PEPPERMINT INNOVATION LIMITED - Capital/Financing Update 2015

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1.	CORPORATE DIRECTORY ................................................................................................ 1
2.	IMPORTANT NOTICE ........................................................................................................ 2
3.	KEY DATES AND OFFER STATISTICS ................................................................................. 6
4.	CHAIRMAN’S LETTER ....................................................................................................... 7
5.	INVESTMENT OVERVIEW ................................................................................................. 8
6.	TRANSACTION OVERVIEW ............................................................................................ 19
7.	DETAILS OF THE OFFERS ................................................................................................ 22
8.	COMPANY OVERVIEW – ASSETS, FINANCIAL INFORMATION AND CAPITAL
	STRUCTURE ..................................................................................................................... 29
9.	PEPPERMINT CORPORATE STRUCTURE .......................................................................... 51
10.	RISK FACTORS ............................................................................................................... 58
11.	BOARD, MANAGEMENT, INTERESTS AND CORPORATE GOVERNANCE ..................... 67
12.	INVESTIGATING ACCOUNTANT’S REPORT ................................................................... 70
13.	CORPORATE GOVERNANCE ........................................................................................ 90
14.	MATERIAL CONTRACTS ................................................................................................. 93
15.	ADDITIONAL MATERIAL INFORMATION ..................................................................... 100
16.	DIRECTORS’ AUTHORISATION ..................................................................................... 112
17.	GLOSSARY AND INTERPRETATION .............................................................................. 113

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1. CORPORATE DIRECTORY

Directors

Dr Neale Fong – Non-Executive Chairman[1]

Mr Jian Hua Sang – Non-Executive Director[1]

Mr Leigh Ryan – Managing Director[2]

Proposed Directors

Mr Christopher Kain (proposed Managing Director)

Registered Office

Suite 20 7 The Esplanade Mt Pleasant WA 6153

Telephone: + 61 8 6180 9290 Facsimile: +61 8 9316 1314

Email: [email protected] Website: www.chrysalisresources.com.au

Share Registry*

Mr Anthony Kain (proposed Executive Director)

Mr Matthew Cahill (proposed Non-Executive Director)

Company Secretary

Computershare Investor Services Pty Limited Level 11 172 St Georges Terrace Perth WA 6000

Telephone: +61 8 9323 2000 Facsimile: +61 8 9323 2033

Mr Kevin Hart

Legal Advisers to Chrysalis

Proposed Company Secretary

Mr Anthony Kain

Current ASX Code:

CYS

Proposed ASX Code:

PIL

Lead Manager to the Offer

Steinepreis Paganin Lawyers and Consultants Level 4, The Read Buildings 16 Milligan Street PERTH WA 6000

Auditor*

HLB Mann Judd Level 4 130 Stirling Street Perth WA 6000

DJ Carmichael Level 14, Parmelia House 191 St Georges Terrace Perth WA 6000

Investigating Accountant

RSM Bird Cameron Corporate Pty Ltd 8 St Georges Terrace Perth WA 6000

1 Resigning upon completion of the Peppermint Acquisition.

2 Will resign as managing director, but will continue to act as non-executive Director.

These entities have been included for information purposes only. They have not been involved in the preparation of this Prospectus.

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2. IMPORTANT NOTICE

2.1 General

This Prospectus is dated 16 October 2015 and was lodged with the ASIC on that date. The ASIC and its officers take no responsibility for the contents of this Prospectus or the merits of the investment to which this Prospectus relates.

No person is authorised to give information or to make any representation in connection with the Offers, which is not contained in the Prospectus. Any information or representation not so contained may not be relied on as having been authorised by Chrysalis Resources Limited (ACN 125 931 964) ( Chrysalis ) in connection with this Prospectus.

It is important that you read this Prospectus in its entirety and seek professional advice where necessary. The Securities the subject of this Prospectus should be considered highly speculative.

2.2 Re-compliance Prospectus

This Prospectus is a re-compliance prospectus for the purposes of satisfying Chapters 1 and 2 of the ASX Listing Rules and to satisfy the ASX requirements for re-admission to the Official List following a change in nature and scale of the Company’s activities.

2.3 Investment Advice

This Prospectus does not provide investment advice and has been prepared without taking into account your financial objectives, financial situation or particular needs (including financial or taxation issues). You should seek professional investment advice before subscribing for Securities under this Prospectus.

2.4 Additional Offers

This Prospectus also includes:

(a) a private offer of 350,000,000 Shares and 100,000,000 Performance Shares to the shareholders of Peppermint Innovation Limited ( Vendors ) in consideration for the acquisition by the Company of all the fully paid ordinary shares of Peppermint ( Peppermint Offer ); and
(b) a private offer of 3,250,000 Shares to DJ Carmichael (or their nominees) in consideration for part payment of the management fee and selling fee under the Mandate ( DJC Offer ).

(together, the Additional Offers ).

2.5 Expiry Date

No Securities may be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus.

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2.6 Forward-looking statements

This Prospectus contains forward-looking statements which are identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’, or ‘intends’ and other similar words that involve risks and uncertainties.

These statements are based on an assessment of past and present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this Prospectus, are expected to take place.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, its Directors, proposed Directors and management.

Although the Company believes that the expectations reflected in the forward looking statements included in this Prospectus are reasonable, none of the Company, its Directors, proposed Directors or officers, or any person named in this Prospectus, can give, or gives, any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this Prospectus will actually occur or that the assumptions on which those statements are based will provide to be correct or exhaustive beyond the date of its making. Investors are cautioned not to place undue reliance on these forward-looking statements.

Except to the extent required by law, the Company has no intention to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this Prospectus.

The forward looking statements contained in this Prospectus are subject to various risk factors that could cause our actual results to differ materially from the results expressed or anticipated in these statements. The key risk factors of investing in the Company are set out in Section 10 of this Prospectus.

2.7 Privacy statement

By completing and returning an Application Form, you will be providing personal information directly or indirectly to the Company, the Share Registry, the Lead Manager and other brokers involved in the Public Offer, Peppermint and related bodies corporate, agents, contractors and third party service providers of the foregoing ( Collecting Parties ). The Collecting Parties collect, hold and will use that information to assess your application, service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you as a Shareholder.

By submitting an Application Form, you authorise the Company to disclose any personal information contained in your Application Form ( Personal Information ) to the Collecting Parties where necessary, for any purpose in connection with an Offer, including processing your acceptance of an Offer and complying with applicable law, the ASX Listing Rules, the ASX Settlement Operating Rules and any requirements imposed by any Public Authority.

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If you do not provide the information required in the Application Form, the Company may not be able to accept or process your acceptance of an Offer.

If the Offers are successfully completed, your Personal Information may also be used from time to time and disclosed to persons inspecting the register of Shareholders, including bidders for your securities in the context of takeovers, Public Authorities, authorised securities brokers, print service providers, mail houses and the Share Registry.

Any disclosure of Personal Information made for the above purposes will be on a confidential basis and in accordance with the Privacy Act 1988 (Cth) and all other legal requirements. If obliged to do so by law or any Public Authority, Personal Information collected from you will be passed on to third parties strictly in accordance with legal requirements. Once your Personal Information is no longer required, it will be destroyed or de-identified. As at the date of this Prospectus, the Company does not anticipate that Personal Information will be disclosed to any overseas recipient.

Subject to certain exemptions under law, you may have access to Personal Information that the Collecting Parties hold about you and seek correction of such information. Access and correction requests, and any other queries regarding this privacy statement, must be made in writing to the Share Registry at the address set out in the Corporate Directory in Section 1 of this Prospectus. A fee may be charged for access.

2.8 Web Site – Electronic Prospectus

A copy of this Prospectus can be downloaded from the website of the Company at www.chrysalisresources.com.au. If you are accessing the electronic version of this Prospectus for the purpose of making an investment in the Company, you must be an Australian resident and must only access this Prospectus from within Australia.

There is no facility for any of the Offers to be accepted electronically or by applying online. Shares and Performance Shares will not be issued under the electronic version of the Prospectus. The Corporations Act prohibits any person passing onto another person an Application Form unless it is attached to a hard copy of this Prospectus or it accompanies a complete and unaltered version of this Prospectus. You may obtain a hard copy of this Prospectus free of charge by contacting the Company.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the Application Form, it was not provided together with the Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered.

2.9 Defined terms

Unless the contrary intention appears or the context otherwise requires, words and phrases contained in this Prospectus have the same meaning and interpretation as given in the Corporations Act and capitalised terms have the meaning given in the Glossary in Section 17 of this Prospectus.

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2.10 Time

All references to time in this Prospectus are references to Australian Western Standard Time.

2.11 Photographs and Diagrams

Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person shown in them endorses the Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale.

2.12 Enquiries

If you are in any doubt as to how to deal with any of the matters raised in this Prospectus, you should consult your broker or legal, financial or other professional adviser without delay.

Should you have any questions about any of the Offers or how to accept any of the Offers, please call the Company Secretary on +61 8 6180 9290.

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3. KEY DATES AND OFFER STATISTICS

3.1 Indicative timetable[1]

Lodgement of Prospectus with the ASIC	16 October 2015
Opening Date of the Offers	16 October 2015
Closing Date of the Offers	13 November 2015
Settlement of Peppermint Acquisition2 (Issue of Consideration Securities, Public Offer Shares and others pursuant to the Term Sheet and Prospectus	18 November 2015
Anticipated date for re-admission to ASX and suspension of trading lifted	24 November 2015

1 The above dates are indicative only and may change without notice. The Company reserves the right to extend the Closing Date or close the Offers early without prior notice. The Company also reserves the right (subject to the terms of the Acquisition Agreements) not to proceed with any of the Offers at any time before the issue of Shares to Applicants.

2 The above stated date for the settlement of the Peppermint Acquisition is only a good faith estimate by the Directors and may have to be varied as required.

3.2 Key Statistics of the Offers

Shares currently on issue	345,484,128
Shares to be issued to Peppermint Shareholders(1)	350,000,000
Performance Shares to be issued to Peppermint Shareholders(2)	100,000,000
Public Offer issue price	$0.02
Maximum Shares to be issued under Public Offer(3)	200,000,000
Shares to be issued to DJ Carmichael and Leigh Ryan	5,250,000
Shares on issue Post-Acquisition(4)(5)	900,734,128
Performance Shares on issue Post-Acquisition(4)(5)	100,000,000

Notes:

1. Further information regarding the terms of the Consideration Shares to be issued to Vendors is set out in Section 15.2.

2. Further information regarding the terms of the Performance Shares is set out in Section 15.3

3. Assuming the maximum subscription of $4 million is achieved under the Public Offer.

4. Assuming no additional Securities are issued.

5. A detailed capital structure is set out in Section 9.7 .

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4. CHAIRMAN’S LETTER

Dear Investor,

Although the Joint Venture with FQM Exploration (Zambia) Limited ( FQM ) in Zambia has entered into the earn-in phase, and subsequently retains significant potential to add value to Chrysalis, the recent downturn in resource market conditions and the difficulty being experienced by junior explorers, including Chrysalis, to raise funds for ongoing mineral exploration has, after considering a number of other opportunities, initiated the acquisition of Peppermint Innovation Limited. The board believes that the proposed acquisition of Peppermint is an excellent opportunity to add value and retain substantial growth potential for the Company.

Accordingly, on behalf of my fellow Directors, it is with great pleasure that I present you with the opportunity to participate in the ownership and future growth of Chrysalis by way of the purchase of Peppermint, a mobile banking and payment platform developer and operator in the Philippines.

Peppermint was formed to take over the next stage of development of a mobile payment and banking technology business which had been developed and operated by TelUPay International Inc. ( TelUPay ) in the Philippines. To do this Peppermint secured an exclusive perpetual licence to carry on the development and commercialisation of TelUPay’s Technology ( TelUPay Technology ), it secured the key personnel who had been responsible for the development and maintenance of the TelUPay Technology and was assigned key service contracts where the technology was in operation currently in use by commercial banks in the Philippines.

With this team and these contracts Peppermint is now building a mobile banking, payments and remittance platform in the Philippines which incorporates the TelUPay Technology and includes a joint venture arrangement with a large agent network for a developing remittance business (the Peppermint Platform ).

The Board believes the Peppermint Platform is well positioned for commercial application with a highly qualified and experienced technical development and management team already in place to achieve its goals. Peppermint requires capital to fund marketing and incentive programs to accelerate the use of the Peppermint Platform. The immediate opportunity is that the Peppermint Platform will go beyond existing customers to provide a wide range of financial services via a mobile phone to the ‘unbanked' population. Such a tool will aim to promote financial inclusion to a large part of the Philippine population and this is a significant target.

On behalf of the board of the Chrysalis, I look forward to welcoming you as a shareholder in Peppermint Innovation Limited.

Yours sincerely

Neale Fong Non-Executive Chairman

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5. INVESTMENT OVERVIEW

This Section is a summary only and is not intended to provide full information for investors intending to apply for Securities offered pursuant to this Prospectus. This Prospectus should be read and considered in its entirety.

Item	Summary	Further information
A. The Company
*Who is the* *issuer of this* *Prospectus?*	Chrysalis Resources Limited ACN 125 931 964 (ASX Code: CYS) is the issuer of this Prospectus. Chrysalis is an ASX listed public company in the business of exploration for gold, base metals and iron ore in Western Australia and Zambia.	Section 8
*What is the* *intended* *Acquisition?*	On 21 May 2015, Chrysalis announced it had agreed to acquire 100% of the issued share capital of unlisted public company, Peppermint Innovation Limited (ACN 600 876 024)) (Peppermint) (Acquisition). The Acquisition is proposed to be effected by means of a binding Term Sheet between Chrysalis, the Company and the Peppermint Shareholders under which Chrysalis has agreed, subject to fulfilment of certain conditions, to acquire 100% of Peppermint’s fully paid ordinary shares (Peppermint Shares) (Peppermint Offer). The Acquisition, once completed, will lead to a significant change in the nature and scale of Chrysalis’ activities. As a result, Chrysalis was required to obtain shareholder approval for (among other things) the Acquisition and re-comply with Chapters 1 and 2 of the ASX Listing Rules. Shareholder approval was subsequently obtained on 2 October 2015. A summary of the key terms of the Acquisition is set out in Sections 14.1 .	Section 8 and 14
*What is the* *purpose of this* *Prospectus?*	The purpose of this Prospectus is to raise sufficient capital through the issue of Shares under the Public Offer to fund the Acquisition and seek re-admission to the Official List of ASX as “Peppermint Innovation Limited”. The proposed use of funds raised under the Public Offer is set out in Section 7.4. A further purpose of this Prospectus is to cleanse the issue of Shares to be issued to the Peppermint Shareholders and DJ Carmichael pursuant to section 708A(11) of the Corporations Act. Further information in relation to this is set out in Section 7.	Section 7.4

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Item	Summary	Summary	Further information
. Business Model of Peppermint post-Acquisition
*Who is* *Peppermint?*		Peppermint Innovation Limited is a public unlisted company, which operates and is developing an established mobile banking, payments and remittance business with operations in the Philippines called the Peppermint Platform. It does this with a skilled team with experience building such a business who have the capacity to continue to develop new and innovative mobile phone applications in this field. Peppermint was formed to fund the next stage of the commercial development of a mobile payment and banking technology business which had been developed and operated by TelUPay in the Philippines. To do this: 1. TelUPay granted Peppermint an exclusive perpetual licence in 97 countries to carry on the development and commercialisation of its mobile banking and payment technology (TelUPay Technology) currently in use by commercial banks in the Philippines – along with a first right of refusal to acquire any other intellectual property rights granted in relation to the TelUPay Technology anywhere in the world; 2. Peppermint took over the key personnel who had been responsible for the development and maintenance of the TelUPay Technology to work and develop further technology exclusively for Peppermint; 3. Peppermint took over key service contracts where the TelUPay technology was operating; and 4. Peppermint entered into a joint venture arrangement with MyWepS International Inc. for the development of a remittance and mobile banking business in the Philippines. The Peppermint team is working with MyWeps to develop that technology on the basis that the rights to the IP developed by Peppermint are retained exclusively by Peppermint. With these key planks in place Peppermint is now focused on the commercialisation and development of the Peppermint Platform with banks, commercial clients, mobile money operators, money transfer and funds remittance companies, and microfinance institutions in the Philippines. Key Aims: One of the key aims of the Company is to provide a tool whichprovidesfinancialservicesfor the unbanked	Section8

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Item	Summary	Further information
	population to access mobile banking and remit money to and from family and others through a system not tied to a particular bank or telephone company. Another key aim is to improve business practises and utility in difficult environments (like the Philippines to start with) and derive revenue for commercial clients and networks in the Philippines, through Asia, Europe and throughout the world as this technology is developed.
*How will the* *Merged* *Group* *generate* *income?*	Peppermint will derive its revenue through commission on each transaction by a user of the Peppermint Platform and fees for the development and maintenance of the Peppermint Platform tailored to the needs of commercial clients. The Merged Group will generate income from existing service contracts with commercial banks and other commercial users of the Peppermint Platform which it will seek to build on with new commercial contracts Peppermint is bidding for.	Section 8.4
*What are the* *key business* *strategies of* *the Merged* *Group?*	Peppermint’s key business strategies will be to focus on: � increasing commercial deployment of the version of the Peppermint Platform approved by the Filipino central banking authorities and currently being used by certain established banks in the Philippines; � the use of the Peppermint Platform to provide domestic and international remittance services initially through a domestic agent network with some 70,000 members/agents in the Philippines; � the development of mobile phone applications for major commercial clients; and � applying capital to marketing and incentive programs to accelerate usage of the Peppermint Platform in the Philippines and beyond.	Section8
*What are the* *key* *dependencies* *of the Merged* *Group’s* *business* *model*	The key factors that Peppermint will depend on to meet its objectives are: � the continuation and growth of the key contracts which are already in place for the Peppermint Platform; � the success of the remittance program pilot; � the success of current development projects now under way with new commercial clients; and � the establishment of new customer relationships and entry into new customer contracts.	Section8

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Item	Summary	Further information
*What are the* *key benefits of* *the* *Acquisition?*	The Board considers that the key benefits of the Acquisition will be the chance for its shareholders to get exposure to a mobile banking, payments and remittance platform that is well placed to capitalise upon the increased growth around the world in mobile payments and banking, especially in the developing world.	Section8
*What are the* *effects of the* *Acquisition?*	The effect of the Acquisition will see the nature and scale of the business activities of Chrysalis change with the Company proposing to focus on a mobile banking, payments and remittance business. The effect of the Acquisition is set out in the capital structure table in Section 9.7 and the pro-forma balance sheet of the Company set out in Section 12. The effect of the Acquisition on the Company’s risk profile, including the dilutive impact on the Company’s existing Shareholders, is set out in Section 10 (a summary of key risks is also set out in Section C below).	Section 8
C. Key Risks
*What are the* *key risks of an* *investment in* *Chrysalis?*	The business, assets and operations of the Company are and will be subject to certain risk factors. These factors can impact on the value of an investment in the Securities of the Company. Set out below are specific risks the Company is and will be exposed to post Acquisition. An investment in Chrysalis should be considered highly speculative. Further risk factors affecting Peppermint are set out in Section 10.	Section 10
*Licence Risk*	Peppermint has entered into an exclusive perpetual licence to use the TelUPay Technology being used by a number of commercial banks in the Philippines. If TelUPay defaults in its obligations under the Licence, it may result in legal action. Legal action can be costly and there can be no guarantee that a legal remedy will be ultimately granted on the appropriate terms. The Company has no current reason to believe that TelUPay will not meet and satisfy its obligations under the Licence.	Section 10.3(a)
*Ability to* *attract and* *retain key* *personnel*	Peppermint’s success depends, to a large extent, on its ability to attract and retain appropriately skilled personnel. Peppermint is currently operated and managed by a small group of select team members. The departure, either temporary or permanent, of those key staff, or any delay in their replacement, could adversely affect Peppermint’s performance.	Section 10.3(b)

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Item	Summary	Further information
	Similarly, as a company seeking to grow and expand, Peppermint’s success in securing new talent will be critical going forward and may be constrained for a number of reasons. Additionally, Peppermint relies on offshore team members. In the event that offshore employees cease to continue working with Peppermint, this could cause significant disruption to the operations of the business and would require Peppermint to find alternative employees.
*Acquisitions* *and* *Partnerships*	Peppermint cannot control the actions of joint venture partners and therefore cannot guarantee that partnerships will be operated or managed in accordance with Peppermint’s preferred direction, strategy or risk management parameters. To the extent that acquisitions or partnership arrangements are not successfully integrated with Peppermint’s existing business lines, the growth and financial performance of Peppermint could be affected and, despite the terms of the relevant agreements, it may be impractical to enforce all of Peppermint’s rights (particularly if the partnerships operate overseas).	Section 10.3(c)
*Contracts*	There is the risk that if counterparties default on their obligations, which may in turn necessitate legal action, there is a risk of significant financial loss for Peppermint. In some cases, the contracts that Peppermint has entered into may be governed in jurisdictions outside Australia. It may be more difficult to resolve disputes in such jurisdictions than it would be under Australian law. As such, Peppermint cannot ensure that an appropriate legal resolution will be achieved.	Section 10.3(d)
*Intellectual* *Property* *Rights*	TelUPay owns the source code now being used by the commercial banks in the Philippines which it has licenced to Peppermint. While Peppermint has systems and procedures in place to protect its content and information and has taken over the team that developed the source code, unauthorised use of the licenced intellectual property could have a negative impact on its operations and brand. There is a risk of third parties making claims of infringement of intellectual property against Peppermint. This could result in significant legal costs and negatively impact operations.	Section 10.3(e)
Competition	The Merged Group’s market position and customer relationships may be affected by competitors. Although the Merged Group will undertake all reasonable due diligence in its business decisions and operations, it will have no influence or control over the activities or actions	Section 10.2(d)

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Item	Summary	Further information
	of its competitors, which activities or actions may, positively or negatively, affect the operating and financial performance of the projects and business of the Merged Group.
*Limited* *Operating* *History*	The business has had limited operations and revenues to date in which potential investors can evaluate the business. Investors must consider all risks associated with and frequently encountered by companies operating in the same space, particularly companies involved in generally new, rapidly evolving markets.	Clause 10.4(a)
Loss of Key Clients	The business currently operates with a few key client relationships. Peppermint is expected to maintain current and establish new relationships through the continued enhancement of its products and solutions. In the event that these established relationships diminish or fail (including through a termination event arising under an agreement) the resulting effect may negatively impact the operating results of Peppermint.	Clause 10.4(b)
*Operations* *and* *management* *of Potential* *Growth*	Peppermint is working in a fast moving environment, engaged in business with multiple partners. Navigating these issues while effectively dealing with prioritisation, timing, execution, cost control, and other business decisions is likely to provide real challenges for its small management team. There can be no guarantee that successful execution of Peppermint’s strategy will make it profitable or commercially viable. Current product development and marketing strategies may not have the intended effect of increasing customers. Similarly, strategies to create value from customers of the application may not yield the expected revenue.	Section 10.3(f)
*Product* *Development*	Peppermint believes that it provides a meaningful and engaging offering. Moreover, in addition to its current products and services, Peppermint is planning to develop new products to suit the mobile banking, payments and remittance business it is building. Delays in product development, cost overruns, or difficulties in delivering new features will negatively impact the Company and its business.	Section 10.3(g)
*Reliance on* *core* *information* *technology,* *other systems* *and security*	Techniques used to gain unauthorised access to private networks are constantly evolving and Peppermint may be unable to anticipate or prevent unauthorised access to data pertaining to its customers, which could include credit card and debit card information, bank account details or other personally identifiable information. Peppermint’s service is vulnerable to computer viruses, phishing attacks or other attacks and similar disruptions fromunauthorized use of its systems, any of whichcould	Section 10.3(l)

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Item	Summary	Further information
	lead to system interruptions, delays or shutdowns, causing loss of critical data or the unauthorized access to personally identifiable information. If an actual or perceived breach of security occurs of Peppermint’s systems, it may face civil liability and public perception of our security measures could be diminished, either of which would negatively affect Peppermint’s ability to attract or maintain customers. Peppermint also would be required to expend significant resources to mitigate any such breach of security and to address related matters.
*Liquidity Risk*	The Securities to be issued to Peppermint Shareholders on completion of the Acquisition will be subject to escrow restrictions in accordance with Chapter 9 of the ASX Listing Rules. This equates to 39% of the post- Acquisition issued Share capital, assuming no further Shares are issued (other than the issue to Mr Leigh Ryan and DJ Carmichael) and full subscription under the Capital Raising. This could be considered an increased liquidity risk as a large portion of issued capital may not be able to be traded freely for a period of time.	Section 10.4(e)
D. Directors and Key Management Personnel
Directors	After successful completion of the Transaction, the directors of the Company will be: � Mr Christopher Kain (Managing Director); � Mr Anthony Kain (Executive Director); � Mr Matthew Cahill (Non-Executive Director); � Mr Leigh Ryan (Non-Executive Director). The profiles of each of these individuals are set out in Section 9.1. Details of the personal interests of each of the above individuals in securities of the Company as well as annual remuneration are set out in Section 11.3. A summary of the material terms and conditions of the current or proposed employment or engagement of the above persons with the Company is set out in Section 14. Current Directors, Mr Neale Fong and Mr Jian Hua Sang intend to retire upon completion of the Transaction.	Sections 11 and 14
Key management personnel	After successful completion of the Transaction, it is proposed that senior management of the Company will be: � Mr Christopher Kain (Chief Executive Officer and Managing Director) � Mr Anthony Kain (Executive Director)	Section 11

