MYECO GROUP LTD - Capital/Financing Update 2014

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TO: COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED DATE: 20 March 2014

DESPATCH OF PROSPECTUS

Further to earlier announcements regarding the Non-Renounceable Rights Issue of Shares and Options being made to eligible Cardia shareholders, the Company advises that the Prospectus had today been dispatched to all the shareholders entitled to participate.

A copy of the Prospectus is attached.

Rekha Bhambhani Company Secretary

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CARDIA BIOPLASTICS LIMITED ABN 89 064 755 237 (ASX Code: CNN)

PROSPECTUS

For the offer of a non-renounceable pro rata rights issue of approximately 898,697,389 New Shares on the basis of 1 New Share for every 3 Existing Shares held on the Record Date at an issue price of $0.003 each to raise up to approximately A$2,700,000 (A$2.7 million) before issue costs with 1 free attaching New Option for every 3 New Shares issued.

Eligible Shareholders may also apply for Shortfall Securities

The Offer is not underwritten

IMPORTANT NOTICE

The Securities offered by this Prospectus are a speculative investment and potential investors should refer to section 7 for further details concerning the risk factors applying to the Company, its operations and the Securities. This document is important and requires your immediate attention. It should be read in its entirety. If you do not understand its contents or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser.

Neither the Company nor any other person guarantees the performance of the Securities offered pursuant to this Prospectus, or the performance of the Company, or the return of any investment.

Important Notice

This Prospectus is dated 6 March 2014 and a copy of this Prospectus was lodged with ASIC on that date. Application will be made to ASX for quotation of the New Shares offered under this Prospectus within 7 days of this date.

Neither ASIC, ASX nor any of their respective officers take any responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates. No securities will be allotted or issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

Nature of this Prospectus

The New Shares which will be issued pursuant to this Prospectus are in the same class of Shares that have been quoted on the official list of the ASX during the 12 months prior to the issue of this Prospectus.

This Prospectus is a 'transaction specific prospectus' for an offer of continuously quoted securities (as defined in the Corporations Act) to which the special content rules under section 713 of the Corporations Act apply. That provision allows the issue of a more concise prospectus in relation to an offer of securities in a class which has been continuously quoted by ASX in the 3 months prior to the date of the prospectus.

In general terms 'transaction specific prospectuses' are only required to contain information in relation to the effect of the issue of New Shares on the Company and the rights attaching to the New Shares. This Prospectus is intended to be read in conjunction with the publically available information in relation to the Company which has been notified to ASX. It is not necessary to include general information in relation to all of the assets and liabilities, financial position, profits and losses or prospects of the issuing company. Refer to section 9.3 for details of the publically available information

This Prospectus contains information only to the extent to which it is reasonable for investors and their professional advisors to expect to find the information in it. It does not include all of the information that would be included in a prospectus for an initial public offer.

Prospectus availability

Shareholders with a registered address in Australia and New Zealand can obtain a copy of this Prospectus during the period of Offer on the Company's website at http://www.cardiabioplastics.com or by contacting the Company. This Prospectus or the offer constituted by an electronic version of this Prospectus is not available to persons in any other jurisdictions (including the United States). If you access an electronic copy of this Prospectus, you should ensure that you download and read the entire Prospectus.

The electronic copy of this Prospectus available from the Company's website will not include a personalised Entitlement and Acceptance Form. Eligible Shareholders will only be able to accept the Offer by completing the personalised an Entitlement and Acceptance Form which accompanies this Prospectus or by making payment using BPAY® (refer to section 5.8 of this Prospectus for further information).

Any person within Australia may obtain a hard copy of this Prospectus by contacting the Company.

Foreign jurisdictions

This Prospectus has been prepared to comply with the laws of Australia. No action has been taken to register or qualify the Offer of the Securities or otherwise permit the public offering of the Securities in any jurisdiction other than Australia and New Zealand. The Offer is not being extended to any person outside Australia and New Zealand other than to Eligible Shareholders.

The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice on and observe any of these restrictions. Failure to comply with these restrictions may violate securities laws. The Company disclaims all liabilities to such persons. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consent are required or whether any other formalities need to be considered and followed. This Prospectus does not constitute an offer in the United States, or to any place in which, or to any person to whom, it should not be lawful to make such an offer.

The Securities have not been, and will not be, registered under the US Securities Act or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, in the United States unless the Securities have been registered under the US Securities Act or in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws.

Disclaimer of representations

No person is authorised to provide any information or make any representation in connection with the Offer which is not contained in this Prospectus.

Forward looking statements

This Prospectus contains forward looking statements that, despite being based on the Company's evaluation of current economic and operating conditions as well as assumptions and expectations about future events, are subject to known and unknown risks, uncertainties and assumptions, many of which are outside the control of the Company and the Directors. These known and unknown risks, uncertainties and assumptions, could cause actual results, performance or

achievements to materially differ from future results, performance or achievements expressed or implied by forward-looking statements in this Prospectus. These risks, uncertainties and assumptions include, but are not limited to, the risks outlined in section 8 of this Prospectus. Forward-looking statements include those containing such words as ‘intents’ 'anticipate', 'estimate', ‘expects’ 'believe', ‘targets’ 'should' ‘could’, 'will', 'may' and similar expressions.

The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied in the forwardlooking statements contained in this Prospectus will actually occur.

Risks

This document is important and it should be read in its entirety along with all information that is deemed to be incorporated. The Securities to be issued pursuant to this Prospectus should be viewed as a speculative investment and investors should refer to the risks affecting the Company set out in section 8. Eligible Shareholders should consult their financial adviser, stockbroker, solicitor, accountant or other professional adviser if necessary.

deficiencies in this Prospectus. If this Prospectus is found to be deficient, applications received during the Exposure Period will be deal with in accordance with section 724 of the Corporations Act. Application received during the Exposure Period will not be processed until the expiry of the Exposure Period. No preference will be conferred on applications received during the Exposure Period.

Definitions

Certain terms and abbreviations used in this Prospectus have defined meanings which are explained in the Glossary.

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

Enquiries

If you have any questions please call the Company Secretary on +61 3 9562 0122 or Advanced Share Registry Ltd on +61 8 9389 8033 (within Australia) at any time between 8.00 am and 5.00 pm (AEDT time) Monday to Friday until the Closing Date. Alternatively, consult your broker or other professional advisor.

Application for Securities

Please refer to section 5.8 and the accompanying personalised Entitlement and Acceptance Forms regarding acceptance of the Offer.

By returning a completed Entitlement and Acceptance Form, making a payment by BPAY® or otherwise applying in accordance with the instructions of the Entitlement and Acceptance Form, the applicant acknowledges that it was received and read this Prospectus, has acted in accordance with the terms of the Offer, agrees to all of the terms and conditions set out in this Prospectus and makes the statements set out in the Entitlement and Acceptance Form. Applicants who submit an Entitlement and Acceptance Form are deemed to accept their entitlement to the New Options.

Privacy

Please read the privacy information located in section 5.16 of this Prospectus. By submitting an Entitlement and Acceptance Form, you consent to the matters outlined in that section.

Exposure Period

In accordance Chapter 6D of the Corporations Act, this Prospectus is subject to an Exposure Period of 7 days from the date of lodgement of the Prospectus with ASIC. This period may be extended by ASIC for a further maximum period of 7 days.

The purpose of the Exposure Period is to enable the Prospectus to be examined by market participants prior to the raising of funds. Such examination may result in identification of

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Corporate Directory

Directors:	Mr Richard Tegoni (Chairman)
	Dr Frank Glatz (Managing Director)
	Mr Gideon Meltzer (Non Exec. Director)
	Mr Steven Bendel (Non Exec. Director)
Company Secretary:	Miss Rekha Bhambhani
Registered office:	Unit 18/35 Dunlop Road
	Mulgrave VIC 3170
	Telephone (03) 9562 0122
	Facsimile (03) 9562 0422
Share Registry:	Advanced Share Registry Ltd
	Unit 2
	150 Stirling Highway
	NEDLANDS WA 6009
	Telephone (08) 9389 8033
	Facsimile (08) 9389 7871
Auditor:	William Buck
	Level 20, 181 William Street,
	MELBOURNE, VIC 3000
	Telephone (03) 9824 8555
	Fax (03) 9824 8580
Lawyers:	Mills Oakley Lawyers
	Level 6, 530 Collins Street
	MELBOURNE VIC 3000
	Telephone (03) 9670 9111
	Fax (03) 9605 0933
Stock Exchange:	Australian Securities Exchange
	Exchange Centre
	20 Bridge Street,
	Sydney NSW 2000
Company Code:	CNN

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Corporate Directory	Corporate Directory	4
1	Timetable to the Offer	6
2	Key Offer Terms and Structure	8
3	Chairman’s letter	9
4	Questions and Answers	10
5	Details of the Offer	12
6	Purpose and Effect of the Offer	18
7	Rights and Liabilities attaching to New Securities	25
8	Risk Factors	28
9	Continuous Disclosure Obligations	33
10	Additional Information	37
11	Director’s authorisation	41
12	Glossary	42

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1 Timetable to the Offer

Event	Day & Date
Announcement of the Offer and application for
quotation of securities (Appendix 3B) lodged
with ASX	6 March 2014
Notice to existing Option Holders regarding
participation in the Right Issue Offer	6 March 2014
Lodge Prospectus with ASIC and ASX	6 March 2014
Notice sent to shareholders containing
information required by Appendix 3B	7 March 2014
Ex-date – Shares Ex Entitlement	12 March 2014
Record Date to identify Eligible Shareholders	18 March 2014
Prospectus and Entitlement and Acceptance
Forms despatched to Eligible Shareholders
(Opening Date). Company announces that
despatch has been completed.	20 March 2014
Offer opens for receipt of Applications
Final date and time for receipt of acceptance
and payment in full (Closing Date)*	4 April 2014 at 5 pm
Securities quoted on a deferred settlement
basis	7 April 2014
Company to notify ASX of under subscriptions	9 April 2014
Allotment and issue of New Shares
Despatch of holding statements	14 April 2014
Date of quotation of Securities	15April 2014

*The dates are indicative only. Subject to the ASX Listing Rules, the Directors may vary the dates without prior notice.

