Chrysalis Resources Limited

(ACN 125 931 964)

(to be renamed Peppermint Innovation Limited)

NOTICE OF GENERAL MEETING AND EXPLANATORY MEMORANDUM

2 October 2015

1.30 pm (WST)

Boulevard Centre, 99 The Boulevard, Floreat WA 6014

This Notice of Meeting and Explanatory Memorandum should be read in its entirety. If Shareholders are in doubt as to how to vote, they should seek advice from their accountant solicitor or other professional adviser without delay.

Should you wish to discuss any matter please do not hesitate to contact the Company by telephone.

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NOTICE OF GENERAL MEETING

Notice is given that the General Meeting of Shareholders of Chrysalis Resources Limited (ACN 125 931 964) ( Company ) will be held at the Boulevard Centre, 99 The Boulevard, Floreat, Western Australia on 2 October 2015 commencing at 1.30pm WST.

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form forms part of this Notice.

The Directors have determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are the registered holders of Shares in the Company on 30 September 2015 at 5pm WST.

Further terms and abbreviations used in this Notice and Explanatory Memorandum are defined in Schedule 1.

AGENDA

1. Resolution 1 – Change to Nature and Scale of Activities

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

“That, subject to and conditional upon the passing of all Resolutions, for the purposes of Listing Rule 11.1.2 and for all other purposes, the Company be authorised to make a significant change in the nature and scale of its activities as set out in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by any person who may obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed, and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

2. Resolution 2 – Create a New Class of Shares (Performance Shares)

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

“That, subject to and conditional upon the passing of all Resolutions, for the purposes of Section 246B of the Corporations Act and for all other purposes, the Company is authorised to issue Performance Shares on the terms and conditions set out in the Explanatory Memorandum.”

3. Resolution 3 – Acquisition of Peppermint Innovation Limited (Issue of Shares and Performance Shares to Vendors)

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

“That, subject to and conditional upon the passing of all Resolutions, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue:

(a) 350,000,000 Shares; and
(b) 100,000,000 Performance Shares,

to the Vendors on completion of the Acquisition on the terms and conditions and as set out in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who may obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed, and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

4. Resolution 4 – Issue of Consideration Securities to Related Parties

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

“ That, subject to and conditional upon the passing of all Resolutions, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the Company to issue 218,884,120 Shares and 62,538,320 Performance Shares to the Related Party Vendors (or their nominees) on the terms and conditions set out in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by the Related Party Vendors (and their nominees) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

5. Resolution 5 – Capital Raising

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

“ That, subject to and conditional upon the passing of all Resolutions, for the purposes of Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 200,000,000 Shares under the Prospectus as part of the Capital Raising on the terms and conditions set out in the Explanatory Memorandum .”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed, and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

6. Resolution 6 – Participation of Director in Capital Raising

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

“That, subject to and conditional upon the passing of all Resolutions, for the purposes of Listing Rule 10.11 and for all other purposes, approval is given for the issue to Director, Dr Neale Fong (or his nominees), of up to a total of 1,500,000 Shares that may be issued under the Capital Raising under Resolution 5 and otherwise on the terms set out in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by Dr Neale Fong (and his nominee) and any of their associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

7. Resolution 7 – Issue of Shares to Director pursuant to Employee Share Plan

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

“That, subject to the passing of all Resolutions, for the purposes of ASX Listing Rule 10.14 and for all other purposes, approval is given for the Company to issue up to 2,000,000 Shares as Director incentive remuneration to Mr Leigh Ryan (or his nominee) on the terms and conditions set out in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by any Director who is eligible to participate in the employee incentive scheme in respect of which approval is sought and, if ASX has expressed an opinion under rule 10.14.3 that approval is required for participation in an employee incentive scheme by anyone else, that person, and any associates of those Directors. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote , in accordance with the directions on the Proxy Form , or , it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:
(i) a member of the Key Management Personnel; or
(ii) a Closely Related Party of such a member; and
(b) the appointment does not specify the way the proxy is to vote on this Resolution. However, the above prohibition does not apply if:
(a) the proxy is the Chair; and
(b) the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

8. Resolution 8 – Issue of Shares to DJ Carmichael

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

“That, subject to the passing of all Resolutions, for the purposes of ASX Listing Rule 7.1 and for all other purposes, approval is given for the Company to issue up to 3,250,000 Shares to DJ Carmichael (or their nominees) on the terms and conditions set out in the Explanatory Memorandum.”

Voting Exclusion

The Company will disregard any votes cast on this Resolution by any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

9. Resolution 9 – Election of Director, Mr Anthony Kain

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

“That, subject to and conditional upon the passing of all Resolutions, for the purpose of clause 11.11 of the Constitution and for all other purposes, approval is given for the election of Mr Anthony Kain as a director of the Company effective from the date of settlement of the Acquisition.”

10. Resolution 10 – Election of Director, Mr Christopher Kain

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

“That, subject to and conditional upon the passing of all Resolutions, for the purpose of clause 11.11 of the Constitution and for all other purposes, approval is given for the election of Mr Christopher Kain as a director of the Company effective from the date of settlement of the Acquisition.”

11. Resolution 11 – Election of Director, Mr Matthew Cahill

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

“That, subject to and conditional upon the passing of all Resolutions, for the purpose of clause 11.11 of the Constitution and for all other purposes, approval is given for the election of Mr Matthew Cahill as a director of the Company effective from the date of settlement of the Acquisition.”

12. Resolution 12 – Change of Company Name

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

“That, subject to and conditional upon the passing of all Resolutions, pursuant to Section 157(1) of the Corporations Act and for all other purposes, the name of the Company is changed to “Peppermint Innovation Limited”.”

13. Resolution 13 – Replacement of Constitution

To consider and, if thought fit, to pass the following resolution as a special resolution:

“That, subject to and conditional upon the passing of all Resolutions, for the purposes of section 136(2) of the Corporations Act and for all other purposes, approval is given for the Company to repeal its existing Constitution and adopt a new constitution in its place in the form as signed by the chairman of the Meeting for identification purposes.”

Dated 1 September 2015 BY ORDER OF THE BOARD

Leigh Ryan Managing Director

EXPLANATORY MEMORANDUM

Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders of the Company in connection with the business to be conducted at the Meeting to be held at Boulevard Centre, 99 The Boulevard, Floreat, Western Australia on 2 October 2015 at 1.30pm (WST).

This Explanatory Memorandum should be read in conjunction with and forms part of the accompanying Notice. The purpose of this Explanatory Memorandum is to provide information to Shareholders in deciding whether or not to pass the Resolutions in the Notice.

A Proxy Form is located at the end of the Explanatory Memorandum.

Action to be taken by Shareholders

Shareholders should read the Notice and this Explanatory Memorandum carefully before deciding how to vote on the Resolutions.

Proxies

A Proxy Form is attached to the Notice. This is to be used by Shareholders if they wish to appoint a representative (a proxy ) to vote in their place. All Shareholders are invited and encouraged to attend the Meeting or, if they are unable to attend in person, sign and return the Proxy Form to the Company in accordance with the instructions thereon. Lodgement of a Proxy Form will not preclude a Shareholder from attending and voting at the Meeting in person.

Please note that:

(a) a member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy;
(b) a proxy need not be a member of the Company; and
(c) a member of the Company entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise, but where the proportion or number is not specified, each proxy may exercise half of the votes.

The enclosed Proxy Form provides further details on appointing proxies and lodging Proxy Forms.

1. Background to the Acquisition

1.1 Background

Since listing in May 2008, Chrysalis Resources Limited has focused on the exploration for gold, base metals and iron ore in Western Australia and more recently copper and gold 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.

The focus on exploring four projects covering over 3,000 square kilometres in Zambia over the past 3 years has resulted in the establishment of a JORC compliant inferred resource (18.6Mt @ 0.52% Cu – 0.3% Cu cut-off) within the Shikila Project, and has identified numerous copper in soil anomalies and several broad low grade copper drill intercepts, but has not yet identified any economically viable deposit.

As set out in the Company’s ASX announcement of 18 November 2014, recent regional soil sampling under a joint venture term sheet with FQM Exploration (Zambia) Limited ( FQM ) dated 23 October 2014 ( Letter Agreement ), confirmed and identified several significant copper-in-soil anomalies within the Shikila and Kabwima projects, including one >10km long x 2km wide discontinuous anomaly (Target H) located in the south-western part of the Kabwima Project.