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Item	Summary	Further information
	� Ms Rosarito Carrillo (Chief Operating Officer and General Manager); � Mr Adrian Ocampo (Chief Technical Officer and Marketing Manager); and � Mr Glenn Anthony Losentes (Core Developer Technical Operations and IT Team Lead) The profiles of senior management are set out in Section 9.1.
E. Financial Information
How have Chrysalis and Peppermint performed over the past 12 months?	The audited statements of financial position of each of Chrysalis and Peppermint as at 30 June 2015 are set out in the Investigating Accountant’s Report in Section 12.	Section 12
What is the financial outlook for the Merged Group?	The Peppermint Platform is now being used by customers and by merging with Chrysalis, the Merged Group is proposing to generate the resources to commercially deploy and accelerate the usage of the Peppermint Platform.	Section 8.3
Will the Merged Group have sufficient funds for its activities?	Based on the proposed use of funds set out in section 7.4, the Board believes the capital raised under the Public Offer should be sufficient to fund Chrysalis’ proposed activities for the next 2 years.	Section 7.4
How has Peppermint historically performed?	Please refer to the financial information in the Investigating Accountant’s Report in Section 12for further information.	Section 12
F. Offers
What is being offered and who is entitled to participate?	Public Offer Chrysalis is inviting applications under the Public Offer for up to 200,000,000 Shares at an issue price of $0.02 per Share, to raise up to $4,000,000 with a $3,500,000 minimum subscription condition. The Public Offer is not underwritten. Only residents of Australia may participate in the Public Offer. The risks associated with investing in Securities are set out in further detail in Section 10.	Sections 7.1, 7.10 and 10

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Item	Summary	Further information
	Peppermint Offer This Prospectus also contains an offer of Shares and Performance Shares in which only Peppermint Shareholders (or their respective nominees) are eligible to participate. The issue of Securities under the Peppermint Offer forms the consideration payable by the Company for the Peppermint Shares held by Peppermint Shareholders. You should not complete an application form in relation to the Peppermint Offer unless specifically directed to do so by directors of Chrysalis or Peppermint. DJC Offer The DJC Offer is a specific offer made to DJ Carmichael. As such, Shares offered under the DJC Offer will be allocated and issued to DJ Carmichael only.
What will Chrysalis’ capital structure look like after completion of the Offers and the Transaction	As at the date of this Prospectus, Chrysalis has 345,484,128 Shares on issue. Following completion of the Offers, the Company is expected to have a maximum of 900,734,128 Shares on issue and 100,000,000 Performance Shares, assuming $4,000,000 is raised under the Public Offer. A pro forma balance sheet setting out the effect of the Transaction on the Company is set out in Section 12.	Sections9.7 and 12
Will I be guaranteed a minimum allocation under the Public Offer?	No, the Company is not in a position to guarantee a minimum application of Shares under the Public Offer.	Section 7.7.2
What are the terms of the Securities offered under the Offers?	A summary of the material rights and liabilities attaching to the Shares offered under the Offers is set out in Section 15.2. The terms of the Performance Shares to be issued under the Peppermint Offer are set out in Section 15.3.	Sections 15.2 and 15.3

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Item	Summary	Further information
Will any Securities be subject to escrow?	No Shares issued pursuant to the Public Offer will be subject to any escrow requirement by the ASX. However, all or a proportion of the Securities issued to Peppermint Shareholders under the Peppermint Offer and DJC under the DJC Offer may be required by ASX to be restricted from trading for a period of up to 24 months after the date of re-admission of Chrysalis to the ASX, and in the case of the Peppermint Shareholders, depending on the cash paid for their Peppermint securities and whether or not the recipient is a related party or promoter of Chrysalis.	Section 7.1
Will Securities be quoted?	Application for quotation of all Shares issued under the Offers will be made to ASX no later than 7 days after the date of this Prospectus. The Performance Shares offered under the Peppermint Offer will not be quoted.	Section 7.8
What are the key dates of the Offers?	The key dates of the Offer are set out in the indicative timetable in Section3.	Section3
What is the minimum investment size under the Public Offer?	Applications under the Public Offer must be for a minimum of $2,000 worth of Shares (100,000 Shares) and thereafter, in multiples of $1,000 worth of Shares (50,000 Shares).	Section 7.1.1(b)
Are there any conditions to the Offer?	The Offers are inter-conditional on the successful completion of each other part of the Acquisition, including: � the Peppermint Acquisition becoming or being declared unconditional; and � ASX conditional approval to re-admit Chrysalis Shares to Official Quotation. If any of these conditions are not satisfied, the Acquisition (including both of the Offers) will not proceed.	Sections 6.3, 6.4and 7.2
G. Use of proceeds
How will the proceeds of the Public Offer be used?	The Public Offer proceeds will be used for: � Expenses of the Offers � Marketing and business development � Product development � Finance Facility & Fundraising fees/costs along with associated legal and accounting fees	Sections 7.4 and 15.9

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Item	Summary	Summary	Further information
	� Working capital A detailed table settling out the proposed use of funds raised under the Public Offer is set out in section 7.4.
H. Additional information
Is there any brokerage, commission or stamp duty payable by applicants?	No brokerage, commission or stamp duty is payable by Applicants on the acquisition of Securities under the Offers.		Section7
What are the tax implications of investing in Securities?	Shareholders may be subject to Australian tax on dividends and possibly capital gains tax on a future disposal of Securities subscribed for under this Prospectus. The tax consequences of any investment in Securities will depend upon an investor’s particular circumstances. Applicants should obtain their own tax advice prior to deciding whether to subscribe for Securities offered under this Prospectus.		Section 7.5
Where can I find more information?	� � � � �	By speaking to your sharebroker, solicitor, accountant or other independent professional adviser. By reviewing Chrysalis’ public announcements, which are accessible from ASX’s website at www.asx.com.au under the code “CYS”. By visiting Chrysalis’ website at www.chrysalisresources.com.au. By contacting the Company on +61 8 6180 9290. By contacting the Company’s Share Registry on +61 8 9323 2000.

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6. TRANSACTION OVERVIEW

6.1 The Peppermint Acquisition

On 21 May 2015, Chrysalis announced it had executed a binding term sheet ( Term Sheet ) with Peppermint, and the Peppermint Shareholders for the option ( Option ) to acquire the entire issued share capital of unlisted public company, Peppermint Innovation Limited (ACN 600 876 024) ( Peppermint ) ( Acquisition ).

Peppermint is a public unlisted company which conducts a mobile banking, payments and remittance business with operations in the Philippines which business includes an exclusive license to a mobile banking and payment business in the Philippines.

The Acquisition is proposed to be effected through agreements between the Company, Peppermint and each Peppermint Shareholder, under which the Company has agreed to acquire 100% of Peppermint’s fully paid ordinary shares ( Peppermint Shares ), free from encumbrances, through the issue of 350,000,000 Shares and 100,000,000 Performance Shares in proportion to the number of Peppermint Shares held by each Peppermint Shareholder ( Peppermint Offer ).

Refer to Section 14 for a summary of the Acquisition Agreements between the Company and Peppermint in respect of the Peppermint Acquisition ( Acquisition Agreements ).

6.2 Consideration

The valuation and number of Consideration Securities to be issued to Peppermint Shareholders in consideration for the acquisition of Peppermint was determined through arm’s length negotiations between the existing Directors of the Company at the date of this Prospectus and the Peppermint Board.

In determining the purchase price for Peppermint, the existing Directors of the Company at the date of this Prospectus took into account the following considerations:

(a) the last prices at which Peppermint raised equity funding from third party investors;
(b) Peppermint’s future prospects based on the status of its revenue base and interest from third parties; and
(c) agreement between the parties as to the price at which an offer for Peppermint would be likely to succeed.

No formal valuation process in respect of Peppermint was undertaken through the engagement of independent advisers.

6.3 Conditions applicable to Acquisition

Completion of the Acquisition (and therefore the Peppermint Offer) is subject to a number of outstanding conditions precedent, including the following which may only be waived by mutual agreement:

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*Third Party* *Consents*	Peppermint obtaining any shareholder approvals or other consents required to effect the Acquisition, including any consents required in relation to the change of ownership of Peppermint.
*Capital Raising*	The completion of the Public Offer to raise up to $4,000,000 through the issue of up to 200,000,000 Shares at an issue price of $0.02 per Share, in respect of which ASX approval has been obtained.Refer to Section 7.1 for further details.
*ASX Restriction* *Agreements*	Restriction agreements, in respect of the Consideration Securities and the Additional Consideration Securities (if any are granted), being executed by any Vendor required to do so by the ASX in respect of the Acquisition.
*Regulatory* *Approval*	Conditional approval from the ASX has been obtained in order to reinstate the Securities of Chrysalis to trading on terms reasonably acceptable to Chrysalis and Peppermint. Refer to Section 6.4 below for further details.
*Employment* *agreements and* *ESOP*	Employment/consulting agreements to be executed with Chris Kain, Anthony Kain and Matt Cahill by completion and an employee share and option plan to be in place.

6.4 Suspension and Re-admission to ASX

As the Company is currently in the business of gold, base metals and iron ore exploration, the merger with Peppermint, if successfully completed, will represent a significant change in the nature and scale of the Company’s operations to a mobile banking, payments and remittance business.

ASX has indicated that this change in the nature and scale of the Company’s activities will require:

(a) the approval of Shareholders; and
(b) the Company to re-comply with the admission requirements set out in Chapters 1 and 2 of the ASX Listing Rules.

The Company’s Shares will not be reinstated to Official Quotation until the Company has re-complied with Chapters 1 and 2 of the ASX Listing Rules and is re-admitted by ASX to the Official List.

Some of the key requirements of Chapters 1 and 2 of the Listing Rules are:

(a) the Company must satisfy the shareholder spread requirements relating to the minimum number of Shareholders and the minimum value of the Shareholdings of those Shareholders;
(b) the Company must satisfy the “assets test” as set out in Listing Rule 1.3; and
(c) the issue price of Shares must be at least 20 cents (however the ASX has granted a waiver from this requirement whereby the Company may offer Shares under the Prospectus at $0.02).

It is expected that the conduct of the Public Offer pursuant to this Prospectus will enable the Company to satisfy the above requirements.

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Applicants should be aware that ASX will not re-admit or admit any Shares to Official Quotation until the Company re-complies with Chapters 1 and 2 of the Listing Rules and is re-admitted by ASX to the Official List.

In the event that the Company does not receive conditional approval for readmission to the Official List, the Peppermint Offer will be withdrawn and the Company will not proceed with the Public Offer and will repay all Application monies received by it in connection with this Prospectus (without interest).

6.5 Change of Name

It is proposed that the Company will change its name to ‘Peppermint Innovation Limited’ on completion on the Acquisition, which in the Company’s opinion will be better suited to the Company’s new direction. An overview of the Company’s business model after successful completion of the Acquisition is set out in Section 8.

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7. DETAILS OF THE OFFERS

7.1 Offers

The Offers under this Prospectus consist of the Public Offer and the Additional Offers (including the Peppermint Offer).

7.1.1 Public Offer

Pursuant to this Prospectus, the Company is inviting applications under the Public Offer for up to 200,000,000 Shares at an issue price of $0.02 per Share to raise up to $4,000,000 ( Public Offer ).

All Shares issued under this Prospectus will be fully paid and will rank equally with all other Shares then currently on issue. A summary of the material rights and liabilities attaching to Shares is set out in Section 15.2.

(a) Minimum subscription

The Public Offer is subject to a minimum subscription of 175,000,000 Shares at an issue price of $0.02 per Share to raise $3,500,000 ( Minimum Subscription ).

If the Minimum Subscription has not been raised within four months after the date of this Prospectus, the Company will not issue any Shares and will repay all Application monies for the Shares within the timeframe prescribed under the Corporations Act, without interest.

The Public Offer is not underwritten.

(b) Minimum application amount

Applications under the Public Offer must be for a minimum of $2000 worth of Shares (100,000 Shares) and thereafter, in multiples of $1000 worth of Shares (50,000 Shares).

(c) Eligible participants

To participate in the Public Offer, you must be a resident of Australia. See Section 7.10 for further details.

(d) Quotation and trading

Application for quotation of all Shares issued under the Public Offer will be made to ASX no later than 7 days after the date of this Prospectus. See Section 7.8 for further details.

No Shares issued pursuant to the Public Offer will be subject to any escrow requirement by the ASX.

7.1.2 Additional Offers

(a) Peppermint Offer

The Peppermint Offer consists of the issue of Consideration Securities to Peppermint Shareholders on a pro rata basis in consideration for the acquisition by the Company of all the Peppermint Shares held by

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them. Accordingly, only Peppermint Shareholders may accept the Peppermint Offer.

Securities subscribed for pursuant to the Peppermint Offer will only be placed to Peppermint Shareholders. A personalised Application Form in relation to the Peppermint Offer will be issued to each Peppermint Shareholder together with a copy of this Prospectus.

(b) DJC Offer

The DJC Offer consists of the issue of 3,250,000 Shares in consideration for part payment of the management and selling fee under the Mandate. Accordingly, only DJ Carmichael may accept the DJC Offer. A personalised Application Form in relation to the DJC Offer will be issued to DJ Carmichael together with a copy of this Prospectus.

7.2 Conditional Offers

Completion of the Offers is conditional upon:

(a) completion of the Acquisition by the Company and the Peppermint Offer becoming unconditional (see Section 6.3); and
(b) ASX confirming that it will re-admit the Company to the Official List, subject to such terms and conditions (if any) as are prescribed by ASX or the ASX Listing Rules (see Section 6.4),

(collectively, the Conditions ).

Accordingly, the Offers under this Prospectus are effectively inter-conditional on the successful completion of each other part of the Acquisition.

In the event that the Conditions are not satisfied, the Offers will not proceed and no Securities will be issued pursuant to this Prospectus. If this occurs, the Public Offer Applicants will be reimbursed their Application monies (without interest).

7.3 Purpose of the Offers and the Prospectus

The primary purpose of the Public Offer under this Prospectus is to enable the Company, after acquiring Peppermint, to raise funds to:

increase commercial deployment of the version of the Peppermint Platform approved by the Filipino central banking authorities and currently being used by established banks in the Philippines;
support the use and development of the Peppermint Platform to provide domestic and international remittance services initially through a domestic agent network with some 60,000 agents in the Philippines;
support the development of mobile phone applications for major commercial clients; and
apply capital to marketing and incentive programs to accelerate usage of the Peppermint Platform in the Philippines and beyond.

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The Company is aiming to apply the funds raised under the Public Offer in the manner detailed in Section 7.4. The Board believes that the funds raised from the Public Offer, combined with existing funds will provide the Company with sufficient working capital at anticipated expenditure levels to achieve the objectives as shown in the table in that Section.

This Prospectus has also been issued to:

(a) assist the Company to meet the re-admission requirements of ASX under Chapters 1 and 2 of the ASX Listing Rules (e.g. Shareholder spread) (see Section 6.4);
(b) enable the Company to offer the Consideration Securities to Peppermint Shareholders in consideration for the acquisition by the Company of their Peppermint Shares; and
(c) enable the Company to offer the shares to DJ Carmichael in consideration for their services under the Mandate (see Section 14.7).

7.4 Use of Funds

The Company intends to apply funds raised from the Public Offer, together with existing cash reserves, in the next two years following re-admission to the Official List of the ASX (for the purpose of satisfying ASX’s requirements for relisting following a significant change to the nature and scale of the Company’s activities) as follows:

Allocation of funds	Minimum Subscription ($3,500,000)	Percentage of Funds (%)	Maximum Subscription ($4,000,000)	Percentage of Funds (%)
Marketing and business development of the Peppermint Platform1	$1,500,000	43%	$1,800,000	45%
Product development2	$500,000	14%	$500,000	12.5%
Finance Facility5& Fundraising fees/costs along with associated legal and accounting fees3	700,000	20%	$732,000	18.3%
Working capital4	$800,000	23%	$968,000	24.2%
TOTAL	$3,500,000	100%	$4,000,000	100%

Notes :

Marketing and business development costs will be the costs of selling the Peppermint Platform to new commercial clients, the cost of servicing clients including training and software upgrades/repairs, the costs of incentive programs and promotion of the Peppermint Platform with old and new clients;
Product development costs will be used for the continued development of the Peppermint Platform for MyWeps, and development of the Peppermint Platform to support bids on new commercial client contracts;
Please refer to Section 15.9 for full details of these costs; and
Working capital will be used to cover operating costs for the Company (and its subsidiaries) and for the provision of administration services and facilities for its personnel in both the Philippines and in Australia.
This relates to the estimate outstanding under a loan facility in place to support operations until the Company is relisted.

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In the event the Company raises more than the minimum subscription of $3,500,000, but less than the maximum subscription of $4,000,000, the additional funds raised will be first applied towards increased marketing and business development of the Peppermint Platform and for general working capital. On completion of the Offer, the Board believes our Company will have sufficient working capital to achieve these objectives.

The above table is a statement of current intentions as of the date of lodgement of this Prospectus with the ASIC. As with any budget, intervening events and new circumstances have the potential to affect the ultimate way funds will be applied. The Board reserves the right to alter the way funds are applied on this basis.

Actual expenditure may differ significantly from the above estimates due to a change in market conditions, the development of new opportunities and other factors (including the risk factors outlined in Section 10).

7.5 Taxation

The acquisition and disposal of Securities will have tax consequences, which will differ depending on the individual financial affairs of each investor.

It is not possible to provide a comprehensive summary of the possible taxation positions of all potential applicants. As such, all potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Securities from a taxation viewpoint and generally.

To the maximum extent permitted by law, the Company, its officers and each of their respective advisors accept no liability and responsibility with respect to the taxation consequences of subscribing for Securities under this Prospectus.

7.6 Applications

Applications for Securities under the Offers must be made using the relevant Application Form. A personalised Application Form in relation to the Peppermint Offer will be issued to each Peppermint Shareholder together with a copy of this Prospectus. Only Peppermint Shareholders may apply for Securities under the Peppermint Offer.

A personalised Application Form in relation to the DJC Offer will be issued to DJ Carmichael together with a copy of this Prospectus. Only DJ Carmichael may apply for Shares under the DJC Offer.

By completing an Application Form, you will be taken to have declared that all details and statements made by you are complete and accurate and that you have received personally the Application Form together with a complete and unaltered copy of the Prospectus.

Completed Application Forms and accompanying cheques (for the Public Offer only), made payable to “ Chrysalis Resources Limited ” and crossed “ Not Negotiable ”, must be mailed or delivered to the address set out on the Application Form, with sufficient time to be received by or on behalf of the Company by no later than 5.00pm (WST) on the Closing Date , which is currently scheduled to occur on 13 November 2015.

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Applications under the Public Offer must be accompanied by payment in full in Australian currency.

The Company reserves the right to close the Offers early.

If you require assistance in completing an Application Form, please contact the Company Secretary on +61 8 6180 9290.

7.7 Issue of Securities and Allocation Policy

7.7.1 General

Subject to the Minimum Subscription being achieved and the satisfaction of each of the conditions to the Offers (see Section 7.2), the issue of Securities offered by this Prospectus will take place as soon as practicable after the Closing Date.

7.7.2 Public Offer

The allocation of Shares under the Public Offer will be determined by the Board in consultation with DJ Carmichael as Lead Manager to the Public Offer and the Proposed Directors, and otherwise in its absolute discretion.

There is no guaranteed allocation of Shares under the Public Offer.

The Board, in consultation with DJ Carmichael as Lead Manager to the Public Offer and the Proposed Directors, reserve the right to reject any Application or to allocate any Applicant fewer Shares than the number applied for. Where the number of Shares issued is less than the number applied for, or where no issue is made, surplus Application monies will be refunded (without interest) to the Applicant as soon as practicable after the Closing Date.

The Company’s decision on the number of Shares to be allocated to an Applicant will be final.

7.7.3 Peppermint Offer

The Peppermint Offer is a specific offer made to Peppermint Shareholders. As such, Securities offered under the Peppermint Offer will be allocated and issued to those Peppermint Shareholders only.

7.7.4 DJC Offer

The DJC Offer is a specific offer made to DJ Carmichael. As such, Shares offered under the DJC Offer will be allocated and issued to DJ Carmichael only.

7.7.5 Defects in Applications

If an Application Form is not completed correctly or if the accompanying payment is the wrong amount, the Company may, in its discretion, still treat the Application Form to be valid. The Company’s decision to treat an Application as valid, or how to construe, amend or complete it, will be final.

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7.7.6 Interest

Pending the issue of the Shares or payment of refunds pursuant to the Public Offer, all application monies will be held by the Company in trust for Applicants in a separate bank account as required by the Corporations Act. The Company, however, will be entitled to retain all interest that accrues on the bank account and each Applicant waives the right to claim interest.

7.8 Quotation of Securities

The Company will apply for Official Quotation of all Shares issued under this Prospectus within 7 days after the date of this Prospectus. However, Applicants should be aware that ASX will not commence Official Quotation of any Shares until the Company has re-complied with Chapters 1 and 2 of the ASX Listing Rules and has received the approval of ASX to be re-admitted to the Official List (see Section 6.4). As such, the Shares may not be able to be traded for some time after the close of the Offers.

If the Shares are not admitted to Official Quotation by ASX before the expiration of 3 months after the date of this Prospectus, or such period as varied by the ASIC, or if ASX otherwise rejects the Company’s application for re-admission to the Official List (see Section 6.4), the Company will not issue any Securities and will repay all Application monies for the Shares within the time prescribed under the Corporations Act, without interest. In those circumstances, the Peppermint Offer and the DJC Offer will be withdrawn and the Company will not proceed with the Transaction.

The fact that ASX may grant Official Quotation to the Shares is not to be taken in any way as an indication of the merits of the Company or the Securities now offered for subscription.

The Company will not apply for Official Quotation of the Performance Shares offered under the Peppermint Offer.

7.9 Clearing House Electronic Sub-Register System and Issuer Sponsorship

The Company participates in the Clearing House Electronic Sub-register System ( CHESS ). ASX Settlement Pty Ltd, a wholly owned subsidiary of ASX, operates CHESS. Investors who do not wish to participate through CHESS will be issuer sponsored by the Company.

Electronic sub-registers mean that the Company will not be issuing certificates to investors. Instead, investors will be provided with holding statements (similar to a bank account statement) that set out the number of Securities issued to them under this Prospectus. The holding statements will also advise holders of their Holder Identification Number (if the holder is broker sponsored) or Security Holder Reference Number (if the holder is issuer sponsored) and explain, for future reference, the sale and purchase procedures under CHESS and issuer sponsorship.

Electronic sub-registers also mean ownership of Securities can be transferred without having to rely upon paper documentation. Further, monthly statements will be provided to holders if there have been any changes in their security holding in the Company during the preceding month. Security holders may request a holding statement at any other time, however a charge may be made for such additional statements.

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7.10 Applicants outside Australia

This Prospectus does not, and is not intended to, constitute an offer of, or invitation to apply for, Securities in any place or jurisdiction, or to any person to whom, it would not be lawful to make such an offer or invitation. 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. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

No action has been taken to register or qualify the Securities or otherwise permit a public offering of the Securities the subject of this Prospectus in any jurisdiction outside Australia. Applicants who are resident in countries other than Australia should consult their professional advisers as to whether any governmental or other consents are required or whether any other formalities need to be considered and followed in order to accept any of the Offers.

If you are outside Australia, it is your responsibility to ensure compliance with all laws of any country relevant to, and obtain all necessary approvals for, the issue of the Securities pursuant to this Prospectus. The return of a completed Application Form will be taken by the Company to constitute a representation and warranty by you that there has been no breach of any such laws and all relevant approvals have been obtained.

Where this Prospectus has been dispatched to persons in jurisdictions outside of Australia, in which the securities legislation or regulation requires registration or any analogous treatment, this Prospectus is provided for information purposes only. This Prospectus has not been and will not be registered under any such legislation or regulation or in any such jurisdiction.

The Offers do not and will not constitute an offer of Securities in the United States of America ( US ). Furthermore, no person ordinarily resident in the US is or will become permitted to submit an Application Form. If the Company believes that any Applicant is ordinarily resident in the US, or is acting on behalf of a person or entity that is ordinarily a resident of the US, the Company will reject that applicant’s application.

7.11 Enquiries

If you have any queries in relation to the Offers, please contact the Company Secretary on +61 8 6180 9290.

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8. COMPANY OVERVIEW – ASSETS, FINANCIAL INFORMATION AND CAPITAL STRUCTURE

8.1 Business Overview

8.1.1 Chrysalis Resources Limited

This Section contains a summary of the Company’s activities. Further information can be found on the Company’s website, www.chrysalisresources.com.au.

The Company was admitted to the Official List of the ASX on 29 May 2008 under the name Chrysalis Resources Limited. Since listing Chrysalis has focused on the exploration for gold, base metals and iron ore in Western Australia and more recently copper and gold via its subsidiary Sedgwick Resources in Zambia. An evaluation of the exploration assets in 2013 initiated a divestment strategy for all Western Australian tenements and subsequently all WA licences have been sold or surrendered.

Copper and gold exploration in Zambia since 2012 resulted in the definition of a JORC compliant inferred resource within the Shikila Project, and identified numerous copper in soil anomalies and several broad low grade copper drill intercepts, but did not identify any economically viable deposit.

Subsequently, on 23 October 2014 Chrysalis entered into a legally binding letter agreement with FQM Exploration (Zambia) Limited ( FQM ) over the Shikila and Kabwima Projects in Zambia (refer to ASX announcement dated 18 November 2014). On the 17 July 2015, FQM satisfied all conditions associated with the Option Period of the Agreement and elected to advance to the “Earn-in” period with the aim of drilling certain prospects (refer to ASX announcement dated 23 July 2015). This drilling has now commenced (refer to ASX announcement dated 14 October 2015).

For the past six months, the Company has been evaluating alternative corporate opportunities, both in Australia and overseas, which have the potential to deliver strong future growth for Shareholders. This is consistent with the Peppermint Offer being made by the Company. An overview of the Peppermint Acquisition is set out in Section 6.1 above.

8.1.2 Peppermint Innovation Limited

Peppermint is an unlisted Australian public company, incorporated on 24 July 2014 focusing on the commercialisation and development of a proprietary mobile banking, payments and remittance technology designed for banks, mobile money operators, money transfer & funds remittance companies, payment processors, retailers/merchants, credit card companies, and microfinance institutions known as the Peppermint Platform. Peppermint currently operates the Peppermint Platform in the Philippines.

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Peppermint –Current Business Snapshot

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* Please note TOP BANKS means the three commercial banks in the Philippines with whom Peppermint currently operates and the reference to Transactions is to the number of transactions on the platform (including failed transactions) reported by these banks.

Company Vision and Opportunity

Peppermint’s vision is to ramp up acceptance and knowledge of the Peppermint Platform so it becomes a trusted provider of mobile banking services in the Philippines and then to continue to develop the Peppermint Platform so that its use expands throughout Asia, Europe and the rest of the world.

