclusive). Performance Share collectively, Performance Share Class A and Performance Share Class B in the Company, on the terms set out in Annexure H Placement the placement of 14,152,950 Shares at a price of $0.02 per Share to sophisticated investors to raise a total of $283,059 as announced to ASX on 17 July 2014.

Proposed Directors Mr Luke Taylor, Mr Eugeni ‘Zhenya’ Tsvetnenko, Mr Jeff Botnick and Mr Stephen Belben, further details of whom are provided at section 2.10.

Proposed Transaction the proposed acquisition by the Company of all of the securities in Livelynk. Prospectus the prospectus to be issued by the Company for the purposes of the Capital Raising as referred to in section 3.9.

Relevant Interest has the meaning given to that term in the Corporations Act. Remuneration Report means the remuneration report set out in the Director’s report section of the Company’s annual financial report for the year ended 30 June 2014.

Resolution a resolution set out in the Notice. Rights Issue a non-renounceable rights issue of 27,126,491 new shares at $0.02 a share to raise $542,530 announced by the Company on 5 August 2014.

ROI means return on investment. Share fully paid ordinary share in the capital of the Company. Share Sale and Purchase Agreement means the Share Sale and Purchase Agreement between the Company and Zhenya Holdings dated 30 September 2014 for the sale of 100% of Zhenya Holdings’ rights and title in the issued capital Livelynk. Shareholder a shareholder of the Company. Special Resolution Resolutions 1 and 8. Stantons Stantons International (Perth). Trident Capital Trident Capital Group Pty Limited (ACN 100 561 733) AFSL 292674.

Vacating Directors the Directors who were directors of the Company when the resolution to make the Directors’ Report considered at the last annual general meeting of the Company was passed, other than the Managing Director of the Company at that time.

Voting Power has the meaning given to that term in the Corporations Act.

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Working Capital Loan has the meaning given to that term in Section 2.2. WST Western Standard Time, being the time in Perth, Western Australia. Zhenya Holdings Zhenya Holdings Pty Limited (ACN 121 173 073) as trustee for the Zhenya Holdings Trust.

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ANNEXURE A – LIVELYNK VENDOR AND EUGENI ‘ZHENYA’ TSVETNENKO – RELEVANT INTERESTS AND VOTING POWER

		Relevant Interests in Consideratio n Shares (excluding Performance Shares)	Relevant Interests in Capital Raising Shares	Relevant Interests in Performance Shares (Class A) (assuming vesting)	Relevant Interests in Performance Shares (Class B) (assuming vesting)	Voting Power (minimum Capital Raising of $7 million)2	Voting Power (maximum Capital Raising of $10 million)2
	Relevant Interests in Existing Shares1
Entity



Zhenya Holdings Pty Ltd (ACN 121 173 073) as trustee for the Zhenya Holdings Trust and Eugeni ‘Zhenya’ Tsvetnenko	Nil	23,500,000	2,501,558	23,100,000	15,400,000	41.13%	37.54%

Notes:

The Existing Shares are set out on a post-Capital Consolidation basis and are subject to rounding.
Reflects the Voting Power of the Livelynk Vendor, Mr Eugeni ‘Zhenya’ Tsvetnenko and their associates.
Assumes that Zhenya Holdings and Mr Tsvetnenko (personally) do not apply for Shares under the Capital Raising other than as set out in the table.

The total numbers of Shares on issue upon which these Voting Power percentages are calculated:

are subject to the rounding effects of the Capital Consolidation;
assume that no Shares are issued from the date of this Notice until completion of the Proposed Transaction (including pursuant to the exercise of existing Options) other than those Shares proposed to be issued pursuant to the Resolutions in this Notice of Meeting; and
assume all the Performance Shares vest into Shares.

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ANNEXURE B – PRO FORMA STATEMENT OF FINANCIAL POSITION

This section contains the Pro Forma Statement of Financial Position for the Company as a merged group with Mpire ( Merged Group ), reflecting the combined business of the Company and Mpire. The Pro Forma Statement of Financial Position is presented to provide Shareholders with an indication of the Merged Group’s consolidated financial position as if the Proposed Transaction had been implemented as at 31 October 2014.

