Peter Biantes | Wattle Health Australia

REPLACEMENT PROSPECTUS

THIS IS A REPLACEMENT PROSPECTUS DATED 1 FEBRUARY 2017. IT REPLACES THE ORIGINAL PROSPECTUS DATED 13 JANUARY 2017.

ACN 150 759 363

For the Offer to issue up to 40 million Shares at an issue price of $0.20 per Share to raise up to $8 million (with a minimum raising of $6 million)

IMPORTANT INFORMATION:

This is an important document and it should be read in its entirety. If after reading this Prospectus, you do not fully understand it or the rights attaching to the Shares offered by it, you should consult an accountant, solicitor or other professional advisor for assistance. The Shares offered by this Prospectus should be considered speculative.

WATTLE HEALTH AUSTRALIA LIMITED

OFFER

The Offer contained in this Prospectus is an invitation to acquire fully paid ordinary shares (Shares) in Wattle Health Australia Limited ACN 150 759 363 (Company, Wattle Health or WHA).

LODGEMENT AND LISTING

This is a Replacement Prospectus dated 1 February 2017 (Prospectus) and replaces the original prospectus lodged with ASIC and dated 13 January 2017. This Prospectus has been issued to:

» include in the Chairman’s Letter a reference to specific material risk factors for consideration by a potential investor in conjunction with the risk factors outlined in section 7;

» provide additional comment in relation to WHA’s existing product formulations;

» clarify any discrepancies between the description of the Company’s principal business activities contained in the Company’s audited financial reports and this Prospectus;

» include a revised Investigating Accountant’s Report signed by Jeffrey Luckins which demonstrates that the audit function and Investigating Accountant’s Report were performed by separate teams within William Buck Audit (Vic) Pty Ltd;

» remove references to the bonus payable to a number of executives based on gross revenue as the relevant executives have agreed to waive such entitlements; and

» include further information regarding the Shares held by Eric Jiang, together with related corresponding changes. A copy of this Prospectus was lodged with the Australian Securities and Investments Commission (ASIC) on 1 February 2017. The Company has applied to ASX Limited (ASX) for admission of the Company to the Official List of ASX and quotation of its Shares on ASX. None of ASIC, ASX or their officers take any responsibility for the content of this Prospectus or for the merits of the investment to which this Prospectus relates.

NOTE TO APPLICANTS

The information in this Prospectus is not financial product advice and does not take into account your investment objectives, financial situation or particular needs.

It is important that you read this Prospectus carefully and in its entirety before deciding whether to invest in the Company. In particular, you should consider the risk factors that could affect the performance of the Company. You should carefully consider these risks in light of your personal circumstances (including financial and tax issues) and seek professional guidance from your stockbroker, solicitor, accountant or other independent professional adviser before deciding whether to invest in Shares. Some of the key risk factors that should be considered by prospective investors are set out in section 7. There may be risk factors in addition to these that should be considered in light of your personal circumstances. You should also consider the assumptions underlying the financial information and the risk factors that could affect the Company’s business, financial condition and results of operations. No person named in this Prospectus, nor any other person guarantees the performance of the Company or the repayment of capital or any return on investment made pursuant to this Prospectus.

SPECIFIC RISKS AS AN EARLY STAGE COMPANY

Applicants should carefully consider the risk factors that affect the Company specifically and generally the industry in which it operates. Applicants should note that an early stage company seeking to achieve branding recognition in new markets and market penetration is a high risk endeavour.

Applicants should understand that an investment in an early stage company is both speculative and subject to a wide range of risks. Applicants may lose the entire value of their investment.

Details of the risk factors of which investors should be aware are described in more detail in section 7 of this Prospectus.

NO OFFERING WHERE OFFERING WOULD BE ILLEGAL

This Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify the Shares or the Offer, or to otherwise permit a public offering of the Shares in any jurisdiction outside Australia. The distribution of this Prospectus outside Australia may be restricted by law and persons who come into possession of this Prospectus outside Australia and should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

This Prospectus has been prepared for publication in Australia and may not be released or distributed in the United States. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States.

The Shares and Existing Shares have not been, and will not be, registered under the US Securities Act or the securities laws of any state of the United States, and may not be offered or sold in the United States, or to, or for the account or benefit of a US Person, except in a transaction exempt from the registration requirements of the US Securities Act and applicable United States state securities laws. The Offer is not being extended to any investor outside Australia, other than to institutional investors as part of the Offer. This Prospectus does not constitute an offer or invitation to potential investors to whom it would not be lawful to make such an offer or invitation.

FINANCIAL INFORMATION PRESENTATION

Section 5 sets out in detail the financial information referred to in this Prospectus. The basis of preparation of that information is also set out in section 5.

All financial amounts contained in this Prospectus are expressed in Australian dollars and rounded to the nearest $0.1 million unless otherwise stated. Any discrepancies between totals and sums of components in tables contained in this Prospectus are due to rounding.

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

Any forward looking statements are subject to various risk factors that could cause the Company’s actual results to differ materially from the results expressed or anticipated in these statements. Forward looking statements should be read in conjunction with risk factors as set out in section 7 and other information in this Prospectus.

DISCLAIMER

No person is authorised to give any information or to make any representation in connection with the Offer described in this Prospectus which is not contained in this Prospectus. Any information not so contained may not be relied upon as having been authorised by the Company, or any other person in connection with the Offer. You should rely only on information in this Prospectus.

It is expected that the Shares will be quoted on ASX initially on a deferred settlement basis. The Company and the Share Registry disclaim all liability, whether in negligence or otherwise, to persons who trade Shares before receiving their holding statement.

EXPOSURE PERIOD

The Corporations Act prohibits the Company from processing Applications in the seven day period after the date of Prospectus lodgement (Exposure Period). The Exposure Period may be extended by ASIC by up to a further seven days. The purpose of the Exposure Period is to enable the Prospectus to be examined by market participants prior to the raising of funds. Applications received during the Exposure Period will not be processed until after the expiry of the Exposure Period. No preference will be conferred on any Applications received during the Exposure Period.

OBTAINING A COPY OF THIS PROSPECTUS

A paper copy of the Prospectus is available free of charge to any person in Australia by calling

the Company Offer Information Line on 1300 88 79 69 (within Australia) or +61 3 8399 9419 (outside Australia) from 9.00am until 5.00pm AEDT Monday to Friday during the Offer period.

This Prospectus is also available to Australian resident investors in electronic form at the Offer website, www.wattlehealth.com.au. The Offer constituted by this Prospectus in electronic form is available only to Australian residents accessing the website from Australia. It is not available to persons in the United States. Persons who access the electronic version of this Prospectus should ensure that they download and read the entire Prospectus.

Applications for Shares may only be made on the appropriate Application Form attached to, or accompanying, this Prospectus in its paper copy form, or in its electronic form which must be downloaded in its entirety from www.wattlehealth.com.au. By making an Application, you declare that you were given access to the Prospectus, together with an Application Form. The Corporations Act prohibits any person from passing the Application Form on to another person unless it is attached to, or accompanied by, this Prospectus in its paper copy form or the complete and unaltered electronic version of this Prospectus.

DEFINED TERMS AND ABBREVIATIONS

Defined terms and abbreviations used in this Prospectus are explained in section 10. Unless otherwise stated or implied, references to times in this Prospectus are to AEDT.

PRIVACY

By completing an Application Form, you are providing personal information to the Company, and the Share Registry, which is contracted by the Company to manage Applications. The Company, and the Share Registry on their behalf, collect, hold and use that personal information to process your Application, service your needs as a Shareholder, provide facilities and services that you request and carry out appropriate administration.

Once you become a Shareholder, the Corporations Act and Australian taxation legislation require information about you (including your name, address and details of the Shares you hold) to be included in the Company’s public register. The information must continue to be included in the Company’s public register if you cease to be a Shareholder. If you do not provide all the information requested, your Application Form may not be able to be processed. The Company, and the Share Registry may disclose your personal information for purposes related to your investment to their agents and service providers or as otherwise authorised under the Privacy Act 1988 (Cth)

You may request access to your personal information held by or on behalf of the Company. You can request access to your personal information or obtain further information about the Company’s privacy practices by contacting the Share Registry or the Company. The Company aims to ensure that the personal information it retains about you is accurate, complete and up-to-date. To assist with this, please contact the Company or the Share Registry if any of the details you have provided change.

In accordance with the requirements of the Corporations Act, information on the Shareholder register will be accessible by members of the public.

PHOTOGRAPHS AND DIAGRAMS

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

Diagrams used in this Prospectus are illustrative only and may not be drawn to scale. Unless otherwise stated, all data contained in graphs, charts and tables is based on information available as at the date of this Prospectus.

IF YOU HAVE ANY QUESTIONS

If after reading this Prospectus, you do not fully understand it or the rights attaching to the Shares offered by it, you should consult an accountant, solicitor or other professional advisor for assistance. The Company is unable

Key Offer Information

Wattle Health Australia Limited ( WHA) is seeking to raise under this Prospectus:

• Minimum Subscription of $6 million by the issue of 30 million Shares at an issue price of 20 cents per Share; and

• Maximum Subscription of $8 million by the issue of 40 million Shares at an issue price of 20 cents per Share.

BASED ON THE MINIMUM SUBSCRIPTION ($6 MILLION)

BASED ON THE MAXIMUM SUBSCRIPTION ($8 MILLION)

Existing shares on issue* 74,531,250 74,531,250

Lead Manager Shares 200,000 200,000

Shares offered under this Prospectus** 30,000,000 40,000,000

Offer Price $0.20 $0.20

Total number of Shares on completion of the Offer 104,731,250 114,731,250

Gross Proceeds from the Offer $6,000,000 $8,000,000

Indicative market capitalisation at Offer Price $20,946,250 $22,946,250

* This assumes conversion of existing convertible notes into fully paid ordinary shares immediately prior to Listing. In addition the Company has allotted or committed to allot 1,122,500 performance rights as detailed in section 9.7.

** The percentage of Shares in the total share capital of the Company available at Listing for investors to freely trade in the public market (i.e. “free float”) is 28.64% based on the Minimum Subscription and 34.86% based on the Maximum Subscription.

INDICATIVE KEY DATES*

Original Prospectus lodged with ASIC 13 January 2017

Replacement Prospectus dated 1 February 2017

Opening Date 28 January 2017

Closing Date 24 February 2017

Expected date for allocation of WHA Shares 10 March 2017

* These dates are indicative only and may change. The Company reserves the right to amend any and all of the above dates without notice to you including (subject to the ASX Listing Rules and the Corporations Act), to close the Offer early, to extend the Offer, to accept late Applications, either generally or in particular cases, or to withdraw the Offer before settlement. If the Offer is withdrawn before the issue of the Shares, then all Application Monies will be refunded in full (without interest) as soon as practicable in accordance with the requirements of the Corporations Act.

Message from the Chairman

Dear Investor,

I have great pleasure in presenting this Prospectus and offering to you the opportunity to become a Shareholder in Wattle Health Australia Limited ACN 150 759 363 ( WHA).

This Prospectus offers for subscription Shares in WHA at $0.20 to raise a minimum of $6 million and up to a maximum of $8 million. JB Advisory Pty Ltd has been appointed as Lead Manager to this initial public offering (IPO).

WHA conducts business in the fast moving consumer food category with an initial focus on dairy products (dried milk and infant formula). WHA is committed to producing high quality 100% Australian made dairy, health and wellness products. While WHA does not have its own internal product development team, WHA’s external consultants have developed 27 product formulations for WHA, with 7 of those formulations now commercialised for use in infant formula and dried milk products and from the remaining 20 non commercialised formulations, up to 10 products from WHA’s natural baby food range may be commercialised in the next 24 months from the funding to be raised under this Prospectus.

Product formulations are not capable of patent protection and therefore WHA in addition to its product formulations has undertaken trade mark registrations to protect its branding strategy (albeit that WHA’s profile and branding is at an early stage of market penetration).

WHA also outsources manufacturing/production of those commercial products as WHA does not have internal production/manufacturing facilities. WHA has entered into two manufacturing agreements with third parties but as WHA does not have its own internal production/manufacturing facilities, WHA faces material risks in its supply chain. Further with the changes in regulations for the importation and sale of dairy products into China (which are operative from January 2018 and restrict the number of brands of dairy products), investors should note there is material uncertainty that WHA will have access to supply of suitable dairy products for sale into China from January 2018 – however that does not impact on sale of dairy products in the Australian markets or to other Asian export markets.

WHA is a relatively new entrant into the market of nutritional health and food products achieving first material revenues during the current financial year. It therefore faces (in addition to the risks mentioned above), risks common to any developing business including continuing to build depth and infrastructure, successfully achieving market penetration, alignment with strategic partners to secure market share and ultimately building brand and product trust with consumers. The main risk factors associated with an investment pursuant to this Prospectus are highlighted in section 7.

The Offer is important for WHA as funding from the Offer will allow it to continue its focus on brand awareness and market penetration with its current commercialised products and also provide for the continued commercialisation of its wider formulation range.

The Closing Date for application and payment is 5:00pm AEDT on 24 February 2017, unless the Minimum Subscription is reached earlier, or later as determined by the Directors.

On behalf of the Directors, I recommend this Offer to you and look forward to your support and participation as a Shareholder.

Yours sincerely

Lazarus Karasavvidis Executive Chairman Wattle Health Australia Limited

Investment Overview

1. Investment Overview

This section is a summary only of the information contained in this Prospectus. Investors should read and consider this Prospectus in its entirety.

WHERE TO FIND MORE INFORMATION A. INTRODUCTION

TOPIC DETAILS

Who is WHA? WHA is an Australian company, based in Melbourne Victoria, committed to developing, sourcing and marketing high quality Australian made consumer food products. WHA operates in the fast moving consumer goods industry (FMCG), currently focusing on infant formula and dried dairy products. While WHA does not have its own internal product development team, WHA’s external consultants have developed 27 product formulations for WHA. From the 27 product formulations, WHA has successfully commercialised:

• Full Cream dried milk powder;

• Three Domestic Infant Formulas for the Australian domestic market –

• Stage 1, infants from birth to 6 months;

• Stage 2, infants from 6 to 12 months;

• Stage 3, infants from 12 months plus.

• Three Export Infant Formulas for the export markets –

• Stage 1, infants from birth to 6 months;

• Stage 2, infants from 6 to 12 months;

• Stage 3, infants from 12 months plus.

WHA has focussed on sourcing quality Australian based manufacturers to produce WHA products and is proud to be 100% Australian made.

WHA’s main objective is to be a brand of choice in the Australian domestic markets and secondly take advantage of its Australian product offering to enter export markets.

Sales in the Australian market have just commenced with an exclusive sales agreement with JR Duty Free for the sale of Wattle Health Domestic Infant Formula, Stages 1, 2 and 3 and dried milk products from the WHA product portfolio across JR Duty Free outlets in Australia.

WHA has had its first major commercial sales of its China CIQ registered Export Infant Formula in China.

What is the Company’s business model?

The Company has to date heavily focused on product formulations, regulatory compliance (for distribution of food products), establishing branding (with various trade mark registrations) and developing relationships with quality Australian manufacturers to produce its product formulation range.

The Company’s business model is to continue to build on the achievements to date, increase Australian domestic sales and export sales while at the same time bringing more of its existing product formulations to the stage of commercial sales. As mentioned above, WHA’s 7 initial commercialised products focus on infant formula and dried milk goods.

Section 2.3

TOPIC DETAILS

What is the Offer Price and total to be raised?

What is the purpose of the Offer and how will the proceeds of the Offer be used?

The Offer Price is 20 cents per Share with a minimum of $6 million (Minimum Subscription) and a maximum of $8 million (Maximum Subscription).

The primary purpose of the Offer is to raise funds to:

• support the Company’s Expenditure Program;

• achieve Listing on the ASX to broaden the shareholder base and provide a market for the Shares;

• to pay the expenses of the Offer; and

• to provide working capital.

Use of funds

The Company’s anticipated use of funds raised under this Prospectus is summarised in the table below:

Use of Funds*

Minimum Subscription $6m Target Subscription $7m

WHERE TO FIND MORE INFORMATION

See Key Offer Information section on page 2 of this Prospectus

Section 2.9

Maximum Subscription $8m

Sales and Marketing 2,495,474 2,796,599 3,089,490 Commercialisation** 576,974 735,626 908,485

New Product Development*** 114,000 584,222 1,048,472

Working Capital and corporate Administration 2,193,552 2,193,553 2,193,553

Expenses of the Offer 620,000 690,000 760,000

TOTAL 6,000,000 7,000,000 8,000,000

* This anticipated Expenditure Program may vary from the actual expenditure. For more detail, see Expenditure Program below.

** This expenditure relates to the existing 7 commercialised dried milk products (including infant formula).

*** This expenditure relates to the 20 existing non-commercialised product formulations, in particular the commercialisation of products from WHA’s natural baby food range.

Section 2.9

TOPIC DETAILS

Expenditure Program

Based on the minimum capital raising under this Prospectus, WHA intends to undertake a program of works described in its Expenditure Program over a 24-month period commencing from the date of Listing to:

• increase the sales and marketing budget to expand brand awareness to drive both direct and retail channel sales for WHA’s current commercialised products in the Australian domestic market and with a secondary focus on export markets (leveraging off WHA’s China CIQ registration for its Export Infant Formula range);

• continue the commercialisation of WHA’s portfolio of product formulations predominately for the Australian domestic market. As outlined earlier, WHA has to date had developed 27 product formulations, of which 7 (in the dried milk category) have already been commercialised. Under the Expenditure Program, from the remaining 20 product formulations, up to 10 products from WHA’s natural baby food range may be commercialised (depending on whether the minimum, target or maximum amount is raised under this Prospectus);

• provide working capital to carry out the Company’s stated objectives as detailed in this Prospectus; and

• pay the cost of the Offer.

Working capital

On completion of the minimum capital raising under this Prospectus, WHA will have sufficient working capital to carry out its stated objectives from its Listing (as detailed in this Prospectus).

No financial forecast WHA believes that revenue forecasts relating to early stage businesses are uncertain and there are a number of significant matters outside its control relating to the Company’s future performance.

In light of these factors and having regard to ASIC Regulatory Guide 170, the Directors consider at this stage WHA is unable to provide potential investors with reliable revenue, profit or cash flow projections or forecasts – other than having sufficient working capital (which has been calculated on an estimated expenditure basis without any revenue for a 24-month period).

Potential investors should take into account this uncertainty and lack of financial forecast in considering the risks in investing in the Company’s Shares.

WHERE TO FIND MORE INFORMATION

Section 2.9

Dividend policy

During this early growth stage of WHA the Directors intend to re-invest surplus capital in the Company’s continued brand and product development.

The financial prospects of WHA are dependent on a number of factors, including without limitation market penetration of its lead commercialised products.

Accordingly, the Directors do not believe WHA will be in a position to declare any dividends in the foreseeable future.

Section 5

Section 7

TOPIC DETAILS

Is the Offer underwritten?

Taxation considerations

No, the Offer is not underwritten. However, the Company has appointed JB Advisory Pty Ltd as Lead Manager to the Offer.