Subsequent to satisfying all conditions associated with the option period under the Letter Agreement, FQM elected to execute the option and advance to the earn-in period in the Kabwima and Shikila Copper projects subject to certain Letter Agreement modifications as follows:

(a) a formal drafting of the joint venture agreement may be postponed for up to 12 months whilst initial drill testing is carried out. During this time all aspects of the joint venture will continue to be governed by the Letter Agreement;
(b) the parties are agreed that the first earn-in stage of the Letter Agreement will be removed altogether leaving FQM with the right to earn an undivided interest of 80% in the project by completing all necessary conditions defined as the second earn-in (clause 3d of the Letter Agreement) within four years of the earn-in notice dated 17 July 2015; and
(c) FQM will act as farm-in manager and carry out all exploration activities itself (by its employees, agents or contractors) as farm-in manager.

Although FQM entering into the earn-in phase of the Letter Agreement is good news, the recent downturn in resource market conditions and the difficulty being experienced by junior explorers, including Chrysalis, to raise funds for ongoing mineral exploration initiated a search for acquisition opportunities both within in the resource industry and across other sectors that would potentially add shareholder value. After considering a number of other opportunities, the board believes that the proposed acquisition of Peppermint Innovation Limited (ACN 600 876 027) ( Peppermint ) is an excellent opportunity to add value and retain substantial growth potential for the Company.

1.1.1 Acquisition of Peppermint Innovation Limited

On 21 May 2015, Chrysalis announced that it had executed a binding term sheet ( Term Sheet ) with Peppermint, and Peppermint’s shareholders ( Vendors ) for the option ( Option ) to acquire 100% of the issued capital of 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 ( TMBT ) with:

(a) an exclusive license to expand the TMBT into Australia, the rest of Asia, the Middle East, Europe and Tunisia ( License Territory );
(b) the right to acquire before any other third party any further rights proposed to be granted or sold by the owner of the TMBT anywhere in the world;
(c) engagement agreements in place with the key technical and commercial developers of the TMBT who were released by the owner of the TMBT to work exclusively for Peppermint; and
(d) the right to assignment of existing contracts for the TMBT in the License Territory.

Accordingly, the exercise of the Option allows the Company to acquire 100% of the issued capital of Peppermint. The consideration payable in respect of the Acquisition is the issue of 350,000,000 Shares and 100,000,000 Performance Shares in the Company to be issued to the Vendors on the terms set out in this Explanatory Memorandum.

The Company completed due diligence on Peppermint, including technical investigations, legal analysis and accounting, sufficient enough for the Board to make an investment decision, and on 22 July 2015, the Company announced that the commercial terms of the Term Sheet had been amended to remove the requirement of a share capital consolidation and the transaction timetable, and that the Company had exercised the Option. In addition, Peppermint raised $500,000 from third parties in the form of an unsecured convertible loan notes which shall be converted into shares in Peppermint prior to completion of the Acquisition.

Pursuant to the exercise of the Option, the Company will seek to acquire all of the issued shares in Peppermint in consideration for the issue of Shares and Performance Shares to the Vendors.

The Company intends to conduct a capital raising to raise a minimum of $3,500,000, with oversubscriptions of a further $500,000 to raise a total of $4,000,000 (before expenses of the offer) to fund the operations of the Company. The capital raising will be conducted under a prospectus as part of its re-compliance with Chapters 1 and 2 of the Listing Rules.

1.2 Terms of the Acquisition

As announced on 21 May 2015, 3 July 2015 and 22 July 2015, the Term Sheet contains the following key terms:

1.2.1 Conditions to Completion

Now that Chrysalis has exercised the Option:

(a) Subject to satisfaction of the conditions set out in (b) below, at completion of the Acquisition, Chrysalis will issue the following securities as consideration for the Acquisition ( Consideration Shares ):
(i) Ordinary Shares: 350,000,000 Shares to be issued upon completion of the Acquisition; and
(ii) Performance Shares : 100,000,000 Performance Shares (on terms specified in Schedule 2), which will be issued upon completion of the Acquisition (where each Performance Share will convert into 1 Share upon achievement of each of the specified performance milestones).
(b) The Acquisition will complete and the Shares described above will be issued subject to the following ( Completion ):
(i) Chrysalis obtaining all necessary shareholder and regulatory approvals required for the Acquisition, including in particular:
- (A) ASX granting Chrysalis a waiver of Listing Rule 2.1, condition 2 (for ASX to waive the “20c rule”) in relation to Chrysalis’ proposed recompliance with Chapters 1 and 2 of the ASX Listing Rules; and
- (B) ASX approval for the readmission of Chrysalis to the official list of ASX in connection with its proposed change in the nature and scale of its activities.
(ii) 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;
(iii) Peppermint will be entitled to appoint 3 directors to the board (being Anthony Kain, Christopher Kain and Matthew Cahill, collectively Proposed Directors ) of Chrysalis and 1 current director of Chrysalis will remain (being Leigh Ryan);

(iv) at Completion, Chrysalis must have in place an employee share and option plan which enables management and key employees of Peppermint to receive shares and options in Chrysalis in accordance with the Listing Rules and Corporations Act; and
(v) Chrysalis raising at least $3,500,000 pursuant to a prospectus in respect of its recompliance with Chapters 1 and 2 of the Listing Rules.

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

1.3 Background on Peppermint

1.3.1 Overview

Worldwide approximately 2.5 billion people lack access to basic formal financial services. Up to three quarters of the world’s poor do not have a bank account due to costs, travel distance and paper work involved. Access to affordable financial services, such as those provided via a mobile phone, is linked to overcoming poverty, reducing income disparities, and increasing economic growth.

Mobile commerce is a transformational enabler of financial interdependence across the globe and is particularly strong in the developing world.

Peppermint is an Australian public unlisted company focused on the commercialisation 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.

1.3.2 Background on the mobile banking industry

Mobile banking and payment processing in the developing world equals financial inclusion, a state wherein there is effective access to wide range of financial services. Financial services (savings accounts, credit facilities, debt payments, remittance and insurance), especially for the unbanked population empowers them to manage their finances and reduce their vulnerability to financial distress, debt and poverty. Financial inclusion (a government agenda in Developing World economies) 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 device. There are 7.3 billion mobile phone SIM connections globally which are estimated to grow to 10 billion by 2020.

Further, the number of people living outside their country of birth is continually increasing as evidenced by The World Bank who estimates that remittances sent by migrants to developing world countries grew by 5% in 2014 to reach US $435 billion. Industry research estimates that by the end of 2015 the value of mobile payments across the globe may reach USD$1trillion.

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Global Mobile Payments Transaction Value Forecast

1.3.3 Peppermint’s Products & Technologies Offering

Peppermint operates a proven mobile banking, payments and remittance platform ( Platform ) in the Philippines which it intends to expand throughout Asia, Australia, the Middle East, Europe and Tunisia.

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A key aspect of this Platform is to provide a mechanism, via a mobile phone, to a big part of the global unbanked population to bridge the financial inclusion gap. It is estimated that 2.5 billion working age adults, over half the world’s adult population, do not have an account at a formal financial institution.

1.3.4 Business Model

The focus of Peppermint’s initial efforts is in the Philippines, a country with circa 105 million mobile phones in across a population of almost 100 million people (of which up to 75% are estimated to be unbanked), where over four years circa $9.5 million has been raised to support development and commercialisation of the technology.

The commercial marketing phase for the technology has been de-risked by the work done with clients with well- established customer bases and proven channels to market and now Peppermint operate the Platform beyond the development, adoption, compliance and integration stage. The current bank-grade end to end encrypted Platform is in use by 3 of the top 10 deposit taking banks in the Philippines - where it has been independently subject to vulnerability assessment and penetration testing, as required by the Central Bank of the Philippines prior to commercial application, and now operates on a commercial basis as a white label mobile banking application offered by those Banks. Peppermint aims to leverage off this base in the Philippines and build on established relationships in order to develop a commercial presence utilising the mobile banking and payment platform. To do this Peppermint is raising capital to fund marketing and incentive programs to accelerate the subscriber base build out and Platform usage, initially in the Philippines and then throughout specifically targeted countries and regions.

To do this Peppermint has a highly qualified and experienced technical development and management team which have already developed financial systems such as Globe’s GCash mobile remittance platform. Key members of the Peppermint team were engaged to build this platform and remained engaged with Globe until 2009 when they left to begin development of the TMBT. This experienced technical development and management team are continually working on new and exciting innovation to address opportunities in this new rapidly expanding mobile banking and payment sector.

1.3.5 Peppermint’s Commercial Evolution

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To pursue its business model Peppermint has secured a licence in perpetuity to operate the TMBT in some 97 countries (including the Philippines and Australia and much of the developing world) along with the technical and management team who developed the technology. This team is engaged exclusively by Peppermint under a release from the owner of the TMBT which means Peppermint can deal with developing, fixing and applying the TMBT in the licensed territory as well as being the owner of the new intellectual property the team create going forward.

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, rapidly growing and Peppermint is well positioned to grow with it.

Xoom Corporation is a digital money transfer or remittance provider that allows consumers to pay bills, reload mobile phones and send money from the United States to 33 countries. On 1 July 2015, Paypal announced that it would be spending $25 per share to acquire Xoom (commentators noting this was based on an enterprise value of USD890 million).