Important Information

(a) Eligible Shareholders should read this document in its entirety and, if in doubt, should consult their professional advisors.
(b) This Prospectus is dated 6 March 2014 and a copy of this Prospectus was lodged with ASIC on that date. ASIC and ASX take no responsibility for the content of this Prospectus.
(c) The expiry date of the Prospectus is 13 months after the date the Prospectus was lodged with ASIC. No Securities will be allotted or issued on the basis of this Prospectus after the expiry date. Securities allotted or issued pursuant to this Prospectus will be allotted or issued on the terms and conditions set out in this Prospectus.
(d) No person is authorised to give information or to make any representation in connection with this Prospectus which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by the Company in connection with this Prospectus.
(e) Certain terms and abbreviations used in this Prospectus have defined meanings, which are explained in section 12 of this Prospectus.
(f) The distribution of this Prospectus in jurisdictions outside Australia and New Zealand may be restricted by law and therefore persons into whose possession this document comes should seek advice on and observe any such restrictions. Any failure to comply with these

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restrictions constitutes a violation of those laws. The Company disclaims all liabilities to such persons. No action has been taken to register or qualify the Securities the subject of this Prospectus or otherwise permit a public offering of the Securities the subject of this Prospectus in any jurisdiction outside Australia or New Zealand.

(g) This Offer is only open to Eligible Shareholders. No offer of Securities will be made to Shareholders resident outside Australia or New Zealand. In accordance with the ASX Listing Rules, and having regard to:
(i) the number of holders resident outside Australia and New Zealand;
(ii) the number and value of New Shares the holders of Shares resident outside of Australia and New Zealand would be offered; and
(iii) the cost of complying with the legal requirements and the requirements of regulatory authorities in places other than Australia and New Zealand,

the Directors consider that it is unreasonable to make an offer to such persons and accordingly the Company will send each Shareholder to whom it will not make the offer details of the Offer and advise that the Company will not offer Securities to that Shareholder.

(h) The Rights Issue Offer contained in this Prospectus to Eligible Shareholders with registered addresses in New Zealand is made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). Members of the public in New Zealand who are not existing Shareholders on the Record Date are not entitled to apply for any Securities.
(i) Recipients may not send or otherwise distribute this Prospectus or the Entitlement and Acceptance Form to any person outside Australia or New Zealand (other than to Eligible Shareholders).
(j) An investment in the Company is speculative. Eligible Shareholders should consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus. For further information in relation to the risk factors applying to the Company, its operations and the Securities please refer to section 8 of this Prospectus.

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2 Key Offer Terms and Structure

Shares currently in issue	2,696,092,168
Listed Options Currently in Issue	221,285,642
Unlisted Options currently in issue	100,000,000
New Shares issued pursuant to Share	118,333,333
Placement
New Options issued pursuant to Share	39,444,444
Placement
New Shares offered under this Prospectus1	898,697,389
New Options issued under this Prospectus2	299,565,796
Amount to be raised under this
Prospectus before Costs if:
(i) all new Shares taken up	$2,696,092
(ii) all New Options taken up	$1,797,395

1 This assumes that the maximum number of New Shares is taken up by Eligible Shareholders.

2 This assumes that the maximum number of New Options is taken up by Eligible Shareholders.

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3 Chairman’s letter

Dear Eligible Shareholder

On behalf of the Directors of Cardia, I am pleased to offer you the opportunity to participate in an offer of New Shares and New Options to Shareholders ( Rights Issue Offer ) and the Shortfall Offer (should it proceed).

Over the last year Cardia has delivered advances in sales, commercialisation and technical development. In addition to securing long-term supply contracts with councils, brand owners and packaging companies, several product launches and technological developments were delivered and communicated to the market. This highlights the momentum of Cardia’s business development and the strengthening global demand for Cardia’s proprietary bioplastics solutions in its target market segments of Carrier Bags, Film & Packaging and Waste Management Products. Over the past few weeks Cardia has released a number of positive announcements about new sales initiatives and contracts that have been awarded in China, Brazil and the United States which are expected to result in increased sales revenues.

The primary purpose of the Offer is to provide Cardia with the funds required to support ongoing working capital requirements as the company seeks to capitalise on immediate sales opportunities, further advance other sales initiatives which are gaining momentum and further support development projects which provide a platform for generating increased sales revenue for the bioplastics business.

Cardia continues to work extensively on development projects with several local and international companies. Some of these projects are in commercial negotiations and others have advanced to “in market trials”.

A large part of this new global interest in Cardia and its products has been driven by both Governments in various countries around the world introducing or supporting bans on plastic carrier bags and by Brand owners looking for alternatives such as bioplastics that contain less oil with a smaller carbon footprint. The Directors believe that Cardia is well positioned to meet their needs.

Further details of the purpose of the Offer are set out in section 6 of this Prospectus.

Pursuant to the Rights Issue Offer, Eligible Shareholders are entitled to subscribe for 1 New Share for every 3 existing Shares held on the Record Date at 0.3 cents ($0.003) per New Share. The New Shares will be issued with 1 New Option for every 3 New Shares issued at no additional cost.

The New Options are exercisable at 0.6 cents ($0.006) at any time before 31 December 2014. Eligible Shareholders who take up their entitlement in full pursuant to the Rights Issue Offer will also have the opportunity to apply for additional New Shares out of the Shortfall (if any). Further details of the Offer and the rights attaching to the Securities are set out in section 7 of this Prospectus. The Offer closes at 5.00pm on 4 April 2014 .

I encourage you to read the prospectus carefully and together with my fellow Directors, look forward to your participation in the Offer.

Yours faithfully,

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Richard Tegoni Chairman

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4 Questions and Answers

Information about the Offer is summarised below. The information provided in this section is a selective overview only. For detailed information, refer to the sections of the Prospectus listed in the right hand column.

Question	Response	Where to find more information
What is the Rights Issue Offer?	The Rights Issue Offer means the offer of approximately 898,697,389 New Shares and 299,565,796 free New Options, by means of the Offer. The Offer is not underwritten	Sections 5.1, 5.4 and 5.10
What is the purpose of the Offer?	The purpose of the Offer is to supplement capital to the business to enable it to further implement and execute its business objectives with a primary focus on pursuing immediate sales opportunities, improve production efficiencies, general working capital requirements and continue development projects which provide a platform for generating increased salesrevenue.	Section 6.2
What is the Rights Issue?	Shareholders who are registered holders as at 5pm AEDT on the Record Date (Tuesday 18 March 2014) and whose address on the register is in Australia or New Zealand will receive an entitlement allocation. If you are an Eligible Shareholder, your Entitlement is to an allocation of one (1) New Share for every three (3) Shares you hold on the Record Date. One (1) free New Option will be issued for every one (3) New Shares issued. New Shares not subscribed for under the Rights Issue Offer will be made available under the Shortfall Offer and can be subscribed for by, among others, Eligible Shareholders who wish to acquire more than their Entitlement.	Section 5
Can foreign Shareholders participate in the Rights Issue?	Only Eligible Shareholders will receive an allocation under the Offer.	Important Information & Section 5.13
Can Eligible Shareholders apply for more than their Entitlement?	Each Eligible Shareholder will receive an entitlement to subscribe for one (1) New Share for every three (3) Shares held by them at the Record Date. Eligible Shareholders who have applied for their full Entitlement may apply for New Shares in excess of their pro rata Entitlement by completing	Sections 5.1, and 5.8(b)

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Question	Response	Where to find more information
	relevant sections of the accompanying Entitlement and Acceptance Form. However, any such Applications may be declined or scaled back at the absolute discretion of the Company. Applications in excess of Eligible Shareholders’ Entitlements will be satisfied from the Shortfall, if any.
What is the Shortfall Offer?	Shortfall means the number of New Shares comprising the difference between the number of New Shares the subject of the Rights Issue Offer and the number of New Shares for which valid Application Forms have been received and accepted by the Company by the Closing Date. The Shortfall Offer is the offer of the Shortfall to Eligible Shareholders and any other persons located and receiving this Prospectus in Australia. The offer of New Shares under the Shortfall Offer is a separate offer independent from the Rights Issue Offer. The issue price of any New Shares issued under the Shortfall Offer will be the same as the issue price under the Rights Issue Offer being, 0.3 cents ($0.003) per NewShare.	Section 5.10
What rights attach to the New Shares?	New Shares will have the same voting rights as existing Shares.	Section 7.1
What rights attach to the New Options?	Each New Option may be exercised at 0.6 cents ($0.006) at any time before 5.00pm AEDT on 31 December 2014.	Section 7.2

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5 Details of the Offer

5.1 Details of the Offer

The Company is making a pro rata non renounceable offer to issue of up to 898,697,389 New Shares under this Prospectus at an issue price of 0.3 cents ($0.003) per New Share to raise up to A$2.7 million (if fully subscribed).

The New Shares are being offered on the basis of 1 New Share for every 3 Shares held on the Record Date. In the calculation of any entitlement, fractions will be rounded down to the nearest whole number. The New Shares will be issued with 1 free attaching New Option for every 3 New Shares subscribed for, at no additional cost, such that a maximum of 299,565,796 New Options may be issued.