The tax treatment and consequences of the Offer will vary depending on the particular circumstances of the Applicant. WHA accepts no liability or responsibility in relation to any taxation consequences connected to the Offer.

Therefore, regarding the appropriate tax treatment that applies to the Offer, it is the responsibility of any Applicant who makes an Application to satisfy themselves by consulting their own professional tax advisors prior to investing in the Company.

ASX listing application Not later than 7 days after the date of this Prospectus, application will be made to the ASX for WHA to be admitted to the Official List of the ASX and for the Official Quotation of the Shares. The fact that the ASX may admit WHA to its Official List is not to be taken in any way as an indication of the value or merits of WHA or of the Shares offered under this Prospectus.

Official Quotation, if granted, will commence as soon as practicable after the issue of transaction holding statements to successful Applicants. If permission for quotation of the Shares is not granted within 3 months after the date of this Prospectus, all Application money will be refunded without interest.

B. KEY FINANCIAL INFORMATION

What is the key financial information of the Company?

The summarised pro forma financial position of WHA after the Offer is set out in the Financial Section of this Prospectus.

The Financial Section of the Prospectus includes three years of audited accounts for the financial years 2014, 2105 and 2016; and audited accounts for the 4 month period ended 31 October 2016.

Should WHA raise the target raise of $7 million and be successfully listed on the ASX, at Listing it will have:

• total assets of $9,180,420;

• total liabilities of $397,826; and

• a net equity position of $8,782,594.

WHERE TO FIND MORE INFORMATION

Section 9.7

Section 8

Section 5

TOPIC DETAILS

C. KEY STRENGTHS AND OPPORTUNITIES

Experienced executive team

WHA has a highly experienced management team led by its Executive Chairman and Chief Executive Officer, Lazarus Karasavvidis. The team’s skills are spread across the WHA organisation, particularly in supply chain management, global distribution networks, sales and marketing in Australia.

WHA has also located one of its sales executives (Mr Martin Glenister) in Asia to enable WHA to capture export market opportunities as they arise.

WHA was founded in 2011 by Lazarus Karasavvidis and Martin Glenister. They were jointly responsible for developing the WHA brand, current market position and ensuring the WHA product offering attractiveness to consumers. They have been joined by a leadership and management group with extensive experience in the FMCG industry in Australia and overseas.

WHERE TO FIND MORE INFORMATION

Section 4

Competitive

advantage

An important feature of the WHA brand and formulation portfolio is that it is intended all products will be 100% Australian-made.

Our approach is designed to assist WHA to achieve the quality standards, product integrity and distribution efficiencies. These are contributing factors and advantages for WHA to increase the credibility of the brand across consumer and potential retail partners locally and overseas.

Section 2.4

Asian export market – food standards

In addition to the Australian domestic market, the large Asian export markets (such as the Chinese market) are a focus for WHA. Chinese regulatory authorities have issued detailed and onerous requirements for the importation of dairy products into China. WHA has obtained Chinese approval (China CIQ registration) for its initial Export Infant Formula range of products to provide the basis generally for its entry into the Chinese market. This China CIQ registration requires WHA to purchase its Export Infant Formula range for export into China from Blend and Pack (a CNCA accredited manufacturer for infant formula) and use Suzhou Peloris Trading Co Ltd as its import agent. See section 9.6 for details of the Blend and Pack Nutritional Powders Supply Agreement and the Peloris Global Sourcing Agreement (which outlines WHA’s current Chinese import arrangements). WHA’s China CIQ registration is current as at the date of this Prospectus. Obtaining and maintaining China CIQ registration is an onerous and lengthy process but it is envisaged to support WHA’s entry into Asian export markets – should countries other than China impose similar requirements.

China CIQ registration allows WHA’s 3 Export Infant Formula products to be exported into China and sold in all sales channels including both retail and online. WHA has not commenced online sales at this point in time.

Sections 3.4, 7.2 (g), 7.2(h), 9.6

TOPIC DETAILS

D. KEY RISKS

Risk of future funding requirements

WHA has limited financial resources and will need to raise additional funds from time to time. In certain circumstances, the Company’s ability to successfully operate may be subject to its ability to raise funds which will be subject to factors beyond the control of WHA and its Directors (including without limitation cyclical factors affecting the economy, financial and share markets generally).

WHERE TO FIND MORE INFORMATION

Section 7.2

Speculative nature of investment

The Shares to be issued pursuant to the Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

The success of WHA is largely dependent on the roll out of its commercialisation strategy for its existing product formulation range, continued supply of its commercialised products in commercial quantities from its suppliers/manufacturers and the performance by WHA’s sales and marketing channels/partners.

The Company has only recently commenced that commercialisation strategy, having to date invested in the development of its formulation range, regulatory approval, brand protection, sourcing suppliers and building an infrastructure for commercial sales.

An investment in its Shares should therefore be considered very speculative reflecting the Company’s commercialisation start up and early stage of product branding. There is the risk of loss of all of an investor’s capital with no dividends or other returns.

Section 7.2

Business strategy execution risk

The Company’s growth and financial performance is dependent on the Company’s ability to successfully execute its business strategy, commercialise its formulation range and gain market share/sales.

There can be no assurance that WHA can successfully achieve any or all of the initiatives set out in section 2.3.

The failure by WHA to successfully execute its business strategy could have a material adverse effect on the Company’s business, financial condition and results of operations.

Section 7.2 (b)

TOPIC DETAILS

Limited history in the nutritional health and food products market

WHA is a relatively a new entrant in the market of nutritional health and food products. As outlined, to date WHA has invested in its formulations range, sourcing manufacturers, developing brand awareness and ensuring all commercial products comply with Australian regulations and obtaining China CIQ registration for 3 formulations of its Export Infant Formula to support future export sales in China.

WHA’s commercial sales/distribution strategy has only recently commenced with gross sales for the period from 1 July 2016 to 31 October 2016 of $771,255.

WHA therefore faces the risks common to any growing company including:

• continuing building its depth and infrastructure;

• commercial product development;

• successfully obtaining market penetration and strategic partners to secure market share;

• increasing its product/brand recognition in the market; and

• obtaining sufficient market penetration/acceptance by domestic consumers.

Investors should consider WHA’s business and prospects in the light of the risks, uncertainties, expenses and challenges that it may face as an early-stage business.

If WHA is not successful in addressing such risks, WHA’s business prospects and financial performance may be materially and adversely affected.

WHERE TO FIND MORE INFORMATION

Section 7.2 (c)

Dependence on service providers

WHA as a sales, marketing and product development company is heavily reliant on its main third party manufacturers, suppliers, distributors, logistics and clearance providers and sales channels.

In this regard, WHA operates a significant amount of its key activities through a series of contractual relationships with independent contractors and some of those arrangements are only entered into to fulfil particular requirements on a timely basis (for example a product order is generated by the sales distribution agents, WHA would contract a manufacturer for the supply of product to fill that order).

All of the Company’s contracts carry a risk that the third parties do not adequately or fully comply with its or their respective contractual rights and obligations. Such failure can lead to termination and/or significant damage to the Company’s branding, customer profile and generally the Company’s business including loss of profit and business/sale opportunities.

Additionally, WHA sources its products from a range of suppliers, a loss of one or multiple suppliers, or a significant disruption in the supply chain could have a material adverse effect on the Company.

Section 7.2 (f)

TOPIC DETAILS

Risks in ability to export food products to Asian markets

WHA has registered 3 formulations of its Export Infant Formula products with China CIQ which is required for importation of those particular products into China. This registration is current as at the date of this Prospectus and is dependent on WHA sourcing its product requirements from Blend and Pack (which is a CNCA accredited manufacturer) and using Suzhou Peloris Trading Co Ltd as its import agent. Details of the current Blend and Pack Nutritional Powders Supply Agreement and the Peloris Global Sourcing Agreement (which outlines WHA’s current Chinese import arrangements) are summarised in section 9.6. It is important to note that Blend and Pack has no contractual obligation to continue to supply WHA with its Export Infant Formula product range. Where Blend and Pack accepts a product order from WHA, the order is then fulfilled on the terms of a Blend and Pack Nutritional Powders Supply Agreement which applies on an order by order basis.

Rigorous requirements must be satisfied in order to obtain China CIQ registration for an infant formulation and this may act as a barrier to entry for many other competitor businesses wanting to export their infant formula products into China. While WHA’s current China CIQ registration is an important competitive advantage for WHA, all China CIQ registrations are to be reviewed by the Chinese regulatory authorities with effect from 1 January 2018 and there is no guarantee WHA will be successful in its renewal and even where successful WHA would need to secure a product manufacturer which has CNCA accreditation satisfactory to the Chinese regulatory authorities.

The process required to maintain the China CIQ registration is also in itself onerous and includes regular ongoing audits by the relevant authorities.

If:

• WHA were to lose its current China CIQ registration (for example, as a result of a change in government, legislation, or breach of any China CIQ registration condition);

• WHA’s China CIQ registration is not renewed in January 2018 or WHA is not able for any reason to source supply of its Export Infant Formula products from a CNCA accredited manufacturer; or

• it becomes easier for competitors to obtain China CIQ registration due to government changes,

this may limit WHA’s ability to be able to expand the market for its products in China. However, China CIQ registration is only required for sales of infant formula in China. Accordingly, WHA will be able to continue to sell its products in the Australian domestic market and expand to other export markets.

WHERE TO FIND MORE INFORMATION

Sections 7.2 (g) and 7.2(h)

TOPIC DETAILS

Key reliance on manufacturer relationship

WHA is not a manufacturer, thus it relies on third party manufacturers to supply all of its products.

(A) NATURE ONE DAIRY PTY LTD

WHA has a non-exclusive Supply Agreement with Nature One Dairy Pty Ltd to supply its infant formula products for the Australian domestic market and other export markets. Please see section 9.6(C) of this Prospectus for further information. However, for export sales of infant formula to China, a CNCA accredited manufacturer with a specific infant formula CNCA accreditation is required.

(B) CNCA MANUFACTURER FOR INFANT FORMULA

Manufacturers of China CIQ registered formulations must themselves also be CNCA accredited. Currently, WHA has a relationship with a CNCA accredited manufacturer (Blend and Pack) which manufactures WHA’s China CIQ registered formulations being its Export Infant Formula product range. However, Blend and Pack does not have an ongoing obligation to supply WHA with its Export Infant Formula product range and there is a risk Blend and Pack may refuse orders from WHA. As at the date of this Prospectus, Blend and Pack has not previously refused any supply orders for WHA’s Export Infant Formula product range.

Accordingly, there is a material risk to the Company’s business if one or more of its significant manufacturers/suppliers for any reason is unable or refuses to manufacture products for WHA as required, breaches or terminates any supply arrangement with the Company.

WHERE TO FIND MORE INFORMATION

Section 7.2 (e)

Reduced demand for the Company’s products

The future success of WHA will be primarily reliant on achieving market penetration for its commercialised products and then continued growth in demand for those products in both the Australian domestic markets and export markets. Sales to date are modest and this market penetration stage for the Company carries significant risk.

Apart from the risk of achieving market penetration/growing commercial sales, there is a general risk that consumer demand for infant formula products similar to WHA’s own formulation range may decrease for reasons outside the Company’s control, including the introduction of new taxes, aggressive selling by competitors, other countries and similar/substitute products being made available locally and abroad in Asia. This may have a material adverse effect on the Company’s future financial performance.

Section 7.2 (j)

TOPIC DETAILS

Competition risk WHA participates in a highly competitive FMCG global business market against many competitors with significantly greater financial, technical, human, development and marketing resources than the Company. Many of those competitors already have a significant market branding/ presence or market share. Some of these competitors may be able to respond more effectively to changing business and economic conditions than WHA.

Competition in this segment is largely based on branding profile, pricing of products, quality of products, perceived value of products, in-store presence/visibility and promotional activities (including online advertising). WHA cannot predict what its competitors will do in these areas or whether new competitors offering comparable products at more attractive prices will emerge.

Further, at the date of this Prospectus WHA has only 7 commercialised products in the dried dairy milk category and therefore has exposure to changes in competition or new products in this dried dairy milk category – without the benefit of any current product differentiation at this time into other non dairy milk categories.

As a consequence, the Company’s current and future products may become uncompetitive, resulting in adverse effects on revenue, margins and profitability. Additionally, WHA’s ability to compete will depend on a number of other factors such as the continued strength of the Company’s brand and products, its ability to enter into new markets and increase its presence in existing markets.

Currency risk Any revenue and expenditures in export markets are subject to the risk of fluctuations in foreign exchange markets. Part of the Company’s business strategy is aimed at penetrating export markets in Asia and therefore it is possible a material proportion of its expenses and potential revenue will be in foreign currencies.

Accordingly, payment will be made in those countries’ currencies, and may exceed the budgeted expenditure if there are adverse currency fluctuations against the Australian dollar. WHA has no plans at this stage to hedge its foreign currency payments.

WHERE TO FIND MORE INFORMATION

Section 7.2 (k)

Section 7.2 (o)

Expenditure Program

WHA has not entered into contracts for a number of the material items covered by the Expenditure Program, nor does it have binding quotations in relation to such items. Rather the Directors have determined that following the successful close of the Offer, WHA will be well positioned to negotiate the exact terms for such contracts. It is possible that actual expenditure may be more than estimated by WHA in its anticipated Expenditure Program. This could, depending on the difference in actual costs, require WHA to seek to raise additional funding.

The Directors and management have relevant industry experience and have prepared the anticipated Expenditure Program based partly on discussions with or indicative quotes obtained from potential suppliers of those services and their own experience of the likely costs for those expenditure items. While the Directors are confident WHA will be able to source suitable suppliers, there is a risk that WHA may not be able to source those suppliers at the estimated expenditure in the Expenditure Program.

Section 7.4

TOPIC DETAILS

Regulatory

requirements

WHA and its products/proposed products are subject to various laws and regulations including but not limited to accounting standards, tax laws, environmental laws, product content requirements, labelling/ packaging, regulations and customs regulations. Changes in these laws and regulations (including interpretation and enforcement) could adversely affect the Company’s financial performance.

Laws and regulations are specific to each geographic location where the Company’s products are manufactured or sold. In this regard, there is a risk that a certain product may not be able to be supplied in another jurisdiction because it fails to meet that jurisdiction’s regulatory requirements (e.g. product registration requirements).

Failure of WHA to remain up to date with these various regulatory requirements, could adversely affect the Company’s financial performance.

Key personnel WHA currently employs or engages as consultants, a number of key members of its management team. The loss of any of these people’s services could materially and adversely affect WHA and may impede the achievements of its product development and commercialisation objectives.

The successful growth of WHA will require the services of additional staff. There can be no assurance that WHA will be able to attract appropriate additional staff and this may adversely affect the Company’s prospects for success.

No independent valuation No independent valuation of the Company’s assets, intellectual property or generally the Company’s Shares has been carried out for the purposes of this Prospectus.

E. SUMMARY OF THE OFFER

Opening and closing of the Offer

Minimum Subscription

Applications may be lodged at any time after the Opening Date until 5.00 pm (AEDT) on the Closing Date.

WHERE TO FIND MORE INFORMATION

Section 7.2 (u)

Section 7.2 (s)

Section 7.5

Allocation policy

WHA has determined that the minimum amount to be raised under this Prospectus is $6 million (being 30,000,000 Shares). If this minimum amount is not raised within 3 months from the date of this Prospectus, all Application money will be refunded in full (without interest).

WHA reserves the right to authorise the issue of a lesser number of Shares than those for which Application has been made or to reject any Application. Where no issue or allocation is made or the number of Shares issued is less than the number applied for, surplus Application money will be refunded without interest. If an Application Form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be treated as valid. The Company’s decision as to whether to treat an Application as valid, and how to construe, amend or complete it will be final. The Company’s decision on the number of Shares to be allocated to an Applicant will also be final.

See Key Offer Information section on page 2 of this Prospectus

See Key Offer Information section on page 2 of this Prospectus

TOPIC DETAILS

What are the costs of the Offer?

Are there any additional costs payable by the Applicant?

F. WHA’S DIRECTORS

Who are the directors of WHA?

The estimated maximum costs of the Offer are approximately $760,000 (exclusive of any applicable GST) based on the maximum raising under this Prospectus. These costs will be paid by WHA out of the proceeds of the Offer and existing cash reserves.

No brokerage, commission, stamp duty or any other costs are payable by Applicants on the acquisition of the Shares under the Offer.

WHERE TO FIND MORE INFORMATION

Section 9.12

What are the interests of the Directors or related parties in WHA?

Lazarus Karasavvidis Co-founder, Executive Chairman & Chief Executive Officer: Lazarus Karasavvidis has over 15 years business experience in Australia and Asia. Lazarus co-founded a successful Australian training and recruitment organisation (Skillup Australia) for a ten plus year tenure in a high level management position. This business was involved in Lean Manufacturing & Six Sigma workplace improvement training programs, across a number of industries including Food, Health, Logistics, Business Services and Manufacturing. Lazarus has also co-founded a consulting services business in Laos, which has two divisions concentrating on unexploded ordnance (UXO) and Biomass. Since 2011, Lazarus has co-founded Wattle Health focusing on regulatory compliance within Australia and China, developing the Company’s product range and increasing brand awareness.

Eric Jiang Independent Non-Executive Director: With over 15 years’ experience, Eric Jiang is an adviser to companies involved in trade between Australia and China. Eric brings a distinct understanding of the cultural, economic and strategic context in which Australian businesses engage with China. Eric currently sits on 3 ASX company boards.

Peter Biantes Independent Non-Executive Director: Peter Biantes is a qualified CPA with over 40 years’ experience. He was a former owner, director, finance director and company secretary of Lemnos Foods Pty Ltd. Lemnos Foods Pty Ltd started as a small business and developed into a major dairy goods supplier.

As at the date of this Prospectus, and after the completion of the Offer, the interests of the Directors of WHA (both direct and indirect) in WHA securities are outlined in section 9.9.

Other relevant material interests are outlined in section 9.10.

Section 4

Sections 9.9 and 9.10

TOPIC DETAILS

G. FOUNDING SHAREHOLDERS AND RELATED PARTIES

The Founding Shareholders and what are their interests in WHA on completion of the Offer (Minimum Raise)?

Based on the minimum raise of $6 million, the interests in WHA Shares are:

Shareholders

Related party transactions

H. APPLICATIONS

How do I apply for Shares?

Number Of Shares (Held Directly Or Indirectly) Percentage Holdings

Lazarus Karasavvidis and Martin Glenister* 34,014,734 32.48%

Ian Olifent** 19,292,760 18.42%

* The shareholding for Lazarus Karasavvidis and Martin Glenister is jointly held.

** Ian Olifent is associated with two Shareholders which collectively hold 19,292,760 Shares in the Company. These Shareholders are Gregory Rasmus as trustee for the Olifent Investment Trust (7,342,630 Shares) and GGP Investments Pty Ltd as trustee for GGP Superannuation Fund (11,950,130 Shares).

The Company has entered into employment agreements with each of Lazarus Karasavvidis and Martin Glenister.