1.3.6 Key Personnel and Executive Management

Managing Director – 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 principal and 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 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 Center 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 co-found Telupay. He also served the JCI Makati Philippines for three years as member of the board of directors and vicepresident.

Business Development Manager – Marlon Portugal

Marlon’s predominant experience is in information technology and system security integration. Marlon has spent 14 years in the field of computer, network design and services, operations, marketing and management. He has experience in the setting-up and maintenance of computer equipment, network equipment and local and wide area network infrastructure, and has been involved in the planning, designing and installation of different network systems and installed network structured cabling for government and private institutions.

Marlon did several maintenance services of LAN/WAN connectivity and formulate backup scheme, recovery and firewall for DELL, HPQ, IBM Servers of a multinational company.

1.4 Board and Management Changes

Pursuant to the Term Sheet, upon completion of the Acquisition (and subject to Shareholder approval pursuant to Resolutions 9, 10 and 0), Christopher Kain, Anthony Kain and Matthew Cahill will be appointed as Directors of Chrysalis. Anthony Kain will also conduct the role of Company Secretary.

Subject to the passing of Resolutions, 10 and 0, and completion of the Acquisition, Neale Fong and Jian Hua Sang will resign as Directors of Chrysalis. Current company secretary Kevin Hart will resign upon completion of the Acquisition.

Leigh Ryan will resign as managing director of Chrysalis, but will continue as a non-executive director of Chrysalis following the Acquisition in order to manage and maintain the companies remaining exploration assets.

Refer to section above for details of the experience and qualifications of the Proposed Directors and Peppermint key management.

1.5 Re-compliance with Chapters 1 and 2 of the Listing Rules

The Company will be required to re-comply with the conditions to listing on ASX set out in Chapters 1 and 2 of the ASX Listing Rules in order to achieve Settlement and before it can be reinstated to trading on ASX following Settlement.

ASX Listing Rule 2.1 Condition 2 provides that it is a condition of quotation of the main class of a company’s securities of an entity seeking admission to ASX that the issue price of the securities for which the company seeks quotation must be at least 20 cents in cash.

The Company is currently in the process of seeking a waiver from the requirements outlined above to enable the Company to issue securities for the purpose of satisfying ASX Listing Rule 2.1, Condition 2 at $0.02 per Share. This waiver is subject to Shareholders approving the Company undertaking the Capital Raising at $0.02.

1.6 Capital Raising

The Company will seek to raise a minimum of $3,500,000 with oversubscriptions of a further $500,000 to raise a total of $4,000,000 (before expenses of the offer) to fund the activities of the Company through the offer by the Company of up to 175,000,000 million Shares (with the right to issue up to 200,000,000 Shares) at an issue price of $0.02 per Share as proposed in Resolution 5 ( Capital Raising ).

The Company intends to conduct the Capital Raising through the issue of a prospectus as part of its re-compliance with Chapters 1 and 2 of the Listing Rules ( Prospectus ).

1.7 Pro-forma balance sheet

A pro forma balance sheet of the Company following completion of the change to the nature and scale of activities, the Acquisition, Capital Raising and other matters is set out in Schedule 3 to this Notice.

1.8 Current capital structure

The capital structure of the Company as at the date of the Notice of Meeting is set out below:


Existing Securities


Ordinary Shares	345,484,128

1.9 Pro-forma capital structure

The capital structure of the Company following the Acquisition, Capital Raising and other matters is set out below:


Event	Ordinary Shares	Performance Shares



Existing securities on issue	345,484,128	Nil
Consideration Shares to Vendors	350,000,000	100,000,000
Shares issued under Capital Raising	175,000,000	Nil
Shares to be issued to Mr Leigh Ryan	2,000,000	Nil
Shares to be issued to DJ Carmichael	3,250,000	Nil

TOTAL	875,734,128	100,000,000

Assumes the minimum subscription of $3,500,000 is raised under the Prospectus at $0.02 per share and therefore 175,000,000 Shares are issued under Capital Raising.
Assumes none of the Performance Share Milestones have been achieved.
Does not include any future issue of Shares or Options under the terms of the ESP.

1.10 Advantages of the Acquisition

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

(a) it has become clear that current market conditions make it very difficult to raise funds to explore the exploration projects which the Company holds. The Acquisition is an excellent opportunity for the Company to gain an entry into an expanding market;
(b) the Acquisition represents a significant asset acquisition opportunity for the Company for mobile payment technology that has been developed and is ready for deployment;
(c) through the acquisition of Peppermint, a larger market capitalisation and enhanced shareholder base should provide a more liquid stock than the Company currently has; and
(d) the new Board of Directors will provide an experienced set of skills in mobile payment technology to guide the growth of the Company.

1.11 Disadvantages of the Acquisition

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

(a) the Company will be changing the nature and scale of its activities, which may not be consistent with the objectives of Shareholders;
(b) the Acquisition will result in the issue of Shares and Performance Shares to the Vendors, which will have a dilutionary effect on the current holdings of Shareholders; and
(c) there are many risk factors associated with the change of nature and scale of the Company’s activities, or rather associated with Peppermint’s business and operations. See an outline of these risks at Schedule 4 to the Notice.

1.12 Risks

Shareholders should be aware that if the Resolutions are approved, the Company will be changing the nature and scale of its activities which is subject to various risk factors. Based on the information available, a non-exhaustive list of risk factors are included in Schedule 4.

The Company’s securities will go into suspension from quotation on ASX on the date of the Meeting. Should the Acquisition not complete, the Company will remain in suspension until such time as the ASX is satisfied that the financial condition (and future prospects) of the Company is adequate for its securities to be reinstated.

1.13 Indicative Timetable

An indicative timetable for the Acquisition is set out below. Shareholders should note the below dates are indicative only and may change without notice. The Directors reserve the right to amend the timetable.

Event	Date
Company announces exercise of Option and change of nature of activities	22 July 2015
Lodgement of Prospectus for Capital Raising	21 September 2015
Opening Date of Prospectus Offer	21 September 2015
Suspension of the Company’s securities from trading on ASX at the opening of trading	2 October 2015
General Meeting to approve the change of nature of activities and other matters	2 October 2015

Event	Date
ASX informed of Shareholder approvals	2 October 2015
Closing Date of Prospectus Offer	19 October 2015
Completion of the Acquisition (Issue of Consideration Shares, Capital Raising Shares and other pursuant to the Term Sheet and Prospectus)	2 November 2015
Anticipated date of re-admission to ASX and suspension of trading of Shares is lifted	5 November 2015

1.14 Plans for the Company if the Acquisition is not completed

If the Company does not complete the Acquisition, the Company will continue its existing projects and investigate and undertake due diligence on new opportunities for growth.

1.15 Directors’ Recommendation

It is the view of the Directors that the Acquisition will give Shareholders the opportunity to participate in a potentially significant development and commercialisation of a fin-tech business in the mobile payments technology sector. The Directors consider that the Acquisition is in the best interests of the Company and unanimously recommend that Shareholders vote in favour of all of the Resolutions. The Resolutions are interdependent, meaning that Shareholders must pass all of the Resolutions for the Acquisition to proceed.

2. Resolution 1 – Change to Scale and Nature of Activities

2.1 General

Resolution 1 seeks approval from Shareholders for a change to the nature and scale of the activities of the Company.

As outlined in Section 1 of this Explanatory Memorandum, the Company has exercised the Option, pursuant to the Term Sheet, under which the Company has agreed to acquire all of the issued capital in Peppermint from the Vendors.

The exercise of the Option is subject to the requirement to obtain Shareholder approval.

A detailed description of the proposed Acquisition and Peppermint’s assets and business prospects is outlined in Section 1 above.

2.2 Legal requirements

Listing Rule 11.1 provides that where an entity proposes to make a significant change, either directly or indirectly, to the nature or scale of its activities, it must provide full details to ASX as soon as practicable and comply with the following:

(a) provide to ASX information regarding the change and its effect on future potential earnings, and any information that ASX asks for;
(b) if ASX requires, obtains the approval of holders of its shares and any requirements of ASX in relation to the notice of meeting; and

(c) if ASX requires, meet the requirements of Chapters 1 and 2 of the Listing Rules as if the Company were applying for admission to the official list of ASX.

ASX has indicated to the Company that given the change in the nature and scale of the Company’s activities resulting from the Acquisition it requires the Company to:

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

3. Resolution 2 – Create a New Classes of Shares

Resolution 2 seeks Shareholder approval for the Company to be authorised to issue Performance Shares.

A company with a single class of shares on issue which proposes to issue new shares not having the same rights as its existing shares, is taken to vary the rights of existing shareholders unless the Constitution already provides for such an issue.