Peppermint has a particular focus on the developing world (in the Philippines to start with) and on providing a tool attractive to the unbanked population to access mobile banking and remit money to and from family and others through a system not tied to a particular bank or telephone company.

It is estimated by the World Bank that “approximately 2.5 billion people do not have a formal account at a financial institution”.[ 1] Additionally the World Bank states ”up to three quarters of the world’s poor do not have a bank account largely due to costs, travel distance and paper work involved”.[ 2] According to the Scaling Mobile Money Report, released by the Bill and Melinda Gates Foundation et al., “this situation also arises because banks do not find it economically attractive to deploy banking infrastructure and staff bank

1 Source: The World Bank Data & Research webpage http://go.worldbank.org/72MAKHBAM0, 19 April 2012, page 1

2 Source: The World Bank Data & Research webpage http://go.worldbank.org/72MAKHBAM0, 19 April 2012, page 1

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employees in poor and rural areas.[ 3] Branch penetration, for example, averages only two branches per 100,000 people in the poorest country quintile (compared with 33 in the richest)”.[ 4] Access to affordable financial services, such as those provided via a mobile phone, could be a contributing factor in overcoming poverty, reducing income disparities, and increasing economic growth.[ 5]

Just like mobile cellular networks has lessened the need for emerging countries to build out expensive landline infrastructure, mobile banking, payments and remittances could assist developing countries to leapfrog over the conventional bank account and debit/credit cards, straight to mobile wallets at a far lower costs and at much higher penetration rates in a shorter time period.

Competition - Peppermint is fully aware that there are many mobile banking technologies now in the world market place (take for example the platforms operated by ANZ, NAB and Commonwealth in Australia and by businesses such as M-Pesa, eServe Global Limited and Xoom Corporation) but the market is very large, is continuing to grow and the Board believes Peppermint is well positioned to grow with it.

Peppermint believes it can overcome the obstacles faced by many other mobile banking start-ups in this sector because of existing contracts and experience it has with its existing clients in the Philippines. Peppermint has sought to de-risk the commercial marketing phase by ensuring it has vested, captivated partners with proven channels to market. It is Peppermint’s view that these banks in the Philippines cannot grow their business in this sector through simply expanding their branch network and that they need to use mobile solutions to reach customers.

Peppermint also believes that the experience and knowledge it has gained from the Central Bank in the Philippines to provide a mobile solution to the Central Bank’s existing clients give it an advantage when expanding the Peppermint Platform into other areas such as remittances and other commercial applications for the Peppermint Platform.

The size and growth of the global mobile payments market, combined with increasing demand for digital banking products, underpins the opportunity for Peppermint to create significant company value over time, by harnessing an established technology, experienced management, skilled development team and low cost operations centered in the Philippines.

3 Source: Scaling Mobile Money, Ignacio Mas and Dan Radcliffe, Bill & Melinda Gates Media Foundation, 31 May 2011, page 1.

4 Source: Scaling Mobile Money, Ignacio Mas and Dan Radcliffe, Bill & Melinda Gates Media Foundation, 31 May 2011, page 1.

5 Source: The World Bank Data & Research webpage http://go.worldbank.org/72MAKHBAM0, 19 April 2012, page 1.

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Peppermint - Commercial Evolution

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To develop this business Peppermint has:

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licensed a mobile banking system (the TelUPay technology) by paying licence fees for an exclusive perpetual licence to that technology in 97 countries (including the Philippines, Australia and much of the developing world), with a first right of refusal on the rest of the world;

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taken over the key technical and management team who developed the TelUPay Technology to work with a new approach and programming expertise on the Peppermint Board to develop the next generation of a mobile banking platform to be owned by Peppermint around the globe. This team is engaged exclusively by Peppermint under a release from the owner of the TelUPay Technology;

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introduced new patterns and practices and development methodologies in order to continually optimise and streamline current software development processes;

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taken over and provided resources to sustain and continue existing service contracts for the TelUPay Technology;

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developed new contracts with MyWeps International. Inc and 1Bro Global Inc. for the application of the next generation of the Peppermint Platform;

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commenced discussions with foreign groups in foreign countries to start to explore the potential for them to use the Peppermint Platform; and

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embarked on the process of listing Peppermint on the Australian Securities Exchange to provide access to the capital needed to support the development and commercial deployment of the Peppermint Platform in the Philippines and around the world.

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8.1.3 The Market: Mobile Payments and Banking Services

Market Size

Mobile commerce is a transformational enabler of financial interdependence across the globe. Opportunities are growing in the mobile payments landscapes as technology changes and adapts to an increasingly competent and technologically savvy business marketplace. Mobile banking and payment systems are a relatively young market and as cash and credit card uses are believed to be in decline, the Board believes the mobile payment market place will grow significantly.

In line with the financial inclusion policy of the World Bank that seeks to provide financial services to the “underserved and financially excluded (consisting of an estimated 2.7 billion adults in emerging markets), mobile telephony offers a tool that can bridge the gap between financial services and mobile phone usage.[ 6] The working poor, comprising 60% of the total labour force in emerging markets will particularly benefit from this financial arrangement. 7 According to the International Fund for Agricultural development, the use of mobile telephony for the access and use of financial services (money transfers, paying for services, making deposits, withdrawing money, consulting bank account balances, etc) is particularly useful in rural areas where 30-40% of remittances are transferred.[ 8] It is also highly accessible to rural workers who, under the traditional banking system, would have to travel long distances to be able to reach financial services traditionally located in densely populated areas.[ 9]

In a large part of the world – the developing world - mobile banking and payment processing equals financial inclusion, a state wherein there is effective access to a wide range of financial services. These financial services (savings accounts, credit facilities, debt payments, remittance and insurance), empower the unbanked population especially to manage their finances and lower the costs of financial transactions, improve security (allowing monitoring of financial transactions), increase banking accessibility, generate jobs and business opportunities, and improves conditions for business to grow.[ 10] The Board believes that financial inclusion (part of the G20 Action Plan for developing countries) supports broad-based economic development that can contribute to inclusive growth within a country.

Significant advances in the telecommunication industry are the major facilitator in the mobile banking and payments market especially in areas outside of urban centres in the developing world. The emergence of 3G networks throughout the world has helped increase the prevalence of mobile technology and increased the numbers of mobile telecommunication devices. Currently there are approximately 7.1 billion mobile phone SIM

6 Source: The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 6, page 2.

7 Source: The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 6, page 2.

8 Source: The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 6, page 2.

9 Source: The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 6, page 2.

10 Source: The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 6, page 3.

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connections globally[11] and in 2014 the global mobile transaction market value was USD392 billion.[12]

“Investors are viewing the integration of financial services into mobile phone usage in emerging markets as the next frontier for investment opportunities. Indeed, as far as financial transaction opportunities in developing countries are concerned, the market remains largely untapped.” Journal of Political Risk January 23, 2014[13]

Figure: Global growth in number of mobile payment users by region

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Source: TechCrunch, Gartner (May 2012) (*Numbers are in millions)

8.1.4 Market Growth

The market for new mobile payments and banking services is still in a very early stage.

The critical drivers that will determine the market outcome in the coming years are predominantly consumer acceptance, merchant willingness to offer innovative payment solutions to clients and the strategy of incumbent financial institutions with respect to such solutions. The rising share of e- commerce via fixed-line or mobile internet and the prevalence of technologies linking the online and offline worlds such as near field communication (NFC) or quick response (QR) codes have sparked interest in new modes of payments. Mobile payment strategies are being developed by different players but have not yet taken off and the payments market is still in a state of flux.

The exceptional reach of mobile phones creates a large opportunity for mobile payment companies to capitalise on current infrastructure.

11 Source: Source: GSMA, The Mobile Economy 2015, GSMA, Executive Summary, page 2.

12 Source: The Mobile Banking and Payment Revolution by Sunil Gupta (in www.europeanfinancialreview.com) (para 2 page 1). Journal of Political Risk (page 3, paragraph 5) and “Mobile Payment Transaction Market: Global Industry Analysis and Opportunity Assessment at www.futuremarketinsights.com/reports/global-mobile-paymenttransaction-market, page 1.

13 Source: The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 5, page 3.

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Additionally there are still many adults and young people the Board believes would benefit from the social and economic advantages of mobile technology but are simply unable to access it, which highlights a strong opportunity for future growth.

Two key areas that are expected to facilitate growth opportunities are the acceptance and use of mobile payments in money remittance networks and in the microfinance industry.

8.1.5 Market Growth Drivers

The Remittance Opportunity

Although remittance is not the only use of mobile banking, the large amount of funds being remitted into and within developing countries highlights a significant opportunity.

Remittance is the act of sending money either domestically within a country, or internationally across country borders which is now being driven by the global phenomenon of international migration with more people living outside their country of birth now than at any other time in history. Remittance payments are one of the most attractive reasons that consumers will use mobile payments. The mobile payment system is superior to carrying cash across a large distance, usually overseas, and is often more cost effective allowing both parties to reduce the amount of time spent on both sides of the transaction.[14]

The most recent brief from the World Bank states remittances sent by migrants to Developing World countries grew by 4.4% in 2014 to reach US $436 billion and are still growing.[15] Global remittance receipts in both developing and high income countries were estimated at $583 billion in 2014 and are also expected to keep growing.[16]

The average cost globally of remitting funds in the 4th quarter of 2014 was 8% of the funds sent.[17]

14 Source: World Bank Migration and Development Brief 24, 13 April 2015, The World Bank, box 2, page 10

15 Source: World Bank Migration and Development Brief 24, 13 April 2015, The World Bank, paragraph 2, page 1.

16 Source: World Bank Migration and Development Brief 24, 13 April 2015, The World Bank, section 1.2, page 3.

17 Source: World Bank Migration and Development Brief 24, 13 April 2015, The World Bank, paragraph 4, page 1 and paragraph 2, page 9.

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Figure: Top 10 Recipients of Migrant Remittances in 2014 in USD

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Source: The World Bank Migration and Development Brief April 13, 2015, The World Bank,page 5

The act of remittance: This has traditionally been done by money transfer institutions who rely on a brick and mortar agent network to facilitate transactions where the sender and the receiver have to visit those locations to transmit and receive funds. In developing countries it is common for people to have to travel significant distances or face logistical factors that make sending or receiving money very difficult or impossible.

In this market mobile commerce is having an impact across the globe particularly in the developing world. This is happening because:

(a) “mobile technology can lower the cost of remittances, as it removes the need for physical points of presence and ensures a timely and secure method of transaction” presenting an opportunity to reach users previously inaccessible;[18] and
(b) mobile cellular networks have eliminated the need for developing countries to build out expensive landline infrastructure. Mobile banking, payments and remittances are assisting such countries to leap frog over the conventional bank account and debit/credit cards, straight to mobile wallets at a far lower cost with much higher penetration rates in a shorter time period.[ 19]

The World Bank notes that remittances are a critical source of external financing for many developing countries and probably the most stable source of primary or additional income for many households in those countries.[20] The importance of remittances goes beyond numbers.[21] For many households in developing countries, receiving remittances is their main contact with financial service providers.[22] These providers are also a

18 Source: World Bank Migration and Development Brief 24, 13 April 2015, The World Bank, box 2, page 10.

19 Source: World Bank Migration an Development Brief 24, 13 April 2015, The World Bank, paragraph 1 and 2 in box 2, page 10 and JPR The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 6, page 3.

20 Source: World Bank Migration and Development Brief 24, 13 April 2015, The World Bank, paragraph 1, page 4

21 Source: JPR The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 2, page 2

22 Source: JPR The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 2, page 2

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potentially powerful enabler of financial inclusion, and ultimately broader financial sector development, which contributes to inclusive and sustainable economic development.[23]

8.1.6 Microfinance

Microfinance is a source of financial services for entrepreneurs and small businesses lacking access to banking and related services. As noted above this lack of access to banks or credit and the ability to save and organise financial affairs is likely to inhibit the growth of an economy[24] and this is particularly the case in developing countries like the Philippines where it is estimated 8 out of 10 households do not have a bank account.[25]

Mobile phone penetration throughout the global population will help expand the reach of microfinance institutions, which currently struggle with high costs, particularly in hard to access rural regions. There is also the opportunity that mobile payments can help improve customer service from the onset of adopting the mobile banking trend. Mobile payments have already helped reduce costs for companies and individuals sending cash across the world and with quick and easy to use applications, mobile payment systems have the opportunity to transform the microfinance industry.

The ability to reach new markets and facilitate growth was demonstrated by M-Pesa in Kenya (a country with a current population of 45 million people). M-Pesa (mobile money in Swahili), for example, launched in Kenya in 2007 and was originally meant to be a mobile banking and payment service to enable Kenyans to repay micro-loans with ease but it quickly went beyond that to become a successful mobile banking and payment service. In its first three years of service M-Pesa went from zero to over 9 million subscribers. After its fifth year of operation (in 2013), M-Pesa had over 17.1 million subscribers and generated USD $252 million in net revenue.[ 26] Please note however, there is no guarantee that the Company will have the same or similar success with the Peppermint Platform.

23 Source: JPR The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, paragraph 2, page 2

24 Source: Wikipedia, “Microfinance”, https://en.wikipedia.org/wiki/Microfinance#mw-head.

25 Source: JPR The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, section 1, paragraph 7, page 3 26 Source: This is based on the M-Pesa FY 2013 Results published by Safaricom page 1 and slide 9 from http://www.slideshare.net/EventsAtBSPMediaGroup/digital-services-in-africa-new-revenue-opportunities

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Figure : Developing World Markets: Adults using mobile money per region

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In the Philippines trials have already been conducted by the Peppermint team with a microfinance institution and it is intended that this work will be continued in the future.

8.2 The Peppermint Technology Platform and Product Offering

8.2.1 Mobile Banking and Payments

The Peppermint Platform offers a wide range of banking services conveniently done from the mobile phone.

Peppermint Mobile Banking Platform

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The Peppermint Platform is integrated to the core banking system or ATM operator to allow consumers access to a range of features including; Balance

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Inquiry, Fund Transfers, P2P Transfers, Fast Cash, Mobile Phone Airtime Purchase (Top Up), Pay Bills, Favourites, Transaction History and Settings.

The application can be downloaded via the respective smartphone application store, or feature mobile phone users can have the application pre-installed via the mobile phone outlet store or telecommunication company at time of purchase.

8.2.2 Commercial Bank Application

Peppermints current bank-grade end to end encrypted platform is in use by three commercial banks in the Philippines.

The platform has been subject to security analysis via independent vulnerability assessment and penetration testing, as required by the Central Bank of the Philippines prior to commercial application, and now the platform operates on a commercial basis as a white label mobile banking application offered by those banks.

Peppermint continues to comply with the regulatory required and business imposed security protocols implemented by the banks as the servers that run this part of the Peppermint Platform are installed behind the bank’s security firewall. The servers are setup to communicate only with the bank servers through a secure channel.

8.2.3 The M-Wallet

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The M-Wallet, similar to a prepaid card is loaded with money prior to use, however the funds are held in a secure encrypted account that is accessed through a mobile device. The M- Wallet is a stand-alone, server-side, mobile account technology specifically designed for mobile operators, money transfer operators and other large network operators. The M-Wallet is a full-featured mobile account with all the

functionality and security (encryption) that is found in the mobile banking and payments service.

The low cost operation of M-Wallet accounts provides clients with the maximum flexibility in their marketing initiatives and customer acquisition/retention strategies.

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Peppermint M-Wallet Platform

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Importantly this part of the Peppermint Platform can also service the unbanked community giving unbanked consumers access to an M-Wallet account upon enrolling in the service. The unbanked consumer can load their accounts with funds via an agent network, participating banks or other merchant encashment locations and can pay their bills, friends and family via this facility.

8.2.4 Remittance Platform

Peppermint’s remittance platform is a money transfer service that will allow a peer to peer transfer of funds within or across borders. Remittance senders evaluate the costs and benefits of money transfer services and two conditions are of paramount interest: low costs and accessibility of use for the sender and receiver. The use of mobile phones for sending and receiving money is seen as the best option for remittances due to its relatively low costs and accessibility.

To access the large Philippine remittance business, Peppermint and its partners have now created an agent network to penetrate and educate the market for domestic P2P remittances and through which international remittances can be terminated from strategic partners. Further preliminary discussions are now starting to occur between Peppermint and international remittance companies and organisations with respect to co-operation in relation to international remittances into and from the Philippines.

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Peppermint Remittance Platform

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8.2.5 Mobile Point of Sale - mPOS

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mPOS (mobile point of sale) solution allows for a customer transaction to be documented by a smartphone or tablet instead of by a traditional checkout register or other point-of-sale terminal. mPOS equips merchants to accept mobile payments and provides customers with a fast and secure way to transact.

An added convenience, for both merchants and consumers, of the mPos solution is the ability for either card-not-present or card-present transactions to take place via those applications listed below

Card-Present transactions;

Card-Not-Present Transactions;

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iPhone and Android mobile iPhone and Android mobile POS POS Mobile QR code generation Magnetic card swiper & QR and linear barcode signature scanning PCIDSS compliant Chip & PIN reader

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8.2.6 Security Features

Security is an established key component of the Peppermint Platform now in use by a number of Philippine commercial banks. Successful independent vulnerability assessment and penetration testing, has been undertaken and established the security integrity of the Peppermint Platform, a pre-requisite of

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the Central Bank of the Philippines for commercial application with Philippine commercial banks.

Peppermint has applied this know-how and security protocol across it’s entire product offering outside and continues to apply and update industry leading security principles as standard across the product offering.

Specific security features that are standard across the Peppermint product offering include;

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Components required to complete a transaction: phone number, correct encryption keys and correct MPIN

Account numbers are not stored in the application All information in the server is stored in encrypted partitions - AES 128bit and 3DES encryption technologies

SSL encryption - 1024-bit (or higher) encryption for GPRS and browser based systems.

8.3 Peppermint Innovation Limited - Business Plan and Market Strategy

Peppermint is raising capital to fund marketing and incentive programs to accelerate the subscriber base build out and the Peppermint Platform usage initially in the Philippines.

The reason for the Philippines focus is that it is a developing country of circa 100 million people living on over 7,000 islands with real transport challenges (even in their capital city). This means access to traditional financial services can be difficult for a large portion of Filipinos’. It is estimated that thirty seven per cent (37%) of the Cities and Municipalities in the Philippines do not have a banking office and for many the closest bank or Money Transfer Organisation is a long car or boat ride away.[ 27]

The Philippines is also a country with 114.6 million mobile connections well positioned for increased uptake of mobile banking and payments with Government Central Bank support and encouragement to make this happen.[ 28] In 2014 smartphone penetration in the Philippines stood at 15% - the lowest rate in Southeast Asia - however, this is changing and a recent study by On Device

27 Source: Slide 8 “Access to fiancé remains a challenge” part of presentation “The E Money Platform – Opportunities for Digital Payments released by Bangko Sentral NG Philippines, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan, , last paragraph, page 9 and Filipino Times, 18 April 2015 .

28 Source: The Journal of Political Risk, Vol 2, No. 1 January 2014, MEL Tovar, A Ortiz de Zarate, LI Pavon and P A Tacujan,, pages 8 and 9.

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Research in the Philippines estimated Smartphone penetration will reach 50% in 2015.[ 29]

All this makes the Philippines an attractive target for Peppermint. It is a country which is the 3rd largest international remittance receiving country worldwide with USD$28 billion estimated from international inbound remittances in 2014 (10% of the country’s GDP comes from migrants sending funds home which exceeds the amount of international aid received by the country) and the widespread use of mobile remittance is not limited to international remittances.[ 30] Peppermint’s initial delivery of financial services via mobile phone to the unbanked population in the Philippines will target domestic remittances before leveraging into the wider domestic P2P payments market. Bankable Frontier Associates LLC estimated the value of domestic P2P payments in the Philippines to be USD3.2 billion in 2010.[ 31]

8.3.1 Commercial Application through Agent Network

To address the Philippine market by raising the awareness of and familiarity with the Peppermint Platform, Peppermint has entered into a joint venture agreement with MyWepS International Inc ( JV Agreement ). MyWeps is a specially formed vehicle focused on building a remittance business in the Philippines by the founder of 1Bro Global Inc. and 1Bro Express. 1BRO Global started as a Distributor in the Philippines of a loading business for Smart, Globe and Sun and expanded In order to meet the needs of customers/clients. Recently, 1BRO Global launched its unique business concept; 1BRO Express “a Division of 1BRO Global” which handles online ticketing (local and int’l flight), bills payment, money remittance, loading business and 1BRO privilege card (featured product of 1BRO Global) to its broad-based group of customers (www.1brophilippines.com).

Under the JV Agreement, Peppermint has agreed to provide the Peppermint remittance system and Peppermint services (at first on a pilot basis) for MyWepS to provide products and services to its direct members, agents, business branches, and other network partners and their respective members, located in the MyWepS network. 1Bro Global Inc., which operates 70,000 agents/members and 40 business centres across the Philippines is also a party to this agreement. Importantly, 50% of the population of the Philippines is located in urban areas which is where many of the 1Bro business centres are located.[ 32]

All the services, documentation and the system provided by Peppermint under the JV Agreement shall be deemed Peppermint confidential information which shall remain the property of Peppermint which cannot be reproduced, distributed, marketed, disclosed, reverse engineered, decoded, decompiled, disassembled, licenced, assigned, transferred or used or disclosed by MyWeps without the agreement of Peppermint.

29 Source: On Device Research, “The Philippines mobile internet crowd: young, affluent, and growing fast, 8 July 2014.

30 Source: World Bank Migration and Development Brief 24, 13 April 2015, The World Bank, page 18.

31 Source: Bankable Frontier Associates LLC, “Demand Study of Domestic Payments in the Philippines”, 3 December 2010, page 4.

32 Source: 1Bro Branches, www.1Brophilippines.com

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Peppermint will be the exclusive provider to MyWeps and its network of the following services:

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Sending and receiving cash (Remittances)
Pay in/Pay out facilities
o Remit to bank account Airtime Load

o For own phone o For others

Bill Payment

Fund transfer

Change Mobile PIN and Password
View Transaction history and account balance

Working with MyWeps International in a joint venture agreement signals the start of access to an established agent networks aimed at providing financial services to the unbanked population within the Philippines, initially targeting the domestic remittances before leveraging into the wider domestic P2P payments market via the established mobile platform in place developed by Peppermint for MyWeps.

As Peppermint looks to expand further within the Asian market the company will draw on established agent network relationships and knowledge to roll out like services aimed at overseas Filipino workers to capture share of the international remittances market.

The Board believes the Company is well positioned to do this with a highly qualified and experienced technical development and management team.

Key members of the Peppermint team have been working together in the Philippines mobile phone financial services sector for some time. Prior to 2009 when they first began developing the mobile banking and payment platform now being operated by Peppermint in the Philippines, they worked for one of the major mobile banking operators in the Philippines. This experienced technical development and management team are continually working on new innovations to address opportunities in the growing mobile banking and payment sector.

8.3.2 Commercial Application through existing Customers:

As noted above, in its existing operations with commercial banks in the Philippines, Peppermint has sought to de-risk the commercial marketing phase by ensuring it has vested partners with proven channels to market. Operating Peppermint servers behind bank firewalls to provide a mobile banking solution to

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the public for those banks, Peppermint believes it is well placed to build that business with the banks to their established customer bases of which less than 10% currently use mobile banking. It is Peppermint’s view the banks cannot grow their business now through simply expanding their branch network and that they need to use mobile solutions to reach customers where:

(a) two out of ten Filipino households have a deposit account;[ 33]
(b) 37% of the Cities and Municipalities do not have a banking office;[ 34]
(c) even in the Philippine Capital Manila, the difficulty of travel makes performing every day traditional banking functions very difficult (for the people that have access to a bank);
(d) the Philippines market place is widely accepting of technology advances and is one of the fastest growing markets for smartphone penetration globally;
(e) the increased penetration of smartphones will help reduce costs and facilitate the run out of Peppermint’s diverse product range; and
(f) the Government is supportive in terms of the regulatory and policy framework to support mobile banking.

To drive take up of its mobile banking, payments and remittance platform, Peppermint in partnership with the commercial banks and clients shall launch focused marketing activities to increase awareness of how financial services provided via a mobile phone can be provided at a low cost and are accessible to almost all of those who own a mobile phone. From the work now going on with banks and clients, Peppermint plans to develop initiatives over time which is intended to be rolled out to include:

Customer-based incentives – designed to directly incentivise customers providing rebates from e-load purchases considered as the top income transaction in mobile banking services, and conducting promotions/contests (prizes, raffles, reward points etc.) for qualifying participants/contestants based on usage of mobile banking services.
Sales Team incentives (banks relations managers, account officers, agents) – mobile banking customer activations are monitored per the sales team providing individual/group rewards (gift checks, cash, trips) triggered by reaching sales targets.
–
Corporate (Payroll) Accounts Sales Blitz both Peppermint and the client teams set up booths at corporate premises and conducts information and promotional campaigns on mobile banking, with onthe-spot booth contests, providing bank and client giveaways (shirts, pens, fans, etc.). This is coordinated with the company concerned, targeting their employees as payroll accountholders of the banks and clients which are considered as the main target users of mobile banking and payment services.

33 Source: Slide 8 “Access to fiancé remains a challenge” part of presentation “The E Money Platform – Opportunities for Digital Payments released by Bangko Sentral NG Philippines

34 Source: Slide 8 “Access to fiancé remains a challenge” part of presentation “The E Money Platform – Opportunities for Digital Payments released by Bangko Sentral NG Philippines

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Promotional Caravan – a series of one-day events, each with several activities (variety show, entertainment, games, contests, raffles, etc.) supporting information and activation for the bank’s and client’s accountholders. Most importantly Peppermint and the bank and client teams can provide first-hand assistance to mobile phone technologychallenged users.
Raffle Draw (accountholders) – users of mobile banking will be entitled to receive electronic raffle tickets for reaching milestones within the promo period. Draw is promoted directly by the bank and client to their accountholders, providing promo collaterals posted on their websites and in their branches and offices.
E - load Promo (accountholders) – for every defined amount of load purchased, either for his or her own consumption or for other mobile phones owners, within a prescribed period of time, the mobile banking user is entitled to an e-load rebate.
Front liners Promo (sales representatives) – for every sales representative that reaches sales targets (activation of mobile banking users, etc.) within a period of time, the sale representative(s) and/or sales team will be entitled to receive incentives either in cash or in kind (e.g. travel trips, gift checks, others).
Social Media Campaign – press releases, announcements of promos and special events supporting mobile banking and payment uptake and usage.