The New Options have an exercise price of 0.6 cents ($0.006) and an expiry date of 31 December 2014. The full terms and conditions of the New Shares and New Options are set out in section 7 of this Prospectus.

As at the date of this Prospectus, the Company has 2,696,092,168 Shares, 221,285,642 Listed Options and 100,000,000 Unlisted Options on issue. All Eligible Shareholders on the Record Date are entitled to participate in the Offer. Option Holders who exercise their Options after the date of this Prospectus but prior to the Record Date are also entitled to participate in the Offer.

The number of New Shares to which you are entitled as an Eligible Shareholder is shown on the accompanying personalised Entitlement and Acceptance Form.

The Offer is not underwritten.

The New Shares offered pursuant to this Prospectus will rank equally with existing Shares on issue. The rights and liabilities of the new shares offered with this prospectus are summarised in section 7.

Eligible Shareholders who accept their full Entitlement have the opportunity to apply for additional New Shares at the same issue price of 0.3 cents ($0.003) each as part of the Shortfall Offer (refer to section 5.10 below). The allocation of these additional New Shares will be limited to any Shortfall and allocation will be dealt with by the Directors (refer to section 5.10 below).

5.2 Opening and Closing Dates of the Offer

The Opening Date of the Offer will be 20 March 2014 at 9.00am AEDT and the Closing Date will be 4 April 2014 at 5.00pm AEDT. The Directors reserve the right to close the Offer early or extend the Closing Date (as the case may be), should it be considered by them necessary to do so. Entitlement and Acceptance Forms received after the Closing Date will be rejected and Application Moneys will be returned without interest.

5.3 Entitlement to offer

The Offer is made to Eligible Shareholders, being those shareholders that

(a) are the registered holder of shares as at 5pm AEDT on the Record Date; and
(b) have a registered address in Australia or New Zealand.

5.4 Underwriting

The Offer is not underwritten.

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5.5 Acceptances

The Offer may be accepted in whole or in part prior to the closing date subject to the rights of the company to extend the offer period. Instruction for accepting you entitlements are set out in section 5.8 below and on the Entitlements and Acceptances Form which accompanies this Prospectus.

5.6 Rights attaching to the Securities

A summary if the important rights attaching to the Securities is contained in section 7 of this Prospectus. New Shares will, once issued, rank pari passu with existing Shares.

5.7 Rights Trading

Entitlements to Securities pursuant to the Offer are non- renounceable and accordingly, Rights will not be tradeable on ASX.

5.8 Eligible Shareholders – what you need to do

If you are an Eligible Shareholder, the number of New Shares and New Options to which you are entitled (your Entitlement) is shown on the accompanying Entitlement and Acceptance Form. Fractional entitlements will be rounded down to the nearest whole number.

(a) If you want to take up your Rights

If you are an Eligible Shareholder and you wish to take up all or part of your Rights, you must accept the Offer by completing the personalised Entitlement and Acceptance Form mailed to you with this Prospectus. Your personalised Entitlement and Acceptance Form will detail your entitlement to New Shares and New Options under the Offer. You should complete the form in accordance with the instructions set out on the reverse side of the form.

Your completed Entitlement and Acceptance Form must be accompanied by the requisite Application Moneys calculated at 0.3 cents ($0.003) for each New Share or payment must be made via BPAY® following the instructions on your personalised Entitlement and Acceptance Form, by the Closing Date (or such later date as the Directors advise).

(b) If you want to apply for additional New Shares

Eligible Shareholders who accept their full Entitlement have the opportunity to apply for additional New Shares.

If you wish to apply for any additional New Shares under the Shortfall, complete the relevant section of the accompanying Entitlement and Acceptance Form in respect of the number of additional New Shares you wish to apply for and include an appropriate payment of the Application Moneys. A single cheque, money order or bank draft should be used for the Application Moneys for your Entitlement and the additional New Shares being applied for. That is, the total New Shares applied for multiplied by 0.3 cents ($0.003). Send the completed Entitlement and Acceptance Form and cheque to the Share Registry before the Closing Date.

Alternatively, if you wish to include payment for additional New Shares using BPAY®, the Share Registry may treat you as applying for as many New Shares as the cleared moneys will pay for.

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The Directors, reserve the right to allocate any Shortfall at their absolute discretion. As such, Eligible Shareholders who apply for additional New Shares may receive fewer than that applied for or none at all. In this event, any surplus Application Moneys will be refunded without interest as soon as practicable.

(c) If you do nothing

If you are an Eligible Shareholder and you do nothing by the Closing Date, your Rights will form part of the Shortfall which will be dealt with in accordance with section 5.10.

(d)

Form of payment

All cheques must be drawn on an Australian Bank or Bank Draft and made payable in Australian currency to “Cardia Bioplastics Share Subscription A/c” and crossed “Not Negotiable”.

Your completed Entitlement and Acceptance Form, together with your cheque must be forwarded to:

By Mail: In Person: Advanced Share Registry Ltd Advanced Share Registry Ltd P O Box 1156 150 Stirling Highway Nedlands WA 6009 Nedlands WA 6009

If you elect to pay via BPAY®, you must follow the instructions for BPAY® set out in the Entitlement and Acceptance Form. If you elect to pay via BPAY®, you will not need to return your completed Entitlement and Acceptance Form.

Completed Entitlement and Acceptance Forms or payment by BPAY® must be received by no later than 5.00pm AEDT on the Closing Date.

5.9 Minimum subscription

There is no minimum subscription for the Offer.

5.10 Shortfall

If you do not wish to take up any part of your Entitlement under the Offer, you are not required to take any action. However, your percentage shareholding in the Company will be diluted. That part of your Entitlement not taken up will form part of the Shortfall. Under the Shortfall Offer, the Directors reserve the right to allocate any Shortfall in their absolute discretion within 3 months after the Closing Date.

The Company will use all reasonable endeavours to place the Shortfall Securities, being any other Securities which may form part of a Shortfall pursuant to the Rights Issue Offer. The allocation of such securities will be made on a first come-first serve basis and in the event of a dispute, the decision of the Directors will be final.

The Shortfall Offer (should it proceed) are separate offers pursuant to this Prospectus. The issue price of any New Shares allocated pursuant to the Shortfall shall be 0.3 cents ($0.003), being the price at which the Entitlement has been offered to Shareholders pursuant to this Prospectus and will include 1 New Option for every 3 New Shares allotted.

Shortfall Securities will only be issued if the Rights Issue Offer is undersubscribed and will only be issued to the extent necessary to make up

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any Shortfall. If the Company receives applications for Shortfall Securities that would result in the Rights Issue Offer being oversubscribed then the Company will not accept such oversubscriptions and will reject applications at its absolute discretion.

The Directors reserve the right to reject any application for Shortfall Securities or to allot a lesser number of Shortfall Securities than applied for. Application Moneys received but not applied towards subscriptions for Shortfall Securities will be refunded as soon as practicable. No interest will be paid on Application Moneys held and returned. Furthermore, the Company will not issue Shortfall Securities where to do so would result in a breach of the Corporations Act or the ASX Listing Rules.

The Company will ensure that no person, entity or Shareholder will, through the allocation of Shortfall Securities, acquire a holding of, or (in the case of existing Shareholders) increase their holding to, an amount in excess of 19.9% of all the Shares on issue following the completion of the Rights Issue Offer.

Should the Directors decide to allocate any Shortfall, the Shortfall Offer will remain open after the Closing Date.

5.11 Allotment of Securities

Securities issued pursuant to the Offer will be allotted as soon as practicable after the Closing Date and otherwise in accordance with the ASX Listing Rules. Where the number of Securities issued is less than the number applied for, or where no allotment is made under the Shortfall, surplus Application Moneys will be refunded without any interest to the Eligible Shareholders as soon as practicable after the Closing Date.

Until allotment and issue of the Securities or payment of refunds pursuant to this Prospectus, the Application Moneys will be held in trust in a separate bank account opened and maintained for that purpose only. Any interest earned on the Application Moneys will be for the benefit of the Company and will be retained by it irrespective of whether allotment and issue of the Securities takes place.

Quotation if granted of the New Shares offered by this prospectus will commence as soon as practicable after statements of holdings of the new shares are dispatched.

5.12 ASX Listing

The Company will make application to ASX within 7 days following the date of this Prospectus for Official Quotation of the Securities offered pursuant to this Prospectus.

if an application for Official Quotation of the Securities is not made within seven days after this prospectus, or if approval is not granted by ASX within 3 months after the date of this Prospectus, the Company will not allot the Securities and will repay all Application Moneys (where applicable) as soon as practicable, without interest.

A decision by ASX to grant Official Quotation of the Securities is not to be taken in any way as an indication of ASX’s view as to the merits of the Company, or the Securities.

If granted, quotation of the New Shares offered under this Prospectus will commence as soon as practicable after statements of holding of the New Shares are dispatched.

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5.13 Ineligible Shareholders

This Prospectus does not constitute an offer of securities in any jurisdiction where, or to any persons to whom, it would not be lawful to issue the Prospectus or make the offer.

The Company has decided that it is unreasonable to make offers under the Offer to Shareholders with registered addresses outside Australia and New Zealand having regard to:

(a) the number of Shareholders in those places;
(b) the number and value of the New Shares they would be offered; and
(c) the cost of complying with the legal and regulatory requirements in those places.

Accordingly, the Offer is not being extended to, and does not qualify for distribution or sale, and no New Shares will be issued under the Offer to Shareholders having registered addresses outside Australia and New Zealand. This Prospectus is sent to those Shareholders for information purposes only.

5.14Treatment of Overseas Shareholders

Given the small number of Shareholders with registered addresses outside Australia or New Zealand and the cost of complying with applicable regulations in those jurisdictions, the Company has decided that it would be unreasonable to extend the Offer to any Shareholder, as at the Record Date, whose registered address is not situated in Australia and New Zealand.