Section 246B of the Corporations Act, and Part 3 of the Constitution provides that the rights attaching to a class of shares cannot be varied without:

(a) a special resolution passed at a meeting of the holders of the issued shares of the affected class; or
(b) the written consent of the holders of 75% of the votes of the affected class.

Pursuant to the Term Sheet, the Company proposes to issue (amongst other Securities) a total of 100,000,000 Performance Shares (the terms and conditions of which are set out in Schedule 2) to the Vendors (pursuant to Resolution 3) in part consideration for the Acquisition.

The purpose of the issue of the Performance Shares is to link part of the consideration to a milestone event. If the milestone is not achieved within the prescribed timeframe, the Company will redeem the Performance Shares for a nominal amount.

The Company currently has only one class of shares on issue being fully paid ordinary shares. The terms of the Performance Shares are not the same as the Shares. Accordingly, the Company seeks approval from Shareholders for the creation of a new class of securities, being the Performance Shares to be issued to the Vendors under Resolution 3.

ASX Listing Rule 6.1 provides that the terms that apply to each class of securities of a company must, in ASX’s opinion, be appropriate and equitable. The Company is in the process of obtaining ASX approval of the terms and conditions of the Performance Shares to be issued (as set out in Schedule 2).

4. Resolution 3 – Acquisition of Peppermint (Issue of Shares and Performance Shares to Vendors)

4.1 General

As outlined in Section 1 of this Explanatory Memorandum, the Company has agreed to acquire all of the issued capital of Peppermint from the Vendors.

Under the Term Sheet, the total consideration to be paid to the Vendors will be the issue of the following Consideration Shares:

(a) 350,000,000 Shares; and
(b) 100,000,000 Performance Shares,

(together, the Consideration Securities ) as set out in Schedule 5.

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

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

The Consideration Securities issued to the Vendors will be subject to any ASX imposed escrow terms. However, submissions will be made to the ASX to apply for cash formula relief in respect of the Consideration Securities.

4.2 Technical Information Required by Listing Rule 7.3

The following information is provided in relation to Resolution 3 pursuant to and in accordance with Listing Rule 7.3:

(a) the maximum number of securities to be issued is 350,000,000 Shares and 100,000,000 Performance Shares;
(b) the Shares and the Performance Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the Listing Rules) and it is intended that allotment will occur on the same date, being the completion date of the Acquisition;
(c) the Shares and the Performance Shares will be issued for nil cash consideration as part of the consideration for the Acquisition. Accordingly no funds will be raised from the issue of the Shares or the Performance Shares;
(d) the Shares and Performance Shares will be issued to the Vendors in amounts set out in Schedule 5 to this Notice;
(e) none of the Vendors are related parties of the Company (other than those related parties where approval is sought under Resolution 4); and
(f) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares. The Performance Shares issued will be on the terms and conditions specified in Schedule 2.

5. Resolution 4 – Issue of Consideration Securities to Related Parties

5.1 General

The Company is seeking Shareholder approval under Resolution 3 to issue a total of 350,000,000 Shares and 100,000,000 Performance Shares pursuant to the Acquisition.

The Related Party Vendors will receive a total of 218,884,120 Consideration Shares and 62,538,320 Performance Shares pursuant to the Term Sheet as part consideration for the Acquisition as set out below:

Related Party Vendors	Consideration Shares	Performance Shares
OHKA Pty Ltd1	109,442,060	31,269,160
Cicak Pty Ltd2	91,416,309	26,118,945
Digital Domain Consulting3	6,437,768	1,839,362
Chris Kain	2,575,107	735,745
Anthony Kain	2,575,107	735,745
Dorothy Kain4	6,437,768	1,839,362
Total	218,884,120	62,538,320

Notes :

A company controlled by Chris Kain OKHA Pty Ltd is the beneficial holder of 1,250,000 Peppermint shares held by Fidelity Management Pty Ltd.
A company controlled by Anthony Kain Cicak Pty Ltd is the beneficial holder of 550,000 Peppermint shares held by Fidelity Management Pty Ltd.
A company controlled by Matthew Cahill
Dorothy Kain’s Consideration Shares and Performance Shares will be held by Fidelity Management Pty Ltd ( Fidelity ) on her behalf given her shares in Peppermint are held by this entity. Ms Kain is not associated with Fidelity other than through Fidelity holding her interest in the Peppermint shares.

Resolution 4 seeks Shareholder approval for the issue of up to 218,884,120 Consideration Shares and 62,538,320 Performance Shares to the Related Party Vendors (or the nominees) arising from the participation by the Related Party Vendors in the Acquisition ( Related Party Vendors’ Participation ).

5.2 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and
(b)
give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The Related Party Vendors’ Participation will result in the issue of Shares and Performance Shares which constitutes giving a financial benefit and the Related Party Vendors are related parties of the Company by virtue of those reasons as set out in Section 5.1.

The Directors consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the Related Party Vendors’ Participation because the Shares and Performance Shares will be issued to the Related Party Vendors on the same terms as Shares issued to non-related party participants in the Capital Raising and as such the giving of the financial benefit is on arm’s length terms.

5.3 ASX Listing Rule 10.11

ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a

related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

As the Placement involves the issue of Shares to a related party of the Company, Shareholder approval pursuant to ASX Listing Rule 10.11 is required unless an exception applies. It is the view of the Directors that the exceptions set out in ASX Listing Rule 10.12 do not apply in the current circumstances.

5.4 Technical Information required by ASX Listing Rule 10.13

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to the Related Party Vendors’ Participation:

(a) the Shares and the Performance Shares will be issued to the Related Party Vendors (or their nominees);
(b) the maximum number of Shares to be issued is 218,884,120 and the maximum number of Performance Shares to be issued is 62,538,320;
(c) the Shares and Performance Shares will be issued no later than 1 month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);
(d) the Shares and Performance Shares will be issued for nil cash consideration as part of the consideration for the Acquisition. Accordingly no funds will be raised from the issue of the Shares or the Performance Shares;
(e) the Shares and Performance Shares will be issued to the Related Party Vendors in amounts set out in Schedule 5 to this Notice; and
(g) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares. The Performance Shares issued will be on the terms and conditions specified in Schedule 2.

Approval pursuant to ASX Listing Rule 7.1 is not required for the Related Party Vendors’ Participation as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Shares to the Related Party Vendors (or their nominees) will not be included in the use of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

6. Resolution 5 – Capital Raising

6.1 General

As outlined in Section 1.2.1 of this Explanatory Memorandum, completion of the Term Sheet and Acquisition is conditional upon the Company completing the Capital Raising.

Resolution 5 seeks Shareholder approval for the issue of up to 200,000,000 Shares at an issue price of $0.02 to raise up to a minimum of $3,500,000 and a maximum of $4,000,000 under the Capital Raising ( Capital Raising Shares ).

The Company has applied for a waiver from ASX to enable the Company to undertake the Capital Raising at 2 cents per Share. The waiver is conditional upon Shareholders approving the issue price of Shares under the Capital Raising at a price of 2 cents per Share.

For the purposes of the Listing Rules, none of the subscribers for the Capital Raising Shares to be issued under Resolution 5 will be related parties of the Company (other than Neale Fong) and approval for Dr Fong to participate in the Capital Raising is being sought under Resolution 6.

A summary of Listing Rule 7.1 is set out in Section 4 of this Explanatory Memorandum.

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

6.2 Technical Information Required By ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Capital Raising:

(a) the maximum number of Shares to be issued is up to 200,000,000;
(b) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that allotment will occur progressively in accordance with the timetable set out in section 1.13 above;
(c)
the issue price will be $0.02 per Share;
(d) the Shares are proposed to be issued to the applicants under the Capital Raising. None of these subscribers will be related parties of the Company (other than Neale Fong);
(e) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(f) the Company intends to use the funds raised from the Capital Raising towards the following items:

Funds available	Minimum Subscription ($3,500,000)	Percentage of Funds (%)	Maximum Subscription ($4,000,000)	Percentage of Funds (%)

Funds raised from the Capital Raising	$3,500,000	100%	$4,000,000	100%
Allocation of funds	Subscription ($3,500,000)	Percentage of Funds (%)	Maximum Subscription ($4,000,000)	Percentage of Funds (%)



Marketing and business development	$1,500,000	43%	$1,800,000	45%
Product development	$500,000	14%	$500,000	12.5%
Finance Facility & Fundraising fees/costs along with associated legal and accounting fees
	500,000	14%	$700,000	17.5%

Working capital*	$1,000,000	29%	$1,000,000	25%
TOTAL	$3,500,000	100%	$4,000,000	100%

Working capital includes the general costs associated with the management and operation of the business including fundraising costs, administration expenses, salaries, directors’ fees, rent and other associated costs.

The above tables are statements of current intentions as of the date of this Notice of Meeting. As with any budget, intervening events and new circumstances have the potential to affect the manner in which the funds are ultimately applied. The Board reserves the right to alter the way funds are applied on this basis.