8.3.3 Commercial Application through developing individual Commercial Client Solutions

The technology solutions provided by Peppermint can be customised for each individual commercial client based on the client's requirements and what the client wants to offer its customers or subscribers. In order to apply its technology to additional commercial markets, the Peppermint Team can work closely with its clients to develop new mobile and administrative applications from the transaction ecosystem illustrated below. In addition to this transaction ecosystem, the Peppermint Team are also working on information systems using the mobile handset to record and relay information to large client bases.

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Peppermint Transaction Ecosystem

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8.4 How Peppermint Makes Money

Peppermint will make money in the following ways:

8.4.1 Remittances: Transaction based revenue streams

Remitting funds creates a commission payable by the person remitting on each transaction at the time of remitting (the average cost globally of remitting funds in the fourth quarter of 2014 was 8% of the funds sent).[35] Transactions going through Peppermint’s remittance platform will generate commissions which Peppermint will share with MyWeps or other agents relevant to that transaction in the future.

8.4.2 Existing bank customers: Commissions for use of The Peppermint Platform

As noted above, after approval by the Central Bank of the Philippines, part of the Peppermint Platform is now operating on a commercial basis as a white label mobile banking application offered by three large commercial Filipino Banks. As a result Peppermint is currently paid by a number of commercial Philippine banks and is entitled to the following in relation to the use of the Peppermint Platform by bank customers:

(a) Transaction Fees
(b) Eload Commission
(c) Bills Pay Commission

35 Source: World Bank Migration and Development Brief 24, 13 April 2015, The World Bank, paragraph 4, page 1 and paragraph 2, page 9.

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(d) SMS Fees
(e) Special Project Fees

With only 100,000 users of the white label product from these banks (a very small portion of the target market in these Banks) generating 1,000,000 transactions a month currently, there is considerable room to grow this business.

8.4.2 Mobile banking platform: Fees for use – Transaction based

In addition to the Remittance Fees to be generated by the use of the Peppermint Platform, the use of the platform will also generate the following commission and fees when used for the following functions:

(a) Eload Commission
(b) Bill Pay Commission
(c) Fund Transfer Fees

Such fees will be shared between Peppermint and MyWeps or other agent who has captured this business in the future.

8.4.3 Special projects – Fees for development and maintenance

Where the solution provided by the Peppermint Team is customised for an individual commercial client based on the client's requirements and what the client wants to offer its customers or subscribers. Peppermint requires fees for the development, maintenance and servicing of the Peppermint Platform tailored to the needs of such commercial client. These fees will be based on specific project development and ongoing maintenance and service requirements.

8.5 Company Comparisons

Note: the following section is for example purposes only. The Company does not in any way intend to draw similarities to, nor does it make any guarantee that its proposed business will have similar success (or guarantee success at all). Investors are advised to consider the contents of this Prospectus carefully before making any investment in the Company and should otherwise consider seeking professional investment advice.

M-Pesa

M-Pesa, launched in 2007 by Safaricom, is the largest mobile network operator in Kenya and is now owned by Vodaphone. Originally designed to allow microfinance-loan repayments to be made using mobile phones thus reducing the costs of handling cash and allowing for lower interest rates, M-Pesa has now broadened its operations with almost 17 million users and is Kenya’s current mobile money payment system. In 2013, its fifth year of operation, M-Pesa recorded revenues of US$ 252 million, a value of $14.82 per user.

Upon entering the Kenyan marketplace the goal of M-Pesa’s marketing campaign was to assure the Kenyan community that mobile banking was a safe and secure way to transfer funds between two parties. In efforts to raise awareness and establish a market share M-Pesa also incentivized agents rewarding them per new subscriber and this advertising and marketing campaign saw the M-Pesa subscriber base increasing from zero to over 9 million users in its first three years of service.

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Similarly to M-Pesa, Peppermint intends to make significant initial investments in marketing to facilitate user growth. However, because the Philippines market is comprised of participants more susceptible to changing environments, Peppermint believes it can build its business in that market at a discount in comparison to M-Pesa’s entry into Kenya.

MTN Mobile Money

Commercialising in 1994, the MTN group is a multinational telecommunications group, which has operations in over 20 countries in Africa, Asia and the Middle East. The MTN group is listed on the JSE securities exchange under the code MTN. MTN group operates largely in the Uganda marketplace where it is looking to roll out the MTN Mobile Money Western Union International Transfer service and increase agent numbers to approximately 386,000.

Currently MTN Mobile Money allows registered users to send money to any MTN mobile phone user registered or not through any network. One can also withdraw cash from an authorised MTN mobile agent. MTN allows users to pay bills, transfer money and store cash with a particular focus on those who are unbanked. This allows registered users to pay bills, which previously were paid in person with cash at a location usually far from the registered user.

MTN Mobile Money is similar to the M-Pesa system operating in Kenya lacking the convenience of users being able to pay for products with their mobile. Peppermint offers a point of sale transaction terminal (mPos) which allows customer transactions to be documented by a smartphone or tablet instead of a traditional EFPOS machine. MTN lacks the diversified product range that Peppermint can offer, which fully integrates traditional banking features into one simple destination.

Monitise

With operations in the UK, USA and Asia Pacific, Monitise is an established mobile money company focusing on mobile payment services and applications. Monitise, listed on the UK stock exchange, was founded in 2003 as a means to fill a gap in the payments market by providing the opportunity to transfer funds over SMS and the internet. It is a mobile banking, payments and commerce solutions technology firm. Monitise has created an application platform that enables users to; send money to friends and family, pay anyone, check their account balances and purchase goods and services.

Similar to Peppermint, Monitise has strong partnership deals to facilitate growth in the m-payments industry, allowing companies to enter the technological space and grow their business. Monitise’s application allows firms access to bank grade systems and interoperability, whilst simplifying the complex mobile payments industry.

Monitise raised GBP $200 million over 5 years, and spent close to GBP $42 million developing their products and applications and getting their first client relationships. It is a testament to their current revenue streams of GBP $74 million in financial year 2013 supporting a market capitalization of GBP2 billion.

Xoom Corporation

A leading digital money transfer or remittance provider that allows consumers to send money, pay bills and reload mobile phones from the United States to 33

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countries, including China, India, Pakistan, Mexico and the Philippines. The company was founded in 2001 and is based in San Francisco, CA, and has an office in Guatemala City, Guatemala.

Xoom is a publicly traded company and was initially backed by venture firms including Sequoia Capital, New Enterprise Associates, SVB Capital, and Fidelity Ventures. On July 1, 2015, Paypal announced that it would be spending $25 a share in cash, or about $1.09 billion, to acquire Xoom Corporation.

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9. PEPPERMINT CORPORATE STRUCTURE

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9.1 Peppermint Team

Managing Director & Chief Executive Officer– Christopher Kain

Christopher is a practised company director with over 15 years’ experience in finance and investment markets and is accomplished in identifying business opportunities and executing commercial strategies for the benefit of both stakeholders and investors. Christopher has specific expertise in investment evaluation, public and private capital raising programs, debt funding strategies and, project development and financing.

Christopher has held advisory and development roles with institutions such as Barclays Capital and Credit Suisse First Boston in London, National Australia Bank and Macquarie Bank in Australia where he worked across institutional, wholesale and retail investment and financial markets.

Executive Director – Anthony Kain

Former special counsel in local and national law firms, Anthony has over 20 years’ experience working in Australian capital markets. He has played a key role in the formation of numerous privately owned and publicly listed companies and has an in-depth understanding of intellectual property and its commercialisation. He also has considerable experience as a director and also a Managing Director of Australian Securities Exchange listed companies operating foreign assets.

Anthony has held previous advisory roles on capital raising, joint ventures and mergers and acquisitions through his exposure to a diverse range of international

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and national development opportunities working with technical teams primarily in the energy, motor vehicle and resources sector.

Non-Executive Director – Matthew Cahill

Matthew is an accomplished technical director with over 16 years’ experience in the Web industry working across a broad range of technologies. He has been involved in roles such as management, strategy, team lead, business analysis, application architecture and development.

As technical director at Vivid Group (now Isobar of Dentsu Aegis Network), Matthew has worked with some of Australia’s largest brands, including Sunbeam, JB HiFi, Echo Entertainment, Fusion Retail Brands, Coates Hire and many more. Matthew’s responsibilities included guiding the technical direction of the company, along with leadership of the large development teams that spanned multiple disciplines and technologies.

Chief Operating Officer and General Manager – Rosarito Carrillo

Rosarito has experience and expertise in the fields of sectorial analysis and development, global business relations, project management, advocacy and policy review. She has also managed the business development and advocacy relations for Litton Mills, Inc., with representations made in ASEAN and in the US. Rosarito has previously held the position of Philippine Associate Director for the Confederation of Garment Exporters of the Philippines (CONGEP), where she handled industry technical development, strategic partnership and advocacy programs supporting sectorial growth.

Rosarito has also worked as the Chief of Corporate Planning for the Centre for International Trade Expositions and Missions (CITEM) under the Department of Trade and Industry (DTI), with previous years engaged in integrated industry development projects and international marketing/trade promotions, organised and coordinated in alliance with local and international private and government stakeholders.

Chief Technical Officer and Marketing Manager – Adrian Ocampo

Adrian was one of the co-founders of TelUPay who helped build out TelUPay’s mobile banking and payment technologies. Prior to TelUPay, Adrian spent 6 years as president of an IT consultancy company, Arowai IT Solutions. During his tenure, he and his team of technologists were engaged by Globe Telecom to build Globe’s G-Cash mobile remittance platform in 2006.

The team continued to be engaged by Globe until Adrian left in 2009 to cofound TelUPay. He also served the JCI Makati Philippines for three years as member of the board of directors and vice-president.

Core Developer Technical Operations and IT Team Lead – Glenn Anthony Losentes

Glenn has 12 years’ experience in the IT Industry and is the lead developer and project manager at Peppermint who also performs the lead role in monitoring and developing workflow, usability and coding standards. He was part of the team who developed the remittance module for Globe’s G-Cash mobile remittance platform.

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Glenn Holds a BS Computer Science and BS Mathematics from Ateneo de Davao University, Philippines.

On completion of the Acquisition Christopher Kain, Anthony Kain and Matthew Cahill will join the board of the Company.

9.2 Key Dependencies of Peppermint’s Business Model

The key factors that Peppermint will depend on to meet its objectives under its business model are:

the success of the current remittance program pilots now under way for the Peppermint Platform;
the success of current development projects now under way with new commercial clients;
the continuation and growth of the key contracts which are already in place for the Peppermint Platform; and
the continuation of key customer contracts, the establishment of new customer relationships and entry into new customer contracts.

9.3 Financial Information

9.3.1 Historical financial information

The Investigating Accountant’s Report contained in Section 12 of this Prospectus sets out:

(a) the audited Statement of Financial Position of the Company as at 30 June 2015;
(b) the audited Statement of Financial Position of Peppermint as at 30 June 2015; and
(c) the reviewed pro-forma Statement Financial Position of the Merged Group (after completion of the Transaction) as at 30 June 2015.

Investors are urged to read the Investigating Accountant’s Report in full.

The full financial statements for the Company for its financial years ended 30 June 2014 and 30 June 2015, which include the notes to the financial statements, can be found from the Company’s ASX announcements platform on www.asx.com.au.

9.3.2 Forecasts

The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that they do not have a reasonable basis to forecast future earnings on the basis that the operations of the Company and Peppermint are inherently uncertain. Any forecast or projection information would contain such a broad range of potential outcomes and possibilities that it is not possible to prepare a reliable best estimate forecast or projection.

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9.4 Pro Forma Financial Information

The pro-forma statement of financial position as at 30 June 2015 has been prepared on the basis of the accounting policies adopted by the Company and reflect the changes to its financial position upon the completion of the Transaction.

The pro-forma statement of financial position has been prepared by the management of the Company for illustrative purposes only to show the effect of the Transaction on the Company’s financial position. The pro-forma statement of financial position has been based on audited financial statements of Chrysalis and Peppermint and adjusted for pro forma transactions as set out in the Investigating Accountant’s Report in Section 12. The pro-forma statement of financial position is represented as being indicative of the Company’s view of the future financial position of the Company and will not necessarily reflect the actual position and balances as at the date on which Settlement occurs.

The pro-forma statement of financial position has been prepared to provide investors with information on the assets and liabilities of the Company and proforma assets and liabilities of the Company as noted below.

The historical and pro-forma financial information in this Prospectus has been prepared in accordance with the measurement and recognition principles of the Australian Accounting Standards Board ( AASB ) (unless otherwise noted) although it is presented in an abbreviated form, insofar as it does not include all of the disclosures required by AASB applicable to annual financial reports prepared in accordance with the Corporations Act.

The basis on which the unaudited pro-forma statement of financial position has been compiled is set out below:

(a) The pro-forma statement of financial position is presented below to illustrate the scenario where it is assumed that:
(i) investors take up the minimum or full amount under the Public Offer raising an amount of $3.5M or $4.0M (before costs);
(ii) total costs expected to be incurred in relation to the Offers of $437,000 are recognised directly against equity;
(iii) Peppermint Shareholders subscribing for all Securities offered under the Peppermint Offer;
(iv) all Shares are issued under the DJC Offer; and
(v) the completion of Acquisition.
(b) The pro-forma statement of financial position is not intended to be indicative of the financial position that would actually have occurred, or the financial position expected in future periods, had events reflected herein occurred on the dates indicated. The Company is required to account for the Offers based on values at the time the Offers are completed. Therefore actual amounts recorded by the Company upon completion of the transaction will differ from those recorded in the proforma statement of financial position.

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(c) The pro-forma statement of financial position should be read in conjunction with the Company’s 2015 Annual Report, released to the ASX on 14 September 2015.

9.5 Funding

The funding for the Company’s short to medium term activities will be generated from the offer of Shares pursuant to the Public Offer under this Prospectus (see Section 7.4). As and when further funds are required, the Company expects to raise additional capital from the issue of securities.

9.6 Dividend Policy

It is anticipated that, post-completion of the Transaction, the Merged Group will focus on increasing commercial deployment of the Peppermint Platform, and developing and marketing the Peppermint Platform throughout the Philippines and beyond. The Company does not expect to declare any dividends during this period.

Any future determination as to the payment of dividends by the Company will be at the discretion of the Board and will depend on the availability of distributable earnings and operating results and financial condition of the Company, future capital requirements and general business and other factors considered relevant by the Board. No assurance in relation to the payment of dividends or franking credits attaching to dividends can be given by the Company.

9.7 Capital Structure

As at the date of this Prospectus, the Company has 345,484,128 Shares on issue.

The expected capital structure of the Company following completion of the Offers (assuming minimum and full under the Public Offer and that the Peppermint Offer and DJC Offer is fully accepted) is summarised below. Refer to the Investigating Accountant’s Report set out in Section 12 of this Prospectus for further details.

	Shares(1) (minimum subscription)	Shares (full subscription)	Performance Shares(2)
Securities on issue at the date of this Notice	345,484,128	345,484,128	Nil
Issue of Consideration Securities to Vendors	350,000,000	350,000,000	100,000,000
Shares Issued under Capital Raising	175,000,000	200,000,000	Nil
Shares issued to DJ Carmichael	3,250,000	3,250,000	Nil
Shares issued to Mr Leigh Ryan	2,000,000	2,000,000	Nil
Total on completion of Acquisition	875,734,128	900,734,128	100,000,000

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	Shares(1) (minimum subscription)	Shares (full subscription)	Performance Shares(2)
Shares issued on Conversion of Performance Shares(2)	100,000,000	100,000,000	-
Total	975,734,128	1,000,734,128	-

Notes:

(1) The rights attaching to the Shares are summarised in Sections 15.2 to of this Prospectus.

(2) The rights attaching to the Performance Shares are summarised in Sections 15.3 of this Prospectus.

(3) Assuming all Milestones are satisfied.

9.8 Substantial Shareholders

As at the date of this Prospectus, the following Shareholders hold 5% or more of the total number of Shares on issue:

Shareholder	Shares	%
Eagle Brilliant Holdings Ltd	57,247,355	16.57
Tiger Resources Limited	45,568,894	13.19
David Nasir Yusoff(1)	32,545,833	9.42
Adrian Paul(2)	32,239,595	9.33

Notes:

(1) Includes David Nasir Yusoff, Timriki Pty Ltd, and Juneday PL
(2) Includes, Adrian Stephen Paul, Allgreen Holdings PL, Cintra Holding PL, and ZME Superannuation Fund

On completion of the Public Offer and the Additional Offers (assuming minimum subscription under the Public Offer and that the Additional Offers are fully accepted), the following Shareholders are expected to hold 5% or more of the total number of Shares on issue and before any Performance Shares vest into fully paid ordinary shares:

Shareholder	Shares	Performance Shares	% (assuming minimum subscription)
Christopher Kain(1)	110,325,322	31,521,521	12.60%
Anthony Kain(2)	93,991,416	26,854,690	10.73%
Eagle Brilliant Holdings Ltd	57,247,355	Nil	6.54%
The Trust Company Ltd atf Merchant Ops Funds	48,927,039	13,979,154	5.6%
David Nasir Yusoff(3)	47,545,833	4,285,714	5.43%

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Adrian Paul(4)	47,239,595	4,285,714	5.39%
Tiger Resources Limited	45,568,894	Nil	5.20%

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Includes Shares and Performance Shares held by Christopher Kain and OHKA Pty Ltd (a company controlled by Christopher Kain).

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Includes Shares and Performance Shares held by Anthony Kain and Cicak Pty Ltd (a company controlled by Anthony Kain).

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Includes David Nasir Yusoff, Timriki Pty Ltd, and Juneday PL

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Includes, Adrian Stephen Paul, Allgreen Holdings PL, Cintra Holding PL, and ZME Superannuation Fund

9.9 Top 20 Shareholders

The Company will announce to the ASX details of its top 20 Shareholders (following completion of the Public Offer and the Peppermint Offer) prior to the Shares commencing trading on ASX.

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10. RISK FACTORS

10.1 Introduction

The Securities offered under this Prospectus are considered highly speculative. An investment in the Company is not risk free and the Directors strongly recommend potential investors to consider the risk factors described below (together with the Key Risks set out in Section 5), together with information contained elsewhere in this Prospectus, before deciding whether to apply for Securities and to consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

This Section identifies circumstances that the Directors regard as the major risks associated with an investment in the Company and which may have a material adverse impact on the financial performance of the Company and the market price of the Shares if they were to arise.

The Board aims, and will aim, to manage these risks by carefully planning the Company’s activities and implementing risk control measures. However, some of the risks identified below are highly unpredictable and the Company is limited to the extent to which they can effectively manage them.

The following risk factors are not intended to be an exhaustive list of the risk factors to which the Company is exposed. In addition, this Section has been prepared without taking into account offerees’ individual financial objectives, financial situation and particular needs. Offerees should seek professional investment advice if they have any queries in relation to making an investment in the Company.

10.2 Key risks applicable to Merged Group

(a) Re-quotation of Securities on ASX

The Acquisition is dependent upon the satisfaction of a number of conditions, which include (but are not limited to) completion of the Capital Raising and re-compliance with Chapters 1 and 2 of the ASX Listing Rules.

Trading in the Company’s Securities will be suspended following the General Meeting and will continue to be suspended until the Company satisfies the requirements of Chapters 1 and 2 of the ASX Listing Rules. If successful, issue of the Shares under the Capital Raising and relisting is anticipated to occur on or around 5 November 2015.

There is a risk that the Company may be unable to meet the requirements of ASX for re-quotation of its Shares on the ASX. Should this occur, the Shares will not be able to be traded until such time as those requirements can be met, if at all. Shareholders may be prevented from trading their Shares should the Company be suspended until such time as it does re-comply with the ASX Listing Rules.

(b) Dilution risk

The Company currently has 345,484,128 Shares on issue. On completion of the Acquisition, the Company proposes to issue the relevant number of Securities to Peppermint Shareholders under the terms of the

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Acquisition and issue Shares under the Public Offer to raise up to $4,000,000 as part of the Capital Raising.

Upon completion of the Acquisition and achieving the minimum subscription of the Capital Raising (assuming no further Shares are issued (other than the proposed issues of Shares to Mr Leigh Ryan and DJ Carmichael which equate to approximately 1% between them), the existing Shareholders will retain approximately 39% of the issued capital of the Company, with the Peppermint Shareholders holding 40% and the investors under the Capital Raising holding 20% of the issued capital of the Company respectively.

Upon completion of the Acquisition and achieving the maximum subscription of the Capital Raising (assuming no further Shares are issued (other than the proposed issues of Shares to Mr Leigh Ryan and DJ Carmichael which equate to approximately 1% between them), the existing Shareholders will retain approximately 38% of the issued capital of the Company, with the Peppermint Shareholders holding 39% and the investors under the Capital Raising holding 22% of the issued capital of the Company respectively.

If subsequently the milestones relating to the conversion of Performance Shares to be issued to the Peppermint Shareholders are met, and all of the Performance Shares convert into Shares, the interests of existing Shareholders will reduce to 35% (post Public Offer), assuming minimum subscription under the Capital Raising, and 35% (post Public Offer), assuming maximum subscription under the Capital Raising.

(c) Capital and Funding Requirements

It is intended that the Public Offer will provide for the Merged Group’s expenses in the immediate term. However, depending on the opportunities that arise for business development, the Merged Group may require further resources to achieve its aims going forward. Beyond its regular operating expenses, additional funding may also be deemed necessary to take advantage of acquisition, promotional or other business opportunities. These funds may come in the form of further investments or loans.

While the Directors believe that the Acquisition represents an exciting and attractive investment opportunity, the Merged Group may not be able to secure funding on acceptable terms. Its ability to raise further capital and the terms on which it does so may depend on economic conditions, the performance of the Merged Group and of the broader mobile banking and payment application industry at the time, and the risks associated with the intended use of the funds. If the Merged Group is unable to access these funds, or is unable to do so on acceptable terms, this could adversely affect the Merged Group’s position.

(d) Competition

There is a risk that the Merged Group’s business will not continue to be competitive and profitable in the industry which it operates over the long term. Increased competition from new and existing technologies and competition may result in a loss of market share which in turn may

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have an adverse impact on the Company’s operating results and financial position.

There is a risk that third parties may develop or may have developed similar products to the ones that the Merged Group will offer that will compete with the Merged Group. The timeliness of technological development is a natural barrier that may defer the occurrence of such competition for a certain period of time.

In order for the Merged Group’s business to gain market share and maintain strong growth in any particular channel, the Merged Group must competitively price its products. Major alterations in the the Merged Group’s pricing model which adversely effects profitability may have an adverse impact on the Merged Group’s operating results and financial position.

As a supplier to a progressive consumer market, the Merged Group must develop new and innovative products in a timely fashion to maintain its market share and investor desirability. If the resources necessary to continue product development become insufficient effecting the Merged Group’s ability to maintain market share and competitiveness the Merged Group as a whole will be adversely effected. In addition, a failure by the Merged Group to identify opportunities for new products may also result in an adverse impact on the Company’s operating results and financial position.

The Directors and Proposed Directors believe that the Merged Group will provide an engaging and differentiated offering and that it has a competitive plan for growth. Nevertheless, there are a number of other mobile banking and payment application businesses that offer broadly similar services to Peppermint. There is also the potential for the size and character of that competition to change. The Merged Group will be competing against these companies for both customers and revenue. If it is unsuccessful in doing so, there will likely be a real material adverse impact on the Merged Group as a result.

10.3 Risks in respect of Peppermint’s current operations

(a) Licence risk

TelUPay has granted to Peppermint an exclusive licence to use the TelUPay Technology now being used by the commercial banks in the Philippines. If TelUPay defaults in its obligations under the Licence, it may result in legal action. Legal action can be costly and there can be no guarantee that a legal remedy will be ultimately granted on the appropriate terms. The Company has no current reason to believe that TelUPay will not meet and satisfy its obligations under the Licence.

(b) Ability to Attract and Retain Skilled Personnel

Peppermint’s success depends, to a large extent, on its ability to attract and retain appropriately skilled personnel. Peppermint is currently operated and managed by a small group of select team members. The departure, either temporary or permanent, of those key staff, or any delay in their replacement, could adversely affect Peppermint’s performance. Similarly, as a company seeking to grow and expand,

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Peppermint’s success in securing new talent will be critical going forward and may be constrained for a number of reasons. The attraction and retention of key staff is determined by a broad range of internal and external factors, some more or less within Peppermint’s control, including, but not limited to, issues concerning: personal or health issues, company performance, public relations and branding, logistics and timing, the availability of IT staff in the market and macroeconomic factors.

Additionally, Peppermint relies on offshore team members. In the event that offshore employees cease to continue working with Peppermint, this could cause significant disruption to the operations of the business and would require Peppermint to find alternative employees. Finding alternative employees would take time in recruiting and training them on the product and getting them to a professional level where they could assist in running the operations of the Peppermint business and help to execute the Peppermint business plan. This would have a significant impact on the costs of running the Peppermint business and would likely delay Peppermint from achieving its objectives and business plan.

(c) Acquisitions and Partnerships

Peppermint plans to investigate and consider potential acquisitions and opportunities to enter into new partnerships that are consistent with its stated growth strategy. The successful implementation of acquisitions will depend on a range of factors including funding arrangements and technical integration. Peppermint may also enter into partnerships in the future.

Subject to the relevant partnerships, Peppermint cannot control the actions of joint venture partners and therefore cannot guarantee that partnerships will be operated or managed in accordance with Peppermint’s preferred direction, strategy or risk management parameters. To the extent that acquisitions or partnership arrangements are not successfully integrated with Peppermint’s existing business lines, the growth and financial performance of Peppermint could be affected and, despite the terms of the relevant agreements, it may be impractical to enforce all of Peppermint’s rights (particularly if the partnerships operate overseas).