The Prospectus is sent to those Shareholders for information only.

The Offer contained in this Prospectus to Eligible Shareholders with registered addresses in New Zealand is made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). Members of the public in New Zealand who are not existing Shareholders on the Record Date are not entitled to apply for any New Shares.

5.15CHESS and Cardia Sponsorship

The Company participates in CHESS. ASX Settlement, a wholly owned subsidiary of ASX, operates CHESS in accordance with the ASX Listing Rules, the ASX Settlement Operating Rules and the ASX Clear Operating Rules. Holders of Securities will not be issued a certificate but will be issued and sent a confirmation of their allotment of their holding of Securities.

If you are a sponsored holder in CHESS, you will be sent a confirmation notice by the Share Registry which will set out the number of Securities issued to you under this Prospectus and provide details of your HIN (holder identification number).

If you are registered on the issuer sponsored sub-register, your holding statement will contain the number of Securities issued to you under this Prospectus and your SRN (security holder reference number).

A CHESS holding statement or issuer sponsored holding statement will otherwise be sent to Shareholders or Option Holders at the end of any calendar month during which the balance of their shareholding changes. Shareholders or Option Holders may request a statement at any other time; however a charge may be made for additional statements.

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5.16 Privacy Act disclosure

Shareholders provide personal information to the Company (directly or indirectly to the Company’s Share Registry). The Company collects, holds and will use that information to service your needs as a Shareholder, facilitate distribution payments and corporate communications to you as a Shareholder and carry out administration.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies, including the Australian Taxation Office, authorised securities brokers, print service providers, mail houses and the Company’s share registry.

You can access, correct and update the personal information that we hold about you. Please contact the Company or its Share Registry if you wish to do so at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act, the Corporations Act and certain rules such as the ASX Settlement Operating Rules. You should note that if you do not provide the information required on the application for New Shares, the Company may not be able to accept or process your application.

5.17 Taxation

It is the responsibility of all persons to satisfy themselves of the particular taxation treatment that applies to them by consulting their own professional tax advisers. Taxation consequences will depend on particular circumstances. Neither the Company nor any of its officers accept any liability or responsibility in respect of the taxation consequences connected with an investment in the Securities in the Company.

5.18 Enquiries

This document is important and should be read in its entirety. Persons who are in any doubt as to the course of action to be followed should consult their financial adviser, stockbroker, solicitor, accountant or other professional adviser without delay.

Any questions concerning the Offer should be directed to the Company Secretary, Miss Rekha Bhambhani on +61 3 9562 0122.

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6.1 Background

6 Purpose and Effect of the Offer

Cardia is an Australian developer and manufacturer of sustainable resins, films, bags and custom finished products derived from renewable resources for the global packaging and plastic products industries. Cardia holds a strong patent portfolio of sustainable resin technologies to drive its mission to be an international supplier of technically advanced sustainable resins and finished products made from renewable resources.

Established in 2002, the company Headquarters and Global Applications Development Centre is in Melbourne, Australia. The Product Development Centre and manufacturing plant for resins and finished goods is in Nanjing, China. Cardia has offices in Australia, China, USA, Brazil and Malaysia, and a network of leading distributors across the Americas, Asia and Europe.

Cardia is well positioned to benefit from the market shift towards sustainable packaging and organic waste diversion from landfill programmes. Cardia offers customers the choice of using sustainable Cardia Biohybrid™ technology (less oil, lower carbon foot print) or Cardia Compostable technology (delivering certified compostability to international standards) for their packaging or plastic product solutions. The company’s materials are suitable for a broad range of packaging applications, including flexible film, injection moulding, blow moulding, foam, and extrusion applications.

Cardia holds an intellectual property portfolio of 11 patent families, with 12 patents so far granted in USA, Australia, China, Japan, New Zealand and South Africa. The patents protect the composition formulation and manufacturing process invented by Cardia’s R&D team. The IP portfolio covers its Cardia Compostable and Cardia Biohybrid[TM] products and applications, as well as its development of novel biodegradable and compostable plastics made from carbon dioxide (Polypropylene carbonate (PPC)) and renewable resources and established a subsidiary fully focused on the next generation of CO2S bioplastics.

Cardia works with leading companies and governments globally to develop sustainable packaging and product component solutions. Major household names, such as Kimberly-Clark, Sealed Air, Nestlé, Henkel have used its packaging or product component solutions; some off the shelf, some that Cardia’s technical team have specifically developed for them. Several of Cardia’s development projects have already been commercialised with longterm sales contracts executed and sales revenues being generated. Others have progressed to Memorandum of Understanding stage now being in commercial negotiations after in market trials having been completed. Whilst no assurances can be given as to the success of converting these projects from development to successful commercial outcomes, any number of conversions would result in a substantial and positive effect on the Company’s sales and cash flows.

Cardia has developed both flexible and rigid packaging products and is now being acknowledged by global companies as a quality and reliable provider of bioplastics solutions, technology and finished products. This was evidenced with the announcement by Sealed Air and Nestlé that Cardia is their development partner for renewable and sustainable bioplastics packaging.

In respect of its standard finished products, the Company has been successful in supplying either direct to clients or through distribution partners or

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converters, brand owners such as Breville, McDonalds, KFC, Jusco, BOC Gas, Nature Organics, K-Mart, 7-Eleven and many others.

Globally more and more governments regulate the use of retail carrier bags towards a reduction of use and a change over to more sustainable bag options. Cardia is benefiting from this trend. For example in Brazil where several Brazilian States have implemented bans of standard plastic carrier bags and are currently formalising legislation. Cardia Bioplastics Brazil delivered initial carrier bag sales to retailers with annual supply agreements under negotiation. An annual contract to supply Ricoy Supermercados, one of Brazil’s largest supermarket chains, was executed in February 2014. Cardia Bioplastics Brazil is set up to supply bags to retailers. These bag sales are expected to accelerate.

With increasing waste generation and limited landfill space available, waste management practices are currently being reviewed by many governments around the world. Diverting organic waste from landfill to composting is a path chosen by more and more Councils. Cardia has established itself as a provider of organic waste management products and solutions to the government and council sector, commercial and industrial, as well as the retail market. Diversion of organic waste from landfill to composting is promoting the use of certified compostable waste bags. Reducing the carbon footprint of waste management products encourages the use of Biohybrid™technology.

Over the last year Cardia has executed long-term contracts with ShanghaiPudong and Nanjing Jianye Councils in China to supply Biohybrid™kitchen waste bags to the households of this region to separate kitchen waste. Cardia also has a certified compostable product offering in its organic waste management business, which is delivering sales in Australia, USA and the UK. New opportunities are being developed in Australia, New Zealand, USA, Canada, Malaysia, Brazil and the UK.

In the Films and Packaging market segment, Cardia won contracts to supply Biohybrid™film for the manufacture of a range of baby diaper and feminine hygiene products. Our largest customer has now increased forward orders as it expands use of Cardia products across additional product lines. Cardia achieved initial Biohybrid™film sales to BOS Water and Yukon Spring in the water distribution industry in Australia and Canada. Cardia delivered sales of compostable films and packaging to US Protective Packaging Leader with testing by select international express logistics companies underway.

Cardia has received recognition and awards for its products including exclusive supplier of biodegradable packaging for the Beijing Olympic and Paralympic Games in 2008, Australian Chamber of Commerce “AustraliaChina Business Excellence Award”, “Clean Equity Monaco Conference Award” for Excellence in the field of Environmental Technology Commercialisation in 2009, “Frost & Sullivan Asia Pacific Green Excellence in Technology Innovation Award" for Eco-Materials in 2011, and IAIR GREEN EXELLENCE AWARDS ASIA Pacific - Best Company for Innovation & Sustainability in Packaging in February 2014.

Cardia operates its manufacturing facility for resins and finished goods in Nanjing, China to service its global customer base. It can manufacture up to 7,200 tonnes per year of its proprietary resin products and convert into finished products like flexible film and bags on its in-house film and bag making facilities. In order to meet increased demand for its finished products business Cardia will double its film and bag making capacity. Cardia’s strategy to expand finished products division is having early impact on global sales. Increased finished products capacity will enhance sales margins, as Cardia

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products will be made in-house. Existing capacity for resin production meets business requirements.

6.2 Purpose of the Offer

The purpose of the Offer is to supplement capital to the business to enable it to further implement and execute its business objectives with a primary focus on pursuing immediate sales opportunities, improve production efficiencies, general working capital requirements and continue development projects which provide a platform for generating increased sales revenue.

If the Offer is fully subscribed and assuming no existing Options are exercised, then the issue will raise approximately $2.7 million before costs. This will provide sufficient funds to achieve above stated objectives.

6.3 Use of Funds

The proposed use of funds is as follows to achieve objectives stated under section 6.2

Funds Available	Amount ($)
Cash on hand (as at 31 December 2013)	1,390,873
Funds raised under Share Placement	355,000
Funds raised under the Offer (on full subscription basis)	2,700,000
Total Funds Available	4,445,873
Use of Funds
Expansion of finished goods production capacity	400,000
Nanjing Factory Moving costs	150,000
Development Projects- compromising research and development costs of existing and new production applications	400,000
Intellectual Property Maintenance	300,000
Working Capital float to maintain cash liquidity in the business	750,000
6% Placement fees payable for funds raised through Share Placement	21,300
Other general working capital requirements	2,373,323
Cost of Issue	51,250
Total	4,445,873

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a) The table assumes that none of the existing Option Holders exercise their options before the Record Date and participate in the Offer.
b) Other general working capital includes is not limited Employment costs, Marketing and Distribution costs, Corporate administration and operating costs that may be applied to ASX and Share Registry fees, legal, tax and audit fees and insurance costs.
c) The table is a statement of the proposed application of the funds raised as at the date of this Prospectus. As with any budget, intervening events and new circumstances have the potential to affect the Company’s decisions and the Company reserves the right to vary the way the funds are applied.
d) Actual expenditure may differ significantly from the above estimates due to a number of factors including market conditions, the development of new opportunities and other factors (including the risk factors outlined in section 8 of this Prospectus).
e) Unallocated working capital may be utilised by the Company to pay for general operating costs, any cost overruns in a budgeted expenditures (if any), additional development expenditure, the acquisition of new opportunities and in the administration of the Company generally.
f) Funds raised on exercise of the New Option will be applied in a manner similar to as described above.