7. Resolution 6 – Participation of Director in Capital Raising

7.1 General

Pursuant to Resolution 6, the Company is seeking Shareholder approval to enable an existing Director (Dr Neale Fong) (or his nominated entities) to participate in the Capital Raising for an amount of up to 1,500,000 Capital Raising Shares on the same terms and conditions as other investors under the Capital Raising.

Any Shares issued to Mr Fong will be deducted from the Shares issued under Resolution 5.

The Company has applied for a waiver of Listing Rule 10.13.3 to permit the Company to issue the Shares to Dr Fong later than 1 month after the Meeting; as it is proposed that the Shares will be issued at Completion, together with the Consideration Shares and Capital Raising Shares. If this occurs later than 1 month after the Meeting and the waiver is not granted, Neale Fong will not participate.

7.2 ASX Listing Rule 10.11

In accordance with the Listing Rules, Shareholder approval is required for the issue of equity securities to a Related Party of the Company. Neale Fong is a current Director of the Company and is therefore a Related Party of the Company. Consequently, in accordance with the Listing Rule 10.11, Shareholder approval is required for the issue of equity securities to Neale Fong.

7.3 Technical Information required by ASX Listing Rule 10.13

Pursuant to and in accordance with ASX Listing Rule 10.13, the following information is provided in relation to this Resolution:

(a) the Shares will be issued to Dr Neale Fong who elects to participate in the Capital Raising (or his respective nominees);
(b) the maximum number of fully paid Shares which Dr Neale Fong (or his nominee) may subscribe for under the Capital Raising is up to1,500,000 Capital Raising Shares:
(c) the issue price of the Shares proposed to be issued will be $0.02 per Share (subject to ASX granting the waiver referred to in Section 1.5), being the same as all other Shares issued under the Capital Raising. Dr Fong will be required to subscribe for the Shares under the Capital Raising, but his application may not exceed the limited outlined in (b) above;
(d) the Shares will be issued no later than 1 month after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules);
(e) the Shares issued will rank equally with the existing Shares on issue;
(f) if approval is given for this Resolution for the purposes of Listing Rule 10.11, approval for the issue under this Resolution is not required under Listing Rule 7.1. Accordingly, the issue of Shares to Mr Fong (or his nominees) will not be included in the use of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1; and

(g) the Company intends to use the funds raised for the same purposes as all other funds raised under the Capital Raising as detailed in the use of funds table specified in section 6.2(f) of this Notice.

7.4 Section 208 of the Corporations Act

Section 228(6) of the Corporations Act states that a person is a related party of a company if the company believes, or has reasonable grounds to believe that the person is likely to become a related party).

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company's members in the manner set out in Sections 217 to 227 of the Corporations Act; and
(b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

Neale’s participation in the Capital Raising will result in the issue of Capital Raising Shares which constitutes giving a financial benefit and Neale is a related party of the Company as described above.

The current Directors consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of Neale’s participation in the Capital Raising as the Shares will be issued to Neale on the same terms as Shares issued to non-related party participants in the Capital Raising and as such the giving of the financial benefit is on arm’s length terms.

8. Resolution 7 – Issue of Shares to Director pursuant to Employee Share Plan

8.1 General

Mr Leigh Ryan and the Company are parties to an executive agreement dated 6 December 2013 ( Executive Agreement ) whereby Mr Ryan acts as the managing director and CEO of the Company. Upon successful completion of the Acquisition, Mr Ryan will step down from this role but shall continue to act as a non-executive Director of the Company.

The Company and Mr Ryan have entered into a non-executive director agreement ( NonExecutive Agreement ) pursuant to which Mr Ryan will be paid $30,000 per annum in addition to out of pocket expenses.

Mr Ryan’s appointment as a non-executive is subject to and conditional upon completion of the Acquisition and once this condition has been met, all rights, entitlements and obligations under the Executive Agreement will be deemed extinguished except for Mr Ryan’s entitlement to 2,000,000 Shares which are being issued pursuant to the Company’s employee share plan approved by shareholders at the 2013 annual general meeting.

Subject to obtaining Shareholder approval, Mr Ryan (or his nominee) will be issued 2,000,000 Shares ( Related Party Shares ) under the Employee Share Plan and on the terms and conditions set out below.

Resolution 7 seeks Shareholder approval for the issue of the Related Party Shares to the Mr Ryan. Resolution 7 is conditional on the approval of all Resolutions contemplated by this Notice.

8.2 Chapter 2E of the Corporations Act

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

(a) obtain the approval of the public company’s members in the manner set out in sections 217 to 227 of the Corporations Act; and
(b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in sections 210 to 216 of the Corporations Act.

The issue of Related Party Shares constitutes giving a financial benefit and Mr Ryan is a related party of the Company by virtue of being a Director.

The Directors (other than Mr Ryan who has a material personal interest in the Resolution) consider that Shareholder approval pursuant to Chapter 2E of the Corporations Act is not required in respect of the issue of Related Party Shares because the agreement to issue the Related Party Shares is considered reasonable remuneration in the circumstances and was negotiated on an arm’s length basis.

8.3 ASX Listing Rule 10.14

ASX Listing Rule 10.14 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities under an employee incentive scheme to a director of the entity, an associate of the director, or a person whose relationship with the entity, director or associate of the director is, in ASX’s opinion, such that approval should be obtained.

8.4 Technical information required by ASX Listing Rule 10.15

Pursuant to and in accordance with ASX Listing Rule 10.15, the following information is provided in relation to Resolution 7:

(a) the Related Party Shares will be issued to Mr Leigh Ryan (or his nominee);
(b)
a maximum of 2,000,000 Related Party Shares will be issued;
(c) the Related Party Shares will be issued for nil cash consideration pursuant to the Employee Share Plan, accordingly no funds will be raised;
(d) the Related Party Shares will be issued under the Employee Share Plan whose terms were approved by Shareholders at the 2013 annual general meeting;
(e) 1 million incentive Shares were issued under the Employee Share Plan to Mr Leigh Ryan in December 2014 for nil cash consideration;
(f) all Directors and employees of the Company are entitled to participate in the Employee Share Plan; and
(g) the Related Party Shares will be issued no later than 12 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares will occur as soon as practicable after the date of the Meeting.

Approval pursuant to ASX Listing Rule 7.1 is not required for the issue of the Related Party Shares as approval is being obtained under ASX Listing Rule 10.14. Accordingly, the issue of Related Party Shares to Mr Ryan (or his nominee) will not be included in the use of the Company’s 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

9. Resolution 8 – Issue of Shares to DJ Carmichael

9.1 General

The Company entered into a corporate advisory services mandate ( Mandate ) with DJ Carmichael ( DJC ) whereby DJC proposes to assist the Company in achieving its strategic objectives in relation to the Capital Raising.

Pursuant to the Mandate, and in addition a $10,000 retainer the Company has agreed to pay DJC, the Company has also agreed to, among other things, pay DJC the following fees:

(a) a management fee of 1% plus GST of the total gross amount raised under the Capital Raising; and
(b) a selling fee of 5% plus GST of the gross amount raised under the Capital Raising.

Under the Mandate, the Company may issue Shares at an equivalent price to the Capital Raising in lieu of up to 50% of the management fee and/or selling fee.

Resolution 8 seeks Shareholder approval for the issue of 3,250,000 Shares in consideration for part payment of the management fee and selling fee provided by DJC ( Placement ).

A summary of ASX Listing Rule 7.1 is set out in section 4.1 above.

The effect of Resolution 8 will be to allow the Company to issue the Shares pursuant to the Placement during the period of 3 months after the Meeting (or a longer period, if allowed by ASX), without using the Company’s 15% annual placement capacity.

9.2 Technical information required by ASX Listing Rule 7.1

Pursuant to and in accordance with ASX Listing Rule 7.3, the following information is provided in relation to the Placement:

the maximum number of Shares to be issued is 3,250,000;

(a) the Shares will be issued no later than 3 months after the date of the Meeting (or such later date to the extent permitted by any ASX waiver or modification of the ASX Listing Rules) and it is intended that issue of the Shares will occur on the same date;
(b) the Shares will be issued for nil cash consideration in satisfaction of part payment of the management fee and selling fee, and in consideration for services provided by DJC;
(c)
the Shares will be issued to DJC, who is not a related party of the Company;
(d) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares; and
(e) no funds will be raised from the Placement as the Shares are being issued in consideration for services provided by DJC.

10. Resolutions 9, 10 and 11 – Election of Directors

10.1 Background

As outlined in Section 1.2.1 and 1.4 of this Explanatory Memorandum, the Company has agreed to procure the appointment of three representatives of Peppermint as directors of the Company (being Anthony Kain, Christopher Kain and Matthew Cahill) effective on and from completion of the Acquisition. Anthony Kain will also conduct the role of Company Secretary.