(d) Contracts

Peppermint may enter agreements with counterparties. In such cases, there is the risk that counterparties default on their obligations, which may in turn necessitate legal action. This could result in significant financial loss for Peppermint. In some cases, the contracts that Peppermint has entered into may be governed in jurisdictions outside Australia. It may be more difficult to resolve disputes in such jurisdictions than it would be under Australian law. As such, Peppermint cannot ensure that an appropriate legal resolution will be achieved.

(e) Intellectual Property Rights

TelUPay owns the TelUPay Technology now being used by commercial banks in the Philippines. While Peppermint has systems and procedures

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in place to protect its content and information, unauthorised use of its intellectual property could have a negative impact on its operations and brand. Peppermint also operates in a market where claims of infringement of intellectual property are common. There is a risk of third parties making claims of infringement of intellectual property against Peppermint. This could result in significant legal costs and negatively impact operations.

(f) Operations and Management of Potential Growth

Peppermint believes that it has attracted a highly skilled and experienced management team. However, Peppermint is a complex and dynamic business. Peppermint is working in a fast moving environment, engaged in business with multiple partners and operating in numerous geographies around the world. Navigating these issues while effectively dealing with prioritisation, timing, execution, cost control, and other business decisions is likely to provide real challenges for its small management team.

There can be no guarantee that successful execution of Peppermint’s strategy will make it profitable or commercially viable. Current product development and marketing strategies may not have the intended effect of increasing customers. Similarly, strategies to create value from customers of the application may not yield the expected revenue.

(g) Product Development

Peppermint believes that it provides a meaningful and engaging offering. Moreover, in addition to its current products and services, Peppermint is planning to develop new products to suit the mobile banking, payments ad remittance business it is building. There is also the risk that delays in product development, cost overruns, or difficulties in delivering new features will negatively impact the Company and its business.

(h) Consistency of Supply

Product shortages and prolonged delays in delivery may jeopardise Peppermint’s ability to supply tangible products and therefore fulfil contractual obligations to customers and distributors. Peppermint will continually adapt its inventory control processes as necessary to mitigate the effect of any supply shortages that may be encounter.

(i) Maintenance of Reputation and Brand

Peppermint is seeking to continue to be a major mobile banking, payment and remittance business. Usage and engagement with the Peppermint products and services have the potential to be significantly affected by popular consumer sentiment. As such, Peppermint’s exposure to public relations issues and threats to its reputation and brand name may be greater than for other businesses.

(j) Dependence on other technological providers

As a mobile banking and payment application business, Peppermint will maintain and rely extensively on information technology systems and

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network infrastructures for the effective operation of its business. As with any product that is dependent on technological systems if the integrity of Peppermint’s products fails to meet its clients’ expectations (whether or not through any fault of Peppermint), Peppermint’s reputation could suffer.

PEP is heavily reliant on the operations of telecommunications networks for the provision of PEP’s services to the marketplace concerned. Should any of these relationships or agreements terminate or become strained for any reason that would have a negative impact on our operations and business development plans.

(k) Insurance

While Peppermint has sought to be insured in a way that is in keeping with industry practices, there is the risk of an event occurring that is not fully covered by insurance. This may cause significant financial and material loss to Peppermint. Furthermore, there is the risk that Peppermint’s insurer fails to respect a legitimate claim made by Peppermint.

(l) Reliance on Core Information Technology, Other Systems and Security

As a mobile banking and payment application business, Peppermint will maintain and rely extensively on information technology systems and network infrastructures for the effective operation of its business. It is also dependent on reliable telecommunication and information technology provision by third parties. As with any product that is dependent on technological systems if the integrity of Peppermint’s products fails to meet its clients’ expectations (whether or not through any fault of Peppermint), Peppermint’s reputation could suffer.

Techniques used to gain unauthorised access to private networks are constantly evolving and Peppermint may be unable to anticipate or prevent unauthorised access to data pertaining to its customers, which could include credit card and debit card information, bank account details or other personally identifiable information. Peppermint’s service is vulnerable to computer viruses, phishing attacks or other attacks and similar disruptions from unauthorized use of its systems, any of which could lead to system interruptions, delays or shutdowns, causing loss of critical data or the unauthorized access to personally identifiable information. If an actual or perceived breach of security occurs of Peppermint’s systems, it may face civil liability and public perception of our security measures could be diminished, either of which would negatively affect Peppermint’s ability to attract or maintain customers. Peppermint also would be required to expend significant resources to mitigate any such breach of security and to address related matters.

(m) International Expansion

Peppermint’s products and services are used in the Philippines but in the future intends to expand into other countries. It may therefore likely be subject to multiple overseas jurisdictions. In each different jurisdiction there may be increased compliance and operating costs. If and when it becomes necessary to have a local presence in overseas markets there will be increased overheads as well as development and marketing

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costs. There is no guarantee such expansions will be successful and increased costs may adversely impact the profitability and working capital of Peppermint.

(n) Unforeseen Expenditure

If Peppermint’s expenses are greater than anticipated due to fluctuation in market prices or any factors which have not been taken into account during the development of this Prospectus, then it will have fewer funds with which to pursue its plan of operations and financing requirements will be greater than anticipated.

10.4 General Risks Relating to Merged Group

(a) Limited Operating History

The business has had limited operations and revenues to date in which potential investors can evaluate the business. Investors must consider all risks associated with and frequently encountered by companies operating in the same space, particularly companies involved in generally new, rapidly evolving markets.

(b) Loss of key clients

The business currently operates with a few key client relationships. Peppermint is expected to maintain current and establish new relationships through the continued enhancement of its products and solutions. In the event that these established relationships diminish or fail (including through a termination event arising under an agreement) the resulting effect may negatively impact the operating results the Peppermint.

(c) Reliance on Key Management

The responsibility of overseeing the day-to-day operations and the strategic management of the Merged Group depends substantially on its senior management and directors. There can be no assurance that there will be no detrimental impact on the performance of the Merged Group or its growth potential if one or more of these employees cease their employment and suitable replacements are not identified and engaged in a timely manner. The Merged Group does not have any present intention to obtain “key person” insurance for any member of its management.

(d) Economic Risks

General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Merged Group’s activities, as well as on its ability to fund those activities.

Further, share market conditions may affect the value of the Company’s securities regardless of the Company’s operating performance. Share market conditions are affected by many factors such as:

(i) general economic outlook;

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(ii) interest rates and inflation rates;

(iii) currency fluctuations;

(iv) changes in investor sentiment toward particular market sectors;

(v) the demand for, and supply of, capital; and

(vi) terrorism or other hostilities.

(e) Liquidity

If and when the Merged Group’s Shares are made open for trading, the market may not be liquid. Prior to the Public Offer the subject of this Prospectus, there has been no public market in the shares of Peppermint. Once the Merged Group’s Shares are quoted on the ASX, there can be no guarantee that an active trading market for the Shares will develop or that the price of the Shares will increase. There may be relatively few buyers or sellers of the Shares on ASX at any time. This may increase the volatility of the market price of the Shares. It may also affect the prevailing market price at which Shareholders are able to sell their Shares. This may result in Shareholders receiving a market price for their Shares that is less than the price the Shareholders paid.

(f) Shareholder Dilution

In the future, the Merged Group may elect to issue Shares or engage in fundraisings and also to fund, or raise proceeds, for acquisitions. While the Merged Group will be subject to the constraints of the ASX Listing Rules regarding the percentage of capital that it is able to issue within a 12 month period (other than where exceptions apply), Shareholders may be diluted as a result of such Shares and fundraisings.

(g) Legal Environment and Sovereign Risk

Peppermint currently conducts its operations in the Philippines with intentions to develop its business through Asia, Europe and through other parts of the world in future.

While Australia is a stable and developed legal environment, there are still a range of sovereign risks that may adversely affect the performance of the Merged Group. These include, but are not limited to: changes to privacy, taxation, accounting, employment, licensing, exchange control or other legislation.

Particularly, over recent years, there has been an increased regulatory and public focus on the use of private information, especially how private information is collected and used for commercial purposes. Any further changes to laws and regulations governing the use of this information could result in an adverse impact on the markets in which Peppermint operates and in its business, including its forecast revenues, profit margins, and compliance costs.

Peppermint’s products and services are also used in numerous other countries and will be subject to the local laws and regulations where they apply. Some of the countries in which Peppermint’s products and

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services are used represent emerging markets and/or less stable legal environments. This may involve risks related to the regularity, speed, transparency and expectations surrounding Government action, ease of gaining fair representation in court and clarity and consistency of the legal framework.

Working in changing, complex and multiple regulatory environments involves a set of risks. These include the risk that the Merged Group may fail to comply with laws or regulations or that laws or regulations may have unintended consequences or are open to interpretations that increase the risk of non-compliance. In addition, there is a risk that the Merged Group may fail to implement procedures within the statutory timeframes to ensure that it can provide services which comply with the introduction of these new laws and regulations.

Any substantial failure by the Merged Group to comply with applicable laws and regulations could result in cessation of part or all of its operations, restriction on its ability to carry out operations, fines, penalties or other liabilities to customers, suppliers or third parties. Compliance failure could also damage the Merged Group’s reputation and reduce the attractiveness of its products and services.

(h) Going Concern

Peppermint’s ability to continue as a going concern is highly dependent upon obtaining financing for planned operations. There can be no assurance that those funds will be raised, or if we are able to raise funds that such funds will be in the amounts required or on terms favourable to the Company.

(i) Force Majeure

The Merged Group and its projects, now or in the future may be adversely affected by risks outside the control of the Merged Group including labour unrest, civil disorder, war, subversive activities or sabotage, extreme weather conditions, fires, floods, explosions or other catastrophes, epidemics or quarantine restrictions.

10.5 This investment is highly speculative

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

Therefore, the Securities to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Securities. The Company does not expect to declare any dividends during the first two years following completion of the Transaction (see further Section 9.6).

Potential investors should consider that the investment in the Company is highly speculative and should consult their professional advisers before deciding whether to apply for Securities pursuant to this Prospectus.

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11. BOARD, MANAGEMENT, INTERESTS AND CORPORATE GOVERNANCE

11.1 Current Directors

As at the date of this Prospectus, the Board comprises of:

(a) Dr Neale Fong (Non-Executive Chairman);
(b) Mr Jian Hua Sang (Non-Executive Director); and
(c) Mr Leigh Ryan (Managing Director).

The profile of each existing Director can be found on the Company’s website.

11.2 Proposed Directors upon completion of Transaction

Following successful completion of the Acquisition, it is proposed that Mr Anthony Kain, Mr Christopher Kain and Mr Matthew Cahill of Peppermint will be elected to the Board ( Proposed Directors ). Following completion of the Acquisition, Dr Neale Fong and Mr Jian Hua Sang will resign as Directors of the Company and Mr Kevin Hart will resign as Company Secretary.

The proposed positions of each of the Proposed Directors are set out below and the profile of each is described above in the description of the Peppermint team:

Mr Christopher Kain

Proposed Managing Director and CEO

Mr Anthony Kain

Proposed Executive Director and Proposed Company Secretary

Mr Matthew Cahill

Proposed Non-Executive Director and Expert Consultant

11.3 Personal Interests of Directors and Proposed Directors

11.3.1 Pre-Acquisition interests in securities

Directors are not required under the Company’s Constitution to hold any Shares to be eligible to act as a director. Immediately prior to completion of the Transaction, the Directors are expected to have relevant interests in Securities as set out in the table below:

Director	Shares	Employee Share Plan
		Rights
Neale Fong	7,611,480(1)	Nil
Jian Hua Sang	Nil	Nil
Leigh Ryan	1,000,000	2,000,000(2)

Notes:

(1) Comprising 2,835,000 held directly, 2,031,480 held by The Fong Superannuation Fund, 2,610,000 held by Riverpalm Pty Ltd atf NW Fong Family Trust and 135,000 held by Peta Fong.
(2) These rights will be extinguished upon the issue of 2,000,000 shares to Leigh Ryan under the Prospectus.

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11.3.2 Post-Acquisition interests in securities

Following the successful completion of the Peppermint Acquisition and the Public Offer, the Directors and Proposed Directors will have relevant interests in Shares and Performance Rights as set out in the table below:

	Shares and Voting Power	Performance shares
Current Directors
Neale Fong	9,111,480 (1.04%)2	Nil
Jian Hua Sang	Nil	Nil
Leigh Ryan	3,000,000 (0.34%)3	Nil
Proposed Directors
Anthony Kain7	93,991,416 (10.73%)	26,854,690
Christopher Kain6	110,325,322 (12.60%)	31,521,521
Matthew Cahill8	6,437,768 (0.74%)	1,839,362

Notes:

The voting power above is calculated on an undiluted basis and on the basis of there being 875,734,128 Shares on issue upon completion of the Acquisition. This assumes no additional Shares are issued and the minimum subscription is raised under the Capital Raising.
It is proposed that Neale Fong and Jian Hua Sang will resign as directors of the Company following successful completion of the Transaction.
Dr Neale Fong will participate in the Public Offer to subscribe for 1,500,000 Shares. Refer to the Notice of General Meeting for further details.
Mr Leigh Ryan will be issued 2,000,000 Shares under the Employee Share Plan.
The terms and conditions of the above Securities are set out in Sections 15.2 and 15.3 of this Prospectus.
Includes Shares and Performance Shares held by Christopher Kain and OHKA Pty Ltd (a company controlled by Christopher Kain).
Includes Shares and Performance Shares held by Anthony Kain and Cicak Pty Ltd (a company controlled by Anthony Kain).
Matthew Cahill will hold these Shares and Performance Shares through his controlled entity, Digital Domain Consulting Pty Ltd.
The actual Shareholdings of the parties on completion of the Transaction may vary.
The numbers of Securities in the above table are subject to rounding.

11.3.3 Remuneration

The Company’s Constitution provides that the remuneration of non-executive Directors will be not more than the aggregate fixed sum determined by a general meeting. Currently the aggregate remuneration for Non-Executive Directors shall be no more than $300,000.

The remuneration of any executive director that may be appointed to the Board will be fixed by the Board and may be paid by way of fixed salary or consultancy fee.

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Following the successful completion of the Peppermint Acquisition and the Public Offer, the Proposed Directors will be paid the following annual remuneration (excluding superannuation) by the Company:

Anthony Kain	$180,000
Christopher Kain	$240,000
Matthew Cahill	$30,000
Leigh Ryan	$30,000

11.4 Key Management Personnel

After successful completion of the Transaction, it is proposed that Key Senior Management of the Company will be the individuals described in the Peppermint Team above. They are:

(a) Mr Christopher Kain (Chief Executive Officer and Managing Director)
(b) Mr Anthony Kain (Executive Director)
(c) Rosarito Carrillo (Chief Operating Officer and General Manager)
(d) Adrian Ocampo (Chief Technical Officer and Marketing Manager)
(e) Glenn Anthony Losentes (Core Developer Technical Operations and IT Team Lead)

The Company is aware of the need to have sufficient management to properly supervise the business operation of the Company, and the Board will continually monitor the management roles in the Company.

11.5 Deeds of indemnity, insurance and access

The Company is in the process of finalising deeds of indemnity, insurance and access with each of the Proposed Directors and will enter into such deeds with the Proposed Directors following their appointments. Under these deeds, the Company agrees to indemnify each officer to the extent permitted by the Corporations Act against any liability arising as a result of the officer acting as an officer of the Company or a related body corporate (subject to customary exceptions). The Company is also required to maintain insurance policies for the benefit of the relevant officer and must also allow the officers to inspect board papers and other documents provided to the Board in certain circumstances.

For existing directors, the Company has entered into deeds of indemnity, insurance and access on similar terms.

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12. INVESTIGATING ACCOUNTANT’S REPORT

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RSM Bird Cameron Corporate Pty Ltd 8 St Georges Terrace Perth WA 6000 GPO Box R1253 Perth WA 6844 T +61 8 9261 9100 F +61 8 9261 9102 www.rsmi.com.au

Direct: 08 9261 9447 Email: [email protected]

AJG/SB/MS

16 October 2015

The Directors Chrysalis Resources Limited 1[st] Floor, 8 Parliament Place West Perth WA 6005

Dear Directors

Investigating Accountant’s Report

Independent Limited Assurance Report (“Report”) on Chrysalis Resources Limited’s historical and pro forma historical financial information and Financial Services Guide

1. Introduction

We have been engaged by Chrysalis Resources Limited (“Chrysalis” or “Company”) to report on the historical financial information and pro forma historical financial information of Chrysalis as at and for the years ended 30 June 2015, 30 June 2014 and 30 June 2013 for inclusion in the prospectus (“Prospectus”) of Chrysalis, pursuant to which the Company is offering between 175,000,000 and 200,000,000 ordinary Chrysalis shares at an issue price of $0.02 per share to raise between $3,500,000 and $4,000,000 (“Capital Raising”) dated on or about 16 October 2015.

Expressions and terms defined in the Prospectus have the same meaning in this Report.

2. Background

Chrysalis, an ASX listed company announced on 21 May 2015 that it had entered into a legally binding conditional agreement to acquire 100% of the issued share capital of Peppermint Innovations Limited (“Peppermint”) (“Acquisition”). In consideration for the Acquisition, Chrysalis will issue to the shareholders of Peppermint up to 350,000,000 ordinary shares and 100,000,000 performance shares (“Takeover Offer”) in the following tranches.

350,000,000 fully paid ordinary shares at settlement (“Shares”);
100,000,000 performance shares (“Performance Shares”) to be issued at the same time as all other Consideration under the Takeover Offer. The Performance Shares will convert into ordinary Chrysalis shares upon satisfaction of the following milestones:
50,000,000 vest on Chrysalis or its subsidiaries generating cumulative revenue of $15,000,000 from the mobile banking, payments and remittance business (“MBPRB”) within 5 years of the date of the Agreement; and
50,000,000 vest on Chrysalis or its subsidiaries generating cumulative revenue of $50,000,000 from the MBPRB within 5 years of the date of the Agreement.

RSM Bird Cameron Major Offices in: RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the Directors of RSM Bird Corporate Pty Ltd Perth, Sydney, Cameron. RSM Bird Cameron is a member of the RSM network. Each member of the RSM ABN 82 050 508 024 Melbourne, Adelaide, network is an independent accounting and advisory firm which practises in its own right. The AFS Licence No 255847 Canberra and Brisbane RSM network is not itself a separate legal entity in any jurisdiction.

3. Scope

Historical financial information

You have requested RSM Bird Cameron Corporate Pty Ltd to review the following historical financial information of Chrysalis (“the responsible party”) and Peppermint included in the Prospectus at Appendix A to this Report:

the statement of comprehensive income of Chrysalis for the years ended 30 June 2014 and 30 June 2013;
the statement of comprehensive income of Chrysalis for the year ended 30 June 2015 and the statement of comprehensive income of Peppermint for the financial period from 24 July 2014 to 30 June 2015; and
the statements of financial position as at 30 June 2015 of both Chrysalis and Peppermint.

The historical financial information has been prepared in accordance with the stated basis of preparation, being the recognition and measurement principles contained in Australian Accounting Standards and Chrysalis’s and Peppermint’s adopted accounting policies. The historical financial information has been extracted from:

the financial report of Chrysalis for the years ended 30 June 2013, 30 June 2014 and 30 June 2015 which was audited by another auditor in accordance with the Australian Auditing Standards. The auditor issued an unqualified audit opinion on the 30 June 2013, 30 June 2014 and 30 June 2015 financial reports. The 30 June 2015 audit report included an emphasis of matter in respect of material uncertainty regarding Chrysalis’s ability to continue as a going concern and the consequential need for Chrysalis to seek additional funding; and
the financial report of Peppermint for the financial period from 24 July 2014 to 30 June 2015, which was audited by RSM Bird Cameron Partners in accordance with the Australian Auditing Standards. RSM Bird Cameron Partners’ audit report included an emphasis of matter in respect of material uncertainty regarding Peppermint’s ability to continue as a going concern and the consequential need for Peppermint to seek additional funding.

The historical financial information is presented in the Prospectus in an abbreviated form, insofar as it does not include all of the presentation and disclosures required by Australian Accounting Standards and other mandatory professional reporting requirements applicable to general purpose financial reports prepared in accordance with the Corporations Act 2001 .

Pro forma historical financial information

You have requested RSM Bird Cameron Corporate Pty Ltd to review the pro forma historical the statement of comprehensive income of Chrysalis and Peppermint for the year ended 30 June 2015 and the statement of “ ” financial position as at 30 June 2015 referred to as the pro forma historical financial information .

The pro forma historical financial information has been derived from the historical financial information of Chrysalis and Peppermint, after adjusting for the effects of the pro forma adjustments described in Note 1 of Appendix A of this Report. The stated basis of preparation is the recognition and measurement principles contained in Australian Accounting Standards applied to the historical financial information and the events or transactions to which the pro forma adjustments relate, as described in Note 1 of Appendix A of this Report, as if those events or transactions had occurred as at the date of the historical financial information. Due to its nature, the pro forma historical financial information does not represent the Company’s actual or prospective financial position or financial performance, and/or cash flows.

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4. Directors’ responsibility

The Directors of Chrysalis and Peppermint are responsible for the preparation of the historical financial information and pro forma historical financial information, including the selection and determination of pro forma adjustments made to the historical financial information and included in the pro forma historical financial information. This includes responsibility for such internal controls as the Directors determine are necessary to enable the preparation of historical financial information and pro forma historical financial information that are free from material misstatement, whether due to fraud or error.

5. Our responsibility

Our responsibility is to express a limited assurance conclusion on the financial information based on the procedures performed and the evidence we have obtained. We have conducted our engagement in accordance with the Standard on Assurance Engagement ASAE 3450 Assurance Engagements involving Corporate Fundraisings and / or Prospective Financial Information .

A review consists of making such enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. Our procedures included:

a consistency check of the application of the stated basis of preparation, to the historical and pro forma historical financial information;
a review of Chrysalis’s and Peppermint’s work papers, accounting records and other documents;
enquiry of directors, management personnel and advisors;
consideration of the subsequent events and pro forma adjustments described in Note 1 of Appendix A of this Report and the Prospectus; and
the performance of analytical procedures applied to the historical and pro forma historical financial information.

A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain reasonable assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

6. Conclusions

Historical financial information

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the historical financial information, as described in Appendix A to this Report, and comprising:

the statement of comprehensive income of Chrysalis for the years ended 30 June 2014 and 30 June 2013;
the statement of comprehensive income of Chrysalis for the year ended 30 June 2015 and the statement of comprehensive income of Peppermint for the financial period from 24 July 2014 to 30 June 2015; and
the statements of financial position as at 30 June 2015 of both Chrysalis and Peppermint

are not presented fairly, in all material respects, in accordance with the stated basis of preparation, as described in Note 1 of Appendix A to this Report.

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Pro Forma historical financial information

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the pro forma historical financial information, as described in Appendix A to this Report, and comprising the statement of comprehensive income of Chrysalis and Peppermint for the year ended 30 June 2015 and the statements of financial position as at 30 June 2015 of both Chrysalis and Peppermint are not presented fairly in all material respects, in accordance with the stated basis of preparation, as described in Section 3 of this Report.

7. Restriction on Use

Without modifying our conclusions, we draw attention to the purpose of the financial information, being for inclusion in the Prospectus. As a result, the financial information may not be suitable for use for another purpose.

8. Responsibility

RSM Bird Cameron Corporate Pty Ltd has consented to the inclusion of this assurance report in the Prospectus in the form and context in which it is included. RSM Bird Cameron Corporate Pty Ltd has not authorised the issue of the Prospectus. Accordingly, RSM Bird Cameron Corporate Pty Ltd makes no representation regarding, and takes no responsibility for, any other documents or material in, or omissions from, the Prospectus.

9. Disclosure of Interest

RSM Bird Cameron Corporate Pty Ltd does not have any interest in the outcome of the Capital Raising or Acquisition other than the preparation of this Report for which normal professional fees will be received.

Yours faithfully

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A J GILMOUR Director

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– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED 30 JUNE 2013 AND 30 JUNE 2014

Interest Income Accounting fees Audit fees Depreciation and amortisation Directors’ remuneration Employee benefits Stock exchange and registry fees Corporate social responsibility Tenement management fees Costs associated with Zambian Copper Project Exploration costs reimbursed / (written off) Impairment of exploration costs Other expenses Loss before income tax expense Income tax expense Loss for the period Other comprehensive income / (loss) Foreign currency translation Total comprehensive loss for the period	Chrysalis Audited 30-Jun-14 $ 43,943 (135,250) (35,258) (65,749) (449,590) (689,617) (44,968) (28,740) (6,304) (26,159) 2,002 (596,434) (756,847) (2,788,971) - (2,788,971) (396,731) (3,185,702)	Chrysalis Audited 30-Jun-13 $ 32,895 (114,759) (63,398) (38,212) (370,206) (433,437) (35,258) (15,056) (14,265) (9,426) (299,505) (1,927,801) (616,578)
		(3,905,006) -
		(3,905,006) 118,163
		(3,786,843)

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– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2015

Revenue Cost of Sales Gain from sale of tenements Interest Income Other income Administration Finance costs Accounting fees Audit fees Directors’ remuneration Depreciation and amortisation Employee benefits Exploration costs written off Stock exchange and registry fees Corporate social responsibility Other expenses Share based payments expense Listing Fee Loss before income tax expense Income tax Loss for the period Other comprehensive income / (loss) Foreign currency translation Total comprehensive loss for the period	Chrysalis Audited 30-Jun-15 $ - - 100,000 11,054 630,064 - - (61,615) (44,937) (143,263) (54,473) (400,444) (3,938,589) (40,774) (19,584) (391,343) - - (4,353,904) - (4,353,904) 87,509 (4,266,395)	Peppermint Audited 30-Jun-15 $ 31,137 (20,169) - - 21 (402,687) (7,722) - - - - - - - - - - - (399,420) - (399,420) (831) (400,251)	Pro forma adjustments 30-Jun-15 $ - - - - - - - - - - - - - - - - (40,000) (5,556,283) (5,596,283) - (5,596,283) - (5,596,283)	Pro-forma Unaudited 30-Jun-15 $ 31,137 (20,169) 100,000 11,054 630,085 (402,687) (7,722) (61,615) (44,937) (143,263) (54,473) (400,444) (3,938,589) (40,774) (19,584) (391,343) (40,000) (5,556,283)
				(10,349,607) -
				(10,349,607) 86,678
				(10,262,929)

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– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015

Note CURRENT ASSETS Cash and cash equivalents 3 Trade and other receivables Other assets Total current assets NON-CURRENT ASSETS Property, plant & equipment Intangible Assets Exploration and evaluation expenditure Total non-current assets Total assets CURRENT LIABILITIES Trade and other payables 4 Total current liabilities NON-CURRENT LIABILITIES Loans and borrowings 5 Total non-current liabilities Total liabilities NET ASSETS EQUITY Share capital 6 Reserves Accumulated losses 7 Total equity	Audited Peppermint 30-Jun-15 $ 155,666 24,027 2,506 182,199 1,594 169,375 - 170,969 353,168 25,319 25,319 507,197 507,197 532,516 (179,348) 220,903 (831) (399,420) (179,348)	Audited Chrysalis 30-Jun-15 $ 159,446 88,753 - 248,199 165,802 - 1,059,896 1,225,698 1,473,897 120,497 120,497 - - 120,497 1,353,400 17,304,812 272,702 (16,224,114) 1,353,400	Subsequent events 30-Jun-15 $ - - - - - - - - - (130,000) (130,000) (377,197) (377,197) (507,197) (507,197) 507,197 - - 507,197	Pro forma adjustments 30-Jun-15 $ 2,965,000 - - 3,095,000 - - - - 3,095,000 - - (130,000) - - 3,095,000 (7,260,129) (272,702) 10,627,831 3,095,000	Pro forma unaudited 30-Jun-15 $ 3,280,112 112,780 2,506
					3,395,398 167,396 169,375 1,059,896
					1,396,667
					4,792,065
					15,816
					15,816 -
					-
					15,816
					4,776,249
					10,772,782 (831) (5,995,702)
					4,776,249

The unaudited consolidated pro forma statement of financial position represents the audited statement of financial position of the Company as at 30 June 2015 adjusted for the subsequent events and pro-forma transactions outlined in Note 1 of this Appendix. It should be read in conjunction with the notes to the historical and pro forma financial information .