Assuming the Offer is not fully subscribed, no existing Options are exercised prior to the Record Date and where the Company raises less than $2.7 million, the company will prioritise its use of funds towards the same objectives but with a greater emphasis on pursuing immediate sales opportunities and general working capital requirements.

There is no minimum aggregate subscription under the Offer and the issue is not underwritten. Subject to the amount received by the Company, it will continue to closely monitor its expenditures having regard to the above priorities.

Shareholders should note that depending on the amount raised under the Offer, the Company may require further capital in the immediate future – resulting in the issue of further Shares or seeking external finance.

6.4 Effect on capital structure

The effect of the offers of Securities under this Prospectus on the capital structure of the Company is set out below.

Particulars	Ordinary Shares	Listed Options (Expiry 30 June 2015)	Unlisted Options (Expiry 15 July 2014)	Options (Expiry 31 December 2014)
Securities currently on issue	2,696,092,168	221,285,642	100,000,000	-
Securities to be issued pursuant to Share Placement	118,333,333	-	-	39,444,444

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Particulars	Ordinary Shares	Listed Options (Expiry 30 June 2015)	Unlisted Options (Expiry 15 July 2014)	Options (Expiry 31 December 2014)
Securities offered pursuant to the Offer	898,697,389	-	-	299,565,796
Total	3,713,122,890	221,285,642	100,000,000	339,010,240

Assuming no existing Options are exercised prior to the Record Date, the issue of New Shares under this Prospectus will raise (if fully subscribed) approximately $2.7 million, before expenses. In addition to the issue of the New Shares, if all New Options established for offer under this Prospectus are taken up and subsequently are exercised prior to the Option Expiry Date, the Company will raise approximately $1.8 million in addition to the amount raised by the issue of New Shares.

In the event that all Options on issue are exercised by the relevant Option exercise dates, the capital structure of the Company will be as follows:

Particulars	Ordinary Shares	Cumulative Ordinary Shares on occurrence of each event
Ordinary Shares currently on issue	2,696,092,168	2,696,092,168
New Shares to be issued pursuant to Share Placement	118,333,333	2,814,425,501
New Shares offered pursuant to this Right Issue Offer	898,697,389	3,713,122,890
Issue of Ordinary shares if all CNNOB options are exercised before expiry date (30 June2015)	221,285,642	3,934,408,532
Issue of Ordinary shares if all Unlisted Options are exercised before expiry date (15 July 2014)	100,000,000	4,034,408,532
Issue of Ordinary shares if all New Options are exercised before expiry date (31 December 2014)	339,010,240	4,373,418,772
Total	4,373,418,772

6.5 Effect on financial position

Set out below is the un-audited pro forma statement of financial position of the Company as at 31 December 2013 which presents the audited financial position as at 30 June 2013, as audited by William Buck Audit (VIC) Pty Ltd and the audit reviewed statement of financial position as at 31 December 2013

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which has been adjusted for the impact of the proposed Offer (including the Share Placement.).

	Audited 30/06/2013	Audit Reviewed Accounts 31/12/2013	Proforma 31/12/2013
	$	$	$
ASSETS
CURRENT ASSETS
Cash and cash equivalents	1,231,477	1,390,873	4,369,415
Trade and other receivables	1,169,390	1,431,177	1,431,177
Inventories	1,449,010	870,333	870,333
TOTAL CURRENT ASSETS	3,849,877	3,692,383	6,670,925
NON-CURRENT ASSETS
Plant and equipment	628,801	579,067	579,067
Financial assets	502,353	563,400	563,400
Intangible assets	5,126,905	5,126,905	5,126,905
TOTAL NON-CURRENT ASSETS	6,258,059	6,269,372	6,269,372
TOTAL ASSETS	10,107,936	9,961,755	12,940,297
CURRENT LIABILITIES
Trade and otherpayables	1,788,975	1,518,019	1,518,019
Short-termprovisions	56,113	48,668	48,668
TOTAL CURRENT LIABILITIES	1,845,088	1,566,687	1,566,687
NON CURRENT LIABILITIES
Longtermprovisions	33,763	44,620	44,620
TOTAL NON CURRENT LIABILITIES	33,763	44,620	44,620
TOTAL LIABILITIES	1,878,851	1,611,307	1,611,307
NET ASSETS	8,229,085	8,350,448	11,328,990
EQUITY
Issued capital	42,717,912	44,106,181	47,084,723
Reserves	(34,106,730)	(35,446,587)	(35,446,587)
Accumulated losses	(420,080)	(347,096)	(347,096)
Parent entityinterest	8,191,102	8,312,498	11,291,040
Non controllinginterest	37,983	37,950	37,950
TOTAL EQUITY	8,229,085	8,350,448	11,328,990

Notes:

(1) In preparing the pro forma accounts no assumptions have been made other than that the Company will raise $2,644,842 after costs from the Offer, which will result in an increase in cash and cash equivalents (current asset) and corresponding increase in issued capital (equity) by the amount raised. The Company will apply the funds raised for the purposes disclosed in section 6.3 of the Prospectus.

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6.6 Potential dilution

Shareholders who do not participate in the Offer will have their holdings diluted. The impact of the dilution will increase as the amount of money raised under this Offer increases.

Shareholders not willing to participate should consult with their financial advisers to ascertain the consequences of any dilution in relation to their holdings.

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7 Rights and Liabilities attaching to New Securities

7.1 Rights attached to New Shares

New Shares will, once issued, rank pari passu with existing Shares. The rights attached to Shares are:

(a) set out in the Company’s Constitution which may be examined free of charge by appointment between 9.00am and 5.00pm on normal Business Days at the registered office of the Company; and
(b) in certain circumstances, regulated by the Corporations Act, the ASX Listing Rules and the general law.

Set out below is a summary of the principal rights attaching to Shares:

(a) General meetings

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

(b) Reports and Notices

Shareholder are entitled to receive all notices, reports, accounts and other documents required to be furnished to Shareholders under the Constitution of the Company and the Corporations Act.

At a general meeting of the Company every ordinary Shareholder present in person, or by proxy or representative shall on a show of hands, have one vote and upon a poll every Shareholder present in person or by proxy or representative has one vote for every Share held and a fraction of a vote (equivalent to the proportion which the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) for that Share, ignoring any amounts paid in advance of a call) for each partly paid share. A qualification to the above is that where a person is present at a meeting as proxy or representative for more than one Shareholder then on a show of hands that person shall have only one vote and not one vote for each person represented by them.

(d) Issue of further Shares

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

(e) Variation of rights

The Company may vary or cancel the rights attaching to any class of Shares only if the variation or cancellation is permitted by the Corporations Act and is approved by special resolution of each of the Shareholders holding Shares of the relevant class.

The Directors must give written notice of the variation or cancellation to the persons holding the Shares within seven days of the variation or cancellation.

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(f) Winding up

Subject to the Corporations Act, the Company’s Constitution and any special or preferential rights attaching to any class or classes of shares, Shareholders will be entitled in a winding up to share in any surplus assets of the Company in proportion to the Shares held by them respectively, less any amount which remains unpaid on their Shares at the time of distribution.

(g) Dividends

The Directors may determine that a dividend or other distribution is or will be payable, subject to the Company’s Constitution and Corporations Act.

(h) Transfer of Shares

Subject to the Constitution of the Company and the Corporations Act the New Shares will be freely transferable.

(i) Reduction of Capital

The Company may only reduce its capital in such manner as may be permitted by the provisions of the Corporations Act and the ASX Listing Rules from time to time.

(j) Directors

The Constitution of the Company contains provisions relating to the rotation of Directors (other than the Managing Director).

7.2 Terms and Conditions of New Options

The following is a summary of the rights and liabilities attaching to the New Options offered by this Prospectus:

(a) Each New Option entitles the holder to, subject to any Shareholder approval under Item 7 of section 611 of the Corporations Act (if required), subscribe for 1 Share in the Company at the exercise price of 0.6 cents ($0.006).
(b) Each New Option will expire at 5.00pm AEDT on 31 December 2014 (Option Expiry Date ).
(c) Each Share allotted as a result of the exercise of an New Option will rank in all respects pari passu with the existing Shares in the Company on issue at the date of allotment.
(d) New Options do not have any voting rights at general meetings of the Company.
(e) Subject to the Constitution of the Company and the Corporations Act, the New Options will be freely transferable and it is intended that application will be made to ASX for Quotation of the New Options.
(f) An Option Holder may exercise Options at any time prior to the Option Expiry Date by submitting the relevant Option exercise form to the Company’s Share Registry. Forms for exercising New Options are available from the Company’s share registry, the Company’s website or by contacting the Company directly.
(g) New Options issued by the Company do not entitle the Option Holder to participate in new issues by the Company.
(h) In the event of any reconstruction (including a consolidation, subdivision, reduction or return) of the issued capital of the Company, all

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rights of holders of New Options will be changed to the extent necessary to comply with the ASX Listing Rules at the time of the reorganisation.