Existing directors Neale Fong and Jian Hua Sang, and Company Secretary Kevin Hart will resign effective on and from completion of the Acquisition, and Leigh Ryan will remain as non-executive director of Chrysalis.

10.2 Constitution Requirements

Clause 11.11 of the Constitution provides for the Company to elect a person as a director of the Company by resolution passed in general meeting.

No person other than a Director seeking re-election shall be eligible for election to the office of Director at any general meeting unless the person or some Shareholder intending to propose his or her nomination has left at the registered office of the Company a notice in writing duly signed by the nominee giving his or her consent to the nomination and signifying his or her candidature for the office or the intention of the Shareholder to propose the person.

Any Director appointed under Clause 11.11 holds office until the next annual general meeting of the Company and is then eligible for re-election but is not to be taken into account in determining the Directors who are to retire by rotation at that meeting.

Pursuant to Resolutions 9 to 11, Anthony Kain, Christopher Kain and Matthew Cahill seek election from Shareholders to be appointed upon completion of the Acquisition.

10.3 Background and Qualifications

The background and qualifications of each proposed director is set in section 1.3.6 above.

11. Resolution 12 – Change of Company Name

Section 157(1) of the Corporations Act provides that a company may change its name if the company passes a special resolution adopting a new name.

Resolution 12 seeks the approval of Shareholders to the adoption of “Peppermint Innovation Limited” as the new name for the Company, subject to completion of the Acquisition occurring.

If Resolution 12 is passed the change of name will take effect when ASIC alters the details of the Company’s registration. The proposed name has been reserved by the Company and if Resolution 12 is passed, the Company will lodge a copy of the special resolution with ASIC following settlement of the Acquisition occurring in order to effect the change.

The Board proposes this change of name on the basis that it more accurately reflects the proposed future operations of the Company.

Resolution 13 – Replacement of Constitution

12.1 General

A company may modify or repeal its constitution or a provision of its constitution by special resolution of Shareholders.

Resolution 13 is a special resolution which will enable the Company to repeal its existing Constitution and adopt a new constitution ( Proposed Constitution ) which is updated to ensure it reflects the current provisions of the Corporations Act and ASX Listing Rules.

This will incorporate amendments to the Corporations Act and ASX Listing Rules since the current Constitution was adopted in 2006. The Directors believe that it is preferable in the circumstances to replace the existing Constitution with the Proposed Constitution rather than to amend a multitude of specific provisions.

The Proposed Constitution is broadly consistent with the provisions of the existing Constitution. Many of the proposed changes are administrative or minor in nature including but not limited to:

(a) updating the name of the Company to that adopted in Resolution 12;
(b) updating references to bodies or legislation which have been renamed (e.g. references to the Australian Settlement and Transfer Corporation Pty Ltd, ASTC Settlement Rules and ASTC Transfer); and
(c) expressly providing for statutory rights by mirroring these rights in provisions of the Proposed Constitution.

The Directors believe these amendments are not material nor will they have any significant impact on Shareholders. It is not practicable to list all of the changes to the Constitution in detail in this Explanatory Memorandum; however, a summary of the proposed material changes is set out below.

A copy of the Proposed Constitution is available for review by Shareholders at the Company’s website www.chrysalisresources.com.au and at the office of the Company. A copy of the Proposed Constitution can also be sent to Shareholders upon request to the Company Secretary. Shareholders are invited to contact the Company if they have any queries or concerns.

12.2 Summary of material proposed changes

(a) Fee for registration of off market transfers

ASX amended ASX Listing Rule 8.14 with the effect that the Company may now charge a “reasonable fee” for registering paper-based transfers, sometimes referred to “off-market transfers”.

The Proposed Constitution is being made to enable the Company to charge a reasonable fee when it is required to register off-market transfers from Shareholders. The fee is intended to represent the cost incurred by the Company in upgrading its fraud detection practices specific to off-market transfers.

Before charging any fee, the Company is required to notify ASX of the fee to be charged and provide sufficient information to enable ASX to assess the reasonableness of the proposed amount.

(b) Partial (proportional) takeover provisions

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

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

This clause of the Proposed Constitution will cease to have effect on the third anniversary of the date of the adoption of last renewal of the clause.

Information required by section 648G of the Corporations Act

Effect of proposed proportional takeover provisions

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

Reasons for proportional takeover provisions

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

Knowledge of any acquisition proposals

Other than as a result of the proposed Acquisition and Capital Raising, as at the date of this Notice of Meeting, no Director is aware of any proposal by any person to acquire, or to increase the extent of, a substantial interest in the Company.

Potential advantages and disadvantages of proportional takeover provisions

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

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

(i) the right to decide by majority vote whether an offer under a proportional takeover bid should proceed;
(ii) assisting in preventing Shareholders from being locked in as a minority;
(iii) increasing the bargaining power of Shareholders which may assist in ensuring that any proportional takeover bid is adequately priced; and

(iv) each individual Shareholder may better assess the likely outcome of the proportional takeover bid by knowing the view of the majority of Shareholders which may assist in deciding whether to accept or reject an offer under the takeover bid.

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

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

12.3 Recommendation of the Board

The Directors do not believe the potential disadvantages outweigh the potential advantages of adopting the proportional takeover provisions and as a result consider that the proportional takeover provision in the Proposed Constitution is in the interest of Shareholders and unanimously recommend that Shareholders vote in favour of Resolution 13.

Schedule 1 – Definitions

In this Notice and the Explanatory Memorandum:

Acquisition means the Company’s acquisition of all the issued capital in Peppermint upon exercise of the Option.

ASIC means the Australian Securities and Investments Commission.

Board means the board of Directors.

Business Day means:

(a) for determining when a notice, consent or other communication is given, a day that is not a Saturday, Sunday or public holiday in the place to which the notice, consent or other communication is sent; and
(b) for any other purpose, a day (other than a Saturday, Sunday or public holiday) on which banks are open for general banking business in Perth.

Capital Raising means a capital raising by the Company pursuant to a prospectus in order to raise a minimum of $3,500,000, with oversubscriptions of a further $500,000 to raise a total of $4,000,000 (before expenses of the offer).

Chair or Chairman means the person appointed to chair the Meeting conveyed by this Notice.

Closely Related Party of a member of the Key Management Personnel means:

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

Company , Chrysalis or CYS means Chrysalis Resources Limited (ACN 125 931 964).

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Director means a director of the Company.

Explanatory Memorandum means the explanatory memorandum attached to the Notice.

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

Meeting has the meaning in the introductory paragraph of the Notice.

MBPRB means the mobile banking, payments and remittance business carried on by Peppermint.

Notice means this notice of general meeting.

Option, in the context of the Securities of the Company, means an option to acquire a Share.

Option, in the context of the Term Sheet, means the Company’s option to acquire 100% of the issued capital of Peppermint pursuant to the Term Sheet.

Peppermint means Peppermint Innovation Ltd.

Performance Shares means the performance shares in the Company to be issued on the terms and conditions set out in Schedule 2.

Plan or Employee Share Plan means the employee share plan approved by members at the 2013 annual general meeting.

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

Prospectus means a prospectus issued by the Company for the purpose of the Capital Raising, as outlined in Section 1.2.1 and 1.5.

Proxy Form means the proxy form attached to the Notice.

Resolution means a resolution contained in the Notice.

Schedule means a schedule to this Notice.

Section means a section contained in this Explanatory Memorandum.

Securities means the securities of the Company.

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

Shareholder means a shareholder of ordinary fully paid shares in the Company.

SME means small and medium sized enterprises.

Term Sheet means the Term Sheet dated 17 April 2014 (and as amended and varied).

Vendors means the shareholders of Peppermint specified in Schedule 5.

VWAP means a volume weighted average price.

WST means Western Standard Time, being the time in Perth, Western Australia.

In this Notice and the Explanatory Memorandum words importing the singular include the plural and vice versa.

Schedule 2 – Terms of Performance Shares

(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 / Milestone	Performance Shares converted

Milestone 1: Chrysalis or its subsidiaries generating cumulative revenue of $15,000,000 from the 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.
(c) In the event of a Change of Control all the Milestone 1 Performance Shares and the Milestone 2 Performance Shares shall convert.
(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 $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 (e) 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;

(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.