By completing and submitting a valid Application Form accompanying this Prospectus. All Application money will be held on trust in a separate bank account that has been opened only for this purpose until the Shares are issued and allotted under the Offer, or the Application money is refunded to the unsuccessful Applicants. Applications must be for at least 10,000 Shares at an aggregate subscription price of $2,000 or a greater number in multiples of 5,000 Shares at an aggregate subscription price of $1,000. The Offer Price of $0.20 per Share is payable in full on Application. Cheques must be in Australian currency and made payable to “ Wattle Health Australia Limited ” and crossed “ Not Negotiable”.

Lodgement of Applications Applicants should return their completed Application Forms together with their cheque for the Application money to:

Wattle Health Australia Limited Share Offer c/- Computershare Investor Services Pty Limited GPO BOX 52 Melbourne VIC 3001

All Application money will be held in trust in a separate bank account which has been opened only for this purpose until the Shares are issued and allotted under the Offer or the Application money is returned to the Applicants.

WHERE TO FIND MORE INFORMATION

Sections 9.9 and 9.10

Where can I find more information about this Prospectus or the Offer?

Further information can be obtained by reading this Prospectus in its entirety. For advice on the Offer you should speak to your stockbroker, accountant or another professional adviser. If you require assistance or additional copies of this Prospectus please contact WHA on 1300 88 79 69 (within Australia) or +61 3 8399 9419 (outside Australia).

Sections 9.9 and 9.10

Company Overview

2. Company Overview

2.1 ABOUT WHA

WHA, founded on the 6th May 2011, is an Australian company, based in Melbourne, Victoria, committed to developing, sourcing and marketing high quality Australian made dairy, health and wellness food products.

While WHA does not have its own internal product development team, WHA’s external consultants have developed 27 formulations for potential products for WHA, including a range of proposed nutritional food products (infant formula, full cream milk powder), natural baby food range and nutritional health supplement range.

WHA’s objective is to become a major brand for its products in the Australian domestic market with a secondary objective to capture export market opportunities as they arise to further enhance the reach of its commercialised products, however investors should note that to date WHA has not been profitable and there is no guarantee that in the future WHA will be successful in the commercialisation of its products or achieve profitability.

2.2 WHA’S CURRENT COMMERCIALISED PRODUCTS

WHA respects and understands that breastfeeding is the ideal source for babies to receive their nutrients for their first year of life. However, when a mother is unable or chooses not to breastfeed, WHA aims to provide a high quality infant formula with additional nutritional benefits for a baby’s development.

WHA currently has commercialised and is actively selling domestically the following products:

• Dried Milk Powder (Full Cream Milk Powder)

• Domestic Infant Formula range:

• Infant Formula Stage 1 which meets Australian and New Zealand regulations and specifications – suitable from birth to 6 months.

• Infant Formula Stage 2 which meets Australian and New Zealand regulations and specifications – suitable from 6 months to 12 months.

• Infant Formula Stage 3 which meets Australian and New Zealand regulations and specifications – suitable for toddlers from 12 months plus.

WHA has also secured, commercialised and commenced initial sales in Asia. With respect to China, WHA uses its China CIQ registered Export Infant Formula range:

• Infant Formula Stage 1 which meets Chinese regulations and specifications – suitable from birth to 6 months.

• Infant Formula Stage 2 which meets Chinese regulations and specifications – suitable from 6 months to 12 months.

• Infant Formula Stage 3 which meets Chinese regulations and specifications – suitable for toddlers from 12 months plus.

While there is some common formulation in WHA’s Domestic Infant Formula and Export Infant Formula product range, there are differences reflecting the strict Australian, Chinese and various international standards for both manufacture and export of infant formula. For example, Australian and New Zealand dairy products must meet the FSANZ (Food Standard Australia and New Zealand) and infant formula exported into China must meet the GB Standard (China National Standard).

WHA’s Domestic and Export Infant Formula range currently complies with all applicable manufacture and export standards required for sale in the relevant country. For further information on the regulatory framework and risks associated with the regulatory environment, please see sections 3.3 and 3.4.

WHA sales have only commenced in the second half of 2016 year with WHA generating sales of $771,255 for the period 1 July 2016 ending 31 October 2016.

2.3 WHA BUSINESS STRATEGY

WHA business strategy is to:

• develop high quality nutritional health and food products to deliver on WHA’s unique formulation for its current commercialised and proposed new products (using its existing product formulations);

• source third party Australian manufacturers for its products with the objective to achieve high quality products being the WHA branding for sale to consumers. This is an important component of WHA’s business strategy as it enables WHA to take advantage of the reputation Australian products generally have with the Australian consumer;

• build on its existing commercialised products; and

• accelerate sales abroad with access to certain export markets.

WHA uses only Australian manufacturers to manufacture its products. This is intended to give WHA the opportunity to promote and leverage on the brand positively in Australia and also in export markets as there is growing consumer sentiment for Australian made food products of a high standard.

WHA will also look at growing the product range for the Australian domestic market by progressing the commercialisation of its existing product formulations (see sections 2.2 and 2.7).

For this strategy to be successful, WHA is of the opinion that brand recognition and sales would need to be increased first in the Australian and New Zealand markets to add credibility to WHA.

2.4 WHA’S COMPETITIVE ADVANTAGES

The Company believes its key competitive advantages include:

• WHA sources all of its existing commercial products only from Australian manufacturers enabling it have Australian made certification for its products.

• WHA has 27 product formulations that are anticipated to be able to be commercialised should the Company determine that there is a demand for such products or that such products will add to the brand awareness of WHA.

• From those 27 product formulations, to date WHA currently has commercialised 7 food products which are available in the Australian domestic markets and also export markets. While commercial sales have only just commenced, WHA generated sales of $771,255 for the period 1 July 2016 to 31 October 2016.

• WHA has an exclusive agreement and has commenced sales with an Australian duty free company, JR Duty Free Pty Ltd to sell the WHA Domestic Infant Formula product range and full cream milk powder in their stores across Australia.

• WHA has achieved registration of its three Export Infant Formulas with China CIQ which is current as at the date of this Prospectus and is dependent on WHA continuing to source its product requirements from Blend and Pack (which is a CNCA accredited manufacturer) and using Suzhou Peloris Trading Co Ltd as its import agent. China CIQ registration is a current requirement to allow the export of infant formula into China, in all retail and online sales channels. WHA has not pursued online sales and has rather focussed on sales through distributors. The Chinese CIQ process is complex and generally can take up to 24 months to secure China CIQ registration for each product.

2.5 OTHER POTENTIALLY COMPETITIVE COMPANIES

Many of WHA’s competitors in the FMCG global market have significantly greater financial, technical, human, development and marketing resources than the Company and those competitors in many cases have significant market/branding presence – as compared to WHA. Some of these competitors with their existing resources may be able to respond more effectively to changing business and economic conditions than WHA.

Competition in FMCG markets is largely based on branding profile, pricing of products, quality of products, perceived value of products, in-store presence/visibility and promotional activities (including online advertising).

WHA cannot predict what its competitors will do in these areas or whether new competitors offering comparable products at more attractive prices will emerge. As a consequence, the Company’s current and future products may not achieve market penetration or even where WHA achieves market share, its products may subsequently become uncompetitive, resulting in adverse effects on revenue, margins and profitability. Additionally, WHA’s ability to compete will also depend on a number of other factors such as its ability in January 2018 to renew its existing China CIQ registration for its Export Infant Formula range, engage CNCA accredited manufacturers (such as Blend and Pack) to produce its Export Infant Formula range, the continued strength of the Company’s brand and products and its ability to enter into new markets and increase its presence in existing markets.

2.6 WHA’S PRODUCT DEVELOPMENT/MARKETING STRATEGY

WHA’s initial strategy is to increase brand awareness of its current commercialised domestic products and continue increasing its sales both through quality retailers and direct sales.

WHA will also look at growing the product range for the Australian domestic market by progressing the commercialisation of its other existing non commercialised product formulations where the Company is of the opinion the Company’s branding position supports new commercialised products and there is a demand for these products or generally it will increase the brand awareness WHA in its market segment.

WHA intends to continue the development of new commercial products from its existing 27 product formulations where it believes the relevant product formulation can be commercialised successfully for the Australian domestic market and eventually into Asia. With respect to Asia, WHA intends to continue the development of its products for the wider Asian markets (other than China) to satisfy demand requirements in such regions. Where sufficient demand arises and subject to any relevant regulatory compliance requirements, WHA will be able to take advantage of its product manufacturing arrangements with Nature One Dairy Pty Ltd for the manufacture of its infant formula for certain regions in Asia. For further information on WHA’s current manufacturing arrangements with Nature One Dairy Pty Ltd, please see section 9.6(C) of this Prospectus.

WHA will also take advantage of its China CIQ registration of its existing three Export Infant Formulas to capture further export market opportunities as they arise. However, it is important to note that while Blend and Pack has not previously refused to supply WHA with its Export Infant Formula product range requirements, Blend and Pack has no contractual obligation to continue to supply WHA with such products.

2.7 OTHER RELEVANT PRODUCTS

In addition to WHA’s dried dairy products range, as outlined above WHA owns 20 non commercialised product formulations (yet to be commercialised and which may not be commercialised depending on market conditions and perceived demand) including:

• natural baby food; and

• vitamin and dietary supplements (as regulated by the Therapeutics Goods Administration).

WHA’s vitamin and dietary supplements range have been registered by WHA with the Therapeutics Goods Administration.

These 20 non commercialised product formulations (i.e. WHA’s natural baby food range and vitamin and dietary supplements range) are capable of immediate commercialisation and WHA intends to commercialise such products in the future only where WHA:

• profile and branding from the sale of its dried dairy products supports the introduction of additional commercial products (based on the 20 non commercialised formulations);

• determines that there is sufficient demand and market for such products; and

• is able to source a suitable third party manufacturer.

Based on the funds sought to be raised under this Prospectus, at the maximum capital raising of $8 million, WHA intends to commercialise up to 10 new products from its natural baby food range (which forms part of WHA’s portfolio of 20 non commercialised product formulations).

Investors should note that there is no guarantee that (a) any of these non commercialised product formulations will be commercialised or (b) even if commercialised that there will be a market for those products or (c) where there is a market, what market penetration may be achieved by WHA for those products.

2.8 TRADE MARKS AND INTELLECTUAL PROPERTY

In order to provide statutory protection for its branding, WHA has instigated a program of registering trademarks in key countries.

As at the date of the Prospectus, the Company has registered trademarks in Australia, China, Indonesia, Thailand, Vietnam and the United States of America. It has also lodged trademark applications in 114 other countries via the Madrid Protocol.

While product formulations are not capable of patent protection; WHA also owns the copyright in the specifications, the packaging and labelling for each of its 27 formulations outlined in this Prospectus. It is important to note that the specifications reflect the composition of the relevant product (being the relative proportions of each constituent material which makes up the relevant product), but WHA does not own the individual constituent materials (such as the milk extract used in a product) which often is generic in nature.

2.9 OVERVIEW OF THE COMPANY’S FUNDING PROGRAM

(A) MINIMUM FUNDING SCENARIO OF $6 MILLION

WHA intends to raise a minimum of $6 million. This will provide funding to carry out its stated objectives after Listing (as detailed in this Prospectus) and will support the Company’s business plan of increasing brand awareness and sales in the Australian and New Zealand domestic market primarily with a secondary focus on exports into Asian markets. This will be achieved by:

• maintaining the current Sales and Marketing Team in Australia to ensure all avenues to increase brand awareness and sales of WHA’s existing commercialised products are captured. This will involve engaging with retailers and also develop direct sale opportunities;

• assessing and monitoring the demand and market conditions for WHA’s 20 non-commercialised existing product formulations (as described in section 2.7 above), but within the funding constraints of a minimum of $6 million raise WHA would not commercialise any of its other 20 non-commercialised products; and

• continuing to seek export opportunities in Asian markets and expand its sales within those markets by having a full time employee positioned there.

(B) TARGET FUNDING SCENARIO OF $7 MILLION

WHA also has a target raise of $7 million. In addition to the proposed expenditure listed under the minimum funding scenario in section 2.9(a), the Company intends to use the additional funds to:

• expand WHA’s Sales and Marketing team to be able to service the New Zealand market;

• increase the commercialisation of WHA existing formulations to accelerate brand awareness and sales in the Australian and New Zealand markets; and

• assess and monitor the demand and market conditions for WHA’s 20 non-commercialised existing product formulations (as described in section 2.7 above), for the purposes of introducing WHA’s natural baby food product range through the commercialisation of up to 10 new natural baby food products from WHA’s existing product formulations where the Company determines that there is demand for such products.

(C) MAXIMUM RAISE OF $8 MILLION

The Offer of Shares under this Prospectus is limited to a total funding of $8 million. With the ongoing growth and fast-paced nature of the market, the Company anticipates using the additional funds to:

• further increase its Sales and Marketing Team for the Australian market; and

• assess and monitor the demand and market conditions for WHA’s 20 non-commercialised existing product formulations (as described in section 2.7 above), for the purposes of expanding WHA’s natural baby food product range through the continued commercialisation of WHA’s existing natural baby food product range where the Company determines that there is demand for such products.

Industry Overview

3. Industry Overview

3.1 INTRODUCTION

WHA operates in the FMCG industry. WHA currently focusses on the dairy products segment of the FMCG industry, with a particular emphasis initially on infant formula and dried dairy goods.

3.2 WHAT IS INFANT FORMULA AND DRIED MILK POWDER

In Australia, “infant formula” generally refers to an infant formula product which is produced as a substitute for breastmilk and which satisfies the nutritional requirements of infants.

“Dried milk powder” generally refers to a milk powder produced by drying raw milk.

3.3 INFANT FORMULA/DRIED MILK POWDER IN AUSTRALIA

(A) AUSTRALIAN MARKET FOR INFANT FORMULA AND DRIED MILK POWDER

In the Australian domestic market, there is high demand for infant formula and dried milk powder. However, domestic manufacturers of infant formula and dried milk powder face strong competition from imports, particularly those from New Zealand.

There are a number of small and large companies that manufacture, export, import and/or market infant formula and dried milk powder in Australia and New Zealand. It is difficult to obtain comprehensive data on the size of the market for infant formula including infant formula manufactured in or imported into Australia and New Zealand.

The infant formula and dried milk powder category is dominated by a number of multinationals (through multiple brands). The remainder of the industry is generally characterised by small independent manufacturers of infant formula and dried milk powder.

(B) REGULATION OF INFANT FORMULA IN AUSTRALIA

(I) PRODUCT AND MANUFACTURING STANDARDS

Infant formula products available in Australia are required to meet strict standards and regulatory requirements for food supply in Australia as set by Food Standards Australia and New Zealand (FSANZ).

In particular, the FSANZ Food Standards Code requires among other things, that the raw materials used in the manufacture of infant formula and of the final product itself meet very stringent specifications. For example, Standard 2.9.1 of the FSANZ Food Standards Code specifies the:

• composition requirements for infant formula including the mandatory nutrient contents for infant formula; and

• labelling requirements for infant formula and specifically prohibits some types of images, symbols and claims on product labels.

The FSANZ Food Standards Code is applicable to all manufactured dairy products. In this regard, WHA currently complies with and anticipates that it will continue to comply with the composition, labelling and safety requirements outlined in the FSANZ Food Standards Code.

The Australian states and territories are responsible for implementing the requirements of the FSANZ Food Standards Code.

In Victoria, Dairy Food Safety Victoria implements and enforces the food standards in the dairy industry through administration of the Victorian Dairy Act 2000 and the Food Act 1984. WHA is committed to ensuring that any manufacturer it uses to produce its infant formula and dried milk powder is approved by the relevant governing body in the state of production and complies with all applicable standards and regulations including but not limited to licensing requirements and quality management requirements (for example, using manufacturers which have a certified on site product safety program (HACCP)).

(II) DISTRIBUTOR IN AUSTRALIA

In Victoria, a Dairy Distributor Licence must be held by the person or entity in charge of operating the dairy business. This includes a person or entity which purchases dairy products for the purpose of distribution and sale or owns a business that operates a dairy distribution premises.

As WHA uses third parties to store and distribute products on its behalf, WHA is not required to hold a Dairy Distributor Licence.

(III) AUSTRALIAN EXPORT REQUIREMENTS

Under Australian export legislation, exporters of dairy products (including infant formula and dried dairy products) must be registered with the Department of Agriculture and Water Resources (DAWR). The dairy products to be exported must also be sourced from an export registered manufacturer.

WHA is currently registered with DAWR (on the Export Documentation system) as an exporter of dairy products.

3.4 INTERNATIONAL MARKETS FOR INFANT FORMULA

(A) INTERNATIONAL MARKET FOR INFANT FORMULA

Globally, the milk powder market (including infant formula) is very active due to the demand for milk powder and infant formula in Asia. Australia, due to its high-quality food standards and ease of access to quality ingredients is thought to have placed Australian brands and manufacturers in prime position to export to Asia.

Additionally and as a result of low Asian sourced milk products or of a perceived low quality of Asian sourced milk products, a large proportion of Australian milk powder (including infant formula) is exported to Asian countries other than China (e.g. Hong Kong and Singapore).

The ability to export milk powder (including infant formula) to Asia is subject to a number of factors including changes in the global price of milk powder, changes in foreign laws and regulation and strong competition in global markets. Please see section 7 of this Prospectus which outlines other risks and factors which may impact WHA’s ability to export to Asia.

WHA believes it is well positioned to take advantage of the demand for infant formula in Asia. In particular, for the Chinese market, WHA can take advantage of its China CIQ registration of its three initial Export Infant Formula products. Additionally, WHA’s Domestic Infant Formula range can be used for export into certain non-Chinese markets without any additional onerous regulatory or product registration requirements.

(B) HIGH LEVEL OF REGULATION FOR THE MANUFACTURE OF INFANT FORMULA IN ASIAN COUNTRIES

In terms of Asian countries, China is one of the world’s largest importers of milk powder (including infant formula). However, China has onerous food standards and trade barriers for infant formula (contained in the Chinese regulatory framework). Accordingly, the Company has sought to comply with the Chinese standards as being the benchmark for export to the Asian markets (including Singapore and Hong Kong).

Food cannot be imported into China unless the foreign manufacturer is registered by the General Administration of Quality Supervision Inspection and Quarantine of the People’s Republic of China (AQSIQ). In China, manufacturers of infant formula are subject to even stricter accreditation for the registration process. In particular, exports of Australian made infant formula to China that are over 10 kg (or 10 litres liquid) must be sourced from manufacturers accredited by the CNCA (a CNCA accredited manufacturer).

As at the date of this Prospectus, there are only 8 Australian manufacturers which are registered with the CNCA for the manufacture of infant formula. While WHA is not a manufacturer, it has worked with and sourced its WHA Export Infant Formula Stage 1, 2 and 3 from a CNCA accredited manufacturer Blend and Pack.

The regulatory environment which applies to infant formula and dairy products sold in China is evolving and is subject to change.