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8 Risk Factors

8.1 Speculative nature of investments

This section 8 identifies some of the major areas of risk associated with an investment in the Company, but should not to be taken as an exhaustive list of the risks faced by the Company or by investors in the Company. The below factors, and others not specifically referred to below, may in the future materially affect the financial performance of the Company and the value of its Securities.

While some of these risks can be mitigated by the use of safeguards and appropriate systems and controls, some of these risk factors are outside the control of the Company and cannot be mitigated.

Accordingly, an investment in the Company carries no guarantee with respect to the payment of dividends, return of capital or the market value of the Securities. The prices at which you may be able to trade the Securities may be above or below the price paid by you for the Securities. An investment in the Company is speculative.

You should read the entire Prospectus and consult your professional advisers before making your own assessment of the likely risks and deciding whether an investment in the Company is appropriate to your own circumstances.

8.2 Key risks

(a) On-going capital requirements for the Company If the Company requires access to further funding at any stage in the future, the Company may be adversely affected in a material way if, for any reason, access to that capital is not available. There can be no assurance that additional funds will be available. If additional funds should be raised by issuing equity securities, this might result in dilution to the interests of then existing Shareholders.
(b) Volatility of petroleum prices

The traditional plastics market is subject to fluctuations in petroleum prices. This hydrocarbon is a critical raw material in the development and manufacturing of plastics. Recently, these prices have been volatile and moved increasingly toward conditions that are supportive of the bioplastics market. With the bioplastic market currently commanding a premium price, any fall in petroleum prices could render bioplastics less competitive as the gap between bioplastics and traditional plastics pricing widens.

(c) Limited operating history

The Company has only commenced sales of its products within the past three years, and continues to develop and launch new product lines. Therefore, the Company is subject to all of the risks inherent in a new business enterprise. Additionally, with a limited operating history, it makes it difficult to evaluate the Company’s financial performance and prospects. As such, period to period comparisons of results from operations may not be meaningful.

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(d) Commercial success depends on widespread market acceptance of bioplastics
The market for bioplastics is a relatively young industry and is still developing. The Company’s success is dependent on consumers’ acceptance of these plastic products as well as the successful commercialisation of its plastics produced with the Company resins by third parties.
(e) Ability to recycle existing plastics improves
Established product manufacturers could improve their ability to recycle their existing products or develop new environmentally friendly products which could render the Company’s technology less competitive. Any improvements or increased recycling of plastic products could lessen its harmful environmental impact, and have an adverse affect on the Company’s business.
(f) Profitability

The Company is not presently profitable and may never be so. The ability of the Company to pay dividends will depend on it generating revenue and the overall financial position of the Company.

(g) Contract Risks

The Company operates through a series of contractual relationships with various parties. All contracts carry risks associated with the performance by the parties thereto of their obligations both as to financial performance and technical capacity and as to the time frames in which operations are carried out and in relation to the quality of work performed. There will be contract risks including relating to the purchase of capital equipment and feedstocks, the maintenance and operation of facilities in China and in respect of all other aspects of its operations. Inability of counterparties to meet their commitments or otherwise default under existing contracts may have an impact on the Company’s revenue, operating margins and cash flows.

8.3 Risks associated with Securities

(a) Securities Investment

You should be aware that there are risks associated with investment in securities of companies listed on a stock exchange. The value of securities can be expected to fluctuate depending on various factors including general worldwide economic conditions, changes in government policies, investor perceptions and sentiments, movements in interest rates, currencies, commodity prices and stock markets, variations in the operating costs and costs of capital replacement which the Company may in the future require. Accordingly, assuming that the Securities are granted Official Quotation by ASX, they may trade on ASX at higher or lower prices than the issue price.

You should consider whether the Securities are a suitable investment for you before deciding to invest in the Securities. If in doubt about investing in securities you should consult your professional advisers immediately.

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(b) Dilution

The interests of Eligible Shareholders who do not participate in the Offer in full and ineligible Shareholders will be diluted as a result of the Company undertaking the Rights Issue or allocating the Shortfall.
(c) New Options may be “out of the money” The New Options are currently “out of the money” and may remain so until the Option Expiry Date.

8.4 Economic risks

(a) Economic risk and external market factors Factors, such as, but not limited to, political movements, stock market trends, changing customer preferences, reduced customer and business confidence, interest rates, inflation levels, commodity prices, exchange rates, industrial disruption, environmental impacts, international competition, changes in governmental policies, taxation changes and legislative or regulatory changes, may all have an adverse impact on the Company’s operating costs, profit margins and share price. These factors are beyond the control of the Company and it cannot, to any degree of certainty, predict how they will impact on the Company.
(b) War and terrorist attacks
War or terrorist attacks anywhere in the world could result in a decline in economic conditions worldwide or in a particular region. There could also be a resultant material adverse effect on the business, financial condition and financial performance of the Company.
(c) Foreign exchange risk
Revenue and expenditure in overseas jurisdictions are subject to the risk of fluctuations of international currency exchange markets. Foreign taxes, limitation on repatriation of earnings, compliance with foreign accounting and business laws, and cultural differences, carry a certain amount of risk. Fluctuations in exchange rates may adversely affect the Company and the price of its Shares. The Company does not at present have any currency hedging in place.
(d) Interest rate risk

The Company, as a borrower of money now or in the future, may be exposed to adverse movements in interest rates which may impact the Company’s financial position.

(e) Tax risks

The Company is exposed to risks arising from the manner in which the Australian and international tax regimes applicable to it may be amended, applied, interpreted and enforced. As a result, the Company may become subject to unanticipated tax liabilities that may have a material adverse effect on the Company’s operations.

8.5 General risks

(a) Ability to retain and attract personnel

The Company’s success depends, in part, on its ability to identify, attract, motivate and retain suitably qualified management personnel. Competition for qualified staff is strong. The inability to access and retain the services of a sufficient number of qualified staff could be disruptive to the Company’s development efforts or

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business development and could materially and adversely affect its operating results.

(b) Litigation

Neither the Company nor any of its subsidiaries are presently involved in litigation and the Directors are not aware of any basis on which any litigation against the Company or any of its subsidiaries may arise.

Operations by the Company may require approvals from regulatory authorities which may not be forthcoming, be subject to conditions or preconditions or which may not be able to be obtained on terms acceptable to the Company. While the Company has no reason to believe that all requisite approvals will not be forthcoming, Eligible Shareholders should be aware that the Company cannot guarantee that any requisite approvals will be obtained. A failure to obtain any approvals would mean that the ability of the Company to develop or operate any project may be limited or restricted either in part or absolutely.

(d) Risks Related to Investment in Technology Generally Investment in areas involving technology are generally subject to high levels of risk. Risks involve those associated with maintenance and development of intellectual property, competition, product obsolescence, the risk that research and development outcomes generally, although successful in laboratory conditions, may not be able to be replicated on a commercial basis either at all or profitably, the time frame for product development and market penetration and other risks such as relying on research personnel which may be contracted, the financial and marketing competence and ability of licensees and other persons.

(e) Strategy Risk

There is a risk that the assumptions upon which the Company’s strategic direction is based are incorrect or that market conditions may change or that the risks generated exceed expected and approved risk appetite or that the execution of the Company’s strategic initiatives proves ineffective.

(f) Intellectual Property Rights

Obtaining, securing and maintaining rights to technology and patents are an integral part of the Company’s business. Competition in retaining and sustaining protection of technology and the complex nature of technologies can lead to patent disputes.

The Company’s success depends, in part, on its ability to obtain patents, maintain trade secret protection and operate without infringing the proprietary rights of third parties. Additionally, success may depend on the Company enforcing and defending its intellectual property against third-party challengers. Because the patent position of companies such as the Company can be highly uncertain and frequently involve complex legal and factual questions, the breadth of claims did not allow nor can their enforceability be predicted. There can be no assurance that any patents which the Company may own, access or control will afford the Company commercially significant

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protection of its technology or its products or have commercial application.

(g) No Valuation

No formal or informal valuations have been completed on any of the intellectual property or other assets of the Company. The Company makes no representation as to the value of its intellectual property or any other such assets. All impending investors and their advisers should make their own assessments as to these matters after having regard to all of the matters contained in this Prospectus.

(h) Impairment of Assets The assets of the Company such as goodwill may be subject to impairment. Such impairment would affect the underlying net assets of the Company.
(i) Regulatory changes

The Company and many of its product applications that are sold into end markets are regulated by various national and local regulations. Changes in those regulations could result in additional costs, seizures, confiscations, recall or fines, any of which could prevent the Company from development and distribution of its products.

(j)

External Suppliers

The Company relies on a number of external suppliers for the provision of services and feedstocks. There can be no assurance given that the failure of an external supplier(s) will not adversely affect the business of the Company.

(k) Operational Risks

These include the possibility of the risk of unexpected mechanical failure or equipment breakdown resulting in loss of production and additional expense generally, unexpected interruption to or imposition of onerous conditions on access, industrial disputes and resultant increases in costs of operation. The availability and pricing of transport and freight may also lead to a cessation of business either temporarily or permanently.

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9 Continuous Disclosure Obligations

9.1 Nature of this Prospectus

This Prospectus is issued under the special prospectus content rules for continuously quoted securities in section 713 of the Corporations Act. This enables listed disclosing entities to issue a prospectus with less rigorous disclosure requirements if:

(a) the securities offered by the prospectus are in a class of securities that have been quoted securities at all times in the 3 months before the date of the prospectus; and
(b) the company is not subject to certain exemptions or declarations prescribed by the Corporations Act.

Securities are quoted securities if:

(a) the company is included in the official list of ASX; and
(b) the ASX Listing Rules apply to those securities.