As the Proposed Transaction, if implemented, will be effected at a future date, the actual financial position of the Merged Group post implementation of the Proposed Transaction will differ from that presented below.

The Company has not yet received a completed review report by a registered company auditor or independent accountant of the pro forma statements of financial position, but that report is proposed to be included in the Prospectus.

Current assets Cash and cash equivalents Trade and other receivables Loan to Livelynk Group Pty Ltd Prepayments Deferred tax assets Non current assets Intangible assets Property, plant and equipment Total assets Current liabilities Trade and other payables Borrowings: Zhenya Holdings Pty Ltd Borrowings: Lithex Resources Ltd Provision for employee entitlements Provision for income tax Total liabilities	Pro forma Consolidated Minimum1 31 Oct 2014 AUD 6,449,237 1,598,750 - 26,952 57,491 8,132,430 494,908 108,749 603,657 8,736,087 460,720 1,226,170 - 125,203 962,430 2,774,523 2,774,523	Pro forma Consolidated Maximum2 31 Oct 2014 AUD 9,296,331 1,598,750 - 26,952 57,491
		10,979,524
		494,908 108,749
		603,657
		11,583,181 460,720 1,226,170 - 125,203 962,430
		2,774,523
		2,774,523
Net assets / (liabilities)	5,961,564	8,808,658
Equity Contributed equity Accumulated losses Foreign Currency Translation Reserve Share Based Payments Reserve	12,694,901 (7,235,942) 3,593 499,013	15,541,995 (7,235,942) 3,593 499,013
	5,961,564	8,808,658

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Notes and assumptions:

The audited financial statements of Livelynk and the Company for the year ended 30 June 2014 have been adjusted for the following to arrive at a pro-forma consolidated balance sheet post completion of the acquisition of Livelynk by the Company:

Completion of a 1 for 5 consolidation of capital.
Completion of:
the maximum Capital Raising of $10,000,000, incurring capital raising costs of $846,653 of which $138,250 is expensed and $708,403 is charged directly to equity; and
the minimum Capital Raising of $7,000,000, incurring capital raising costs of $693,747 of which $138,250 is expensed and $555,497 is charged directly to equity.
Of the total Capital Raising amount, $500,312 (2,501,558 Shares) is not received in cash, but rather offset against a loan from the Livelynk Vendor.
Completion of the acquisition of Livelynk by way of an issue of 23,500,000 Shares at a deemed issue price of $0.20 per Share ($4,700,000) and the issue of 38,500,000 Performance Shares at a deemed issue price of $0.00 per Performance Share.
The issue of 28,575,000 Performance Shares to Livelynk management and staff at a deemed value of $0.00 per Performance Share.
The issue of the following Shares on a post Capital Consolidation basis at a deemed issue price of $0.20 per Share as consideration for the introduction of Livelynk as an acquisition target of the Company:
1,500,000 Shares issued to CPS Capital (deemed value of $300,000);
625,000 Shares issued to Niche Export Agency (deemed value of $125,000); and
2,000,000 Shares issued to Trident Capital (deemed value of $400,000).
The issue of 6,000,000 Options t o Trident Capital as consideration for the introduction of Livelynk as an acquisition target of the Company. The Options are exercisable at $0.25 each on or before 30 June 2017 and have been valued using the Black-Scholes option valuation methodology at $372,787.
Completion of Livelynk’s acquisition of Maroon Tech.
Livelynk operating costs of approximately $1,473,000 for the period 1 July to 31 October 2014 having obtained funding from the Company of $1,200,000.
Company operating costs of approximately $533,000 for the period 1 July to 31 October 2014.
The principles of reverse acquisition accounting have been applied and all intercompany balances have been eliminated.

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ANNEXURE C – INDEPENDENT EXPERT’S REPORT

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