On 6 June 2016, the China Food and Drug Administration (CFDA) announced regulatory changes aimed at reducing the number of infant formula brands sold in China. Under the regulatory changes, the formulas of all infant formula products manufactured and/or sold in China must be registered with the CFDA. If the infant formula brand is not registered with the CFDA, it cannot be sold in China. Additionally, each manufacturer of infant formula can only register up to three brands and nine different products with the CFDA. The CFDA registration requirement became effective on 1 October 2016. However, the CFDA has granted a transition period to allow manufacturers to adapt to the new regulatory changes. In this regard, all manufacturers of infant formula will be required to comply with the new requirements by 1 January 2018.

Please see section 7.2(h) of this Prospectus which outlines the risks associated with regulatory changes in particular the upcoming change with respect to the CFDA registration.

(C) REGULATION FOR THE IMPORTATION OF INFANT FORMULA INTO MAINLAND CHINA

(I) INSPECTION OF INFANT FORMULA

AQSIQ attaches great importance to the safety and quality of imported infant formula including supervising the testing and inspection of each batch of infant formula imported in China.

Infant formula is subject to inspections by the China CIQ which is a branch of AQSIQ. This can be a complicated, time consuming, costly and a challenging process.

Additionally, infant formula must meet the Chinese GB Standards.

WHA’s Export Infant Formula Stage 1, 2 and 3 is currently China CIQ registered (as at the date of this Prospectus) and meets Chinese GB Standards. For further information about WHA’s China CIQ registration (and the associated risks), please see section 7.2 of this Prospectus.

(II) IMPORTATION OF INFANT FORMULA INTO CHINA

Importation of infant formula into China is very complex and subject to stringent licensing requirements. In this regard, only licensed importers have the right to import infant formula into China. As such, it is not uncommon for infant formula manufacturers, distributors and product developers to export their products into China through intermediaries including import agents.

For further information on WHA’s logistics and clearance arrangements in China please see section 9.6 of this Prospectus.

(III) “GREY CHANNEL”

An alternative path for importation has been the “grey channel” where the relevant goods are taken into China through an unapproved path (for example a consumer carrying product into China).

The Chinese Government has tightened its control on the “grey channel” by imposing taxes.

These taxes have been implemented to restrict market opportunities and revenue generation for foreign companies currently and planning to market through the “grey channel”.

Board and Management

4. Board and Management

4.1 BOARD MEMBERS

• Lazarus Karasavvidis – Co-founder, Executive Chairman and Chief Executive Officer: Lazarus Karasavvidis has over 15 years business experience in Australia and Asia. Lazarus co-founded the business Skillup Australia which was, a successful Australian training and recruitment organisation for a ten plus year tenure in a high level management position. This business was involved in Lean Manufacturing & Six Sigma workplace improvement training programs, across a number of industries including Food, Health, Logistics, Business Services and Manufacturing. Lazarus has also co-founded a consulting services business in Laos, which has two divisions concentrating on unexploded ordnance (UXO) and Biomass. Since 2011, Lazarus has co-founded Wattle Health focusing on regulatory compliance within Australia and China, developing the Company’s product range and increasing brand awareness.

• Eric Jiang – Independent Non-Executive Director: With over 15 years’ experience, Eric Jiang is an adviser to companies involved in trade between Australia and China. Eric brings a distinctive understanding of the cultural, economic and strategic context in which Australian businesses engage with China. Eric is currently an executive director of Connexion Media Limited (ASX:CXZ) and Perpetual Resources Limited (ASX:PEC) and non-executive director of Wingara AG Limited (ASX:WNR). Eric Jiang is an independent director as in the Board’s view he is free from any business or other relationship that could materially interfere with or reasonably be perceived to materially interfere with the independent exercise of his judgement.

• Peter Biantes – Independent Non-Executive Director : Peter Biantes is a qualified CPA with over 40 years’ experience. He was also a former owner, director, finance director and company secretary of Lemnos Foods Pty Ltd. Lemnos Foods Pty Ltd started as a small business and developed into a major dairy goods supplier. Peter Biantes is an independent director as in the Board’s view he is free from any business or other relationship that could materially interfere with or reasonably be perceived to materially interfere with the independent exercise of his judgement.

4.2 COMPANY SECRETARY

• George Karafotias – Company Secretary & Finance Manager: George Karafotias completed a Bachelor of Commerce degree at the University of Adelaide. George has over 5 years’ experience in providing company secretarial services to a number of ASX listed entities. George is currently the company secretary of an ASX listed company, Connexion Media Limited (ASX:CXZ) and was previously the company secretary of Wingara AG Limited (ASX: WNR).

4.3 THE TEAM

• Martin Glenister – Co-founder & Director of Sales: Martin Glenister has over 20 years’ sales and management experience building high performing teams in public and private companies in Australia and South East Asia. Since 2010, Martin has co-founded and actively chaired companies in Australia and South East Asia, building revenue streams in emerging markets, focusing on agribusiness and Australian exports.

• Mark McCammon – Vice President Global Sales: Mark McCammon has 25 years’ experience working as a consultant, general manager, director and business owner. Mark has built his reputation based on the overriding principles of trust, co-operation and a commitment to providing holistic quality solutions. As the National Aged & Disability Manager for aged care at McArthur Proprietary Services Pty Ltd, Mark’s primary objective was to build relationships with government and private aged care bodies across Australia.

• Angela Coppola – Finance and Administration Executive: Angela Coppola has over 25 years’ of accounting and administration experience. Working as an Accountant and Practice Manager with Chartered Accountants, has provided insights into ensuring businesses have correct internal systems and protocols. In the last 15 years, Angela has been a business owner, providing services to many small to medium business. These services have included setting up internal processes and accounting systems which enable the business to correctly report and provide timely and accurate internal reports as well as ensuring that the business meets its statutory obligations.

• Yvette Yifang Wang – Client engagement specialist: Yvette Yifang Wang is highly experienced in Chinese business relations having worked with the Consulate for the General of the People’s Republic of China for a number of years. Yvette’s rich knowledge about the market in China spans from financial, business relations and marketing experience.

4.4 REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL AS AT THE DATE OF THIS PROSPECTUS

POSITION

ANNUAL REMUNERATION (INCLUSIVE OF SUPERANNUATION)

Lazarus Karasavvidis Executive Chairman and Chief Executive Officer $602,250*

Eric Jiang** Non-Executive Director $52,000

Peter Biantes Non-Executive Director $52,000

Martin Glenister Sales Executive $383,250*

* Lazarus Karasavvidis and Martin Glenister jointly hold 34,014,734 Shares in the Company. For further information see sections 9.9 and 9.10.

** Eric Jiang currently holds 1,872,371 Shares in the Company. For further information see section 9.9.

Financial Information

The following information has been taken from the Company’s audited financial statements and related reports.

Please note that while the Company’s audited financial statements and reports referred to the principal activities of the Company as being:

• Manufacture of therapeutic health care products;

• Manufacture of organic baby skin care range;

• Manufacture of organic baby food range;

• Manufacture of full dairy range as well as a number of specialist products, the Company currently outsources all of its manufacturing requirements and the Company’s principal activities do not include the manufacture of an organic baby skin care range or an organic baby food range (as referred to in the Company’s prior audited financial statements and related reports). Accordingly any reference to “manufacturing” or to an “organic baby skin care range” or “organic baby food range” as a principal activity of the Company in such financial reports is a reference to product concepts only. To date such product concepts have not been advanced and may never be advanced to a stage of a product formulation/ product suitable for sale. Investors should rely only upon the outline of the Company’s activities as detailed in this Prospectus.

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

4 months ended Oct 2016 $ (audited)

12 months ended June 2016 $ (audited)

12 months ended June 2015 $ (audited)

12 months ended June 2014 $ (audited)

REVENUE 771,255 9,978 1,506 455,013

COST OF SALES (572,075) (13,616) (25,393) (421,163)

GROSS PROFIT/(LOSS) 199,180 (3,638) (23,887) 33,850

EXPENSES

General and Administrative Expenses (611,083) (368,425) (233,063) (103,498) Selling and Marketing Costs (348,735)

OPERATING LOSS BEFORE FINANCE, AMORTISATION & CORPORATE ADVISORY COSTS (760,638) (372,063) (256,950) (69,648) Amortisation (15,913) (7,841) (7,841) (5,084)

Finance Costs (80,213) (155,682) (86,278) (83,266)

Corporate Advisory Costs (842,233)

OPERATING LOSS (1,698,997) (535,586) (351,069) (157,998)

Foreign Exchange Gain/(Losses) – (9) 19,781

Export Market Development Grant – 34,787 55,215 Fair Value Gain/(Losses) on Investment – (75,138)

LOSS BEFORE INCOME TAX EXPENSE (1,698,997) (535,586) (316,291) (158,140)

Income Tax Expense

LOSS AFTER INCOME TAX EXPENSE FOR THE YEAR (1,698,997) (535,586) (316,291) (158,140)

Other Comprehensive Income for the Year, Net of Tax

TOTAL COMPREHENSIVE LOSS FOR THE YEAR (1,698,997) (535,586) (316,291) (158,140)

STATEMENTS OF FINANCIAL POSITION

ASSETS

CURRENT ASSETS

Cash and Cash Equivalents

Oct 2016 $ (audited)

June 2016 $ (audited)

June 2015 $ (audited)

June 2014 $ (audited)

1,635,321 2,398,907 40,182 6,327

Trade and Other Receivables 370,693 19,075 15,818 45,849 Prepayments 5,838 399,105 186,625 217,173 Inventory 733,075 360,844

Investment in Sustainable Soils & Farms 125,244 125,244 125,244 125,244

TOTAL CURRENT ASSETS 2,870,171 3,303,175 367,869 394,593

NON-CURRENT ASSETS

Non-Current Receivables 17,428

Plant and Equipment 8,642 Intangible Assets 42,927 45,541 40,768 32,959

TOTAL NON-CURRENT ASSETS 68,997 45,541 40,768 32,959

TOTAL ASSETS 2,939,168 3,348,716 408,637 427,552

LIABILITIES

CURRENT LIABILITIES

Trade and Other Payables 331,214 46,634 136,112 130,062 Superannuation Payable 21,945

Provisions 27,239

Related Party Borrowings 2,468,327 1,329,137 1,037,811 Convertible Notes 2,489,390

TOTAL CURRENT LIABILITIES 2,869,788 2,514,961 1,465,249 1,167,873

NON-CURRENT LIABILITIES

Convertible Notes 2,425,953 Provisions 17,428

TOTAL NON-CURRENT LIABILITIES 17,428 2,425,953

TOTAL LIABILITIES 2,887,216 4,940,914 1,465,249 1,167,873

NET (DEFICIENCY) OF ASSETS 51,952 (1,592,198) (1,056,612) (740,321)

EQUITY

Issued Capital 3,338,556 2,000 2,000 2,000

Share-Based Payment Reserve 6,591

Accumulated Losses (3,293,195) (1,594,198) (1,058,612) (742,321)

TOTAL EQUITY 51,952 (1,592,198) (1,056,612) (740,321)

STATEMENTS OF CHANGES IN EQUITY

Issued Capital $ (audited)

Share-based reserve $ (audited)

Accumulated Losses $ (audited)

Total (Deficiency) in Equity $ (audited)

Balance at 1 July 2013 2,000 (584,181) (582,181)

Total Comprehensive loss for the Year Ended 30 June 2014 (158,140) (158,140)

BALANCE AT 30 JUNE 2014 2,000 (742,321) (740,321)

Total Comprehensive loss for the Year Ended 30 June 2015 (316,291) (316,291)

BALANCE AT 30 JUNE 2015 2,000 (1,058,612) (1,056,612)

Total Comprehensive loss for The Year Ended 30 June 2016 (535,586) (535,586)

BALANCE AT 30 JUNE 2016 2,000 (1,594,198) (1,592,198)

Total Comprehensive loss for the 4 month period ended 30 June 2016 (1,698,997) (1,698,997)

Contributions of equity, net of transaction costs 2,494,323 2,494,323

Share-Based payments 842,233 6,591 848,824

BALANCE AT 31 OCTOBER 2016 3,338,556 6,591 (3,293,195) 51,952

STATEMENTS OF CASH FLOWS

4 months Oct 2016 $ (audited)

12 months June 2016 $ (audited)

12 months June 2015 $ (audited)

12 months June 2014 $ (audited)

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from Customers 419,637 9,978 31,528 527,470

Payments to Suppliers and Employees (1,172,421) (650,613) (194,225) (380,043) Proceeds from Government Grants – 34,787 55,215

NET CASH USED IN OPERATING ACTIVITIES (752,784) (640,635) (127,910) 202,642

CASH FLOWS USED IN INVESTING ACTIVITIES

Payments for Trademarks, Licenses and Patents (12,615) (15,650) (27,576)

Purchase of Plant and Equipment (10,802)

NET CASH USED IN INVESTING ACTIVITIES (10,802) (12,615) (15,650) (27,576)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from Borrowings from Related Parties 592,500 193,000 146,500 Repayment of Borrowings from Related Parties (80,525) (15,585) (324,483) Proceeds from the Issue of Convertible Notes 2,500,000

NET CASH FROM/(USED IN) FINANCING ACTIVITIES – 3,011,975 177,415 (177,983)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (763,586) 2,358,725 33,855 (2,917)

Cash and Cash Equivalents at the Beginning of the Financial Year 2,398,907 40,182 6,327 9,244

CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR/PERIOD 1,635,321 2,398,907 40,182 6,327

PRO-FORMA STATEMENTS OF FINANCIAL POSITION

Note 31 Oct 2016 $AUD audited

Pro-forma $6m minimum subscriptions

Pro-forma $7m target subscriptions

Pro-forma $8m maximum subscriptions

Cash and Cash Equivalents 4a) 1,635,321 6,946,573 7.876,573 8.806,573 Trade and Other Receivables 370,693 370,693 370,693 370,693 Prepayments 5,838 5,838 5,838 5,838 Inventories 733,075 733,075 733,075 733,075 Investment in Sustainable Soils & Farms 125,244 125,244 125,244 125,244

TOTAL CURRENT ASSETS 2,870,171 8,181,423 9,111,423 10,041,423 Non-Current Receivables 17,428 17,428 17,428 17,428 Plant and Equipment 8,642 8,642 8,642 8,642 Intangible Assets 42,927 42,927 42,927 42,927

TOTAL NON-CURRENT ASSETS 68,997 68,997 68,997 68,997

TOTAL ASSETS 2,939,168 8,250,420 9,180,420 10,110,420

Trade and Other Payables 331,214 331,214 331,214 331,214 Superannuation Payable 21,945 21,945 21,945 21,945 Provisions 27,239 27,239 27,239 27,239 Convertible Notes 3e) 2,489,390

CURRENT LIABILITIES 2,869,788 380,398 380,398 380,398 Non-Current Provisions 17,428 17,428 17,428 17,428

TOTAL NON-CURRENT LIABILITIES 17,428 17,428 17,428 17,428

TOTAL LIABILITIES 2,887,216 397,826 397,826 397,826

NET ASSETS 51,952 7,852,594 8,782,594 9,712,594 Issued Capital 4b) 3,338,556 11,207,946 12,137,946 13,067,946

Share-Based Payments Reserve 3a) 6,591 6,064 6,064 6,064 Accumulated Losses (3,293,195) (3,361,416) (3,361,416) (3,361,416)

TOTAL EQUITY 51,952 7,852,594 8,782,594 9,712,594

NOTES TO THE FINANCIAL INFORMATION

These are the financial statements of Wattle Health Australia Limited (the “company”) which is incorporated and domiciled in Australia and its controlled entity, being the partnership of the LLEA LK Family Trust and the Williams Family Trust (together, the “consolidated entity”).

NOTE 1 BASIS OF PREPARATION

This financial information has been prepared on an accruals basis and is based on historical costs, applying the going concern basis of accounting. All amounts are presented in Australian dollars, unless otherwise noted.

GOING CONCERN

The audited historical financial information which is presented in this Financial Information is presented on a going concern basis of accounting. This going concern basis of accounting formed a basis for the independent auditor’s emphasis of matter paragraph which was included in the independent auditor’s unqualified reports to the general purpose financial statements of the Group for the years ended 30 June 2014, 30 June 2015 and 30 June 2016 and the 4 month period ended 31 October 2016.

The following statements were made in those financial statements regarding the going concern basis of accounting which are still relevant to the audited historical financial information prepared for this Prospectus:

This financial information has been prepared on a going concern basis, notwithstanding the fact that for the 4 months ended 31 October 2016, the Group generated a loss after tax of $1,698,997 and incurred net cash outflows from operations of $752,784. These conditions indicate a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern. The directors believe that it is appropriate to prepare the accompanying financial information on a going concern basis for the following reasons:

• A capital raising in the form of an initial public offering is expected to occur in the first half of calendar 2017 to raise between $6m and $8m;

• In October 2016 the Group had available cash reserves of $1,635,321, principally attributable to the issue of $2.5m unsecured convertible notes issued in June with 6% interest and an entitlement to convert those notes upon a liquidity event at a price of 80% of the listing price of the company’s ordinary shares as at the date of conversion. The directors expect that the notes will convert into shares when the initial public offering occurs however in the event the company does not list within 24 months from the date the notes were issued, the directors expect to extend the maturity of the notes beyond June 2018.

• In addition to this on 12 August 2016 the Group issued shares in order to repay its shareholder loans, which at 12 August 2016 had a value, including accrued interest of $2,494,323; and

• The cash flow forecast anticipates increased revenue from sales of goods and control of costs, as and where appropriate.

For these reasons, the Directors believe that the assumption of a going concern basis in the preparation of this financial information is appropriate. The financial statements do not include any adjustments in relation to the recoverability or classification of recorded assets, nor the amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern.

NOTE 2 SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, deposits held at call with banks, other and short-term highly liquid investments with original maturities of three months or less.

LOANS AND RECEIVABLES

Loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans and receivables”. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

INVENTORIES

Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a ‘first in first out’ basis. Cost comprises direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined after deducting rebates and discounts received or receivable. Stock in transit is stated at the lower of cost and net realisable value. Cost comprises purchase and delivery costs, net of rebates and discounts received or receivable. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

FINANCIAL ASSETS

Investments in unlisted equity securities with less than a significant interest in the voting rights and power in the investee are held at fair value, with any changes in fair value taken to the profit or loss. Fair value is calculated with reference to the price of the latest arms-length seed capital price of the investee.

INTANGIBLE ASSETS

Trademarks and licenses acquired are initially recognized at cost and are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortized to profit or loss using the straight-line method over 10 to 20 years, which is the shorter of their estimated useful lives and/or period of contractual rights.

TRADE AND OTHER PAYABLES

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided prior to the end of the period that are unpaid and arise when there is an obligation to make future payments in respect of the purchase of these goods and services.

CONVERTIBLE NOTES

Convertible notes are recognised when the Group is contractually bound to the instrument. Convertible notes where the option to convert to equity is in the hands of the note holder are classified as a liability in the statement of financial position and following initial recognition at fair value are accounted for at amortised cost.