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– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

1. Introduction

The financial information set out in this Appendix consists of the statements of comprehensive income of Chrysalis for the two years year ended 30 June 2014 and 30 June 2013, (“the historical financial information”) together with a pro forma consolidated statement of financial position and pro forma consolidated statements of comprehensive income reflecting the Directors’ pro forma adjustments (“the pro forma consolidated financial information”).

The pro forma consolidated financial information has been compiled by adjusting the Company’s consolidated statement of financial position as at 30 June 2015 and consolidated statement of comprehensive Income for the year ended 30 June 2015 for the impact of the following adjustments.

Adjustments adopted in compiling the pro forma historical financial information

The pro forma historical statement of financial position as at 30 June 2015 has been prepared by adjusting the audited statement of financial position of Chrysalis as at 30 June 2015 and the audited statement of financial position of Peppermint as at 30 June 2015, to reflect the financial effects of the following subsequent events which have occurred in the period since 30 June 2015 and the date of this report:

Loans and borrowings payable by Peppermint were converted into equity in Peppermint in full settlement of the loan liability of $507,197;
The company entered into a financing arrangement to fund expenses and working capital between the pro forma balance date and completion of the Capital Raising (“Finance Facility”). At the date of this Prospectus $130,000 had been drawn down to pay trade and other payables;

and the following pro forma transactions which are yet to occur, but are proposed to occur following completion of the Acquisition and the Capital Raising.

The acquisition of 100% of the issued capital of Peppermint through the issue of 350,000,000 ordinary fully paid Chrysalis shares and 100,000,000 Performance Shares;
Completion of the Capital Raising through the issue of 175,000,000 ordinary Chrysalis shares at $0.02 each, to raise $3,500,000 pursuant to the Prospectus;
The issue of up to 3,250,000 ordinary Chrysalis Shares to DJ Carmichael Pty Ltd (or its nominees) (“DJC”) in consideration for DJC and its nominees to assist the Company in achieving its strategic objectives in relation to the Capital Raising;
The issue of 2,000,000 ordinary Chrysalis Shares to a Director;
The payment of $405,000 of cash costs related to the Capital Raising; and
Repayment of the drawn Finance Facility.

The pro forma consolidated financial information has been presented in abbreviated form and does not contain all the disclosures usually provided in an Annual Report prepared in accordance with the Corporations Act 2001.

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– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

Basis of Preparation

(a) Statement of compliance

The historical financial information has been prepared in accordance with the recognition and measurement requirements of the Australian Accounting Standards (AASBs), adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB).

The significant accounting policies that have been adopted in the preparation and presentation of the Pro forma Consolidated Financial Information are:

(b) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments classified at fair value through profit or loss , which are measured at fair value.

(c) Functional and presentation currency

These consolidated financial statements are presented in Australian dollars, which is the Group’s functional currency.

(d) Use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

(e) Going concern

The historical and pro forma financial information has been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.

(f) Reverse acquisition accounting

The proposed acquisition of Peppermint (the legal subsidiary) by Chrysalis (the legal parent) is deemed to be a reverse acquisition, since the substance of the transaction is such that the existing shareholders of Peppermint will obtain control of Chrysalis.

AASB 3 Business Combinations (AASB 3) sets out the accounting principles to be followed in a reverse acquisition transaction. However, the Directors have concluded that Chrysalis does not meet the definition of a business as prescribed in AASB 3 and, as such, it has been deemed that the Acquisition cannot be accounted for in accordance with the guidance set out in AASB 3.

Therefore, consistent with the accepted practice for transactions similar in nature to the Acquisition, the Company has accounted for the Acquisition in the consolidated financial statements of the legal acquirer (Chrysalis) as a continuation of the financial statements of the legal acquiree (Peppermint), together with a share based payment measured in accordance with AASB 2 Share Based Payments (AASB 2), which represents a deemed issue of shares by the legal acquiree (Peppermint), equivalent to the current shareholders interest in Chrysalis post the Acquisition. The excess of the assessed value of the share based payment over the pro forma net assets of Chrysalis as at 30 June 2015 has been expensed to the income statement as a listing fee.

Page 9 of 20

– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION

AS AT 30 JUNE 2015

Further disclosure on the adopted accounting treatment for the Acquisition is set out at Note 6.

(g) Principals of consolidation

The historical and pro forma financial information incorporates the assets and liabilities of all subsidiaries of Chrysalis (''company'' or ''parent entity'') and Peppermint as at 30 June 2015

(i) Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

(ii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

(iii) Loss of control

On the loss of control, the Group derecognises the assets and liabilities of the subsidiary and other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently that retained interest is accounted for as an equity accounted investee or as an availablefor-sale financial asset depending on the level of influence retained.

(h) Revenue recognition

(iv) Services

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns and discounts. Revenue is derived from various products and services which are accounted for differently. The method used is selected on the basis of that which best represents the nature of the contract.

Revenue from licence sales of software products is recognised when all of the risks and rewards have been transferred to the customer, usually only after the delivery, installation and client acceptance of the products.

Revenue derived from support activities is recognised on a straight-line basis over the support period.

Revenue relating to a contractual arrangement to develop customised software is recognised in profit or loss in proportion to the stage of completion of the transaction at the reporting date.

Revenue derived through licensing agreements is recognised on a straight-line basis over the licensing period.

(v) Government grants

An unconditional government grant is recognised in profit or loss as other income when there is reasonable assurance that the grant will be received and the Group will comply with the conditions associated with the grant.

Page 10 of 20

– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

(vi) Interest income

Interest income is recognised using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

(i) Research and development costs

Research costs are recognised as an expense when incurred. Development costs are recognised as an expense when incurred, except to the extent that such costs, together with unamortised deferred costs in relation to that project are expected, beyond any reasonable doubt, to be recoverable.

Any deferred development costs are amortised over the period in which the corresponding benefits are expected to arise.

The unamortised balance of development costs deferred in previous periods is reviewed regularly and at each reporting date, to ensure the criterion for deferral continues to be met. Where such costs are no longer considered recoverable, they are written-off as expenses in profit or loss.

Government grants received or receivable in relation to development costs, which are deferred, are deducted from the carrying amount. Grants and income tax offsets received or receivable in relation to research and development costs that are recognised as an expense during the current or previous periods, to the extent they are eligible for income tax purposes, are recognised as revenue.

(j) Share-based payment transactions

The Company provides benefits to employees and other parties in the form of share based payments, whereby the employees and parties provide services in exchange for shares and other securities in the Company. The cost of the equity settled share based payment transactions is determined by reference to the fair value of the equity instruments granted assessed in accordance with AASB 2 Share Based Payments.

The fair value of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance/ and or service conditions are fulfilled (vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:

(i) The grant date fair value;
(ii) The extent to which the vesting period has expired; and
(iii) The number of equity instruments that, in the opinion of the Directors of the Company, will ultimately vest.

This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date.

No expense is recognised for equity instruments that do not ultimately vest, except for equity instruments where vesting is conditional upon a market condition.

Page 11 of 20

– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

(k) Income tax

Income tax expense comprises current and deferred tax. Current and deferred tax expenses are recognised in profit or loss except to the extent that it relates to items recognised directly in equity, or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries and associates and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

(i) Tax consolidation

Current tax expense / income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the taxconsolidated group using the ‘stand-alone taxpayer’ approach by reference to the carrying amounts of assets and liabilities in the separate financial statements of each entity and the tax values applying under tax consolidation.

Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries are assumed by the head entity in the tax-consolidated group and are recognised by the Company as amounts payable (receivable) to / (from) other entities in the tax-consolidated group in conjunction with any tax funding arrangement amounts (refer below). Any difference between these amounts is recognised by the Company as an equity contribution or distribution.

The head entity recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that it is probable that future taxable profits of the tax-consolidated group will be available against which the asset can be utilised.

Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised assessments of the probability of recoverability is recognised by the head entity only.

(l) Determination of fair value

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Page 12 of 20

– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

(i) Trade and other receivables

The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. Fair value is determined at initial recognition and, for disclosure purposes, at each annual reporting date.

(ii) Non-derivative financial liabilities

Fair value is measured at initial recognition and, for disclosure purposes, at each annual reporting date. Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.

(iii) Share-based payments

The fair value of equity settled share based payment transactions is determined with reference to recent share issues for cash consideration in arm’s length transactions.

The fair value of employee share options is measured using the Black-Scholes formula. Measurement inputs include the share price on the measurement date, the exercise price of the instrument, expected volatility, expected term of the instrument (based on historic experience and general option holder behaviour), expected dividends, and the riskfree interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.

Page 13 of 20

– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

2. Reverse acquisition

The proposed acquisition of Peppermint (the legal subsidiary) by Chrysalis (the legal parent) is deemed to be a reverse acquisition as the substance of the transaction is such that the existing shareholders of Peppermint will obtain control of Chrysalis. However, Chrysalis is not considered to meet the definition of a business under AASB 3 Business Combinations (AASB 3) and, as such, it has been concluded that the Takeover Offer cannot be accounted for in accordance with the guidance set out in AASB 3. Therefore, consistent with the accepted practice for transactions similar in nature to the Takeover Offer, we have accounted for the acquisition in the consolidated financial statements of the legal acquirer (Chrysalis) as a continuation of the financial statements of the legal acquiree (Peppermint), together with a share based payment measured in accordance with AASB 2 Share Based Payments (AASB 2), which represents a deemed issue of shares by the legal acquiree (Peppermint), equivalent to current shareholders interest in Chrysalis post the acquisition. The excess of the assessed value of the share based payment over the net assets of Chrysalis has been expensed to the income statement as a listing fee.

Chrysalis (legal parent, accounting acquiree) will issue 350,000,000 ordinary shares and 100,000,000 Performance Shares to Peppermint’s shareholders who, as a result, will own approximately 50.3%[1] of the combined entity at settlement of the Acquisition prior to the Capital Raising. The remaining 49.7% will be owned by the current shareholders of Chrysalis.

As there is no current market for Peppermint shares, the fair value of 100% of Chrysalis is assessed as $6,909,683 based on 345,484,128 Chrysalis shares on issue at 2 cents each immediately prior to the acquisition.

Consequently, a listing expense of $5,556,283 has been expensed to the income statement which represents the excess of the deemed fair value of the share based payment less the pro forma net assets of Chrysalis of $1,353,400 as at 30 June 2015, immediately prior to settlement of the acquisition, as set out below.

Cash and cash equivalents Trade and other receivables Exploration and evaluation expenditure Property, plant and equipment Trade and other payables Net assets of Chrysalis acquired on reverse acquisition Fair value of acquisition of Chrysalis Pro-forma listing expense recognised on reverse acquisition	Unaudited Pro-forma 30-Jun-15 $ 159,446 88,753 1,059,896 165,802 (120,497)
	1,353,400 6,909,683
	5,556,283

1 Calculations do not reflect the impact of the 100,000,000 Performance Shares (Deferred Consideration)

Page 14 of 20

– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

3. Cash and cash equivalents

Cash and cash equivalents Peppermint cash and cash equivalents as at 30 June 2015 Adjustments arising in the preparation of the pro forma statement of financial position are summarised as follows: Chrysalis cash and cash equivalents as at 30 June 2015 Proceeds from the issue of fully paid ordinary shares in Chrysalis pursuant to the Prospectus Capital raising costs Repayment of Finance Facility Pro-forma cash and cash equivalents	Audited 30-Jun-15 $ 155,666	Unaudited Pro-forma 30-Jun-15 $ 3,280,112
		155,666 159,466 3,500,000 (405,000) (130,000)
		3,124,446
		3,280,112

The Prospectus has provision for subscriptions of between 175,000,000 and 200,000,000 shares to raise between $3.5 million and $4 million wherein the pro forma statement of financial position assumes the minimum $3.5 million is raised. Should the maximum $4 million be raised, the share issue costs would increase to $437,000, the cash at bank balance would increase by $468,000 to $3,748,112.

Page 15 of 20

– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

4. Trade and other payables

Trade and other payables Peppermint payables as at 30 June 2015 Subsequent events are summarised as follows: Payment of trade and other payables with funds from Finance Facility Adjustments arising in the preparation of the pro forma statement of financial position are summarised as follows: Chrysalis payables as at 30 June 2015 Pro-forma trade and other payables 5. Loans and borrowings Loans and borrowings Peppermint loans and borrowings as at 30 June 2015 Subsequent events are summarised as follows: Settlement of loans by conversion to equity in Peppermint Drawdown of funds from the Finance Facility Adjustments arising in the preparation of the pro forma statement of financial position are summarised as follows: Repayment of Finance Facility Pro-forma accumulated losses	Audited 30-Jun-15 $ 25,319	Unaudited Pro-forma 30-Jun-15 $ 15,816
	Audited 30-Jun-15 $ 507,197	25,319 (130,000) 120,497
		(9,503)
		15,816
		Unaudited Pro-forma 30-Jun-15 $ -
		507,197 (507,197) 130,000 (130,000)
		(507,197)
		-

Page 16 of 20

– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

6. Contributed equity

(a)Issued and fully paid up capital Peppermint issued share capital as at 30 June 2015 Subsequent events are summarised as follows: Conversion of loans to ordinary shares in Peppermint prior to acquisition Adjustments arising in the preparation of the pro forma statement of financial position are summarised as follows: Elimination of the issued share capital of Peppermint on reverse acquisition Existing Chrysalis shares at Acquisition Shares issued to Peppermint shareholders on reverse acquisition Issue of Chrysalis shares to advisors of Chrysalis and Peppermint Fully paid ordinary shares issued at $0.02 pursuant to this Prospectus Costs associated with the Capital Raising pursuant to this Prospectus Shares issued to a Director Pro-forma issued share capital	Number of shares $ 11,650,000 220,903
	- 507,197 (11,650,000) - 345,484,128 - 350,000,000 6,909,683 3,250,000 - 175,000,000 3,500,000 - (405,000) 2,000,000 40,000
	864,084,128 10,551,782
	875,734,128 10,772,782

The Prospectus has provision for subscriptions of between 175,000,000 and 200,000,000 shares to raise between $3.5 million and $4 million wherein the pro forma statement of financial position assumes the minimum $3.5 million is raised. Should the maximum $4 million be raised, the share issue costs would increase to $437,000, the contributed equity balance would increase by $468,000 to $11,240,782. The total number of shares on issue would be 900,734,128.

(b) Performance Shares

In addition to the 350,000,000 ordinary shares issued to the shareholders of Peppermint at settlement of the Acquisition, the Company will also issue 100,000,000 Deferred Consideration by way of Performance Shares. The Performance Shares will convert to ordinary Chrysalis shares upon the achievement of certain performance milestones as follows:

50,000,000 vest on Chrysalis or its subsidiaries generating cumulative revenue of $15,000,000 from the MBPRB within 5 years of the date of the Agreement: and
50,000,000 vest on Chrysalis or its subsidiaries generating cumulative revenue of $50,000,000 from the MBPRB within 5 years of the date of the Agreement.

Page 17 of 20

– Appendix A Historical and pro forma financial information

CHRYSALIS RESOURCES LIMITED NOTES TO THE HISTORICAL AND PRO-FORMA FINANCIAL INFORMATION AS AT 30 JUNE 2015

7. Accumulated losses

Accumulated losses Peppermint accumulated losses as at 30 June 2015 Adjustments arising in the preparation of the pro forma statement of financial position are summarised as follows: Shares issued to a Director Listing fee recognised on reverse acquisition Pro-forma accumulated losses	Audited 30-Jun-15 $ (399,420)	Unaudited Pro-forma 30-Jun-15 $ (5,955,702)
		(399,420) (40,000) (5,556,283)
		(5,596,283)
		(5,995,702)

8. Related party disclosure

The Directors of Chrysalis as at the date of this Report are Neale Fong and Leigh Ryan. These Directors are to resign on the completion of the Acquisition and Capital Raising, with the exception of Leigh Ryan. The proposed Directors are Anthony Kain, Christopher Kain, and Matthew Cahill. Directors’ holdings of shares, directors’ remuneration and other directors’ interests are set out in Section 11 of the Prospectus.

9. Commitments and contingent liabilities

The combined entity does not have any contingent liabilities at 30 June 2015.

10. Controlled entities

Consolidated Entities	Country of Incorporation	Pro-forma Interest held
Chrysalis Resources Limited	Australia	Parent
Horizon Copper Zambia Limited	Republic of Zambia	100%
Zambian Copper Pty Ltd	Australia	100%
Sedgwick Resources Limited	Republic of Zambia	99.99%
Peppermint Innovation Limited	Australia	100%
Peppermint Innovation Inc	Philippines	100%

Page 18 of 20

Financial Services Guide

RSM Bird Cameron Corporate Pty Ltd ABN 82 050 508 024 (“RSM Bird Cameron Corporate Pty Ltd” or “we” or “us” or “ours” as appropriate) has been engaged to issue general financial product advice in the form of a report to be provided to you.

In the above circumstances we are required to issue to you, as a retail client, a Financial Services Guide (“FSG”). This FSG is designed to help retail clients make a decision as to their use of the general financial product advice and to ensure that we comply with our obligations as financial services licensees.

This FSG includes information about:

who we are and how we can be contacted;
the services we are authorised to provide under our Australian Financial Services Licence, Licence No 255847;
remuneration that we and/or our staff and any associates receive in connection with the general financial product advice;
any relevant associations or relationships we have; and
our complaints handling procedures and how you may access them.

Financial services we are licensed to provide

We hold an Australian Financial Services Licence, which authorises us to provide financial product advice in relation to:

deposit and payment products limited to:
(a) basic deposit products;
(b) deposit products other than basic deposit products.
interests in managed investments schemes (excluding investor directed portfolio services); and
securities (such as shares and debentures).

We provide financial product advice by virtue of an engagement to issue a report in connection with a financial product of another person. Our report will include a description of the circumstances of our engagement and identify the person who has engaged us. You will not have engaged us directly but will be provided with a copy of the report as a retail client because of your connection to the matters in respect of which we have been engaged to report.

Any report we provide is provided on our own behalf as a financial services licensee authorised to provide the financial product advice contained in the report.

General Financial Product Advice

In our report we provide general financial product advice, not personal financial product advice, because it has been prepared without taking into account your personal objectives, financial situation or needs.

You should consider the appropriateness of this general advice having regard to your own objectives, financial situation and needs before you act on the advice. Where the advice relates to the acquisition or possible acquisition of a financial product, you should also obtain a product disclosure statement relating to the product and consider that statement before making any decision about whether to acquire the product.

Benefits that we may receive

We charge fees for providing reports. These fees will be agreed with, and paid by, the person who engages us to provide the report. Fees will be agreed on either a fixed fee or time cost basis.

Page 19 of 20

1.1. Except for the fees referred to above, neither RSM Bird Cameron Corporate Pty Ltd, nor any of its directors, employees or related entities, receive any pecuniary benefit or other benefit, directly or indirectly, for or in connection with the provision of the report.

Remuneration or other benefits received by our employees

All our employees receive a salary.

Referrals

We do not pay commissions or provide any other benefits to any person for referring customers to us in connection with the reports that we are licensed to provide.

Associations and relationships

RSM Bird Cameron Corporate Pty Ltd is beneficially owned by the partners of RSM Bird Cameron, a large national firm of chartered accountants and business advisers. Our directors are partners of RSM Bird Cameron Partners.

1.2. From time to time, RSM Bird Cameron Corporate Pty Ltd, RSM Bird Cameron Partners, RSM Bird Cameron and / or RSM Bird Cameron related entities may provide professional services, including audit, tax and financial advisory services, to financial product issuers in the ordinary course of its business.

Complaints Resolution

Internal complaints resolution process

As the holder of an Australian Financial Services Licence, we are required to have a system for handling complaints from persons to whom we provide financial product advice. All complaints must be in writing, addressed to The Complaints Officer, RSM Bird Cameron Corporate Pty Ltd, P O Box R1253, Perth, WA, 6844.

1.3. When we receive a written complaint we will record the complaint, acknowledge receipt of the complaint within 15 days and investigate the issues raised. As soon as practical, and not more than 45 days after receiving the written complaint, we will advise the complainant in writing of our determination.

Referral to External Dispute Resolution Scheme

A complainant not satisfied with the outcome of the above process, or our determination, has the right to refer the matter to the Financial Ombudsman Service (“FOS”). FOS is an independent company that has been established to provide free advice and assistance to consumers to help in resolving complaints relating to the financial services industry.

1.4. Further details about FOS are available at the FOS website or by contacting them directly via the details set out below.

Financial Ombudsman Service GPO Box 3 Melbourne VIC 3001 Toll Free: 1300 78 08 08 Facsimile: (03) 9613 6399 Email: [email protected]

Contact Details

You may contact us using the details set out at the top of our letterhead on page 1 of this report.

Page 20 of 20

13. CORPORATE GOVERNANCE

13.1 ASX Corporate Governance Council Principles and Recommendations

The Company has adopted comprehensive systems of control and accountability as the basis for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company’s needs.

To the extent applicable, the Company has adopted The Corporate Governance Principles and Recommendations (3rd Edition) as published by ASX Corporate Governance Council ( Recommendations ).

The Board seeks, where appropriate, to provide accountability levels that meet or exceed the ASX Corporate Governance Council’s Principles and Recommendations. Details on the Company’s corporate governance procedures, policies and practices can be obtained from the Company website at www.chrysalisresources.com.au.

Board of Directors

The Board is responsible for corporate governance of the Company. The Board develops strategies for the Company, reviews strategic objectives and monitors performance against those objectives. The goals of the corporate governance processes are to:

(a) maintain and increase Shareholder value;
(b) ensure a prudential and ethical basis for the Company’s conduct and activities; and
(c) ensure compliance with the Company’s legal and regulatory objectives.

Consistent with these goals, the Board assumes the following responsibilities:

(a) developing initiatives for profit and asset growth;
(b) reviewing the corporate, commercial and financial performance of the Company on a regular basis;
(c) acting on behalf of, and being accountable to, the Shareholders; and
(d) identifying business risks and implementing actions to manage those risks and corporate systems to assure quality.

The Company is committed to the circulation of relevant materials to Directors in a timely manner to facilitate Directors’ participation in the Board discussions on a fully-informed basis.

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Composition of the Board

Election of Board members is substantially the province of the Shareholders in general meeting. However, subject thereto, the Company is committed to the following principles:

(a) the Board is to comprise Directors with a blend of skills, experience and attributes appropriate for the Company and its business; and
(b) the principal criterion for the appointment of new Directors is their ability to add value to the Company and its business.

The Board has appointed a Nomination and Remuneration Committee ( Committee ) and established a Charter for the Committee which includes the identification and recommendation of potential director appointments. Where a casual vacancy arises during the year, the Committee has procedures to select the most suitable candidate with the appropriate experience and expertise to ensure a balanced and effective Board. Any director appointed during the year to fill a casual vacancy or as an addition to the current Board, holds office until the next General Meeting and is then eligible for re-election by the shareholders.

It is proposed that, whilst there are four directors of the Company, all directors will be members of the Nomination and Remuneration Committee with one to be appointed as the chair of the Committee, if the Transaction is successfully completed.

Ethical standards

The Board is committed to the establishment and maintenance of appropriate ethical standards.

Independent professional advice

Subject to the Chairman’s approval (not to be unreasonably withheld), the Directors, at the Company’s expense, may obtain independent professional advice on issues arising in the course of their duties.

Remuneration arrangements

The total maximum remuneration of non-executive Directors is initially set by the Constitution and subsequent variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable. The determination of non-executive Directors’ remuneration within that maximum will be made by the Board having regard to the inputs and value to the Company of the respective contributions by each non-executive Director.

Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance of their duties as Directors.

Trading policy

The Board has adopted a policy that sets out the guidelines on the sale and purchase of securities in the Company by its key management personnel (i.e. Directors and, if applicable, any employees reporting directly to the managing

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director). The policy generally provides that written notification to the Chairman must be obtained prior to trading.

External audit

The Company in general meetings is responsible for the appointment of the external auditors of the Company, and the Board from time to time will review the scope, performance and fees of those external auditors.