The information in this Prospectus principally concerns the terms and conditions of the Offer and the information necessary to make an informed assessment of:

(a) the effect of the Offer on the Company; and
(b) the rights and liabilities attaching to the New Securities offered by this Prospectus.

As the Company has been listed on ASX since 21 November 1996, a substantial amount of information concerning the Company has previously been notified to ASX and is therefore publicly available.

This Prospectus is intended to be read in conjunction with the publicly available information in relation to the Company which has been notified to ASX and does not include all of the information that would be included in a prospectus for an initial public offering of securities in an entity that is not already listed on a stock exchange. You should therefore also have regard to the other publicly available information in relation to the Company before making a decision whether or not to invest in the New Shares. Information can be accessed from ASX or via the Company’s website at http://www.cardiabioplastics.com.

Having taken such precautions and having made such enquires as are reasonable, the Company believes that it has complied with the general and specific requirements of ASX as applicable from time to time throughout the period from lodgement of the Company's annual financial statements of the Company for the financial year ended 30 June 2013 to the issue of this Prospectus which required the Company to notify ASX of information about specified events or matters as they arise for the purpose of ASX making that information available to the stock market conducted by ASX.

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

9.2 Regular reporting and disclosure obligations

The Company is a disclosing entity under the Corporations Act. It is subject to regular reporting and disclosure obligations under the Corporations Act and the ASX Listing Rules.

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These obligations require the Company to notify ASX of information about specified events and matters as they arise for the purposes of ASX making that information available to the stock market conducted by ASX. In particular, the Company has an obligation under the ASX Listing Rules (subject to certain limited exceptions) to notify ASX immediately of any information of which it becomes aware concerning the Company which a reasonable person would expect to have a material effect on the price or value of securities in the Company.

The Company is also required to prepare and lodge with ASIC both yearly and half yearly financial statements accompanied by a Directors’ statement and report and an auditor’s report.

All announcements made by the Company are available from ASX.

Having taken such precautions and having made such enquiries as are reasonable, the Company believes that it has complied with the general and specific requirements of the ASX (as applicable from time to time throughout the 12 months before the issue of this Prospectus) which require the Company to notify ASX of information about specified events or matters as they arise, for the purpose of the ASX making that information available to the market.

The Company believes there is no other information that Shareholders or investors would reasonably require for the purposes of making an informed assessment of the assets and liabilities, financial position and performance, profits and losses and prospects of the Company and the rights and obligations attaching to the New Shares under this Prospectus, which has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules.

9.3 Your right to obtain copies of the Company’s documents

Copies of any documents in relation to the Company which are lodged with ASIC may be obtained from, or inspected at, an ASIC office.

During the period that the Offer remains open, the Company will provide copies of the following to any person on request, free of charge:

(a) the Company’s annual financial report for the year ended 30 June 2013 (being the last annual financial report that has been lodged with ASIC before lodgement of this Prospectus);
(b) the Company’s half-year financial report for the period ended 31 December 2013 (being the half –year that has been lodged with ASIC after last annual financial report and before lodgement of this Prospectus);
(c) any continuous disclosure notices used to notify ASX of information relating to the Company between 30 September 2013 (being the date of lodgement of the financial report referred to in paragraph (a) with ASIC) and the date of lodgement of this Prospectus, being the following:

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No	Date	Title of notice as lodged with ASX
1	7/10/2013	Director Appointment
2	7/10/2013	Appendix 3X
3	9/10/2013	Cardia raises further $400K from the placement of shares
4	10/10/2013	CleansingNotice- Share Placement
5	10/10/2013	Share Placement under ListingRule 7.1A
6	17/10/2013	Director Resignation
7	18/10/2013	Board Changes
8	29/10/2013	Notice of Annual General Meeting/ProxyForm
9	29/10/2013	Shareholder Update
10	31/10/2013	September 2013 QuarterlyReport
11	4/11/2013	Notices of change of interest from substantial holders
12	4/11/2013	Notice of change of interest from substantial holder
13	7/11/2013	Director Appointment
14	13/11/2013	TradingHalt
15	14/11/2013	Share Placement
16	14/11/2013	CleansingNotice- Share Placement
17	19/11/2013	Sale of EquityInterest in P-Fuel Limited
18	22/11/2013	Director Resignation
19	22/11/2013	Director Resignation
20	29/11/2013	Chairman Address
21	29/11/2013	AGM Presentation
22	29/11/2013	Results of Annual General Meeting
23	2/1/2014	VoluntaryDelisting- OTCQX
24	30/1/2014	December 2013 QuarterlyReport
25	12/2/2014	Supply contract with Ricoy Supermercados in Brazil
26	14/2/2014	Cardia to double film and bagmakingcapacity
27	17/2/2014	Cardia wins waste management supply contract into Nanjing
28	24/2/2014	Cardia compostable resin and process secures patents in USA
29	27/2/2014	Cardia develops Biohybrid films technology for BIB water
30	28/2/2014	Half Year Report 31 December 2013
31	03/03/2014	Cardia receives IAIR Green Excellence Award

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9.4 Documents available for inspection

The following documents are available for inspection during normal business hours at the Company’s registered office :

(a) this Prospectus;
(b) the Company’s Constitution; and
(c) the consents referred to in section 10.5 of this Prospectus.

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10 Additional Information

10.1 Directors’ interests and benefits

The Company has entered into indemnity, insurance and access deeds with each of the Directors ( Deeds ). Under the Deeds, the Company agrees to indemnify each of the Directors to the extent permitted by the Corporations Act against certain liabilities incurred by the Directors whilst acting as an officer of the Company, and to insure each Director against certain risks to which the Company is exposed as an officer of the Company. The Deeds also grant each Director a right of access to certain records of the Company for a period of up to 7 years after the Director ceases to be an officer of the Company.

The Deeds were entered into as part consideration for the Directors agreeing to hold office as directors of the Company.

The Constitution of the Company provides that the Directors may be paid for their services as Directors. Non-executive Directors may only be paid a sum not exceeding such fixed sum per annum as may be determined by the Company in general meeting, to be divided among the Non-executive Directors and in default of agreement then in equal shares.

The Company also pays premiums to insure all of the Directors against liabilities for costs and expenses incurred by them in defending legal proceedings arising from their conduct whilst acting in the capacity as a Director of the Company.

Other than as set out below or elsewhere in this Prospectus, no Director or proposed Director of the Company, and no firm in which a Director or proposed Director of the Company is a partner, holds, or held at any time during the last 2 years before the date of this Prospectus, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the Offer, or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any Director or proposed director of the Company:

(a) to induce them to become, or to qualify them as, a Director; or
(b) for services rendered by them in connection with the formation or promotion of the Company or in connection with the Offer.

Directors are not required under the Company’s Constitution to hold any shares in the Company.

The table below shows the interest of each Director (whether held directly or indirectly) in securities of the Company as at the date of this Prospectus:

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Director	Shares	Listed Options (Expiry 30 June 2015)	Unlisted Options (Expiry 15 July 2014)
Mr Richard Tegoni Dr Frank Glatz Mr Gideon Meltzer MrSteven Bendel	228,231,445 21,952,917 8,000,000 40,000,000	- 1,490,583 - -	- - - 10,000,000

Directors may hold the relevant interests in Shares and Options shown above directly, or through holdings by companies, trusts or other persons with whom they are associated.

10.2 Directors remuneration

The Company’s Constitution provides that the Directors may be paid fees for carrying out their duties and responsibilities as directors up to a total amount set by the shareholders of the Company in a general meeting. This amount is currently set at $220,000.

10.3 Related party transactions

There are no related party transactions entered into that have not otherwise been disclosed in this Prospectus or to the ASX.

10.4 Interests of other persons

Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus, and no promoter of the Company holds, or held at any time during the last 2 years before the date of this Prospectus, any interest in:

(a) the formation or promotion of the Company;
(b) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the Offer; or
(c) the Offer,

and no amounts have been paid or agreed to be paid and no benefit has been given or agreed to be given to any of these persons for services rendered by them in connection with the formation or promotion of the Company or in connection with the Offer.

The following persons will be paid the amounts described:

(a) Mills Oakley Lawyers, will be paid approximately $15,000 (excluding GST) for legal services in relation to this Prospectus. Mills Oakley Lawyers has received $22,446 (excluding GST) for fees for services to the Company in the 2 years prior to the date of this Prospectus; and
(b) Advanced Share Registry Ltd will be paid approximately $6,000 (excluding GST) for its share registry services in relation to the Offer. Advanced Share Registry Ltd has received $47,675 (excluding GST) for fees for services to the Company in the 2 years prior to the date of this Prospectus.

10.5 Consents

Each of the parties referred to in this section:

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(a) has not authorised or caused the issue of this Prospectus;
(b) does not make, or purport to make, any statement in this Prospectus other than as specified in this section;
(c) has not made any statement on which a statement in this Prospectus is based, other than as specified in this section; and
(d) to the maximum extent permitted by law, expressly disclaims all liability in respect of, makes no representation regarding, and takes no responsibility for, any part of this Prospectus other than the reference to its name and the statement (if any) included in this Prospectus with the consent of that party as specified in this section.

Mills Oakley Lawyers have given and, at the time of lodgement of this Prospectus, have not withdrawn their written consent to being named in this Prospectus as legal advisers to the Company in respect of the Offer in the form and context in which they are named.

William Buck Audit (Vic) Pty Ltd have given and, at the time of lodgement of this Prospectus, have not withdrawn their written consent to being named in this Prospectus as auditors to the Company in respect of the Offer in the form and context in which they are named.

Advanced Share Registry Ltd has given, and at the time of lodgement of this Prospectus, has not withdrawn, its consent to be named in this Prospectus as the Company’s share registry, in the form and context in which it is named.