Convertible notes where the option to convert to equity is at the discretion of the Group are classified into their debt fair value, with the residual fair value in equity. Where there is no reliable fair value for the debt component, due to a lack of a deep and liquid market for similar debt instruments in the market, all of the convertible note is recorded as a liability at transaction date value and then subsequently measured at amortised cost.

OTHER FINANCIAL LIABILITIES

Financial liabilities are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method. Any financial liability that includes an equity conversion feature is classified as a financial liability where a contractual obligation exists, enforceable at the discretion of the counterparty, to settle the liability with cash or a variable amount of equity instruments that may be issued by the company as consideration.

FOREIGN CURRENCY TRANSLATION AND BALANCES

The functional currency of each entity is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the Group’s functional and presentation currency.

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when the fair values were determined.

Exchange differences arising on the translation of monetary items are recognised in the statement of comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.

TAX LOSSES

Deferred tax assets relating to carry-forward losses are only recognised to the extent that the Group has satisfied all legal and jurisdictional requirements that qualify for their recognition and that the Group can prove that the earning of assessable income to recoup those losses is probable.

SHARE-BASED PAYMENTS

Equity-settled share-based compensation benefits may be provided to contractors or employees in-exchange for the rendering of services. The cost of equity-settled transactions is measured at fair value on grant date. Grant date is the date that both contracting parties have a clear understanding of the terms and conditions attached to the share-based payment arrangement.

Fair value is independently determined using quoted market prices when issuing shares, or in the case of unlisted ordinary shares, with reference to the price of the latest arms-length seed capital price.

The cost of the payment is charged to the profit or loss over its vesting period, being the period in which the service (for which consideration is given) is rendered. Where non-market based vesting conditions are not satisfied and the underlying equity instrument lapses, is cancelled or is forfeited, the value of the amount previously charged to the profit or loss is credited back.

NO MATERIAL CHANGES TO THE GROUP’S FINANCIAL POSITION

To the best of the Directors’ knowledge and belief, there have been no material items, transactions or events subsequent to 31 October 2016 and not otherwise disclosed in this Prospectus and in Note 3 below.

NOTE 3 ASSUMPTIONS USED IN PREPARING PRO-FORMA FINANCIAL INFORMATION

The following key assumptions were used in preparing the Pro-Forma Statement of Financial Position which is included in the Financial Information:

Material transactions subsequent to 31 October 2016

a) On 6 December the company and its employee (not a member of key management personnel), by mutual agreement cancelled an agreement entitling that employee to performance shares. His previous agreement entitled him to 500,000 performance shares, which vested in the event that the share price for five consecutive days maintained a share price of 80 cents. A total of $527 was credited to the profit and loss as a consequence of this cancellation of the agreement.

b) No other matter or circumstance has arisen since 31 October 2016 that has significantly affected, or may significantly affect the entity’s operations, the results of those operations, or the entity’s state of affairs in future financial years.

Transactions that are expected to take place as part of this Prospectus

c) The issue of a minimum of 30,000,000 shares at 20 cents per share to raise $6,000,000, to a target issue of 35,000,000 shares at 20 cents per share to raise $7,000,000 up to a maximum of 40,000,000 shares at 20 cents per share to raise $8,000,000;

d) Costs directly associated with the issue of new shares under Prospectus to investors, which are $620,000 if the minimum issue is achieved, through to costs of $690,000 if the target issue is achieved up to $760,000 if the maximum issue of shares is achieved; and

e) The issue of 15,625,000 ordinary fully paid shares in Wattle Health Australia Limited for the conversion of convertible notes from debt to equity, which become convertible upon the successful completion of an Initial Public Offering. Accrued interest earned on the convertible note will be settled in cash.

NOTE 4 RECONCILIATIONS OF AUDITED HISTORICAL FINANCIAL INFORMATION TO PRO-FORMA FINANCIAL INFORMATION

Note

Note 4a) Cash and cash equivalents

Pro-forma $6m minimum subscriptions

Pro-forma $7m target subscriptions

Pro-forma $8m target subscriptions

31 October 2016 audited 1,635,321 1,635,321 1,635,321

Prospectus shares December2016 3c) 6,000,000 7,000,000 8,000,000

Payment of interest accrued on convertible notes 3e) (68,748) (68,748) (68,748)

Costs of the offer 3d) (620,000) (690,000) (760,000)

TOTAL 6,946,573 7,876,573 8,806,573

Note 4b) Issued capital

31 October 2016 audited 3,338,556 3,338,556 3,338,556

Conversion of convertible notes to equity 3e) 2,489,390 2,489,390 2,489,390

Prospectus shares December 2016 3c) 6,000,000 7,000,000 8,000,000

Costs of the offer 3d) (620,000) (690,000) (760,000)

TOTAL 11,207,946 12,137,946 13,067,946

NOTE 5 RELATED PARTY ARRANGEMENTS

Details of related party arrangements, including remuneration contracts with key management personnel, are disclosed in sections 9.9 and 9.10 of this Prospectus.

NOTE 6 CONTINGENT LIABILITIES

As at 31 October 2016 the Group had no contingent liabilities that are material to the Financial Information presented in this Prospectus.

Investigating Accountant’s Report

Investigating Accountant’s Report

Investigating Accountant’s Report

Investigating Accountant’s Report

Risk Factors

7. Risk Factors

This section identifies some of the major risks associated with an investment in the Company. Intending Applicants should read the whole of this Prospectus in order to fully appreciate such matters and the manner in which WHA intends to operate before any decision is made to subscribe for Shares.

7.1 SPECULATIVE NATURE OF INVESTMENT

Any potential investor should be aware that subscribing for Shares involves various risks. The Shares to be issued pursuant to the Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares. The Company’s business is in its early growth stage, where it is continuing to build its branding and market penetration. An investment in Shares of WHA should therefore be considered very speculative.

7.2 BUSINESS RISKS ASSOCIATED WITH THE COMPANY

(a) Sufficiency of funding: The funding proposal set out in this Prospectus is based on the Company’s best estimation of cash flow projections and estimated expenditures to carry out its stated objectives as detailed in this Prospectus. Investors should note that WHA has limited financial resources and may require additional funds from time to time to finance its other longer-term objectives. WHA may never achieve profitability. The Company’s ability to raise additional funds will be subject to, among other things, factors beyond the control of WHA and its Directors, including cyclical factors affecting the economy and share markets generally. The Directors can give no assurance that future funds can be raised by WHA on favourable terms, if at all.

(b) Business strategy execution risk : The Company’s future growth and financial performance is dependent on the Company’s ability to successfully execute its business strategy. This will be impacted by a number of factors, including the Company’s ability to:

• expand through new distribution channels and develop direct within Australian domestic and export markets for its current commercialised products;

• ability to successfully commercialise its current formulations and being able to distribute these products;

• innovate and successfully commercialise new products that are appealing to the consumer;

• comply with regulatory requirements (reflecting the sensitive regulatory nature or highly regulated environment in which the Company’s Domestic and Export Infant Formula are sold).

There can be no assurance that WHA can successfully achieve any or all of the above initiatives/strategies. The failure by WHA to successfully execute its business strategy could have a material adverse effect on the Company’s business, financial condition and results of operations.

(c) Limited history in the nutritional health and food products market risk : WHA is relatively a new entrant in the market of quality nutritional health and food products (FMCG category). It therefore faces the risks common to any new company including:

• building its depth and infrastructure;

• successfully obtaining market penetration and strategic partners to secure market share;

• increasing its product/brand recognition; and

• obtaining acceptance by the end consumers.

Investors should consider WHA’s business and prospects in light of the risks, uncertainties, expenses and challenges that it may face as an early-stage business. If WHA is not successful in addressing such risks, WHA’s business prospects and financial performance may be materially and adversely affected.

(d) Manufacturing/production risks: The manufacturing of quality nutritional health and food products is very complex and associated with uncertainties in relation to issues such as the costs of goods, manufacturing capacity for large scale manufacturing and the environment. The Company currently intends to source its products from external third party manufacturers and suppliers. WHA has currently entered into a manufacturing/supply agreement with Blend and Pack which is a CNCA accredited manufacturer for the manufacture of WHA’s Export Infant Formula product range. Details of the current Blend and Pack Nutritional Powders Supply Agreement are summarised in section 9.6. WHA has also entered into a non-exclusive manufacturing/supply agreement with Nature One Dairy Pty Ltd for its Australian and New Zealand operations (being the supply of its Domestic Infant Formula product range). Should difficulties or delays occur in the production of the Company’s products (e.g. mechanical breakdowns), any increases in the cost of manufacturing such products or if adverse weather (such as fire, drought and flooding) halts or reduces production, such occurrences are likely to have an adverse material impact on the financial performance of the Company.

(e) Reliance on major suppliers: WHA is not a manufacturer, thus relies on third party manufacturers to supply all its products. For the Australian domestic market, WHA has an ongoing supply agreement for the production of its Domestic Infant Formula products with Nature One Dairy Pty Ltd. The supply agreement with Nature One Dairy Pty Ltd does not cover the manufacture of WHA’s China CIQ commercialised product being its Export Infant Formula product range, as Nature One Dairy Pty Ltd is not a CNCA approved manufacturer for infant formula. CNCA approval is required for the exportation of WHA’s Export Infant Formula range into China. As noted in section 7.2 (d), the Company sources its Export Infant Formula product range (which is China CIQ registered) from a CNCA accredited manufacturer, Blend and Pack (see section 9.6). However it is important to note that Blend and Pack has no contractual obligation to continue to supply WHA with its Export Infant Formula product range. Where Blend and Pack accepts a product order from WHA, the order is fulfilled on the terms of a Blend and Pack supply agreement which is entered into on an order by order basis. In this regard, WHA does not have an ongoing manufacturing agreement with any CNCA accredited manufacturer for its Export Infant Formula product range. Accordingly, there is a material risk to the Company’s business if a significant supplier/manufacturer for any reason is unable or refuses to supply/manufacture the products for WHA as required, breaches or terminates any supply arrangement with the Company.

(f) Dependence on service providers: As outlined, the Company’s sourcing and product distribution is reliant on third party service providers. Thus, WHA intends to operate a significant amount of its key activities through a series of contractual relationships with independent contractors and suppliers. Typically outsourced arrangements carry a risk that the third parties may not adequately or fully comply with its or their respective rights and obligations. A failure may lead to termination and/or significant damage to the Company’s business including loss of profit and business/sale opportunities. Additionally, while WHA intends to source its products from a range of suppliers, a loss of one or multiple suppliers, or a significant disruption in the supply chain could have a material adverse effect on the Company.

(g) China CIQ registration risk : WHA has China CIQ registration (current as at the date of this Prospectus) for three infant formulations. WHA’s current China CIQ registration of its Export Infant Formula range requires WHA to obtain such products from Blend and Pack (a CNCA accredited manufacturer) and specifies that Suzhou Peloris Trading Co Ltd (WHA’s nominated import agent) will import such products into China. China CIQ registration is required for the exportation of particular food products into China and enables those products to be sold in all traditional retail channels. The rigorous requirements which must be satisfied in order to obtain China CIQ registration may act as a barrier to entry for many other competitor businesses wanting to export their goods into China. Accordingly, the Company’s China CIQ registration for a number of its products is an important competitive advantage to WHA. However, the process required to maintain the China CIQ registration is onerous and includes regular audits by the relevant authorities. If WHA were to lose its current China CIQ registration for its three Export Infant Formula products (for example, where China CIQ registration was not renewed in January 2018 or as a result of a change in government, legislation, or breach in its licence condition) or if it became easier for competitors to obtain China CIQ registration due to regulatory changes, this would adversely impact the financial performance of the Company in its ability to access the export markets in China. Presently China CIQ registration is only required for sales into China and lack of China CIQ registration would not prohibit or prevent sales into other Asian countries.

(h) CNCA manufacturing risk : From 1 January 2018, each manufacturer of infant formula must register each of its products with the CFDA in order for that infant formula to be sold in China. Additionally, each manufacturer of infant formula can only register three brands and nine different products with the CFDA. As there are only eight Australian CNCA accredited manufacturers which each will be limited to three brands and nine products, there is a material risk that a CNCA manufacturer will not choose to manufacture or register with the CFDA WHA’s branded Export Infant Formula. If this were to occur, from 1 January 2018, WHA would not be able to sell its infant formula into China but would still be free to sell its infant formula into other Asian countries. This may adversely impact the financial performance of the Company and its ability to access the export markets in China.

(i) Logistics risk : WHA is reliant on out-sourced logistics. Accordingly, if an adverse event occurs such as a strike, poor logistics technology, increases in the price of energy, changes in transport services and the physical destruction of infrastructure (e.g. roads and railways), WHA (or its third party providers) may not be able to efficiently supply and deliver the Company’s products. This may have an adverse impact on the Company’s financial performance.

(j) Reduced demand for the Company’s products: The future success of WHA will be reliant on the sustained and potential growth in demand for its products primarily in Australian domestic markets and export markets (in Asian countries). There is a risk that demand for such products may decrease for reasons outside the Company’s control including the introduction of new taxes, aggressive selling by other countries and similar/substitute products being made available. This may adversely affect the Company’s financial performance.

(k) Competition risk : The sale of quality nutritional health and food products in the FMCG category is highly competitive and includes large multinational consumer product companies with significantly greater financial, technical, human, development and marketing resources than the Company. Some of these competitors may be able to respond more effectively to changing business and economic conditions. Competition in nutritional health and food products is largely based on branding presence, pricing of products, quality of products, perceived value of products, in-store presence and visibility and, promotional activities (including online advertising). Further at the date of this Prospectus WHA has only 7 commercialised products in the dried dairy milk category and therefore has exposure to changes in competition or new products in this dried dairy milk category – without the benefit of any current product differentiation at this time into other non dairy milk categories. WHA cannot predict what its competitors will do in these areas or whether new competitors offering comparable products at more attractive prices will emerge. As a consequence, the Company’s current and future products may become uncompetitive, resulting in adverse effects on revenue, margins and profitability. Additionally, WHA’s ability to compete will also depend on a number of other factors such as the continued strength of the Company’s brand and products and its ability to enter into new markets and increase its presence in existing markets.

(l) Product safely and liability risk : Adverse events could expose WHA to product liability claims or litigation, resulting in product recall and/or monetary damages being awarded against the Company. In such event, the Company’s liability may exceed the Company’s insurance coverage. Additionally, product safety or quality failures (whether actual or perceived) or allegations of defective products, even when false or unfounded could significantly damage the Company’s reputation and reduce consumer demand for the Company’s products resulting in adverse effects on revenue margins, profitability, the business and its operations.

(m) New product risk : There is no guarantee WHA products as commercialised will be successful. Any failure to successfully launch and commercialise a new product may have a material adverse effect on WHA including loss of business opportunity and profitability. The risks with supplying a new product include but are not limited to costs (including advertising, promotional and marketing expenses) exceeding expectations and sales being less than expected due to customers not being willing to pay for the products.

(n) Customer credit risk : A general decline in economic conditions or business downturn may negatively impact an existing retailer customer’s ability to purchase the Company’s products. Such financial difficulties could result in WHA reducing or ceasing its business with that retailer customer. Alternatively, WHA may extend further credit to its retailer customers. The Company’s inability to collect such receivables (i.e. bad debts) from one or a group of retailer customers could have a material adverse effect on the Company’s financial performance. If a retailer customer were to go into liquidation, WHA could incur additional costs if WHA decides to buy back the retailer customer’s inventory of the Company’s products to protect its brand.

(o) Currency risk : Revenue and expenditures in overseas jurisdictions are subject to the risk of fluctuations in foreign exchange markets. Where a material proportion of the Company’s revenue is in the future generated in foreign currencies, the Company will be exposed to the risk of changes in exchange rates of such foreign currency against the Australian dollar. WHA has no plans at this stage to hedge its foreign currency payments.

(p) Reputational risk : WHA’s failure to protect its reputation or the failure of its third party suppliers or distributors to protect their reputation or failure in product quality from WHA’s sourced manufacturers – all could have a material adverse effect on WHA including its brand and profitability. The Company’s brand could be jeopardised if it fails to maintain a supply of high quality products or if the Company, or the third parties with whom it does business, fail to comply with regulations or accepted business practices (including ethical, social, product, labour and environmental standards, or related political considerations). Additionally, WHA depends on the reputations of its third party suppliers, which can be affected by matters outside of the Company’s control. If damage were to occur to the Company’s or the reputation of its third party suppliers, the demand for the Company’s products may be reduced and/or the Company’s products may be boycotted. This will likely have an adverse effect on revenue margins, profitability and the Company’s operations.

(q) Business disruption risk : WHA is engaged in the development, sourcing and sale of quality nutritional health and food products. Accordingly, WHA is subject to the risks inherent in such activities, including environmental events, strikes and other labour disputes, industrial accidents, disruptions in supply chain, product quality control, safety and regulatory issues and other events outside of the Company’s control including natural disasters.

(r) Growth risk : Where commercialisation and market penetration of a product is successful, WHA may through lack of availability of products, materials, packaging, human resources or other unforeseen circumstances be unable to supply its products in a timely manner to meet the demand of its customers. Alternatively even with market penetration, demand for food products similar to WHA’s products may reduce for reasons not in the control of WHA. Such events could have an adverse effect on the reputation of WHA as well as its profitability.

(s) Reliance on key personnel: WHA currently employs a number of key management personnel and the Company’s future depends on retaining and attracting suitably qualified personnel. WHA has included in its employment with key personnel provisions aimed at providing incentives and assisting in the recruitment and retention of such personnel. It has also, as far as legally possible, established contractual mechanisms through employment and consultancy contracts to limit the ability of key personnel to join a competitor or compete directly with the Company. Despite these measures, however, there is no guarantee that WHA will be able to attract and retain suitably qualified personnel, and a failure to do so could materially and adversely affect the business, operating results and financial prospects.

(t) Market and consumer trend risk : The Company’s continued success depends on its ability to anticipate, react and adapt quickly to changes in industry trends as well as consumer preferences/attitudes toward its products. WHA must continually work to develop, commercialise and market new products and enhance the recognition of its branding. Failure to anticipate, react and adapt to industry trends in a timely and cost effective manner may affect the Company’s financial results. Additionally, the increasing use of social media (such as Facebook, Instagram, Twitter, WeChat and Weibo) by consumers affects the speed at which information and opinions are shared, which may result in the rapid change of industry trends/ consumer preferences. If WHA is unable to anticipate, respond and adapt to new trends in the market/changes to consumer preferences, the Company’s financial performance may suffer.

(u) Regulatory risks: WHA and its products are subject to various laws and regulations including but not limited to accounting standards, tax laws, environmental laws, product content requirements, labelling/packaging, regulations, import and customs regulations. Changes in these laws and regulations (including interpretation and enforcement) could adversely affect the Company’s financial performance. Laws and regulations are specific to each geographic location. In this regard, there is a risk that a certain product may not be able to be supplied in another jurisdiction because it fails to meet that jurisdiction’s regulatory requirements (e.g. product registration requirements). Additionally, if WHA fails to remain up to date with these various regulatory requirements, there is a risk that the Company’s financial performance could be adversely affected.