Audit and risk committee

The Board has established an audit and risk committee ( Audit and Risk Committee ) as part of its Corporate Governance Charter. The Audit and Risk Committee is responsible for ensuring the risks and opportunities are identified on a timely basis. To achieve this, the Audit and Risk Committee will implement a risk system which allows for the regular monitoring of identified risk areas and performance against the activities to minimise or control these identified risks.

The Audit and Risk Committee’s purpose is to provide assistance to the Board in fulfilling its corporate governance and monitoring responsibility in relation to the Company’s risks associated with the integrity of financial reporting, internal control systems and external audit functions.

It is proposed that, whilst there are only four directors of the Company, all directors will be members of the Audit and Risk Committee with one to be appointed as the chair of the Committee, if the Transaction is successfully completed.

Diversity Policy

The Board has adopted a diversity policy which provides a framework for the Company to achieve, amongst other things, a diverse and skilled workforce, a workplace culture characterised by inclusive practices and behaviours for the benefit of all staff, improved employment and career development opportunities for women and a work environment that values and utilises the contributions of employees with diverse backgrounds, experiences and perspectives.

13.2 Departures from Recommendations

The Company’s compliance and departures from the Recommendations will be announced to ASX prior to the Company’s re-instatement to trading.

Following re-admission to the Official List of ASX, the Company will be required to report any departures from the Recommendations in its annual financial report.

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14. MATERIAL CONTRACTS

14.1 Binding Term Sheet

On 20 May 2015 (and as varied on 2 July 2015, 21 July 2015 and 25 August 2015), the Company and Peppermint Innovation Limited ( Peppermint ) entered into a binding term sheet upon which shareholders in Peppermint agreed to grant an option ( Option ) to the Company to acquire 100% of the issued share capital of Peppermint ( Acquisition ) from all person who hold Peppermint shares at the date of completion of the Acquisition ( Term Sheet ). The Company exercised the Option on 22 July 2015.

The Term Sheet contains the following key terms:

(a) subject to satisfaction of the conditions set out in (b) below, at completion of the Acquisition, the Company will issue the following securities on a pro rata basis as consideration ( Consideration Securities ):
(i) 350,000,000 Shares; and
(ii) 100,000,000 Performance Shares (where each Performance Share will convert into 1 Share upon achievement of certain milestones).
(b) the Acquisition will complete and the Consideration Securities issued subject to the following conditions precedent:
(i) Peppermint obtaining all necessary third party consents or approvals as a result of the Acquisition including under any contracts to which Peppermint is a party;
(ii) the Company obtaining ASX approval for the re-admission of the Company to the official list of ASX in connection with its proposed change in the nature and scale of its activities.
(iii) the Company raising at least $3,500,000 pursuant to this Prospectus in respect of its re-compliance with Chapters 1 and 2 of the Listing Rules.
(c) Peppermint will be entitled to appoint three directors to the board (being Anthony Kain, Christopher Kain and Matthew Cahill, collectively Proposed Directors ) of the Company and one current director of the Company will remain (being Leigh Ryan);
(d) at Completion, the Company must have in place an employee share and option plan which enables management and key employees of Peppermint to receive shares and options in the Company in accordance with the Listing Rules and Corporations Act; and

The Term Sheet otherwise contains terms and conditions (including warranties and representations) typical for an agreement of this nature.

14.2 Installed Software Licence agreement

By a licence agreement dated 9 March 2015, TelUPay International Inc. granted Peppermint an exclusive, enterprise-wide, royalty-bearing perpetual licence to

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carry on the development and commercialisation of the mobile payment and banking technology business ( TMBT ) in permitted locations (which includes countries in Australia, Asia and Europe, and Tunisia) ( Permitted Locations ) and secure the service contracts with commercial banks and other nominated contracts ( TelUPay Contracts ) to Peppermint ( Licence ).

Pursuant to the Licence, TelUPay grants to Peppermint:

(a) the exclusive right to use, copy and install the software that underpins the mobile banking payments and remittance business ( MBPRB ( Software ) in the Permitted Locations;
(b) the use of certain registered trademarks and names associated with the MBPRB in the Permitted Locations;
(c) the assignment of all rights held by TelUPay or any other affiliates in the TelUPay Contracts and the consent of subsidiaries which Peppermint requires to support the licences and rights granted to Peppermint under this Licence along with a waiver and release for each of the key personnel which means they are free to work for Peppermint without breaching any obligations to TelUPay or its affiliates;
(d) the right to employ the key personnel engaged by TelUPay to develop and commercialise the Platform and
(e) first refusal to any further disposal of the rights to the intellectual property ( Intellectual Property Rights ) owned by TelUPay in relation to the Software.

Peppermint shall pay the following licence fee and royalty:

(a) Peppermint engaging the Key Personnel and absorbing TelUPay’s obligation to pay their salaries amounting to A$106,953;
(b) A$62,205 in unpaid salaries to other employees of TelUpay;
(c) a $150,000 bond to TelUPay to be deemed paid upon execution of the Licence whereby Peppermint shall be deemed to convert the debt due for funds loaded to TelUPay Inc. under a loan agreement ( Bond ). The Bond shall be repayable upon termination of the Licence unless it is deemed to convert to a non-refundable payment for the Licence upon Peppermint generating $300,000 in gross revenue from the use of the Software or the expiry of 9 months from the execution of the Licence, whichever is sooner; and
(d) a monthly royalty payment based on the greater of 5% of the gross revenues received by Peppermint for that month from the use of the Software or the sum of $5,000 per month ( Royalty ).

The Licence may be terminated by mutual agreement or Peppermint may terminate on at least 60 days’ notice to TelUPay for any reason. The Licence may also be terminated by either party for breach. Where termination is effected for any reason other than breach, TelUPay will cease to provide services but the Licence shall remain in place on a perpetual basis along with the obligation to pay the Royalty subject to the immediate right of Peppermint to extend the Permitted Locations or immediately acquire the Intellectual Property Rights if

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Peppermint terminates by notice to TelUPay in circumstances where (but not limited to) if TelUPay is dissolved, is insolvent or bankrupt. In addition, Peppermint may extend the Permitted Locations by payment to TelUPay of cash or the issue of equity to the value of A$500,000 or acquire the Intellectual Property Rights by payment or price to be agreed.

The Licence otherwise contains terms and conditions (including warranties, representations and indemnities) typical for an agreement of this nature.

14.3 TelUPay Contracts

As set out in Section 14.2, TelUPay granted Peppermint the Licence which included the securing by Peppermint of the TelUPay Contracts. Each of the TelUPay Contracts have been assigned to Peppermint whereby Peppermint has assumed all rights, privileges and obligations under each of the TelUPay Contracts to provide installation and maintenance services in relation to the Peppermint Platform which is being utilised by clients. Under each of the TelUPay Contracts, Peppermint will receive a transactional service fee that is dependent on the usage rate of the Peppermint Platform. The Intellectual Property Rights under the TelUPay Contracts remain with TelUPay and have not been assigned to Peppermint. However, Peppermint has first right of refusal of any disposal of Intellectual Property Rights.

14.4 Joint Venture Agreement

On 23 July 2015, Peppermint entered into an agreement with MyWepS International Inc. ( MyWepS ) and 1Bro Global Inc. ( 1Bro ) whereby Peppermint agreed to provide and MyWepS agreed to receive and use the Peppermint remittance system and Peppermint services to provide products and services to its direct members, agents and business branches, and other network partners and their respective members, agents and business branches located in the MyWepS network ( JV Agreement ).

Part of the MyWepS network includes 1Bro, a marketing company who operate 60,000 agents/members and 40 business centres across the Philippines. Pursuant to the JV Agreement, 1Bro and its network have agreed to receive and use in their commercial operations and business, MyWepS’ services and products including, but not limited to, the Peppermint remittance services.

The parties are currently in the pilot phase of the JV Agreement. If the pilot is successful, MyWepS will appoint Peppermint to provide the Peppermint remittance system and Peppermint services on an exclusive basis.

The fees generated by MyWepS and the MyWepS network, including 1Bro and its members, agents and business centres for the use of the Peppermint services are to be shared between Peppermint and MyWepS on the basis of charges, with the respective shares and charging rate per transaction to be finalised by a separate agreement, at completion of the pilot phase.

The term of the JV Agreement is 5 years, with termination permitted in select circumstances including but not limited to;

(a) either party serving the other with written notice at least six months prior to the second anniversary year from 23 July 2015; and

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(b) the event that either Peppermint or MyWepS face bankruptcy, insolvency or winding-up proceedings.

The JV Agreement does not constitute the grant of a licence in favour of MyWepS and all Peppermint services referred to in the JV Agreement remain the property of Peppermint.

14.5 Agreements with Key Personnel

Peppermint has entered into contracts of employment with key personnel ( Key Personnel ), who are engaged to carry on the development and commercialisation of the Peppermint Platform ( Engagement Agreements ):

The material terms of each of the Engagement Agreements are as follows:

(a) Remuneration: Peppermint will pay the Key Personnel a total of Php875,000 per month (this equates to approximately A$27,000 as at 15 October 2015) for their services under the Engagement Agreements;
(b) Probation Period : the Key Personnel are subject to a probation period of 6 months and a performance evaluation;
(c) Assignment of rights to third parties : Peppermint reserve the right to assign the rights and obligations it has under the Engagement Agreements to a suitable subsidiary company to stand in the place of Peppermint;
(d) Non-Compete: the Key Personnel must not compete nor engage in any activity in competition with or adverse to the interests of Peppermint for a period of 2 years from the date of termination of their appointment; and
(e) Intellectual Property Rights: any Technology, including any associated copyright, patent, know-how or intellectual property right ( IP ), developed by the Key Personnel during their appointment remains the property of Peppermint. Peppermint has the right to assign or register any rights in relation to the IP in any country;

Since the signing of the Engagement Agreements each of the Key Personnel have completed their probation period, passed their performance evaluation and are working for Peppermint on a regular status, subject to key performance indicators that are currently being determined.

14.6 Waiver and Release of Key Personnel from previous employer

Each of the Key Personnel were previously employed by either TelUPay (Philippines) Inc. or TelUPay PLC ( TelUpay Subsidiaries ), each a subsidiary of TelUPay. On 2 March 2015, TelUPay and TelUPay (Philippines) Inc. entered into identical waiver and release agreements with the Key Personnel to enable them to enter into the Engagement Agreements with Peppermint ( Waiver Agreements ).

Pursuant to the Waiver Agreements the Key Personnel provide a complete waiver in relation to their entitlements to unpaid salaries and termination payments from the TelUPay Subsidiaries.

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14.7 DJ Carmichael Corporate Advisory and Lead Manager on Relisting

The Company has engaged DJ Carmichael Pty Ltd ( DJC ) as corporate advisors in order to assist in raising up to $4 million of additional equity funding as part of the Company’s proposed re-compliance with Chapters 1 and 2 of the ASX Listing Rules ( Re-listing ). DJC will assist the Company in meeting its objectives on a best endeavours basis with regards to the issue of new Shares pursuant to the Re-Listing, and have been named as Lead Manager, on the terms and conditions set out in the corporate advisory services mandate signed by Chrysalis and DJC on 9 July 2015 ( Mandate ).

A corporate advisory retainer of $10,000 per month (or part thereof) plus GST ( Retainer ) will commence accruing from completion of due diligence and continue until the date of the Company’s successful Re-Listing. This Retainer fee will be payable by the Company to DJC within 5 days of the Company’s successful Re-Listing.

The Company and DJC acknowledge that should a successful Re-Listing not occur no Retainer fee in relation to this section will be payable by the Company to DJC.

The successful Re-Listing of the Company will trigger an automatic corporate advisory engagement extension for a minimum 6 month period commencing on Re-Listing unless agreed to in writing by DJC and the Company, with an option to extend for a further 6 months subject to agreement in writing by DJC and the Company at the time ( Corporate Advisory Engagement Period ). A corporate advisory retainer of $10,000 per month (or part thereof) plus GST will be payable by the Company to DJC for the Corporate Advisory Engagement Period.

A fee of 1% plus GST of the total gross amount raised under the Re-Listing will be payable by the Company to DJC ( Management Fee ).

A fee of 5% plus GST of the gross amount raised under the Re-Listing by DJC will be payable by the Company to DJC ( Selling Fee ). All third party fees will be paid out of this fee.

The Company and DJC acknowledge that:

(a) DJC and the Company may agree to payment of up to 50% of the Management Fee and/or Selling Fee via the issue of Shares at an equivalent price to the Re-Listing issue price; and
(b) notwithstanding that some or all of the Management Fee and/or Selling Fee may be paid in Shares, the Company will be required to pay the GST component of the total fee in cash.

In addition to the above fees, DJC will require reimbursement of reasonable outof-pocket expenses (together with any applicable GST) directly related to the contemplated Transaction (whether or not the Acquisition proceeds) and the mandated role.

14.8 Agreements with Executive Directors

The Company has entered into consultancy services agreements with Mr Christopher Kain (together with Okha Pty Ltd, an entity controlled by Christopher Kain) and Mr Anthony Kain (together with Cicak Pty Ltd, an entity controlled by

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Anthony Kain) ( Consultants ) ( Consultancy Services Agreements ). The material terms of the Consultancy Services Agreements are as follows:

(a) Term: two years from the date of readmission of the Company to the ASX after completion of the Acquisition;
(b) Remuneration:
(i) Anthony Kain – $15,000 per month (exclusive of GST), paid to Cicak Pty Ltd, based on a minimum work commitment of 35 hours per week;
(ii) Christopher Kain – $20,000 per month (exclusive of GST), paid to Cicak Pty Ltd, based on a minimum work commitment of 35 hours per week;

Further to this, the Company agree to reimburse the Consultants all reasonable expenses incurred in the performance of their services;

(c) Non-cash benefits: the Consultants may be granted non cash incentive benefits subject to shareholder approvals or a performance based bonus subject to regulatory approvals;
(d) Restraint of trade: upon termination of the Consultancy Services Agreements, the Consultants will be subject to a restraint of trade period of up to 2 years; and
(e) Termination: the Company and Consultants may terminate the respective Consultancy Services Agreement without cause by giving the other party the requisite notice.

Otherwise the Consultancy Services Agreements contain provisions usually found in contracts of this nature.

14.9 Agreements with Non-Executive directors

The Company has entered into non-executive services agreements with Mr Matthew Cahill and Mr Leigh Ryan ( Non-Executive Services Agreements ).

The material terms of the Non-Executive Services Agreements are as follows:

(a) Conditional appointment: appointment as a non-executive director is conditional upon completion of the Acquisition by the Company and re-admission to the ASX official list;
(b) Term: to commence on the completion of the Acquisition by the Company and subject to successful election and re-election by Shareholders;
(c) Remuneration: remuneration at the rate of $30,000 per annum plus superannuation together with:
(i) an entitlement to fees or other amounts in relation to special duties or service performed outside the scope of ordinary employment as a director;

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(ii) reimbursement for out of pocket expenses incurred as a result of engagement as a director.

The Non-Executive Services Agreement for Mr Ryan extinguishes all other rights and entitlements held by Mr Ryan or owed by the Company under the executive employment contract between the Company and Mr Ryan, dated 6 December 2013, except for Mr Ryan’s entitlement to 2,000,000 Company shares pursuant to that contract.

14.10 Loan Agreements to Peppermint Innovation Limited

On or around 15 May 2015, Peppermint entered into nine separate loan agreements with certain shareholders of Peppermint ( Lenders ), pursuant to which it was loaned a total of $500,000 ( Loan Agreements ). Under the Loan Agreements interest accrues at a flat rate of 12% per annum on the basis that funds will be repaid by:

(a) the issue of fully paid ordinary shares in Peppermint at a price of $0.26 per share ( Repayment Shares ), at or before completion of the Acquisition;
(b) in the event the Acquisition did not successfully complete within 6 months of the execution date of the Loan Agreements, repayment to be made by Peppermint either:
(i) if the Repayment Shares have not been issued within this timeframe, the issue of such number of fully paid ordinary shares in the capital of Peppermint as equates to the outstanding monies divided by $0.125 ( Increased Repayment Shares ); or
(ii) the issue of such further number of fully paid ordinary shares in the capital of Peppermint as is the difference between the Repayment Shares and the Increased Repayment Shares.

(the Repayment Shares and Increased Repayment Shares together being the Conversion Shares ).

Repayment of the outstanding monies accrued under the Loan Agreements is deemed to be made by Peppermint on the date of the issue of the Conversion Shares. Further, on the issue of any Conversion Shares, the relevant Lender has a right of first refusal to participate, on a pro rata basis, in all future equity issues by Peppermint.

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15. ADDITIONAL MATERIAL INFORMATION

15.1 Litigation

As at the date of this Prospectus, neither the Company nor Peppermint is involved in any material legal proceedings and neither the Directors nor the Proposed Directors are aware of any legal proceedings pending or threatened against the Company or Peppermint.

15.2 Rights and liabilities attaching to Chrysalis Shares

The Shares offered under this Prospectus will be fully paid ordinary shares in the issued capital of the Company and will, upon issue, rank equally with all other Shares then on issue.

The rights and liabilities attaching to Shares are regulated by the Company’s Constitution, the Corporations Act, the ASX Listing Rules, the ASX Settlement Rules and common law. The following is a summary of the more significant rights and obligations attaching to the Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders. To obtain such a statement, persons should seek independent legal advice.

Further details of the rights attaching to Shares are set out in the Constitution, a copy of which is available for inspection at the Company’s registered office during normal business hours.

15.2.1 General meetings

Shareholders are entitled to attend and vote at general meetings of the Company, in person, or by proxy, attorney or representative.

For so long as the Company remains a listed entity, Shareholders will be entitled to receive at least 28 days’ prior written notice of any proposed general meeting.

Shareholders may requisition meetings in accordance with Section 249D of the Corporations Act and the Constitution.

15.2.2 Voting rights

Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at a general meeting of Shareholders or a class of Shareholders:

(a) on a show of hands, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder has one vote; and
(b) on a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder shall, in respect of each fully paid Share held by him or her, or in respect of which he or she is appointed a proxy, attorney or representative, have one vote for the Share, but in respect of partly paid Shares shall have such number of votes as bears the same proportion to the total of such Shares registered in the Shareholder’s name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited).

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100

15.2.3 Dividend rights

Subject to the rights of any preference Shareholders and to the rights of the holders of any Shares created or raised under any special arrangement as to dividend, the Board may from time to time declare a dividend to be paid to the Shareholders entitled to the dividend which shall be payable on all Shares according to the proportion that the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) in respect of such Shares. The Board may also from time to time pay to the Shareholders such interim dividends as the Board may determine.

No dividend shall carry interest as against the Company. The Board may set aside out of the profits of the Company any amounts that they may determine as reserves, to be applied at the discretion of the Board, for any purpose for which the profits of the Company may be properly applied.

Subject to the ASX Listing Rules and the Corporations Act, the Company may, by resolution of the Board, implement a dividend reinvestment plan on such terms and conditions as the Board thinks fit and which provides for any dividend which the Board may declare from time to time payable on Shares which are participating Shares in the dividend reinvestment plan, less any amount which the Company shall either pursuant to the Constitution or any law be entitled or obliged to retain, be applied by the Company to the payment of the subscription price of Shares.

15.2.4 Winding-up

If the Company is wound up, the liquidator may, with the authority of a special resolution of the Company, divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he or she considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders or different classes of Shareholders.

The liquidator may, with the authority of a special resolution of the Company, vest the whole or any part of any such property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no Shareholder is compelled to accept any Shares or other securities in respect of which there is any liability.

15.2.5 Shareholder liability

As the Shares offered under the Prospectus are fully paid shares, they are not subject to any calls for money by the Company and will therefore not become liable for forfeiture.

15.2.6 Transfer of Shares

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

15.2.7 Variation of rights

The rights attaching to Shares may only be varied or cancelled by the sanction

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of a special resolution passed at a meeting of Shareholders or with the written consent of holders of three quarters of all Shares on issue.

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

15.2.8 Alteration of Constitution

The Constitution can only be amended by a special resolution passed by at least three quarters of Shareholders present and voting at the general meeting.

15.3 Terms of Performance Shares

The terms of Performance Shares are as follows:

(a) The Performance Shares shall be issued on completion and each one (1) Performance Share is convertible into one (1) fully paid ordinary share in the capital of Chrysalis, upon the following milestones being achieved:

Event / Milestones	Performance Shares converted
Milestone 1: Chrysalis or its subsidiaries generating cumulative revenue of $15,000,000 from the Mobile Banking Payments Remittance Business (MBPRB) within 5 years of the date of the Agreement	50,000,000
Milestone 2: Chrysalis or its subsidiaries generating cumulative revenue of $50,000,000 from the MBPRB within 5 years of the date of the Agreement	50,000,000

(b) The Performance Shares shall not convert into ordinary shares until such time as the milestones referred to above have been satisfied unless there is a Change of Control of Chrysalis before the milestones referred to above have been achieved. Change of Control means a bidder announcing pursuant to Chapter 6 of the Corporations Act that it has received acceptances of more than 50% of the Chrysalis shares on issue and the bid has become unconditional OR the Court granting orders approving a compromise or scheme of arrangement for the purposes of or in connection with a scheme of arrangement under which all shares are to be either cancelled or transferred to a third party (not a scheme of arrangement for the purposes of a corporate restructure) ( Change of Control ).

(c) In the event of a Change of Control all the Milestone 1 Performance Shares and the Milestone 2 Performance Shares shall convert.

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102

(d) If the milestones are not achieved, or not achieved within the expiry dates, the Performance Shares for a particular tranche will be redeemed for a total nominal sum of AUD $1.00.
(e) If the issue of Performance Shares would result in any person being in contravention of section 606(1) of the Corporations Act the conversion of each Performance Share that would cause the contravention shall be deferred until such time or times thereafter that the conversion would not result in a contravention of section 606 (1) of the Corporations Act. Where such conversion is deferred for 5 years from the date of the Agreement, the Performance Shares shall be redeemed as stated in (d) above.
(f) Notwithstanding the other terms, the issue of Performance Shares on a Change of Control shall be limited to 10% of the total shares on issue in the capital of Chrysalis as at the date of the Change of Control. Where not all Performance Shares are converted because of the application of this paragraph, those that can be converted into fully paid ordinary shares will be issued to the holders in proportion to their respective holdings. Performance Shares that do not convert into ordinary shares due to this limit will continue to be held by the holder until they can convert or expire 5 years from the date of the Agreement (whichever comes first).
(g) Prior to conversion, the Performance Shares shall have no:
(i) right of transfer;
(ii) voting rights (except as otherwise required by law);
(iii) dividend rights (whether fixed or at the discretion of the directors);
(iv) capital rights (whether in a winding up, upon a reduction of capital or otherwise);
(v) right to profit or assets on winding up; and
(vi) right to participate in new issues of securities by Chrysalis (including bonus issues or entitlement issues).
(h) The Performance Shares will not be quoted.
(i) In the event of any reconstruction, consolidation or division of the issued capital of Chrysalis, the Performance Shares and their terms of conversion shall be reconstructed, consolidated or divided in the same manner so as to ensure that the holder of the Performance Shares will not be disadvantaged by the reorganisation in its position relative to Chrysalis shareholders, but at the same time will not receive a benefit that Chrysalis shareholders do not also receive.

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15.4 Terms of Employee Incentive Share Plan

The key terms of the Incentive Share Plan ( Share Plan ) are as follows:

(a) Eligibility: Participants in the Share Plan may be Directors, full-time and part-time employees of the Company or any of its subsidiaries ( Eligible Participants ) or, subject to the Share Plan, a selective nominee of an Eligible Participant ( Participant ).
(b) Administration of Share Plan : The Board is responsible for the operation of the Share Plan and has a broad discretion to determine which Participants will be offered Shares under the Share Plan.
(c) Offer: The Board may issue an offer to a Participant to participate in the Share Plan ( Offer ). The Offer:
(i) will invite application for the number of Shares specified in the Offer ( Plan Shares );
(ii) will specify the issue price for the Plan Shares or the manner in which the issue price is to be calculated;
(iii) may invite applications for a loan up to the amount payable in respect of the Plan Shares accepted by the Participant in accordance with the Offer ( Loan );
(iv) will specify any restriction conditions applying to the Plan Shares;
(v) will specify an acceptance period; and
(vi) specify any other terms and conditions attaching to the Plan Shares.
(d) Issue price: The issue price of the Plan Shares shall be determined by the Board in its absolute discretion, but must be no less than the volume weighted average price at which Shares were traded on the ASX over the 10 trading days up to and including the actual date of acceptance of the Shares offered under the Offer.
(e) Restriction Conditions: Plan Shares may be subject to restriction conditions (such as a period of employment) which must be satisfied before the Plan Shares can be sold, transferred, or encumbered ( Restriction Conditions ). Plan Shares cannot be sold, transferred or encumbered until any loan in relation to the Plan Shares has been repaid or otherwise discharged under the Share Plan.
(f) Loan: A Participant who is invited to subscribe for Plan Shares may also be invited to apply for a Loan up to the amount payable in respect of the Plan Shares accepted by the Participant ( Applicant ), on the following terms:
(i) the Loan will be interest free unless the Company and Applicant agree otherwise;

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(ii) the Loan made available to an Applicant shall be applied by the Company directly toward payment of the issue price of the Plan Shares;
(iii) the Loan repayment date ( Repayment Date ) and the manner for making such payments shall be determined by the Board and set out in the Offer;
(iv) an Applicant must repay the Loan in full by the Repayment Date but may elect to repay the Loan amount in respect of any or all of the Plan Shares at any time prior to the Repayment Date;
(v) the Company shall have a lien over the Plan Shares in respect of which a Loan is outstanding and the Company shall be entitled to sell those Plan Shares in accordance with the terms of the Share Plan;
(vi) a Loan will be non-recourse except against the Plan Shares held by the Applicant to which the Loan relates; and
(vii) the Board may, in its absolute discretion, agree to forgive a Loan made to an Applicant.
(g) Unfulfilled Restriction Condition: Where a Restriction Condition in relation to Shares is not satisfied by the due date, or becomes incapable of satisfaction in the opinion of the Board, the Company must, unless the Restriction Condition is waived by the Board, either:
(i) buy back and cancel the relevant Shares in accordance with Part 2J.1 of the Corporations Act; or
(ii) arrange to sell the Shares as soon as reasonably practicable either on the ASX or to an investor who falls within an exemption under section 708 of the Corporations Act provided that the sale must be at a price that is no less than 80% of the volume weighted average price at which Shares were traded on the ASX on the 10 trading days before the sale date and apply the sale proceeds ( Sale Proceeds ) in the following priority:
- (A) first, to pay the Company any outstanding Loan Amount (if any) in relation to the Shares and the Company’s reasonable costs in selling the Shares;
- (B) second, to the extent the Sale Proceeds are sufficient, to repay the Participant any cash consideration paid by the Participant or Loan Amount repayments (including any cash dividends applied to the Loan Amount) made by or on behalf of the Participant; and
- (C) lastly, any remainder to the Company to cover its costs of managing the Share Plan.

