general risks

(a) Economic

General economic conditions, introduction of tax reform, new legislation, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s research and development programmes, as well as on its ability to fund those programmes.

(b) Market conditions

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

(i) general economic outlook;

(ii) introduction of tax reform or other new legislation;

(iii) interest rates and inflation rates;

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

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

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The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the market for equities in general and biotechnology stocks in particular. Neither the Company nor the Directors warrant the future performance of the Company or any return on an investment in the Company.

(c) Additional requirements for capital

The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the capital raising. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its development and research programmes as the case may be. There is however no guarantee that the Company will be able to secure any additional funding or be able to secure funding on terms favourable to the Company.

(d) Reliance on key personnel

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel including the members of the Scientific Medical Advisory Committee. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

(e) Currently No Market

There is currently no public market for the Company’s Shares, the price of its Shares is subject to uncertainty and there can be no assurance that an active market for the Company’s Shares will develop or continue after the Offer.

The price at which the Company’s Shares trade on ASX after listing may be higher or lower than the Offer Price and could be subject to fluctuations in response to variations in operating performance and general operations and business risk, as well as external operating factors over which the Directors and the Company have no control, such as movements in mineral prices and exchange rates, changes to government policy, legislation or regulation and other events or factors.

There can be no guarantee that an active market in the Company’s Shares will develop or that the price of the Shares will increase.

There may be relatively few or many potential buyers or sellers of the Shares on ASX at any given time. This may increase the volatility of the market price of the Shares. It may also affect the prevailing market price at which Shareholders are able to sell their Shares. This may result in Shareholders receiving a market price for their Shares that is above or below the price that Shareholders paid.

(f) Dependence on outside parties

The Company may pursue a strategy that forms strategic business relationships with the other organisations for the manufacture and distribution of products and services. The manufacture and global distribution of products and services is important to the overall success of the Company. There can be no assurance that the Company will be able to attract such prospective organisations and to negotiate appropriate terms and conditions with these organisations.

(g) Funding risk

The Company’s ability to effectively implement its business and operations plans in the future, to take advantage of opportunities for acquisitions, joint ventures or other business

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opportunities and to meet any unanticipated liabilities or expenses which the Company may incur may depend in part on its ability to raise additional funds. The Company may seek to raise further funds through equity or debt financing, joint ventures, production sharing arrangements or other means. Failure to obtain sufficient financing for the Company's activities and future projects may result in delay and indefinite postponement of development or research. There can be no assurance that additional finance will be available when needed or, if available, the terms of the financing might not be favourable to the Company and might involve substantial dilution to Shareholders.

Further, the Company, in the ordinary course of its operations and developments, is required to issue financial assurances, particularly insurances and bond/bank guarantee instruments to secure statutory and environmental performance undertakings and commercial arrangements. The Company’s ability to provide such assurances is subject to external financial and credit market assessments, and its own financial position. Loan agreements and other financing rearrangements such as debt facilities, convertible note issue and finance leases (and any related guarantee and security) that may be entered into by the Company may contain covenants, undertakings and other provisions which, if breached, may entitle lenders to accelerate repayment of loans and there is no assurance that the Company would be able to repay such loans in the event of an acceleration. Enforcement of any security granted by the Company or default under a finance lease could also result in the loss of assets.

The Company is exposed to risks associated with its financial instruments (consisting of cash, receivables, accounts payable and accrued liabilities due to third parties from time to time). This includes the risk that a third party to a financial instrument fails to meet its contractual obligations; the risk that the Company will not be able to meet its financial obligations as they fall due; and the risk that market prices may vary which will affect the Company’s income.

(h) Insurance risks

The Company intends to insure its operations in accordance with industry practice. However, in certain circumstances, the Company’s insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the Company.

(i) Investment speculative

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

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

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section 8

intellectual

property report

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Contact: Peter Hille _{20 November 2014} Principal/Associate: Peter Hille

The Directors Phytotech Medical LTD Suite 9, 330 Churchill Avenue, Subiaco WA 6008 Australia Our ref: 253871 Dear Directors,

This Report has been prepared for inclusion in a Prospectus required for lodgement at the Australian Securities and Investments Commission for the purpose of raising funds through the issue of securities.

Phytotech Medical Ltd (‘Phytotech’) holds an exclusive worldwide license to make commercial use of the subject matter of a provisional patent application filed with the United States Patent Office for the delivery of any cannabidiol (CBD) or tetrahydrocannabinol (THC) for the treatment or prevention of any medical condition or disease in humans, except for the treatment and/or the relief of sleep apnea, snoring and/or any sleep disorder and/or any other disorder that occurs during sleep. Phytotech is also owner and applicant of one Australian provisional patent application.

This Report summarises the status of these patent applications.

In the preparation of this Report, we have not enquired into or otherwise assessed the validity of the license granted to Phytotech. We have relied only upon a copy of the license agreement provided to us.

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Phytotech Medical LTD 20 November, 2014

2

1. Background

This Report is based on information generated by patent searches undertaken by us on 13 November 2014 and on information provided by the licensees of the patent applications that has been licensed to Phytotech.

The Report also includes information of an Australian provisional patent application owned by Phytotech. This information was provided by WRAYS as the patent attorneys responsible for prosecution of this particular Australian provisional patent application.

Further information regarding the licensed foreign application (outside Australia) was provided by the attorneys which are overviewing and responsible for the prosecution of the licensed patent application. This application for which we obtained information from third parties regarding the status of the application is marked accordingly (*).

In compiling this Report, in respect of the patent application either licensed to Phytotech or owned by Phytotech, the filing particulars have been confirmed and the current status ascertained. Based on the information provided to us all of the patent applications set out in this Section 2 of this Report are currently in force.

Wrays is not aware of any material changes expected to occur to the status of matters discussed below, except for normal changes in the course of standard patent prosecution and grant.

Wrays has not confirmed if the licensed patent application has been prosecuted in accordance with the Patent Law and Regulations of the jurisdiction in which it was filed.