(v) Changes to import or export trade barriers: Any adverse changes to trade tariffs or duties, the subsidisation of local producers or the introduction of other important trade barriers could reduce the Company’s profitability and make the exportations of such products financially unsustainable.

Risk Factors

(w) Insurance coverage risk : While WHA currently has in place what it reasonably believes to be sufficient levels of insurance to cover general and product liability, directors’ and officers’ liability and workers compensation claims, there is a possibility that events may arise which are not covered by the Company’s insurance policies. In those circumstances, WHA will be liable to cover such costs regardless of the quantum. This could affect the Company’s ability to conduct and operate its business.

(x) Information technology risks: WHA relies and uses information technology in conducting its business including (but not limited to) using the internet to process, transmit and store electronic and financial information, for digital marketing purposes, to manage a variety of business processes and activities such as inventory control, financial management and reporting database management. If WHA is unable to protect against service interruptions, data corruption, cyber security breaches or network security breaches, the Company’s business operations could be negatively affected. The Company’s information technology systems (some of which may be managed by a third party), may be vulnerable to disruptions, damage or shutdowns as a result of failures during the process of upgrading or replacing software, computer viruses, power outages, hardware failures, computer hacking, user errors or other similar events. If the Company’s information technology systems suffer severe damage, disruption or shutdown and WHA does not efficiently resolve such issues, the sale of the Company’s product may be materially and adversely affected. While WHA will use all reasonable endeavours to prevent such security breaches, if WHA fails to do so, it may suffer financial and reputational damage and potentially penalties because of the unauthorised use and disclosure of confidential information belonging to WHA or to its distributors, customers or suppliers.

(y) Force majeure: WHA may be adversely impacted by risks outside the control of WHA including labour, unrest, war, sabotage, extreme weather conditions (e.g. fires and floods), quarantine restrictions, explosions or other similar incidents.

7.3 THE COMPANY’S INTELLECTUAL PROPERTY

Counterfeit products risk : Third parties may distribute and sell counterfeit versions of the Company’s products, which may be inferior in quality and/or pose safety risks for consumers. Consumers could confuse the Company’s products with these counterfeit products, which could cause them to refrain from purchasing the Company’s brands in the future or turn to the Company’s competitors. Such an occurrence could adversely affect the Company’s financial performance. The presence of counterfeit versions of the Company’s products in the market could also dilute the value of the Company’s brands or otherwise have a negative impact on its reputation and business. WHA may be unable to prevent all counterfeiting of its products or the infringement of its intellectual property rights.

7.4 EXPENDITURE PROGRAM

WHA has not entered into contracts for a number of the material items covered by the Expenditure Program, nor does it have binding quotations in relation to such items. Rather the Directors have determined that following the successful close of the Offer, WHA will be well positioned to negotiate the exact terms for such contracts. WHA has indicative quotations for major expenditures items.

The Directors have extensive experience in the sale of nutritional health and food products and have prepared the anticipated expenditure detailed in section 1A and 2.9 based on discussions with potential suppliers of those services and their own experience of the likely costs for those expenditure items. While the Directors are confident WHA will be able to source suitable suppliers, there is a risk that WHA may not be able to source those suppliers at the estimated expenditure in section 1A and 2.9.

7.5 NO INDEPENDENT VALUATION

No independent valuation has been undertaken of WHA for the purposes of the Listing. Valuations of early stage companies can be imprecise.

The Board do not believe that an independent valuation would be meaningful given the likely qualifications and limitations in such valuations and the difficulties and high cost of determining the likely commercial success of the Company, its technologies and products given the further development work required.

7.6 MARKET FOR SHARES

Prior to the Offer there has been no public market for the Shares. No assurance can be given that an active market will develop in the Shares or that the Shares will trade at or above the Offer Price after the Shares have been listed on the Official List and after Official Quotation.

7.7 STOCK MARKET VOLATILITY

Regardless of the performance of the Company, the day to day performance of the share market and general share market conditions may affect WHA and the price at which it’s shares trade on a share market, such as that, the ASX. The share market has in the past and may in the future be affected by a number of matters including:

• economic conditions, in general terms and in particular to the industry that a business operates in;

• interest rates;

• market confidence;

• supply and demand for money;

• currency exchange rates;

• general economic outlook; and

• changes in government policy.

7.8 PROSPECTIVE INFORMATION

No assurance as to future profitability or dividends can be given as they are dependent on successful product development, future earnings and the working capital requirements of the Company.

There can be no guarantee that the assumptions on which the financial forecasts and development strategies of the Board, or those upon which WHA bases its decisions to proceed, will ultimately prove to be valid or accurate. The forecasts and development strategies depend on various factors many of which are outside the control of the Company.

Changes in interest rates, exchange rates, government budgetary measures, relevant taxation and other legal regimes and Government policies may adversely affect the Company.

The Board expect that the proceeds of the public capital raising and borrowings will provide sufficient capital resources to enable WHA to achieve its current business objectives. The Board can give no assurance, however, that such objectives can be met without future financing or, if future financing is necessary, that it can be obtained on favourable terms.

7.9 CONCLUDING COMMENT

The above list of risk factors ought not to be taken as an exhaustive one of the risks faced by WHA or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of WHA and the value of the Shares offered under this Prospectus. Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

Investment in WHA must be regarded as highly speculative and neither WHA nor any of its Directors or any other party associated with the preparation of this Prospectus guarantee that any specific objectives of WHA will be achieved or that any particular performance of WHA or of the Shares, including those offered by this Prospectus, will be achieved.

Taxation

8. Taxation

The following taxation summary provides a general overview of the Australian tax implications to Australian resident and non-resident investors who acquire and hold the Shares under the offer contained in this Prospectus. This summary is based on the tax laws of Australia as at the date of this Prospectus.

The Australian tax laws are complex and the following is not intended to be a complete statement of the possible implications for investors. It is your responsibility to be satisfied as to the particular taxation treatment that applies to your investment. You should seek independent professional advice with respect to the tax consequences applicable to your individual circumstances before investing.

The following discussion assumes you hold the Shares on capital account. A different treatment may apply if you hold the Shares on revenue account, for example if you are a share trader.

8.1 AUSTRALIAN INVESTORS

CAPITAL GAINS TAX

Australian income tax laws contain a capital gains tax (CGT ) regime. Shareholders who hold Shares on capital account will be subject to the CGT regime on disposal of those Shares. For CGT purposes, you acquire your Shares on the date the Shares are issued or allotted to you. The cost base and reduced cost base of Shares acquired is generally the amount you pay to acquire the Shares plus any incidental costs of acquisition and disposal of the Shares.

Gains on the disposal of Shares held on capital account will be subject to the CGT provisions. A capital gain will arise where the capital proceeds received exceed the cost base of the Shares. Conversely, you incur a capital loss where the capital proceeds received on disposal are less than the reduced cost base of the Shares.

Capital losses made in the same or prior years can typically be offset against any capital gains made in the current year. Any remaining net capital gain is included in assessable income and taxed. Where a net capital loss is incurred it may be carried forward indefinitely and offset against future capital gains subject to the loss recoupment rules.

Individuals and trusts in certain circumstances may be entitled to a 50% discount on capital gains derived where they have held the Shares as a CGT asset for 12 months or more before their disposal.

STAMP DUTY

No stamp duty is payable on the issue or transfer of Shares. Under current stamp duty legislation, no stamp duty would be payable on subsequent transfers of the Shares as long as the Shares remain quoted on the ASX.

TAXATION OF DIVIDENDS

AUSTRALIAN RESIDENT INDIVIDUALS

Dividends paid to you will be included in your assessable income in the income year they are paid. Dividends you receive may be franked or unfranked. Franked dividends have “franking credits” attached and reflect the Australian corporate tax paid on the profits out of which the dividends are paid. The dividends and any franking credits attached should be included in your assessable income.

You will be entitled to a tax offset equal to the franking credits received, provided you are a “qualified person”. In general terms, to be a qualified person two tests must be satisfied being the “holding period rule” and the “related payments rule”. These rules will, in broad terms, be satisfied where you have held the Shares at risk for at least 45 continuous days (excluding the dates of acquisition and disposal).

AUSTRALIAN RESIDENT TRUSTS

Where dividends are paid to Australian resident trusts, the ultimate beneficiaries of the dividends (where they are Australian residents) will generally be entitled to a tax offset based on their share of the franking credit attached to the dividend.

The tax treatment of the dividend will depend on the type of beneficiary receiving the distribution, for example whether the beneficiary is an individual, a corporate entity or a trustee. Where it is the trust itself that is subject to tax on the dividend, then it may be entitled to offset the tax payable against the franking credit.

The benefit of the franking credit will be lost where the trust has a net loss or does not have any net income. However, if the trust has at least $1 of net income, the franking credits will be able to be passed onto those beneficiaries who are presently entitled to income of the trust.

The trustee of a non-fixed trust may be required to make a family trust election in order to enable beneficiaries to utilise the franking credits.

9. Additional Information

9.1 COMPANY INFORMATION

WHA was incorporated on 6 May 2011 under the Corporations Act as Safe Health Australia Pty Ltd. Safe Health Australia Pty Ltd changed its name to Wattle Health Australia Pty Ltd on 20 February 2012 and converted to a public company limited by shares on 13 October 2016. WHA will be taxed as a public company and its statutory accounts will be made up to 30 June annually.

9.2 COMPANY’S CONSTITUTION

The Shares offered under this Prospectus are fully paid ordinary shares in the capital of WHA. A summary of the more significant rights attaching to the Shares is set out below. This summary is not exhaustive nor does it constitute a definitive statement of the rights and liabilities of WHA members.

• Ranking – The Shares will be ordinary shares and will rank equally in all respects with the ordinary shares in WHA on issue prior to the date of this Prospectus.

• Reports and notices – Members are entitled to receive all notices, reports, accounts and other documents required to be furnished to members under the Constitution of WHA and the Corporations Act.

• General meetings – Subject to any preferential or special rights attaching to any shares that may be issued by WHA in the future, members are entitled to be present in person, or by proxy, attorney or representative to speak and to vote at general meetings of WHA. Members may requisition general meetings in accordance with the Corporations Act and the Constitution of WHA.

• Voting – At a general meeting of WHA every ordinary member present in person, or by proxy, attorney or representative shall on a show of hands have one vote and upon a poll every member present in person or by proxy, attorney or representative has one vote for every share held.

• Reduction of capital – Subject to the Corporations Act and Listing Rules, WHA may resolve to reduce its share capital by any lawful manner as the Directors or shareholders may approve.

• Winding up – Members will be entitled in a winding up to share in any surplus assets of WHA in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them respectively.

• Transfer of Shares – Shares in WHA may be transferred in any form authorised by the Corporations Act or approved by the Directors and in the manner prescribed by the Constitution of WHA, the Corporations Act, the Listing Rules or the ASX Settlement and Operating Rules. The Directors may subject to the Listing Rules and the ASX Settlement and Operating Rules, request an ASX approved clearing and settlement facility to apply a holding lock to prevent any transfer of shares. The Directors may refuse to register a paper based transfer of a share in particular circumstances.

• Issue of further Shares – The Directors control the allotment, issue, grant of options in respect of and disposal of shares. Subject to restrictions on the allotment of shares and grant of options to Directors or their associates and the Corporations Act, the Directors may allot, grant options or otherwise dispose of shares on such terms and conditions as they see fit.

• Takeover approval provisions – Any proportional takeover scheme must be approved by those members holding shares included in the class of shares in respect of which the offer to acquire those shares was first made. The registration of the transfer of any shares following the acceptance of an offer made under a scheme is prohibited until that scheme is approved by the relevant members.

• Application of Listing Rules – On admission to the Official List of the ASX then, despite anything in the Constitution of WHA, if the Listing Rules prohibit an act being done, the act must not be done. Nothing in the Constitution prevents an act being done that the Listing Rules require to be done. If the Listing Rules require an act to be done or not to be done, authority is given for that act to be done or not to be done (as the case may be). If the Listing Rules require a Constitution to contain a provision or not to contain a provision, the Constitution is deemed to contain that provision or not to contain that provision (as the case may be). If a provision of the Constitution is or becomes inconsistent with the Listing Rules, the Constitution is deemed not to contain that provision to the extent of that inconsistency.

9.3 CHESS

WHA will apply to be admitted to participate in CHESS, in accordance with the ASX Listing Rules and the ASX Settlement and Operating Rules. On admission to CHESS, WHA will operate an electronic issuer-sponsored sub-register and an electronic CHESS sub-register. The two sub-registers together will make up the Company’s principal register of Shares.

WHA will not issue certificates to Shareholders. Shareholders who elect to hold Shares on the issuer-sponsored sub-register will be provided with a holding statement (similar to a bank account statement), which sets out the number of Shares allotted to the Shareholder under this Prospectus. For Shareholders who elect to hold the Shares on the CHESS sub-register, WHA will issue an advice that sets out the number of Shares allotted to the Shareholder under this Prospectus. At the end of the month of allotment, CHESS (acting on behalf of the Company) will provide Shareholders with a holding statement that confirms the number of Shares (as the case may be) held.

A holding statement (whether issued by CHESS or the Company) will also provide details of a Shareholder’s Holder Identification Number in the case of a holding on the CHESS sub-register or Shareholder Reference Number in the case of a holding in the issuer-sponsored sub-register. Following distribution of these initial holding statements to all Shareholders, a holding statement will also be provided to each Shareholder at the end of any subsequent month during which the balance of that Shareholder’s holding of Shares changes.

9.4 RESTRICTED SECURITIES AND ESCROW ARRANGEMENTS

ASX may, as a condition of granting the Company’s application for Official Quotation of its Shares, classify certain of its Existing Shares as restricted securities. Any such classification will restrict the transfer of effective ownership or control of any restricted securities without the written consent of the ASX and for such period as the ASX may determine. The terms of any such restriction or escrow arrangements will be determined by the ASX in accordance with the ASX Listing Rules. Details of any such restriction or escrow arrangements will be disclosed prior to commencement of Official Quotation of the Company’s Shares.

9.5 INDEX TO MATERIAL CONTRACTS

The following contracts are considered by the Directors to be material for the purposes of this Prospectus or may be relevant to a potential investor and have been divided into the following categories:

• Section 9.6 – material contracts relating to the Company’s supply and logistics arrangements;

• Section 9.7 – other material operational agreements.

9.6 MATERIAL CONTRACTS – SUPPLY AND LOGISTIC ARRANGEMENTS

(A) AUSTRALIAN DUTY FREE PRODUCT SUPPLY AGREEMENT

On 25 August 2016, WHA entered into the Australian Duty Free Product Supply Agreement with James Richardson Proprietary Limited (Customer) for the exclusive supply of WHA Domestic Infant Formula Stage 1, 2 and 3 and WHA Full Cream Milk Powder (Domestic Products).

The following is a summary of the key provisions of the Australian Duty Free Product Supply Agreement.

PRODUCT ORDERS AND PAYMENT:

WHA has agreed to supply the Domestic Products to the Customer in:

• duty free retail businesses located at the airports in Brisbane, Cairns, Perth and Darwin (including all retail shops at such airports) where the Customer is selling at least one product; and

• duty free retail businesses located within the States of Victoria, South Australia and Western Australia (other than the airports) where the Customer is selling at least one product.

The Customer has agreed to pay an agreed price per item of Domestic Product.

EXCLUSIVITY

The Customer has agreed to exclusively purchase the Domestic Products from WHA and no other supplier during the term of the Australian Duty Free Product Supply Agreement. The Customer has also agreed that after the term of the Australian Duty Free Product Supply Agreement, for a period of 24 months, the Customer will not approach or source the supply of the Domestic Products from any of WHA’s suppliers.

WHA has agreed that it will not during the term of the Australian Duty Free Product Supply Agreement supply the Domestic Products to any other duty free retailer which sells or is likely to sell the Domestic Products within the locations listed above (see “Product Orders and Payment”).

There are no minimum order requirements under the Australian Duty Free Product Supply Agreement.

WARRANTIES AND INDEMNITY

The Australian Duty Free Product Supply Agreement contains certain standard representations, warranties and undertakings by WHA to the Customer. These include but are not limited to representations and warranties relating to product specifications and delivery, and indemnities relating to product recalls.

TERM AND TERMINATION

The Australian Duty Free Product Supply Agreement commenced on 22 August 2016 and will terminate on 22 August 2018 (Initial Term) unless terminated earlier or extended.

The Initial Term of the Australian Duty Free Product Supply Agreement can be extended by the Customer for a further three terms of 12 months upon 90 days written notice to WHA.

The Australian Duty Free Product Supply Agreement may be terminated by written notice by either party on the occurrence of an event of default which includes a breach of the Australian Duty Free Product Supply Agreement (provided that such a breach has not been remedied within 30 days of receiving written notice from the other party).

(B) PELORIS GLOBAL SOURCING AGREEMENT

WHA has entered into a services agreement with Peloris Global Sourcing Pty Ltd (PGS). PGS provides cold chain logistics and clearance services for exported Australian products into mainland China. WHA has agreed to exclusively use PGS’s logistics and border clearance services for its Wattle Health Infant Formula Stages 1, 2 and 3 (i.e. WHA’s Export Infant Formula product range) for the purposes of selling and distributing its Export Infant Formula products into mainland China.

PGS is currently WHA’s logistics and clearance services provider for its Export Infant Formula products into mainland China. WHA also engages a number of distributors to sell the Export Infant Formula products within China.

PGS’s Chinese trading company Suzhou Peloris Trading Co., Ltd (SPT ) is the import agent and has licences to import the Export Infant Formula products directly into mainland China. SPT is the nominated import agent on WHA’s China CIQ registration and as such, WHA’s Export Infant Formula products must be imported into China by SPT. SPT is not a party to the Peloris Global Sourcing Agreement. In this regard, WHA will have no contractual right to enforce obligations on SPT.

The following is a summary of the key provisions of the services agreement.

PRODUCT ORDERS AND PAYMENT

WHA’s product distributors in mainland China will place all orders for Export Infant Formula products with PGS. PGS will place such orders for the Export Infant Formula products directly with WHA. Upon receipt of the orders for the Export Infant Formula products from PGS, WHA will deliver the Export Infant Formula products to PGS at a location agreed by the parties.

SPT will then import the relevant Export Infant Formula products into China.

SPT as the import agent will receive payment from WHA’s distributor for each shipment of WHA’s Export Infant Formula products. Upon PGS receiving an invoice from WHA for payment, PGS will transfer the relevant amount (as received by SPT) into an account nominated by WHA.

SPT and PGS (as the case may be) are responsible for the payment of:

• all duties and taxes associated with importing the Export Infant Formula products into mainland China;

• quality assurance management costs including but not limited to obtaining the relevant health certificates, custom fees and AQSIQ liaison; and

• quality assurance importation and clearance services costs including but not limited to China CIQ customs clearance (including the requisite labelling of Export Infant Formula products) and China CIQ inspection and testing.

In this regard, PGS and SPT subtract the service costs (including the abovementioned costs) before transferring any money received from a distributor with respect to each shipment of Export Infant Formula products to WHA.