Schedule 3 –Pro-forma Balance Sheet

CHRYSALIS RESOURCES LIMITED Consolidated Pro-forma Balance Sheet

as at 30 June 2015$3.5m raise	Peppermint unaudited	Chrysalis unaudited	Pro forma adjustments	Pro forma unaudited
	30-Jun-15	30-Jun-15	30-Jun-15	30-Jun-15
	$	$	$	$
Current Assets
Cash and cash equivalents	131,073	159,446	3,074,770	3,365,289
Trade and other receivables	15,000	88,753	-	103,753
Total Current Assets	146,073	248,199	3,074,770	3,469,042
Non-current assets
Property,Plant and Equipment	1,594	165,802	-	167,396
Intangible Assets	169,375	-	-	169,375
Exploration and evaluation expenditure	-	1,059,896	-	1,059,896
Total non-current assets	170,969	1,225,698	-	1,396,667
Total Assets	317,042	1,473,897	3,074,770	4,865,709

Current liabilities
Trade and otherpayables	(23,997)	120,497	-	96,500
Loan Payable	500,000	-	(500,000)	-
Total current liabilities	476,003	120,497	(500,000)	96,500
Net Assets	(158,961)	1,353,400	3,574,770	4,769,209

Shareholders' equity
OrdinaryShare Capital	330,000	17,304,812	(6,715,359)	10,919,453
Reserves	-	272,702	(272,702)	-
Retained Earnings	(488,961)	(16,224,114)	10,562,831	(6,150,243)
Total shareholders' equity	(158,961)	1,353,400	3,574,770	4,769,209
	-	-	-	-

Numberofshares		345,484,128		875,734,128
Number of Performance shares		-		100,000,000

$4m raise	Peppermint unaudited	Chrysalis unaudited	Pro forma adjustments	Pro forma unaudited
	30-Jun-15	30-Jun-15	30-Jun-15	30-Jun-15
	$	$	$	$
Current Assets
Cash and cash equivalents	131,073	159,446	3,544,770	3,835,289
Trade and other receivables	15,000	88,753	-	103,753
Total Current Assets	146,073	248,199	3,544,770	3,939,042
Non-current assets
Property,Plant and Equipment	1,594	165,802	-	167,396
Intangible Assets	169,375	-	-	169,375
Exploration and evaluation expenditure	-	1,059,896	-	1,059,896
Total non-current assets	170,969	1,225,698	-	1,396,667
Total Assets	317,042	1,473,897	3,544,770	5,335,709

Current liabilities
Trade and otherpayables	(23,997)	120,497	-	96,500

Loan Payable	500,000	-	(500,000)	-
Total current liabilities	476,003	120,497	(500,000)	96,500
Net Assets	(158,961)	1,353,400	4,044,770	5,239,209

Shareholders' equity
OrdinaryShare Capital	330,000	17,304,812	(6,245,359)	11,389,453
Reserves	-	272,702	(272,702)	-
Retained Earnings	(488,961)	(16,224,114)	10,562,831	(6,150,243)
Total shareholders' equity	(158,961)	1,353,400	4,044,770	5,239,209
	-	-	-	-

Numberofshares		345,484,128		900,734,128
Numberof Performance shares		-		100,000,000

Schedule 4 – Risks

RISK FACTORS - PEPPERMINT INNOVATION LIMITED

Introduction

The acquisition of Peppermint Innovation by CYS (to then be renamed Peppermint Innovation Limited after the acquisition (PEP)) involves a number of risks. You should carefully consider the following risks and uncertainties in addition to other information in this current report. PEP’s business, operating results and financial condition could be affected due to any of the following risks which may not be all of the risks facing PEP as risks not presently known or that we currently consider immaterial may also impair PEP.

Risks relating to the change in nature and scale of activities

(a) Re-quotation of Shares on ASX

The acquisition of Peppermint constitutes a significant change in the nature and scale of the Company’s activities and the Company needs to re-comply with Chapters 1 and 2 of the ASX Listing Rules as if it were seeking admission to the official list of ASX.

There is a risk that the Company may not be able to meet the requirements of the ASX for requotation of its Shares on the ASX. Should this occur, the Shares will not be able to be traded on the ASX 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 Consideration Shares and Performance Shares under the Acquisition, a minimum of 175,000,000 Shares as part of the capital raising, 2,000,000 Shares to Mr Leigh Ryan and 3,250,000 Shares to DJC.

Following the issue of all of the Shares pursuant to the Resolutions, the existing Shareholders will retain approximately 40% of the issued capital of the Company, with the Vendors holding 40%, and the investors under the Capital Raising holding 20% of the issued capital of the Company respectively.

If subsequently the performance milestones are met and all the Performance Shares are converted (and provided no other Shares are issued), the interests of the existing Shareholders in the Company will reduce to approximately 26% on a post-offer basis, assuming minimum subscription under the Capital Raising.

There is also a risk that the interests of Shareholders will be further diluted as a result of future capital raisings required in order to fund the development of the Business.

(c) Liquidity risk

On completion of the Acquisition, the Company proposes to issue 350,000,000 Consideration Shares and 100,000,000 Performance Shares to the Vendors. These securities will be subject to escrow restrictions in accordance with Chapter 9 of the ASX Listing Rules. Based on the post-offer capital structure (and assuming no further Shares are issued), the Shares will equate to approximately 40% of the post-Offer issued Share capital (assuming minimum 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.

(d) Contractual risk

Pursuant to the Term Sheet, the Company has been granted the Option to acquire 100% of Peppermint. The Company exercised the Option on 22 July 2015. However, completion of the Acquisition is subject to the fulfillment of certain conditions precedent.

The ability of the Company to achieve its stated objectives will depend on the performance by the parties of their obligations under the Term Sheet. If any party defaults in the performance of their obligations, it may be necessary for the Company to approach a court to seek a legal remedy, which can be costly.

Specific Risks

(a) Transaction Risk

The acquisition through the issue of CYS shares, which includes the requirement to raise funds through the issue of shares to be listed on the ASX, involves shareholder approvals and regulatory approvals which CYS does not control and which could impede or adversely affect the plans in place for the acquisition, funding and development of PEP.

(b) Development and Commercialisation of Products

PEP will be relying on its ability to develop and commercialize its line of products and solutions. Failure to continually develop future products successfully and commercialize next generation technology could lead to a loss of opportunities in relevant markets as well as adversely impact the Company’s operating results and financial position. PEP will monitor and adapt its business as it sees necessary to ensure the successful development and commercialization of its products.

(c) Protection of the PEP Product line

PEP will diligently protect its intellectual property, however, there cannot be complete assurance that these measures have been or will be adequate. Further, effective protection of developed technologies may not be available in every jurisdiction PEP operates or offers products and technologies.

(d) Competition

Long Term

There is a risk that PEP 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 have an adverse impact on the Company’s operating results and financial position.

Short Term

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

Pricing

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

New Products

As a supplier to a progressive consumer market, PEP 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 PEP’s ability to maintain market share and competitiveness PEP as a whole will be adversely effected. In addition, a failure by PEP to identify opportunities for new products may also result in an adverse impact on the Company’s operating results and financial position.

(e) Consumer Demand

Consumer demand is a combination of factors that exist outside the control of PEP. Should the demand for PEP products not grow as anticipated, operating results may be adversely effected.

(f) Dependency on Other Technological Providers

As a mobile banking and payment application business, PEP will maintain and rely extensively on information technology systems and network infrastructures for the effective operation of its business. As with any product that is dependent on technological systems if the integrity of the PEP’s products fails to meet its clients’ expectations (whether or not through any fault of PEP), the PEP 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.

(g) Technological Providers and Security

Techniques used to gain unauthorized access to private networks are constantly evolving and PEP may be unable to anticipate or prevent unauthorized access to data pertaining to its customers, which could include credit card and debit card information, bank account details or other personally identifiable information. PEP’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 PEP’s systems, it may face civil liability and public perception of our security measures could be diminished, either of which would negatively affect PEP’s ability to attract or maintain customers. PEP also would be required to expend significant resources to mitigate any such breach of security and to address related matters.

(h) Marketing Risks (Country Specific)

While PEP is of the opinion that the markets it operates in are of sufficient size to exploit opportunities for its products, the growth of PEP and its products, in the areas it operates, may be limited due to the number of potential users in each respective market. Any demand constraint may have a material adverse effect on the Company’s business, financial condition and results of operations.

There can be no guarantee that new markets will be established successfully and accept new technology or use the products that PEP offers. Failure to establish in new markets may have a material adverse effect on PEP’s future business, financial condition and results of operations. To mitigate such effects PEP intends to conduct sufficient market research and will continue to adapt its business plan as necessary.

(i) Loss of Key Clients

The business currently operates with a few key client relationships. PEP 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 PEP.

(j) Consistency of Supply

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

(k) Unforeseen Expenditure

If PEP’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.

(l) Growth Management

The rate of PEP’s growth may be significantly more rapid than anticipated placing strain on managerial, operational and financial resources. PEP has and will continue to manage and mitigate foreseeable risks associated with rapid growth. Inability to manage growth effectively may result in a material adverse impact on the PEP’s business, results of operations and financial conditions

General Risks

(a) Regulatory Risk

Changes in government legislation, including alterations and amendments to existing policy, and developments in existing common law or the respective interpretation of legal requirements in jurisdictions in which PEP operates may have an adverse effect on the ability to complete this transaction, the profitability of PEP, the value of Shares, the relative attractiveness of investing, the ability to raise capital for the business and the ability to recover loan funds.