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105

(h) Repayment of Loan : a Loan shall become repayable in full where:

(i) the Participant (or, where the Participant is a nominee of the Eligible Participant, that Eligible Participant) ceases to be an eligible employee for any reason (including death) and, at that time, there is a Restriction Condition that is unsatisfied or is incapable of being satisfied in the Board’s opinion (and this Restriction Condition is not waived);
(ii) the Participant suffers an event of insolvency;
(iii) the Participant breaches any condition of the Loan or the Share Plan; or
(iv) a Restriction Condition in relation to Plan Shares subject to the Loan is not satisfied by the due date, or becomes incapable of satisfaction in the opinion of the Board (and is not waived).
(i) Power of Attorney: The Participant irrevocably appoints each of the Company and each director of the Company severally as his or her attorney to do all things necessary to give effect to the sale of the Participant’s Plan Shares in accordance with the Share Plan.
(j) Share Plan limit: The Company must take reasonable steps to ensure that the number of Shares offered by the Company under the Share Plan when aggregated with:
(i) the number of Shares issued during the previous 3 years under the Share Plan (or any other employee share plan extended only to Eligible Employees); and
(ii) the number of Shares that would be issued if each outstanding offer for Shares (including options to acquire unissued Shares) under any employee incentive scheme of the Company were to be exercised or accepted,

does not exceed 5% of the total number of Shares on issue at the time of an offer (but disregarding any offer of Shares or option to acquire Shares that can be disregarded in accordance with relevant ASIC Class Orders).

(k) Quotation on ASX: Unless the Plan Shares are subject to Restriction Conditions, the Company will apply for each Plan Share to be admitted to trading on ASX upon issue of the Share Plan Share. Quotation will be subject to the ASX Listing Rules and any holding lock applying to the Plan Shares.

(l) Rights attaching to Shares : Each Plan Share shall be issued on the same terms and conditions as the Company’s issued Shares (other than in respect of transfer restrictions imposed by the Share Plan) and it will rank equally with all other issued Shares from the issue date except for entitlements which have a record date before the issue date.

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15.5 Terms of Employee Incentive Option Plan

The material terms and conditions of the Incentive Option Plan ( Option Plan ) are as follows:

(a) Eligibility and Grant of Options : The Board may grant Options ( Plan Options ) to any Director, full or part time employee, or casual employee, consultant or contractor who falls within ASIC Class Order 14/1000 ( Class Order ), of the Company or an associated body corporate ( Eligible Participant ). The Board may also offer Options to a prospective Eligible Participant provided the Offer can only be accepted if they become an Eligible Participant. Options may be granted by the Board at any time.
(b) Consideration : Each Plan Option will be granted for no more than nominal cash consideration.
(c) Conversion: Each Plan Option is exercisable into one Share in the Company ranking equally in all respect with the existing issued Shares in the Company.
(d) Exercise Price and Expiry Date : The exercise price and expiry date for Options granted under the Option Plan will be determined by the Board prior to the grant of the Options.
(e) Exercise Restrictions : The Plan Options may be subject to conditions on exercise as may be fixed by the Directors prior to grant of the Plan Options ( Exercise Conditions ). Any restrictions imposed by the Directors must be set out in the offer for the Plan Options.
(f) Lapsing of Options : An unexercised Plan Option will lapse:
(i) on its expiry date;
(ii) if any Exercise Condition is unable to be met and is not waived, as determined by the Board;
(iii) on the unauthorised dealing in, or hedging of, the Plan Option;
(iv) if the Board deems that the Plan Option lapses due to fraud, dishonesty or other improper behaviour of the Eligible Participant;
(v) the Company undergoes a change of control or a winding up resolution or order is made and the Board does not exercise its discretion to vest the Plan Option; or
(vi) subject to certain good leaver exceptions, where the Eligible Participant ceases to be an Eligible Participant.
(g) Trust: The Board may, at any time, establish a trust for the sole purpose of acquiring and holding Shares in respect of which an Eligible Participant may exercise, or has exercised, vested Plan Options, including for the purpose of enforcing the disposal restrictions and appoint a trustee to act as trustee of the trust.

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(h) Disposal of Options: Plan Options will not be transferable except to the extent the Option Plan or any offer provides otherwise.
(i) Quotation of Options : Plan Options will not be quoted on the ASX, except to the extent provided for by the Option Plan or unless an offer provides otherwise.
(j) Disposal of Shares : The Board may, in its discretion, determine that a restriction period will apply to some or all of the Shares issued on exercise of the Plan Options, up to a maximum of seven (7) years from the date of grant of the Plan Options.
(k) Participation in Rights Issues and Bonus Issues: There are no participating rights or entitlements inherent in the Plan Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Plan Options.
(l) Reorganisation : The terms upon which Plan Options will be granted will not prevent the Plan Options being re-organised as required by the Listing Rules on the re-organisation of the capital of the Company.
(m) Limitations on Offers : The Company must have reasonable grounds to believe, when making an offer in reliance on the Class Order, that the number of Shares to be received on exercise of Plan Options offered under an offer, when aggregated with the number of Shares issued or that may be issued as a result of offers made at any time during the previous 3 year period under an employee incentive scheme covered by the Class Order or an ASIC exempt arrangement of a similar kind to an employee incentive scheme, will not exceed 5% of the total number of Shares on issue at the date of the offer.

15.6 Interests of Directors and Proposed Directors

Other than as set out in this Prospectus, no Director or Proposed Director holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, 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:
(i) its formation or promotion; or
(ii) any of the Offers; or
(c) any of the Offers,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to a Director or Proposed Director:

(d) as an inducement to become, or to qualify as, a Director; or
(e) for services provided in connection with:
(i) the formation or promotion of the Company; or

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108

(ii) any of the Offers.

15.7 Interests of Experts and Advisers

Other than as set out below or elsewhere in this Prospectus, no:

(a) 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;
(b) promoter of the Company; or
(c) underwriter (but not a sub-underwriter) to any Offer or a financial services licensee named in this Prospectus as a financial services licensee involved in any Offer,

holds, or has held within the 2 years preceding lodgement of this Prospectus with the ASIC, any interest in:

(d) the formation or promotion of the Company;
(e) any property acquired or proposed to be acquired by the Company in connection with:
(i) its formation or promotion; or
(ii) any of the Offers; or
(iii) any of the Offers,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons for services provided in connection with:

(f) the formation or promotion of the Company; or
(g) any of the Offers.

DJ Carmichael has acted as Lead Manager for the Company in relation to the Public Offer. The Company estimates it will pay DJ Carmichael a total of approximately $47,000 (excluding GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, DJ Carmichael has not received any fees from the Company for their services.

RSM Bird Cameron Corporate Pty Ltd has acted as Investigating Accountant of the Company and has prepared the Investigating Accountant’s Report which is included in Section 12 of this Prospectus. The Company estimates it will pay RSM Bird Cameron Corporate Pty Ltd a total of approximately $5,500 (excluding GST) for these services. During the 24 months preceding lodgement of this Prospectus with the ASIC, RSM Bird Cameron Corporate Pty Ltd has not received any fees from the Company for their services.

HLB Mann Judd has acted as auditor of the Company. During the 24 months preceding lodgement of this Prospectus with the ASIC, HLB Mann Judd has received $44,100 from the Company for their services.

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109

Steinepreis Paganin has acted as the solicitors to the Company in relation to the Offers. The Company estimates it will pay Steinepreis Paganin $70,000 (excluding GST) for these services. Subsequently, fees will be charged in accordance with normal charge out rates. During the 24 months preceding lodgement of this Prospectus with the ASIC, Steinepreis Paganin has received fees of $32,200 (excluding GST) from the Company for legal services.

15.8 Consents

(a) Other than as set out below, each of the parties referred to in this Section 15.8:
(i) does not make, or purport to make, any statement in this Prospectus, nor is any statement in this Prospectus based on any statement by the relevant party;
(ii) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of the party; and
(iii) did not authorise or cause the issue of all or any part of this Prospectus.
(b) Steinepreis Paganin has given and has not, before lodgement of this Prospectus with ASIC, withdrawn its consent to be named in this Prospectus as Australian lawyers to the Company in relation to the Offers.
(c) HLB Mann Judd has given its written consent to being named as auditor of the Company in this Prospectus. HLB Mann Judd has not withdrawn its consent prior to lodgement of this Prospectus with ASIC.
(d) Computershare Investor Services Pty Limited has given its written consent to being named as share registry of the Company in this Prospectus. Computershare Investor Services Pty Limited has not withdrawn its consent prior to lodgement of this Prospectus with ASIC.
(e) RSM Bird Cameron Corporate Pty Ltd has given its written consent to being named as Investigating Accountant in this Prospectus and to the inclusion of the Investigating Accountant’s Report in Section 12 of this Prospectus in the form and context in which the information and reports are included. RSM Bird Cameron Corporate Pty Ltd has not withdrawn its consent prior to lodgement of this Prospectus with the ASIC.
(f) DJ Carmichael has given and has not, before lodgement of this Prospectus with ASIC, withdrawn its consent to be named in this Prospectus as Lead Manager to the Public Offer in the form and context in which it is named.

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110

15.9 Expenses of the Offers

The total expenses of the Offers (excluding GST) are estimated to be approximately $437,000 (assuming maximum subscription under the Public Offer) and are expected to be applied towards the items set out in the table below:

Allocation of funds for finance		Maximum
facility & fundraising fees/costs	Minimum Subscription	Subscription
along with associated legal and	($3,500,000)	($4,000,000)
accounting fees
ASIC fees	$2,320	$2,320
ASX fees	$72,515	$73,015
Capital raising fees	$210,000	$240,000
Legal fees	$114,665	$116,165
Investigating Accountants fees	$5,500	$5,500
TOTAL	$405,000	$437,000

15.10 Continuous disclosure obligations

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

Price sensitive information will be publicly released through ASX before it is disclosed to shareholders and market participants. Distribution of other information to shareholders and market participants will also be managed through disclosure to the ASX. In addition, the Company will post this information on its website after the ASX confirms an announcement has been made, with the aim of making the information readily accessible to the widest audience.

15.11 Governing law

Each of the Offers and the contracts formed on return of an Application Form are governed by the laws applicable in Western Australia, Australia. Each person who applies for securities pursuant to this Prospectus submits to the non-exclusive jurisdiction of the courts of Western Australia, Australia, and the relevant appellate courts.

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111

16. DIRECTORS’ AUTHORISATION

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

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

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Neale Fong Non-Executive Chairman For and on behalf of Chrysalis Resources Limited

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17. GLOSSARY AND INTERPRETATION

17.1 Definitions

Unless the context requires otherwise, where the following terms are used in this Prospectus, they have the following meanings:

$ means an Australian dollar.

Acquisition means the proposed acquisition of all Peppermint Shares by Chrysalis, subject to and in accordance with the terms of the Acquisition Agreements.

Acquisition Agreement means the binding term sheet between the Company, Peppermint Innovation Limited and shareholders in Peppermint dated 20 May 2015 and as varied on 2 July 2015, 21 July 2015 and 25 August 2015.

Application means an application for Securities made on an Application Form.

Application Form means a Public Offer Application form or Peppermint Application Form attached to or accompanying this Prospectus relating to an Offer.

ASIC means Australian Securities & Investments Commission.

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

ASX Listing Rules means the official listing rules of ASX.

ASX Settlement Corporation means ASX Settlement Pty Ltd (ACN 008 504 532).

ASX Settlement Operating Rules means the operating rules of the ASX Settlement Facility (as defined in Rule 1.1.1 and Rule 1.1.2 of the ASX Settlement Operating Rules) in accordance with Rule 1.2 which govern, inter alia, the administration of the CHESS sub registers.

Board means the board of Directors as constituted from time to time.

Capital Raising has the same meaning given to that term in Section 6.3.

Closing Date means the closing date of the Offers as set out in the indicative timetable in Section 3 of this Prospectus (subject to Chrysalis reserving the right to extend the Closing Date or close the Offers early).

Company, Chrysalis or CYS means Chrysalis Resources Limited (to be renamed Peppermint Innovation Limited) (ACN 125 931 964).

Conditions means the conditions to the Offers set out in Section 7.2 of this

Prospectus.

Consideration means the consideration payable by the Company to the Vendors under the Acquisition Agreement as set out in Section 14.1.

Consideration Performance Shares or Performance Shares means the Performance Shares to be issued to the Vendors pursuant to Acquisition Agreement, as the context requires as set out in Section 14.1.

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Consideration Securities means the Consideration Shares and the Performance Shares payable by the Company to the Vendors under the Acquisition Agreement.

Consideration Shares means the Shares to be issued to the Vendors pursuant to the Acquisition Agreement.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

DJC means DJ Carmichael.

DJC Offer has the meaning in Section 2.4(b).

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

General Meeting means the General Meeting of Chrysalis held on 2 October 2015, which sought Shareholder approval for the matters set out in the Notice of Meeting.

Lead Manager means DJ Carmichael.

Merged Group means the Company and its subsidiaries after successful completion of the Peppermint Acquisition, including without limitation Peppermint.

Milestone has the meaning given to that term in Section 15.3.

Minimum Subscription means Chrysalis receiving Valid Applications for 175,000,000 Shares under the Public Offer to raise $3,500,000.

Notice of Meeting means the Notice of General Meeting and Explanatory Statement of Chrysalis in relation to the General Meeting.

Offers means, collectively, the Public Offer, the Peppermint Offer and the DJC Offer, and Offer means any of them, as the case requires.

Official List means the official list of ASX.

Official Quotation means official quotation by ASX in accordance with the ASX Listing Rules.

Peppermint means Peppermint Innovation Limited (ACN 600 876 024).

Peppermint Application Form means the Peppermint application form accompanying this Prospectus relating to the Peppermint Offer.

Peppermint Board means the board of directors of Peppermint as at the date of this Prospectus, comprising Chris Kain, Anthony Kain and Mathew Cahill.

Peppermint Offer means the offer of Shares and Performance Shares to Peppermint Shareholders under this Prospectus set out in Section 7.1.

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

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114

Peppermint Shareholder means a holder of one or more Peppermint Shares.

Performance Shares means the Performance Shares to be issued to the Vendors pursuant to Acquisition Agreement, as the context requires as set out in Section 14.1.

Proposed Directors means Mr Anthony Kain, Mr Christopher Kain and Mr Matthew Cahill.

Prospectus means this prospectus.

Public Authority means any government or governmental, semi-governmental, administrative, statutory, fiscal, or judicial body, entity, authority, agency, tribunal, department, commission, office, instrumentality, agency or organisation (including any minister or delegate of any of the foregoing), any self-regulatory organisation established under statute and any recognised securities exchange (including without limitation ASX), in each case whether in Australia or elsewhere.

Public Offer means the offer of Shares to the public pursuant to this Prospectus as set out in Section 7.1.

Public Offer Application Form means the application form to subscribe for Shares under the Public Offer, attached to or accompanying this Prospectus.

Section means a section of this Prospectus.

Security means a security in the capital of the Company, including a Share or Performance Share, as the context requires.

Settlement means the settlement of the Acquisition under the Acquisition Agreement.

Settlement Date means the date on which settlement occurs pursuant to the Acquisition Agreement.

Share or CYS Share means a fully paid ordinary share in the capital of Chrysalis.

Shareholder means a holder of one or more Shares.

Share Registry means Computershare Investor Services Pty Limited.

Technology in the context of the Engagement Agreements outlined in Section 14.5, includes but is not limited to computer processes, computer codes, relevant materials, such processes, codes and materials as being improved, and other materials of whatever form and medium which are designed, developed, researched, compiled, created, implemented, delivered or installed by the Key Personnel during their appointment.

Valid Application means a valid and complete application to subscribe for Shares under the Public Offer, accompanied by the appropriate application money in full.

Vendor means the shareholders of Peppermint at the time of Settlement.

WST means Western Standard Time as observed in Perth, Western Australia.

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115

17.2 Interpretation

Unless the contrary intention appears, the following rules apply in interpreting this Prospectus:

(a) words or phrases defined in the Corporations Act have the same meaning in this Prospectus;
(b) a reference to legislation, code or other law includes regulations and other instruments under it and consolidations, amendments, reenactments or replacements of any of them;
(c) the singular includes the plural and vice versa;
(d) the word “person” includes an individual, a firm, a body corporate, a partnership, a joint venture, an unincorporated body or association, or any government agency;
(e) a reference to Australian dollars, AUD, $ or dollars is to the lawful currency of the Commonwealth of Australia; and
(f) a reference to time is to WST.

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PUBLIC OFFER APPLICATION FORM AND INSTRUCTIONS

CHRYSALIS RESOURCES LIMITED (ACN 125 931 964) Share Registrars Use Only Please read all instructions on the reverse of this form A Number of Shares applied for at $0.02 per Share Broker reference – Stamp only (Minimum of 100,000 Shares then multiples of 50,000 Shares) Broker Code You may be allocated all of the Shares above or a lesser number B Total amount Payable by cheque(s) for Shares A$ C Full name details, title, given name(s) (no initials) and D Tax File Number(s) surname or Company name or exemption category Name of Applicant 1 - Individual or Company TFN Name of joint Applicant 2 or Trust Name of joint applicant 3 or Trust E Full postal address and F Contact Details Number/Street Contact Name Suburb/Town State/postcode Contact Number ( ) G Chess HIN (if applicable)

Share Registrars Use Only Broker reference – Stamp only Broker Code Adviser Code

H Cheque payment details please fill out your cheque details and make your cheque payable to “Chrysalis Resources Limited – Subscription Account”

Drawer	Cheque Number	BSB Number	Account Number	Total of Cheque
				$

Chrysalis Resources Limited – Subscription Account

You should read this Prospectus carefully before completing this Application Form. The Corporations Act prohibits any person from passing on this Application Form (whether in paper or electronic form) unless it is attached to or accompanies a complete and unaltered copy of the Prospectus and any relevant supplementary prospectus (whether in paper or electronic form).

I/We declare that:

(a) this Application is completed according to the declaration/appropriate statements on the reverse of this form and agree to be bound by the constitution of Chrysalis Resources Limited ; and

(b) I/we have received personally a copy of this Prospectus accompanied by or attached to the Application Form or a copy of the Application Form or a direct derivative of the Application Form, before applying for Shares.

Return of the Application Form with your cheque for the Application Monies will constitute your Offer to subscribe for Shares in the Company. Please note that the Company will not accept electronic lodgement of Application Forms or electronic funds transfer.

Guide to the Public Offer Application Form

This Application Form relates to the Public Offer of Shares in Chrysalis Resources Limited. The expiry date of the Prospectus is the date which is 13 months after the date of this Prospectus. The Prospectus contains information about investing in the Shares of the Company and it is advisable to read this document before applying for Shares. A person who gives another person access to this Application Form must at the same time and by the same means give the other person access to the Prospectus, and any supplementary prospectus (if applicable), and an Application Form on request and without charge.

Please complete the all relevant sections of the Application Form using BLOCK LETTERS. These instructions are cross referenced to each section of the Application Form. Further particulars in the correct forms of resistible titles to use on the Application Form are contained in the table below.

A Insert the number of Shares you wish to apply for. The Application must be for a minimum of 100,000 Shares and thereafter in multiples of 50,000 Shares.
B Write the full name you wish to appear on the statement of shareholdings. This must be either your own name or the name of the Company. Up to three joint Applicants may register. You should refer to the table below for the correct forms of registrable title. Applicants using the wrong form of title may be rejected. Clearing House Electronic Sub–Register System (CHESS) participants should complete their name and address in the same format as that presently registered in the CHESS system.
C Enter your Tax File Number (TFN) or exemption category. Where applicable please enter the TFN for each joint Applicant. Collection of TFNs is authorized by taxation laws. Quotation for your TFN is not compulsory and will not affect your Application.
D Please enter your postal address for all correspondence. All communications to you from the Shares Registry will be mailed to the person(s) and address as shown. For Joint Applicants, only one address can be entered.
E Please enter your telephone number(s), area code, email address and contact name in case we need to contact you regarding your Application.
F Chrysalis Resources Limited will apply to the ASX to participate in CHESS, operated by ASX Settlement Pty Limited, a wholly owned subsidiary of ASX Limited. In CHESS, the Company will operate an electronic CHESS sub register of securities holdings and an electronic issuer sponsored sub register of securities holdings. Together the two sub registers will make up the Company’s principal register of securities. The Company will not be issuing certificates to applicants in respect of securities allotted.

If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold securities allotted to you under this Application in uncertified form on the CHESS sub register, complete Section G or forward your Application Form to your sponsoring participant for completion of this section prior to lodgement. Otherwise, leave Section G blank and on allotment, you will be sponsored by the Company and an SRN will be allocated to you. For Further information refer to the relevant section of the Prospectus.

G Please complete cheque details as requested.

Make your cheque payable to “Chrysalis Resources Limited – Subscription Account” in Australian currency and cross it “Not Negotiable” Your cheque must be drawn on an Australian Bank.

The amount should agree with the amount shown in section B.

Sufficient cleared funds should be held in your account, as cheques returned unpaid are likely to result in your Application being rejected.

H Before completing the Application Form the Applicant(s) should read the Prospectus to which the Application relates. By lodging the Application Form, the Applicant(s) agrees that this Application is for shares in Chrysalis Resources Limited upon and subject to the terms of this Prospectus, and agrees to take any number of Shares equal to or less than the number of Shares indicated in Section A that may be allotted to the Applicant(s) pursuant to the Prospectus and declares that all details and statements made are complete and accurate. It is not necessary to sign the Application Form.

Lodgement of Applications

Return your completed Application Form with cheque(s) attached to:

	In Person to: Chrysalis Resources Limited Suite 20 7 The Esplanade Mt Pleasant WA 6153	By Post to: Chrysalis Resources Limited Suite 20 7 The Esplanade Mt Pleasant WA 6153	By Email to: [email protected]

Application Forms must be received no later than 13 November 2015 which may be changed immediately after the Opening Date at any time at the discretion of the Company.

Correct form of Registrable Title

Only legal entities are allowed to hold Shares. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to the Company. At least one full given name and the surname are required for each natural person. The name of the beneficiary or any other non-registrable title may be included by way of an account designation if completed exactly as described in the examples below:

Type of Investor	Correct form of Registrable Title	Incorrect form of Registra Title
Individual Use Names in full, no initials	Mr John Alfred Smith	JA Smith
Minor (a person under the age of 18). Use the name of a responsible adult, do not use the name of a minor.	John Alfred Smith	Peter Smith
Company - Use Company title, not abbreviations	ABC Pty Ltd	ABC P/L; ABC Co
Trusts - Use Trustees(s) personal name(s), do not use the name of the trust	Mrs Sue Smith	Sue Smith Family Trust
Deceased Estates - Use executor(s) person name(s), do not use the name of the deceased	Ms Jane Smith	Estate of Late John Smith
Partnerships - Use partners personal names, do not usethename of the partnership	Mr John Smith and Mr Michael Smith	John Smith and Son

AI assistant

PEPPERMINT INNOVATION LIMITED — Capital/Financing Update 2015

65563_rns_2015-10-15_1f47e706-64d6-4f2e-b8a2-bef67a501e0f.pdf

CONTENTS

1. CORPORATE DIRECTORY

Directors

Proposed Directors

Registered Office

Share Registry*

Company Secretary

Legal Advisers to Chrysalis

Proposed Company Secretary

Current ASX Code:

Proposed ASX Code:

Lead Manager to the Offer

Auditor*

Investigating Accountant

2. IMPORTANT NOTICE

2.1 General

2.2 Re-compliance Prospectus

2.3 Investment Advice

2.4 Additional Offers

2.5 Expiry Date

2.6 Forward-looking statements

2.7 Privacy statement

2.8 Web Site – Electronic Prospectus

2.9 Defined terms

2.10 Time

2.11 Photographs and Diagrams

2.12 Enquiries

3. KEY DATES AND OFFER STATISTICS

3.1 Indicative timetable[1]

3.2 Key Statistics of the Offers

Notes:

4. CHAIRMAN’S LETTER

5. INVESTMENT OVERVIEW

6. TRANSACTION OVERVIEW

6.1 The Peppermint Acquisition

6.2 Consideration

6.3 Conditions applicable to Acquisition

6.4 Suspension and Re-admission to ASX

6.5 Change of Name

7. DETAILS OF THE OFFERS

7.1 Offers

7.1.1 Public Offer

(a) Minimum subscription

(b) Minimum application amount

(c) Eligible participants

(d) Quotation and trading

7.1.2 Additional Offers

(a) Peppermint Offer

(b) DJC Offer

7.2 Conditional Offers

(collectively, the Conditions ).

7.3 Purpose of the Offers and the Prospectus

7.4

Use of Funds

Notes :

7.5 Taxation

7.6 Applications

7.7

Issue of Securities and Allocation Policy

7.7.1 General

7.7.2 Public Offer

7.7.3

Peppermint Offer

7.7.4 DJC Offer

7.7.5 Defects in Applications

7.7.6 Interest

7.8

Quotation of Securities

7.9

Clearing House Electronic Sub-Register System and Issuer Sponsorship

7.10 Applicants outside Australia

7.11 Enquiries

8. COMPANY OVERVIEW – ASSETS, FINANCIAL INFORMATION AND CAPITAL STRUCTURE

8.1 Business Overview

8.1.1 Chrysalis Resources Limited

8.1.2 Peppermint Innovation Limited

Company Vision and Opportunity

PEPPERMINT INNOVATION LIMITED Capital/Financing Update 2015