EXCLUSIVITY

WHA has appointed PGS as its exclusive provider of the services subject to PGS’s ability to service minimum volumes of Export Infant Formula products at WHA’s request.

PGS can provide services to other similar companies. However, PGS will provide preferred supplier services to WHA by providing the services to WHA in preference to other processors in circumstances where insufficient capacity exists to provide the services to WHA and other clients.

WARRANTIES AND INDEMNITIES

WHA provides a number of warranties under the services agreement including that the Export Infant Formula products supplied to PGS:

• will conform to WHA Export Infant Formula products specifications (except to the extent there is an inconsistency between WHA Export Product specifications and legal requirements);

• at the time of supply, the Export Infant Formula products will be of acceptable merchantable quality and fit for purpose;

• will not infringe any trade mark, patent, copyright designs or intellectual property rights of any third party; and

• upon payment in full of the purchase price to WHA, PGS will receive clear title to WHA Export Infant Formula products, free and clear of any mortgages, charges or encumbrances.

PGS also provides a number of warranties under the services agreement including that:

• it holds all licences, permits, consents and authorisations required under any law in relation to the provision of the services;

• its provision of and WHA’s receipt of the services will not infringe the intellectual property or other rights of any person;

• it will work co-operatively will all entities in WHA’s supply chain for the WHA Export Infant Formula products; and

• will provide the services in accordance with the agreement, all applicable laws, authorisations, regulations, applicable professional standards, using due care, skill and diligence.

PGS and WHA each agree to indemnify the other party from and against all claims and proceedings and all loss and damage suffered or incurred directly or indirectly by the other party to the extent that the claims or proceedings arise out of any warranties and representations which are false or become false and the exercise of rights or licenses in the performance or breach of any of its obligations under the services agreement.

Additionally, WHA indemnifies PGS from and against loss suffered or incurred directly by PGS in the form of direct costs of Export Infant Formula products recalls, failure to pass approved testing standards and replacements in mainland China (excluding indirect and consequential loss and damage) to the extent attributable to the supply of WHA Export Infant Formula products. This indemnity is capped at AUD$5,000,000.

TERM AND TERMINATION

The services agreement is for a 3 year term (reviewed every 12 months) and will expire on 21 July 2018 unless extended by written agreement by the parties or terminated earlier.

Either party has the right to terminate the services agreement upon the occurrence of any of the following events:

• the other party commits a material or persistent breach of any term or condition of the agreement and that breach is not capable of remedy or if capable of remedy, is not remedied within 30 days of written notice of the breach;

• the other party is subject to an insolvency event;

• the other party ceases to carry on business; or

• a force majeure event occurs (which continues for more than 30 days in respect of a rolling 12 month period).

(C) NATURE ONE DAIRY PURCHASE AND SUPPLY AGREEMENT

On 16 November 2016, WHA and Nature One Dairy Pty Ltd (Nature One Dairy) entered into a non-exclusive supply agreement (Nature One Dairy Supply Agreement) whereby Nature One Dairy has agreed to manufacture and supply the WHA Domestic Infant Formula Stage 1, 2 and 3 in the territories agreed by the parties being Australia, New Zealand, Thailand, Vietnam, Cambodia, Malaysia, Singapore, Myanmar, Taiwan, Indonesia, Ghana, Nigeria and India (Relevant Territories) on the terms set out in the Nature One Dairy Supply Agreement.

The following is a summary of the key provisions of the Nature One Dairy Supply Agreement.

PRODUCT ORDERS AND PAYMENT

WHA has made an initial order with Nature One Dairy for the supply of tins of its Domestic Infant Formula range at a total price of $237,276 (excluding GST) (Initial Order). The Initial Order amount also represents the minimum order requirement under the Nature One Dairy Supply Agreement (Minimum Order Requirement). Since the Initial Order, WHA has ordered further stock from Nature One Dairy to enable WHA to meet future customer demands.

EXCLUSIVITY

This is a non-exclusive supply agreement. Provided that WHA meets the Minimum Order Requirement, WHA can obtain products from another manufacturer.

Nature One Dairy can supply dairy products to other brands.

WARRANTIES AND INDEMNITY

The Nature One Dairy Supply Agreement contains certain standard representations, warranties and undertakings by WHA to Nature One Dairy.

Nature One Dairy warrants that the products will be “Fit for Use” based on Internationals and Australian Standards.

WHA assumes full responsibility and indemnifies Nature One Dairy for claims arising out of storage, handling or misuse of products after delivery by Nature One Dairy; breach of any warranty provided by WHA under the Nature One Dairy Supply Agreement; and any loss, liability, costs or expenses incurred by Nature One Dairy in connection with any breach of WHA’s packaging obligations. Additionally, WHA indemnifies Nature One Dairy against all costs, charges and expenses incurred by Nature One Dairy in recovering amounts that have not been paid by the due date.

Nature One Dairy indemnifies WHA against all costs, charges and expenses incurred by Nature One Dairy in recovering amounts owing to WHA by Nature One Dairy where Nature One Dairy has failed to complete an order.

TERM AND TERMINATION

The Nature One Dairy Supply Agreement is for a 5 year term commencing 16 November 2016 and can be extended for a further 5 years provided that a number of conditions are satisfied.

The Nature One Dairy Supply Agreement can be terminated by the other party upon 30 days’ written notice where the other party has committed a breach of the Nature One Dairy Supply Agreement which cannot be or has not been remedied, where an insolvency event occurs or where a receiver or liquidator has been appointed.

(D) BLEND AND PACK NUTRITIONAL POWDERS SUPPLY AGREEMENT

On 24 November 2016, WHA entered into an agreement with Blend and Pack Pty Ltd (BAP) pursuant to which BAP supplies nutritional powder in packaging according to WHA specifications and as per the order from WHA (Nutritional Powders Supply Agreement).

BAP is a CNCA accredited manufacturer for general dairy products and infant formula and is listed as WHA’s CNCA accredited manufacturer for its China CIQ registered Export Infant Formula range.

The Nutritional Powders Supply Agreement commenced on 24 November 2016 and has an initial term of one year. The parties have an option to renew the Nutritional Powders Supply Agreement for up to a further 9 years (being 3 further terms of 3 years). However the Nutritional Powders Supply Agreement is “product order based”. Accordingly, once a product order has been accepted and the terms with respect to that order under the Nutritional Powders Supply Agreement have been fulfilled, the parties’ obligations under the Nutritional Powders Supply Agreement are satisfied. There is no ongoing contractual obligation on BAP to supply and manufacture WHA’s Export Infant Formula and BAP may accept or reject an order from WHA. Please see section 7.2 for further information on the risks associated with this arrangement.

Products provided by BAP must comply with the specifications provided by WHA. WHA confirms that products conform to specifications by conducting sampling and testing procedures on products manufactured by BAP.

WHA provides BAP with all necessary information to ensure that all products manufactured by BAP for WHA are appropriately labelled in accordance with applicable laws and regulatory requirements.

9.7

OTHER MATERIAL OPERATIONAL AGREEMENTS

(A) INTUITIVE CONSULTANCY AGREEMENT

On 30 August 2016, WHA entered into a Consultancy Agreement with Intuitive Pty Ltd (Consultant). The Consultant has agreed to perform consulting services with respect to introducing and finalising WHA’s marketing awareness strategies within Australia and globally pursuant to the terms of the Consultancy Agreement (Consultancy Services).

The Consultancy Agreement has a 12 month term commencing 19 December 2016. However, either party may terminate the Consultancy Agreement at any time by giving the other party three months written notice.

WHA has agreed to pay the Consultant a monthly fee for the Consultancy Services on general commercial terms. WHA has agreed to issue the Consultant up to 687,500 Shares based on the achievement of certain share price structured milestones.

(B) MARKETING CONSULTING AGREEMENT

One Collective Consulting Pty Ltd (OCC ) operates a business specialising in the provision of marketing strategy services, and contracts with businesses from time to time. OCC has agreed to provide services to WHA from 1 May 2016.

The initial term of the Marketing Consulting Agreement is 2 years. Unless a party provides 3 months’ written notice of termination to the other party prior to the end of the initial term, the agreement will be automatically renewed for a further 2 years on the same conditions.

In consideration for the services, WHA has agreed to pay OCC a monthly service fee. WHA has also agreed and provided that the agreement has not been terminated, at the end of the initial term, WHA will issue for no consideration 35,000 Shares to OCC (or its nominee) in recognition for the work done by OCC.

The parties may by agreement terminate the Marketing Consulting Agreement or upon a party providing 12 months written notice to the other party. The agreement can also be terminated where a party commits a breach which is not remedied within 14 days or where a party becomes insolvent.

(C) LEAD MANAGER’S MANDATE

JB Advisory Pty Ltd has been appointed as Lead Manager under the Offer, pursuant to a mandate letter between the Lead Manager and WHA (Mandate Letter). The Offer has not been underwritten by the Lead Manager. Under the Mandate Letter, the Lead Manager has agreed to act as exclusive corporate adviser and manage the Offer.

FEES/SHARES TO THE LEAD MANAGER

WHA must pay the Lead Manager management and selling fees totalling 8% (plus GST) on all equity funds raised by the Lead Manager directly under the Offer and 7% (plus GST) on all equity funds raised by third parties under the Offer. The Lead Manager will also receive a monthly retainer for its services.

WHA has agreed to reimburse the Lead Manager for all reasonable out-of-pocket expenses incurred by the Lead Manager in connection with the Mandate Letter and the Offer.

JB Advisory will also be entitled to receive (credited as fully paid):

• 200,000 Shares on listing of WHA;

• 300,000 Shares when the price of WHA shares on the ASX reach $0.40; and/or

• 100,000 Shares when the price of WHA shares on the ASX reach $1.00.

(D) AGREEMENTS: STAFF AND CONSULTANTS

WHA has entered into agreements with staff and consultants. Each of these agreements contains a confidentiality clause. The terms of those agreements with regards to confidentiality are standard in that they impose restrictions on the disclosure of confidential information and restrictions on the use of confidential information, except for the purposes for which it has been disclosed.

The agreements are subject to the usual exclusions in relation to information that was in the public domain when disclosed, that comes into the public domain after disclosure, other than as a result of the recipient’s breach of the agreement or was in the recipient’s possession when disclosed. Some agreements contain other exclusions relating to disclosure required by law to the extent required to be so disclosed.

(E) DIRECTORS’ DEEDS OF INDEMNITY, INSURANCE AND ACCESS

WHA has entered into a deed of indemnity, insurance and access with each of its Directors. The key features of this deed may be summarised as follows:

• to the extent permitted by law, the Company:

• indemnifies each of the Directors against any liability (excluding liability for legal costs) incurred by the Director as an officer or former officer of the Company;

• indemnifies the Director against any reasonable legal costs incurred as a result of the Director defending an action for any liability incurred by the Director as an officer or former officer of the Company;

• releases the Director from any present, future or contingent claims that arise directly or indirectly from the Director’s position acts or omissions as an officer or former officer of the Company;

• WHA must, where possible, maintain appropriate insurance cover in favour of the Director during the term of the Director’s appointment for at least a period of seven years after the Director ceases to be an officer of WHA on terms that are reasonably prudent to the Company;

• the Director, during his or her appointment and for a period of ten years after the Director ceases to be an officer of the Company, may inspect any books and records of WHA in certain circumstances and for particular purposes; and

• the Director is entitled to retain any Board documents, including minutes of Board meetings or committees. These documents will become the property of the Director at the time they are supplied to the Director. Notes of Board meetings or other communications made by the Director will remain the property of the Director.

9.8 CORPORATE GOVERNANCE

The Directors are responsible for the strategic direction of the Company, the identification and implementation of corporate policies and goals, and monitoring of the business and affairs of WHA on behalf of its members.

WHA is cognisant of the Corporate Governance Principles and Recommendations (3rd edition) as published by ASX Corporate Governance Council and acknowledges that the 8 principles set out therein are fundamental to good corporate governance.

The Board believes that the structure of the Company, its management and business practices provide a basis of governance which meets the essential corporate governance principles articulated by ASX in that publication.

One of the key objectives of the Board is to ensure timely, transparent and accurate communication with all members and compliance with all regulatory requirements. To this effect the Board has established a number of committees.

The Board has formally adopted a Corporate Governance Policy for the Company. Under this Corporate Governance Policy, the Board has established:

• An Audit and Risk Committee whose primary function is to provide additional assurance regarding the quality and reliability of financial information used by the Board and financial information provided by the Company pursuant to its statutory reporting requirements.

• A Nomination and Remuneration Committee:

• to review the composition of the Board to ensure that the Board has an appropriate mix of expertise and experience and to assess and review the performance of the Directors of the Company; and

• to review and report to the Board on matters concerning executives’ and Directors’ remuneration.

The Company’s Corporate Governance Policy can be found on the WHA website at www.wattlehealth.com.au.

While the ASX Corporate Governance Principles and Recommendations are not compulsory, WHA will and in accordance with Listing 4.10, advise the market whether it meets the ASX Corporate Governance Principles and Recommendations and if not, state why not. Please find below a high level summary of the Company’s current departures from the ASX Corporate Governance Principles and Recommendations:

DEPARTURE FROM ASX CORPORATE GOVERNANCE PRINCIPLES AND RECOMMENDATIONS REASON FOR DEPARTURE

ASX Recommendation 1.5: A listed entity should have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them. The Company is required to disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the Board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them.

While the Company has adopted a Diversity Policy which provides a framework for the Company to establish and achieve measurable diversity objectives, including in respect of gender diversity, it currently has no female board members or senior executives. The Company recognises the importance of building a strong female presence across all tiers of the business. In this regard, and as the Company grows and Board/employee positions become available, attention will be given to identifying opportunities for improving gender diversity across the organisation.

Once Listed, the Company will disclose in greater detail the measurable objectives for achieving gender diversity and its progress in achieving such objectives.

ASX Recommendation 2.5: The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.

The Executive Chairman, Lazarus Karasavvidis is not an independent Director.

The roles of Executive Chairman and Chief Executive Officer are exercised by the same person, being Mr Karasavvidis.

The Board recognises that it is desirable for the chair of the Board to be an independent Director, however the Company’s current size dictates that this is the most efficient mode of operation at the current time. The Board will review the appointment of further independent Directors and possible independent chair should the Company’s size and growth warrant this.

ASX Recommendation 3.1: A listed entity should have a code of conduct for its directors, senior executives and employees and disclose that code or a summary of it.

ASX Recommendation 4.1: The board of a listed entity should have an audit committee which has at least three members, all of whom are non-executive directors and a majority of whom are independent directors.

The Company is in the process of developing a code of conduct.

Due to the size of the Company and the Board there are currently only two non-executive Directors on the Board (being Eric Jiang and Peter Biantes). Thus, the audit committee includes an executive Director, Lazarus Karasavvidis.

As the Company expands and brings on additional independent Directors, it is the Company’s intention to have the audit committee comprise of non-executive Directors with the majority being independent.

9.9 DIRECTORS’

SHAREHOLDING

QUALIFICATIONS, REMUNERATION AND INTERESTS

Except as disclosed in the Prospectus, no Director or proposed Director of the Company, or firm in which a Director or proposed Director is a partner, has any interest, nor has had any interest for registration, or has received or is entitled to receive any sum for services rendered by either him or the firm to induce him to become or qualify him as a Director, or otherwise in connection with the promotion or formation of WHA or in the property proposed to be acquired by WHA in connection with its promotion or formation.

SHAREHOLDING QUALIFICATIONS & REMUNERATION

The Directors are not required under the Constitution of WHA to hold any Shares in order to qualify as Directors. The Constitution provides the Directors are entitled to remuneration for their services as Directors as determined by WHA in general meeting. A Director may be paid fees or other amounts as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for any disbursements or any other out of pocket expenses incurred as a result of the directorship or any special duties.

DIRECTORS’ INTERESTS IN SECURITIES

Set out below are details of the interests of the Directors in the Shares and other securities of WHA immediately prior to lodgement of the Prospectus with the ASIC for registration. Interests include those held directly and indirectly.

NAME POSITION

Lazarus Karasavvidis Executive Chairman and Chief Executive Officer

$602,250 34,014,734* nil N/A

Eric Jiang** Non-Executive Director $52,000 1,872,371 nil N/A

Peter Biantes Non-Executive Director $52,000 nil nil N/A

* The 34,014,734 Shares are jointly held by Lazarus Karasavvidis and Martin Glenister.

** In recognition of corporate advisory services (unrelated to the work undertaken in preparation of the capital raising under this Prospectus), the Company has previously allotted for no cash consideration (i) 1,872,371 Shares to Acee Group Pty Ltd (an entity related to Eric Jiang) as detailed in the table above. This allotment related to due diligence undertaken by Perpetual SIV Pty Ltd (of which Eric Jiang is a director) concerning an earlier alternative capital raising proposal; (ii) 1,854,014 Shares to GAASP Holdings Pty Ltd (also related to the due diligence undertaken by Perpetual SIV Pty Ltd; and (iii) 1,872,371 Shares to nominees of HMAL Pty Ltd. HMAL Pty Ltd is associated with WHA’s company secretary George Karafotias and the allotment was In consideration of services provided to WHA directly by Mr Karafotias. All of these Shares are reflected in the number of Existing Shares on issue prior to the date of this Prospectus.

9.10 OTHER RELEVANT MATERIAL INTERESTS

(A) MARTIN GLENISTER – SALES EXECUTIVE

Martin Glenister who as at the date of this Prospectus has a relevant interest in 32.48% of the issued share capital (prior to the allotment of the Shares under this Prospectus) has entered into an employment agreement with the Company under which Martin Glenister will receive a base salary inclusive of superannuation of $383,250 per annum.

(B) IAN OLIFENT

Ian Olifent is associated with two Shareholders of the Company which collectively hold 19,292,760 Shares in the Company (equivalent to an 18.42% interest in the capital of the Company after the issue of the Shares under this Prospectus). These Shareholders are Gregory Rasmus as trustee for the Olifent Investment Trust (7,342,630 Shares) and GGP Investments Pty Ltd as trustee for GGP Superannuation Fund (11,950,130 Shares). These entities (associated with Ian Olifent) are early investors in the Company and have no material contractual employment consultancy or like arrangements with the Company.

9.11 INTERESTS AND CONSENTS OF EXPERTS

Except as disclosed in this Prospectus:

• No expert, or firm in which any expert is a partner, has any interest that existed when a copy of the Prospectus was lodged with the ASIC for registration, nor had any such interest within 2 years before lodgement of the Prospectus for registration, in the promotion of WHA or has received or is entitled to receive any sum for services rendered by the expert or the firm in connection with the promotion or formation of the Company, or in any property proposed to be acquired by WHA in connection with the promotion or formation.

• No amounts have been paid or agreed to be paid to any expert, or any firm in which any expert is a partner, for services rendered in connection with the promotion or formation of the Company.