10.6 Estimated expenses of the Offer

The estimated costs and expenses of the Offer are:

Item	Amount ($)
ASICfees	2,225
ASX fees	14,025
Legalexpenses	15,000
Printing and Share registry expenses	20,000
TOTAL	51,250

These expenses are payable by the Company.

10.7 Market Price of Existing Shares

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

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

Highest:	0.4 cents ($0.004) per Share	17, 25, 26 and 27 February 2014 3 and 5March 2014
Lowest:	0.2 cents ($0.002) per Share	11, 12, 13, 17, 18 and 20 February 2014

The latest available closing sale price of the Company’s Shares on ASX prior to the lodgement of this Prospectus with the ASIC was 0.3 cents ($0.003) on 5 March 2014.

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10.8 Litigation

10.9 Taxation implications

The Directors do not consider that it is appropriate to give Shareholders or other potential Eligible Shareholders advice regarding the taxation consequences of applying for New Shares under this Prospectus, as it is not possible to provide a comprehensive summary of the possible taxation consequences. The Company, its advisers and officers, do not accept any responsibility or liability for any taxation consequences to Shareholders or other potential Eligible Shareholders. Potential Eligible Shareholders should, therefore, consult their own professional tax adviser in connection with the taxation implications of subscribing for New Shares offered pursuant to this Prospectus.

10.10 Foreign Selling Restrictions

This Prospectus, and any other material related to the Offer do not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. By applying for the Securities, each Eligible Shareholder represents and warrants that there has been no breach of such laws.

Eligible Shareholders who are nominees, trustees or custodians are therefore advised to seek independent advice as to how they should proceed. Eligible Shareholders who are acting on behalf of persons who are not resident in Australia are responsible for ensuring that taking up of the Securities does not breach the selling restrictions set out in this Prospectus or otherwise violate the securities laws in the relevant overseas jurisdictions.

10.1 Electronic Prospectus

Pursuant to Class Order 00/44, ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an electronic prospectus and electronic Entitlement and Acceptance Form on the basis of a paper prospectus lodged with the ASIC, and the publication of notices referring to an electronic prospectus or electronic Application Form, subject to compliance with certain conditions.

If you have received this Prospectus as an electronic Prospectus, please ensure that you have received the entire Prospectus accompanied by the Application Form. If you have not, please phone the Company on +61 3 9562 0122 and the Company will send you, for free, either a hard copy or a further electronic copy of the Prospectus, or both.

New Shares and New Options will only be issued on receipt of an Entitlement and Acceptance Form issued together with this Prospectus. The Company reserves the right not to accept an Entitlement and Acceptance Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

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11 Director’s authorisation

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

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive and that, in respect to any other statements made in this Prospectus by persons other than Directors, the Directors have made reasonable enquiries and, on that basis, have reasonable grounds to believe that persons making the statement or statements were competent to make such statements. Those persons have given their consent to the statements being included in this Prospectus, in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with the ASIC or, to the Directors’ knowledge, before any issue of the New Shares and New Options pursuant to this Prospectus.

Each of the Directors of the Company has consented to the lodgement of this Prospectus in accordance with section 720 of the Corporations Act and has not withdrawn that consent.

This Prospectus is signed for and on behalf of the Company pursuant to a resolution of the Board.

Dated: 6 March 2014

==> picture [104 x 52] intentionally omitted <==

Richard Tegoni Director

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12 Glossary

means Australian Eastern Daylight Savings Time. means money received by the Company in respect of applications. means the Australian Securities and Investments Commission.

AEDT Application Moneys

ASIC

ASX

means ASX Limited ABN 98 008 624 691.

ASX Clear Operating Rules means the official clearing rules of the ASX Clear Pty Limited ABN 48 001 314 503. ASX Listing Rules means the official listing rules of the ASX.

ASX Listing Rules ASX Settlement

means ASX Settlement Pty Limited ABN 49 008 504 532. means the official settlement rules of ASX.

ASX Settlement Operating Rules

Board or Board of Directors means the board of directors of the Company. Business Day means a day (other than a Saturday, Sunday or public holiday) on which banks are open for general banking business in Melbourne, Australia. CHESS means Clearing House Electronic Subregister System operated by ASX Settlement.

Closing Date means the closing date for receipt of an an Entitlement and Acceptance Form under this Prospectus as set out in section 1 (unless extended).

Company or Cardia means Cardia Bioplastics Limited ABN 89 064 755 237 Constitution means the Company’s constitution as at the date of this Prospectus. Corporations Act means Corporations Act 2001 (Cth). Directors means the directors of the Company as at the date of this Prospectus. Deed means the indemnity, insurance and access deeds between the Company and each of the Directors. Electronic Prospectus means the electronic copy of this Prospectus located at The Company’s website at www.cardiabioplastics.com. Eligible Shareholders means a Shareholder whose registered address is in Australia or New Zealand and who is a Shareholder at 5.00 pm (AEDT) on the Record Date.

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Entitlement means the entitlement of an Eligible Shareholder to participate in the Offer. Entitlement and Acceptance means the application forms entitled “Entitlement Form and Acceptance Form” either attached to or accompanying this Prospectus. Exposure Period means the period of 7 days from the date of lodgement of this Prospectus, which period may be extended by ASIC by not more than 7 days pursuant to section 727(3) of the Corporations Act. New Options means the free attaching Options issued with the New Shares under this Prospectus, on the terms set out in section 7.2 of this Prospectus. New Shares means the Shares offered pursuant to this Prospectus. Offer means the Rights Issue Offer and the Shortfall Offer. Opening Date means the opening date for receipt of an Entitlement and Acceptance Forms under this Prospectus as set out in Section 1. Option means an option to acquire a Share. Option Holder means the holder of an Option. Option Expiry Date means has the meaning given to that term in section 7.2(b) of this Prospectus. Privacy Act means Privacy Act 1988 (Cth). Prospectus means this prospectus. Quotation and Official Quotation means the official quotation on ASX. Record Date means the date as at which Rights will be determined, as set out in the timetable in section 1. Right means a right to subscribe for an Entitlement pursuant to this Prospectus. Rights Issue and Rights Issue means the non-renounceable rights issue offer to Offer Eligible Shareholders as further detailed in section 5.1 of this Prospectus. Securities means the New Shares and the New Options. Share means a fully paid ordinary shares in the capital of the Company. Shareholder means the holder of a Share as recorded in the register of the Company. Share Placement means a placement of 118,333,333 fully paid ordinary shares to professional and sophisticated investors to raise approximately A$355,000 as announced on ASX on 6 March 2013. Share Registry means Advanced Share Registry Ltd.

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Shortfall means the number of Securities comprising the difference between the Securities the subject of the Rights Issue Offer, and the number of Securities for which valid applications have been received and accepted by the Company by the Closing Date. Shortfall Offer The offer of the Shortfall to Eligible Shareholders or other persons located and receiving this Prospectus in Australia (including any retail investor). Shortfall Securities means the number of New Shares and New Options comprising the Shortfall. US Securities Act means the US Securities Act of 1933 , as amended from time to time.

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AI assistant

MYECO GROUP LTD — Capital/Financing Update 2014

65304_rns_2014-03-19_0b6a0805-9fa3-4d88-a3e6-617a5f4a270b.pdf

TO: COMPANY ANNOUNCEMENTS OFFICE ASX LIMITED DATE: 20 March 2014

DESPATCH OF PROSPECTUS

CARDIA BIOPLASTICS LIMITED ABN 89 064 755 237 (ASX Code: CNN)

PROSPECTUS

The Offer is not underwritten

IMPORTANT NOTICE

Important Notice

Nature of this Prospectus

Prospectus availability

Foreign jurisdictions

Disclaimer of representations

Forward looking statements

Risks

Definitions

Enquiries

Application for Securities

Privacy

Exposure Period

Corporate Directory

TABLE OF CONTENTS

Important Information

Dear Eligible Shareholder

4 Questions and Answers

5.1 Details of the Offer

5.2 Opening and Closing Dates of the Offer

5.3 Entitlement to offer

5.4 Underwriting

5.5 Acceptances

5.6 Rights attaching to the Securities

5.7 Rights Trading

5.8 Eligible Shareholders – what you need to do

(a) If you want to take up your Rights

(b) If you want to apply for additional New Shares

(c) If you do nothing

(d)

Form of payment

5.9 Minimum subscription

5.10 Shortfall

5.11 Allotment of Securities

5.12 ASX Listing

5.13 Ineligible Shareholders

5.14Treatment of Overseas Shareholders

5.15CHESS and Cardia Sponsorship

5.16 Privacy Act disclosure

5.17 Taxation

5.18 Enquiries

6 Purpose and Effect of the Offer

6.2 Purpose of the Offer

6.3 Use of Funds

6.4 Effect on capital structure

6.5 Effect on financial position

6.6 Potential dilution

7.1 Rights attached to New Shares

(d) Issue of further Shares

(f) Winding up

(g) Dividends

7.2 Terms and Conditions of New Options

8.1 Speculative nature of investments

8.2 Key risks

(c) Limited operating history

8.3 Risks associated with Securities

(a) Securities Investment

(b) Dilution

8.4 Economic risks

8.5 General risks

(e) Strategy Risk

(j)

External Suppliers

(k) Operational Risks

9 Continuous Disclosure Obligations

9.1 Nature of this Prospectus

9.2 Regular reporting and disclosure obligations

9.3 Your right to obtain copies of the Company’s documents

9.4 Documents available for inspection

10.1 Directors’ interests and benefits

10.2 Directors remuneration

10.3 Related party transactions

MYECO GROUP LTD Capital/Financing Update 2014