(b) Economic Conditions Risk

Economic conditions, including the level of employment, investment, consumer spending, consumer confidence, inflation, low gross domestic product growth, currency declines, foreign exchange rates and investment market performance generally, may adversely affect the profitability of PEP as a business or may adversely affect the ability of PEP to raise capital for its business.

(c) 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.

(d) Share Market Risk

It is proposed that these monies will be raised by the issue of shares which are to be quoted on the ASX. As with all publically listed shares and the quotation of those shares on the ASX, the price of those shares will be subject to numerous influences and this Prospectus in no way guarantees the price at which shares will be traded on ASX or the shares profitability, dividends or return on capital nor does it guarantee the ability of PEP to have Shares quoted on the ASX.

(e) Liquidity Risk Trading of shares on the ASX is sporadic, and the price of shares may be volatile; we caution you as to the highly illiquid nature of an investment in shares.

(f) Going Concern PEP’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 favorable to us.

(g) Industry Risk

PEP’s industry is highly competitive and subject to rapid change. Some of its current and potential competitors for business opportunities may have greater technical, financial, marketing, sales and other resources than PEP. Such competition will potentially affect PEP’s chances of achieving profitability and ultimately adversely affect its ability to continue as a going concern.

(h) World Events

The occurrence of major world events such as war and terrorist attacks may also have an adverse effect on the profitability of PEP and the value of its business.

(i) Natural Disasters

Natural disasters, such as hurricanes, earthquakes or typhoons could cause significant disruptions to PEP’s employee or customer base and could adversely impact the business and its results of operations.

(j) Taxation Risk

The returns from PEP may be influenced by tax laws or their interpretation. Changes in tax law, or changes in the way tax law is expected to be interpreted in the jurisdictions in which the PEP will operate, may affect the expected tax liabilities PEP.

(k) Changes to Accounting Standards

Changes to the accounting standards applied in Australia could adversely affect PEP’s reported earnings performance in any given period and its financial position from time to time.

(l) Additional Capital Requirements The directors believe that the proceeds achieved from the offer of PEP shares on the ASX will provide sufficient capital to begin the development of the PEP business so it may achieve sustainable profitability in the future, however, the directors can provide no guarantee that any objective will be met without further capital and note that all the risk factors above may adversely affect the ability of to raise such capital for PEP.

If further capital raising is necessary the terms and conditions of additional equity financing may dilute shareholdings and debt financing, if available and necessary, may involve restrictions on financing and operating activities. If PEP is unable to obtain additional financing as required, it may be necessary to reduce the scope of operations.

Total Cumulative Share % interest in CYS (post completion/pre Capital Raising)		12.22%	11.11%	11.11%	7.03%	0.93%	0.37%	0.37%	6.95%	6.55%	1.40%	0.58%	0.49%	2.01%	0.39%	0.58%	62.08%
Ordinary Consideration Share % interest in CYS (post completion/pre Capital Raising)		12.22%	11.11%	11.11%	7.03%	0.93%	0.37%	0.37%	2.16%	2.16%	0.29%	0.58%	0.43%	0.72%	0.29%	0.58%	50.32%
Current % interest in CYS		0	0	0	0	0	0	0	9.65%	8.84%	2.25%	0	0.12%	2.61%	0.20%	0	23.67%
CYS Consideration Shares	Performance Shares	24,279,583	22,072,348	22,072,348	13,979,154	1,839,363	735,745	735,745	4,285,714	4,285,714	571,429	1,142,857	857,143	1,428,571	571,429	1,142,857	100,000,000
	Ordinary Shares	84,978,541	77,253,219	77,253,219	48,927,039	6,437,768	2,575,107	2,575,107	15,000,000	15,000,000	2,000,000	4,000,000	3,000,000	5,000,000	2,000,000	4,000,000	350,000,000
Current Holding in CYS		0	0	0	0	0	0	0	33,351,595	30,545,833	7,762,500	0	423,315	9,000,000	680,000	0
No of PEP Shares Held		3,300,000	3,000,000	3,000,000	1,900,000	250,000	100,000	100,000	576,923	576,923	76,923	153,846	115,385	192,308	76,923	153,846	13,573,077
ACN		008 934 638	132 931 410	058 083 328	000 000 993	150 068 607	N/A	N/A	N/A	009 431 476	144 784 896	009 201 389	N/A	107 391 793	N/A	N/A
Name		Fidelity Management Pty Ltd	OHKA Pty Ltd 1	Cicak Pty Ltd 2	The Trust Company Ltd atf Merchant Ops Funds	Digital Domain Consulting Pty Ltd	Chris Kain	Anthony Kain	"Adrian Stephen Paul" and "Adrian & Noelene Paul atf The ZME Super Fund"	Timriki Pty Ltd	Redspark Holdings Pty Ltd	Reef Investment Pty Ltd	Leslie Robert Fong atf The LR Fong Family Trust	Greatside Holdings Pty Ltd	Mr Simon David Yeo & Mrs Jennifer Dale Yeo	Mr Russell & Mrs Catherine Kane

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PEPPERMINT INNOVATION LIMITED — Proxy Solicitation & Information Statement 2015

65563_rns_2015-09-06_f9878b2f-a27b-4fea-a775-5cddb04e53f5.pdf

Chrysalis Resources Limited

NOTICE OF GENERAL MEETING AND EXPLANATORY MEMORANDUM

2 October 2015

1.30 pm (WST)

NOTICE OF GENERAL MEETING

AGENDA

1. Resolution 1 – Change to Nature and Scale of Activities

Voting Exclusion

2. Resolution 2 – Create a New Class of Shares (Performance Shares)

3. Resolution 3 – Acquisition of Peppermint Innovation Limited (Issue of Shares and Performance Shares to Vendors)

Voting Exclusion

4. Resolution 4 – Issue of Consideration Securities to Related Parties

Voting Exclusion

5. Resolution 5 – Capital Raising

Voting Exclusion

6. Resolution 6 – Participation of Director in Capital Raising

Voting Exclusion

7. Resolution 7 – Issue of Shares to Director pursuant to Employee Share Plan

Voting Exclusion

Voting Prohibition

8. Resolution 8 – Issue of Shares to DJ Carmichael

Voting Exclusion

9. Resolution 9 – Election of Director, Mr Anthony Kain

10. Resolution 10 – Election of Director, Mr Christopher Kain

11. Resolution 11 – Election of Director, Mr Matthew Cahill

12. Resolution 12 – Change of Company Name

13. Resolution 13 – Replacement of Constitution

Dated 1 September 2015 BY ORDER OF THE BOARD

EXPLANATORY MEMORANDUM

Introduction

Action to be taken by Shareholders

Proxies

1. Background to the Acquisition

1.1 Background

1.1.1 Acquisition of Peppermint Innovation Limited

1.2 Terms of the Acquisition

1.2.1 Conditions to Completion

1.3 Background on Peppermint

1.3.1 Overview

1.3.2 Background on the mobile banking industry

1.3.3 Peppermint’s Products & Technologies Offering

1.3.4 Business Model

1.3.5 Peppermint’s Commercial Evolution

1.3.6 Key Personnel and Executive Management

Managing Director – Christopher Kain

Executive Director – Anthony Kain

Non-Executive Director – Matthew Cahill

Chief Operating Officer and General Manager – Rosarito Carrillo

Chief Technical Officer and Marketing Manager – Adrian Ocampo

Business Development Manager – Marlon Portugal

1.4 Board and Management Changes

1.5 Re-compliance with Chapters 1 and 2 of the Listing Rules

1.6 Capital Raising

1.7 Pro-forma balance sheet

1.8 Current capital structure

1.9 Pro-forma capital structure

1.10 Advantages of the Acquisition

1.11 Disadvantages of the Acquisition

1.12 Risks

1.13 Indicative Timetable

1.14 Plans for the Company if the Acquisition is not completed

1.15 Directors’ Recommendation

2. Resolution 1 – Change to Scale and Nature of Activities

2.1 General

2.2 Legal requirements

3. Resolution 2 – Create a New Classes of Shares

4. Resolution 3 – Acquisition of Peppermint (Issue of Shares and Performance Shares to Vendors)

4.1 General

(together, the Consideration Securities ) as set out in Schedule 5.

4.2 Technical Information Required by Listing Rule 7.3

5. Resolution 4 – Issue of Consideration Securities to Related Parties

5.1 General

Notes :

5.2 Chapter 2E of the Corporations Act

5.3 ASX Listing Rule 10.11

5.4 Technical Information required by ASX Listing Rule 10.13

6. Resolution 5 – Capital Raising

PEPPERMINT INNOVATION LIMITED Proxy Solicitation & Information Statement 2015