In accordance with the terms of their engagement William Buck Audit (Vic) Pty Ltd (William Buck) has prepared its Independent Accountant’s Report which forms part of this Prospectus. In aggregate, William Buck (as auditors for the Company) will be paid $52,422 (plus GST) for services provided in connection with this Offer and may receive further payments in accordance with its normal time based charges.

In accordance with the terms of their engagement, K&L Gates as Australian Legal Advisors for WHA will be paid $135,000 (plus GST) for services provided in connection with this Offer and may receive further payments in accordance with its normal time based charges.

In accordance with the terms of their engagement, JB Advisory Pty Ltd as Lead Manager will be paid aggregate fees of up to between $420,000 and $560,000 (plus GST) depending upon the amount raised pursuant to the Offer for management fees and commission in connection with this Offer.

WILLIAM BUCK – INDEPENDENT ACCOUNTANT AND AUDITOR

William Buck has given and not withdrawn its written consent to being named as Independent Accountant and auditor for WHA in the Prospectus in the form and context in which it is named and the issue of the Prospectus with its Investigating Accountant’s Report dated 25 January 2017 in the form and context in which it is included and to all references to that report in the Prospectus in the form and context in which those references are included. William Buck has only participated in the preparation of the Prospectus to the extent of preparing its Investigating Accountant’s Report on the Financial Information (see section 6). William Buck was not involved in the preparation of any other part of the Prospectus and did not authorise or cause the issue of any other part of the Prospectus.

Except as provided above William Buck does not make, or purport to make, any statement in this Prospectus and is not aware of any statement in this Prospectus which purports to be based on a statement made by it and makes no representation, expressed or implied, regarding and takes no responsibility for any statement in or omissions from this Prospectus.

K&L GATES – LEGAL ADVISER

K&L Gates has given and not withdrawn its written consent to be named herein as Australian legal advisers to WHA in the form and context in which it is so named. K&L Gates does not make, or purport to make, any statement in this Prospectus and is not aware of any statement in this Prospectus which purports to be based on a statement made by it and makes no representation, expressed or implied, regarding and takes no responsibility for, any statements in or omissions from this Prospectus.

COMPUTERSHARE INVESTOR SERVICES PTY LTD – SHARE REGISTRY

Computershare Investor Services Pty Ltd (Computershare) has given and not withdrawn its written consent to be named herein as the share registry to WHA in the form and context in which it is so named. Computershare does not make, or purport to make, any statement in this Prospectus and is not aware of any statement in this Prospectus which purports to be based on a statement made by it and makes no representation, expressed or implied, regarding and takes no responsibility for, any statements in or omissions from this Prospectus.

JB ADVISORY PTY LTD – LEAD MANAGER

JB Advisory Pty Ltd (JB Advisory) has given, and at the time of lodgement of this Prospectus, has not withdrawn its consent to be named as Lead Manager to the Offer of securities under this Prospectus, in the form and context in which it is named.

JB Advisory was not involved in the preparation of any part of this Prospectus and did not authorise or cause the issue of this Prospectus. JB Advisory makes no express or implied representation or warranty in relation to WHA, this Prospectus or the Offer and does not make any statement in this Prospectus, nor is any statement in it based on any statement made by JB Advisory. To the maximum extent permitted by law, JB Advisory expressly disclaims and takes no responsibility for any material in, or omission from, this Prospectus other than the reference to its name.

9.12 COSTS OF THE OFFER

If the Offer proceeds, the total estimated costs of the Offer, including legal fees incurred, registration fees, fees for other advisors, Prospectus design, printing and advertising expenses and other miscellaneous expenses, will be approximately:

• $620,000 if the minimum funds are raised under the Offer;

• $690,000 if the target funds are raised under the Offer; or

• $760,000 if the maximum funds are raised under the Offer.

9.13 LEGAL PROCEEDINGS

There is no litigation of a material nature or threatened which may significantly affect WHA or its activities.

9.14 AUTHORISATION

This Prospectus is issued by the authority of the Board of the Company.

Dated: 1 February 2017

Lazarus Karasavvidis Executive Chairman

Wattle Health Australia Limited

Glossary

In this Prospectus, unless the context otherwise requires:

$ or A$ means Australian dollars.

AEDT means Australian Eastern Daylight Saving Time.

Applicant means a person who makes an Application for Shares.

Application means an application for Shares under this Prospectus made by an Applicant under an Application Form.

Application Form means the form accompanying or attached to this Prospectus by which an Applicant may apply for Shares.

ASIC means the Australian Securities and Investments Commission.

ASX means the ASX Limited ACN 008 624 691.

ASX Listing Rules means the official listing rules of the ASX.

ASX Settlement and Operating Rules means the rules established under the Corporations Act for settlement of transactions of securities of a company for which CHESS approval has been given.

Board means the board of Directors of the Company.

CHESS means the Clearing House Electronic Sub-Register System.

China CIQ registration is the registration with CIQ of a consumer food product for sale in China.

CIQ means China Entry-Exit Inspection and Quarantine Bureau.

Closing Date means the date on which the Offer closes as described in the Indicative Key Dates section.

CNCA means the Certification and Accreditation Administration of the People’s Republic of China.

Company or WHA means Wattle Health Australia Limited ACN 150 759 363.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth)

Directors means the directors of WHA from time to time.

Domestic Infant Formula means the WHA infant formula product range which meets Australian and New Zealand specifications and regulations.

EBITDA means Earnings before Interest, Tax Depreciation and Amortisation.

Existing Shares means the issued Shares immediately prior to the allotment of Shares under the Offer.

Expenditure Program means the anticipated expenditures to be incurred by WHA and funded by the capital raising under this Prospectus as detailed in section 1A.

Export Infant Formula means the WHA China CIQ registered infant formula product range which meets Chinese specifications, regulations and standards (in particular GB Standards).

Exposure Period means the period of 7 days (or 14 days if extended by ASIC) after the lodgement of the Prospectus with the ASIC during which WHA may not accept Applications.

FMCG means fast moving consumer goods.

GB Standards means the National Standards in China.

Lead Manager means JB Advisory Pty Ltd.

Listing or Listed means the admission of the Shares to quotation on the ASX in accordance with ASX Listing Rules.

Listing Date means the date Listing occurs.

Maximum Subscription means the maximum subscription of $8 million by the issue of 40 million Shares at an issue price of 20 cents per Share.

Minimum Subscription means the minimum subscription of $6 million by the issue of 30 million Shares at an issue price of 20 cents per Share.

Offer means the offer of up to 40 million ordinary Shares under this Prospectus.

Offer Price means $0.20 per Share.

Official List means the official list of the ASX.

Official Quotation means official quotation of the Shares on the Official List.

Opening Date means the date the Offer opens as described in the Indicative Key Dates section.

Prospectus means this replacement prospectus dated 1 February 2017, which replaces the original prospectus dated 13 January 2017.

Share means an ordinary share in the capital of the Company.

Share Registry means Computershare Investor Services Pty Ltd.

Shareholder means a person who holds Shares.

Number of Shares applied for

Enter the number of Shares you wish to apply for. The Application must be for a minimum of 10,000 Shares A$2,000. Shares must be in multiples of 5,000 Shares $A1,000.

Application Monies

Enter the amount of Application Monies. To calculate the amount, multiply the number of Shares applied for in Step A by the Issue Price of A$0.20 per Share.

Applicant Name(s)

Enter the full name you wish to appear on the statement of shareholding. This must be either your own name or the name of a company. Up to 3 joint Applicants may register. You should refer to the table below for the correct forms of registrable title. Applications using the wrong form of names may be rejected. Clearing House Electronic Subregister System (CHESS) participants should complete their name identically to that presently registered in the CHESS system.

Postal Address

Enter your postal address for all correspondence. All communications to you from the Registry will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered.

Contact Details

Enter your contact details. These are not compulsory but will assist us if we need to contact you regarding this Application.

CHESS

Wattle Health Australia Limited will apply to the ASX to participate in CHESS, operated by ASX Settlement Pty Limited, a wholly owned subsidiary of ASX Limited. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold Shares issued to you under this Application on the CHESS Subregister, enter your CHESS HIN. Otherwise, leave this section blank and on issue, you will be sponsored by Wattle Health Australia Limited and allocated a Securityholder Reference Number (SRN).

Payment

Make your cheque, bank draft or money order payable in Australian dollars to "Wattle Health Australia Limited" and crossed "Not Negotiable". Cheques must be drawn from an Australian bank. Cash will not be accepted. The total payment amount must agree with the amount shown in Step B. Complete the cheque details in the boxes provided.

Cheques will be processed on the day of receipt and as such, sufficient cleared funds must be held in your account as dishonoured cheques may not be represented and may result in your Application being rejected

Paperclip (do not staple) your cheque(s) to the Application Form. Receipts will not be forwarded. Funds cannot be directly debited from your bank account.

Before completing the Application Form the Applicant(s) should read the Replacement Prospectus to which this Application relates. By lodging the Application Form, the Applicant agrees that this Application for Shares in Wattle Health Australia Limited is upon and subject to the terms of the Replcement Prospectus and the Constitution of Wattle Health Australia Limited, agrees to take any number of Shares that may be issued to the Applicant(s) pursuant to the Replacement Prospectus and declares that all details and statements made are complete and accurate. It is not necessary to sign the Application Form.

Lodgement of Application

Application Forms must be received by Computershare Investor Services Pty Limited (CIS) by no later than 5:00pm (AEDT) on 24 February 2017. You should allow sufficient time for this to occur. Return the Application Form with cheque, bank draft or money order attached to:

Computershare Investor Services Pty Limited

GPO Box 52

MELBOURNE VIC 3001

Neither CIS nor Wattle Health Australia Limited accepts any responsibility if you lodge the Application Form at any other address or by any other means.

Privacy Notice

The personal information you provide on this form is collected by CIS, as registrar for the securities issuers (the issuer), for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. In addition, the issuer may authorise us on their behalf to send you marketing material or include such material in a corporate communication. You may elect not to receive marketing material by contacting CIS using the details provided overleaf or emailing privacy@computershare.com.au. We may be required to collect your personal information under the Corporations Act 2001 (Cth) and ASX Settlement Operating Rules. We may disclose your personal information to our related bodies corporate and to other individuals or companies who assist us in supplying our services or who perform functions on our behalf, to the issuer for whom we maintain securities registers or to third parties upon direction by the issuer where related to the issuer’s administration of your securityholding, or as otherwise required or authorised by law. Some of these recipients may be located outside Australia, including in the following countries: Canada, India, New Zealand, the Philippines, the United Kingdom and the United States of America. For further details, including how to access and correct your personal information, and information on our privacy complaints handling procedure, please contact our Privacy Officer at privacy@computershare.com.au or see our Privacy Policy at http://www.computershare.com/au.

Correct forms of registrable title(s)

Note that ONLY legal entities are allowed to hold Shares. Application Forms must be in the name(s) of a natural person(s), companies or other legal entities acceptable to Wattle Health Australia Limited. At least one full given name and the surname is required for each natural person. Application Forms cannot be completed by persons less than 18 years of age. Examples of the correct form of registrable title are set out below.

Type of Investor Correct Form of RegistrationIncorrect Form of Registration

Individual: use given names in full, not initials

Joint Holdings: use full and complete names

Trusts: use the trustee(s) personal name(s)

Deceased Estates: use the executor(s) personal name(s)

Minor (a person under the age of 18): use the name of a responsible adult with an appropriate designation

Partnerships: use the partners personal names

Long Names

Clubs/Unincorporated Bodies/Business Names: use office bearer(s) personal name(s)

Superannuation Funds: use the name of the trustee of the fund

Mr John Alfred Smith

JA Smith Company: use the company’s full title, not abbreviations

ABC Pty Ltd

Mr Peter Robert Williams & Ms Louise Susan Williams

Mrs Susan Jane Smith <Sue Smith Family A/C>

Ms Jane Mary Smith & Mr Frank William Smith

<Est John Smith A/C>

Mr John Alfred Smith <Peter Smith A/C>

Mr John Robert Smith & Mr Michael John Smith <John Smith and Son A/C>

Mr John William Alexander Robertson-Smith

Mr Michael Peter Smith <ABC Tennis Association A/C>

Jane Smith Pty Ltd <Super Fund A/C>

ABC P/L or ABC Co

Peter Robert & Louise S Williams

Sue Smith Family Trust

Estate of late John Smith or John Smith Deceased

Master Peter Smith

John Smith and Son

Mr John W A Robertson-Smith

ABC Tennis Association

Jane Smith Pty Ltd Superannuation Fund

Number of Shares applied for

Enter the number of Shares you wish to apply for. The Application must be for a minimum of 10,000 Shares A$2,000. Shares must be in multiples of 5,000 Shares $A1,000.

Application Monies

Enter the amount of Application Monies. To calculate the amount, multiply the number of Shares applied for in Step A by the Issue Price of A$0.20 per Share.

Applicant Name(s)

Enter the full name you wish to appear on the statement of shareholding. This must be either your own name or the name of a company. Up to 3 joint Applicants may register. You should refer to the table below for the correct forms of registrable title. Applications using the wrong form of names may be rejected. Clearing House Electronic Subregister System (CHESS) participants should complete their name identically to that presently registered in the CHESS system.

Postal Address

Enter your postal address for all correspondence. All communications to you from the Registry will be mailed to the person(s) and address as shown. For joint Applicants, only one address can be entered.

Contact Details

Enter your contact details. These are not compulsory but will assist us if we need to contact you regarding this Application.

CHESS

Wattle Health Australia Limited will apply to the ASX to participate in CHESS, operated by ASX Settlement Pty Limited, a wholly owned subsidiary of ASX Limited. If you are a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold Shares issued to you under this Application on the CHESS Subregister, enter your CHESS HIN. Otherwise, leave this section blank and on issue, you will be sponsored by Wattle Health Australia Limited and allocated a Securityholder Reference Number (SRN).

Payment

Make your cheque, bank draft or money order payable in Australian dollars to "Wattle Health Australia Limited" and crossed "Not Negotiable". Cheques must be drawn from an Australian bank. Cash will not be accepted. The total payment amount must agree with the amount shown in Step B. Complete the cheque details in the boxes provided.

Cheques will be processed on the day of receipt and as such, sufficient cleared funds must be held in your account as dishonoured cheques may not be represented and may result in your Application being rejected

Paperclip (do not staple) your cheque(s) to the Application Form. Receipts will not be forwarded. Funds cannot be directly debited from your bank account.

Before completing the Application Form the Applicant(s) should read the Replacement Prospectus to which this Application relates. By lodging the Application Form, the Applicant agrees that this Application for Shares in Wattle Health Australia Limited is upon and subject to the terms of the Replcement Prospectus and the Constitution of Wattle Health Australia Limited, agrees to take any number of Shares that may be issued to the Applicant(s) pursuant to the Replacement Prospectus and declares that all details and statements made are complete and accurate. It is not necessary to sign the Application Form.

Lodgement of Application

Application Forms must be received by Computershare Investor Services Pty Limited (CIS) by no later than 5:00pm (AEDT) on 24 February 2017. You should allow sufficient time for this to occur. Return the Application Form with cheque, bank draft or money order attached to:

Computershare Investor Services Pty Limited

GPO Box 52

MELBOURNE VIC 3001

Neither CIS nor Wattle Health Australia Limited accepts any responsibility if you lodge the Application Form at any other address or by any other means.

Privacy Notice

The personal information you provide on this form is collected by CIS, as registrar for the securities issuers (the issuer), for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. In addition, the issuer may authorise us on their behalf to send you marketing material or include such material in a corporate communication. You may elect not to receive marketing material by contacting CIS using the details provided overleaf or emailing privacy@computershare.com.au. We may be required to collect your personal information under the Corporations Act 2001 (Cth) and ASX Settlement Operating Rules. We may disclose your personal information to our related bodies corporate and to other individuals or companies who assist us in supplying our services or who perform functions on our behalf, to the issuer for whom we maintain securities registers or to third parties upon direction by the issuer where related to the issuer’s administration of your securityholding, or as otherwise required or authorised by law. Some of these recipients may be located outside Australia, including in the following countries: Canada, India, New Zealand, the Philippines, the United Kingdom and the United States of America. For further details, including how to access and correct your personal information, and information on our privacy complaints handling procedure, please contact our Privacy Officer at privacy@computershare.com.au or see our Privacy Policy at http://www.computershare.com/au.

Correct forms of registrable title(s)

Note that ONLY legal entities are allowed to hold Shares. Application Forms must be in the name(s) of a natural person(s), companies or other legal entities acceptable to Wattle Health Australia Limited. At least one full given name and the surname is required for each natural person. Application Forms cannot be completed by persons less than 18 years of age. Examples of the correct form of registrable title are set out below.

Type of Investor Correct Form of RegistrationIncorrect Form of Registration

Individual: use given names in full, not initials

Joint Holdings: use full and complete names

Trusts: use the trustee(s) personal name(s)

Deceased Estates: use the executor(s) personal name(s)

Minor (a person under the age of 18): use the name of a responsible adult with an appropriate designation

Partnerships: use the partners personal names

Long Names

Clubs/Unincorporated Bodies/Business Names: use office bearer(s) personal name(s)

Superannuation Funds: use the name of the trustee of the fund

Mr John Alfred Smith

JA Smith Company: use the company’s full title, not abbreviations

ABC Pty Ltd

Mr Peter Robert Williams & Ms Louise Susan Williams

Mrs Susan Jane Smith <Sue Smith Family A/C>

Ms Jane Mary Smith & Mr Frank William Smith

<Est John Smith A/C>

Mr John Alfred Smith <Peter Smith A/C>

Mr John Robert Smith & Mr Michael John Smith <John Smith and Son A/C>

Mr John William Alexander Robertson-Smith

Mr Michael Peter Smith <ABC Tennis Association A/C>

Jane Smith Pty Ltd <Super Fund A/C>

ABC P/L or ABC Co

Peter Robert & Louise S Williams

Sue Smith Family Trust

Estate of late John Smith or John Smith Deceased

Master Peter Smith

John Smith and Son

Mr John W A Robertson-Smith

ABC Tennis Association

Jane Smith Pty Ltd Superannuation Fund

Corporate Directory

DIRECTORS

Lazarus Karasavvidis – Executive Chairman and Chief Executive Officer

Eric Jiang – Non-Executive Director

Peter Biantes – Non-Executive Director

COMPANY SECRETARY

George Karafotias

71 Victoria Crescent Abbotsford, Victoria 3067

REGISTERED OFFICE

71 Victoria Crescent Abbotsford, Victoria 3067

SHARE REGISTRY

Computershare Investor Services Pty Ltd Yarra Falls, 452 Johnston Street Abbotsford, Victoria 3067

AUSTRALIAN LEGAL ADVISERS

K&L Gates Level 25 525 Collins Street Melbourne, Victoria 3000

INDEPENDENT ACCOUNTANTS

William Buck Audit (Vic) Pty Ltd Level 20, 181 William Street Melbourne, Victoria 3000

AUDITORS

William Buck Audit (Vic) Pty Ltd Level 20, 181 William Street Melbourne, Victoria 3000

LEAD MANAGER

JB Advisory Pty Ltd 8-28 The Corso Manly, NSW 2095