GRATIFII LIMITED — Capital/Financing Update 2021

Feb 24, 2021

ASX ANNOUNCEMENT

25 February 2021

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Market update: Disclosure of key information required by ASX in relation to conditions for reinstatement to trading.

Mobecom Limited (ACN 125 688 940) ( MBM or Company ) has been liaising with ASX Limited ( ASX ) regarding the conditions MBM must satisfy in order to achieve reinstatement of MBM’s securities to trading. As part of the reinstatement conditions, MBM is required to release to the market the information set out in this announcement.

MBM’s Capital Structure

The capital structure of MBM at the date of this announcement is set out below:

Capital	Number
Total fully paid ordinary (Shares) on issue*	558,134,090
Total options to acquire Shares (Options) on issue • 33,500,000 quoted options - exercise price: $0.10, expiry: 30 June 2021 • 2,947,135 unlisted options – exercise price: $0.05, expiry: 10 July 2022 • 4,983,776 unlisted options – exercise price $0.0336, expiry: 13 February 2023 • 10,650,568 ESOP options – exercise price: $0.05, expiry: 13 February 2022 • 1,333,332 previous Director Loan free Attaching Options – exercise price: $0.10, expiry: 30 June 2021: • 6,000,000 unlisted options – exercise price: nil to pay, expiry: 17 April 2023 • 1,500,000 unlisted options – exercise price: nil to pay, expiry: 23 May 2023	60,914,811
Other convertible securities – face value: $360,000, conversion price: $0.04	9,000,000**

*Assumes no other Options or other convertible securities are exercised.

** As disclosed to market on 26 November 2020.

Fully Diluted Share Capital	Number of Shares
Total Shares on issue if all Options and other convertible securities on issue are exercised	628,048,901

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Bombora Loan Agreement and Convertible Note Agreement

The Company has entered into a secured loan agreement for $1.5m with Bombora Investment Management Pty Ltd ATF Bombora Special Investments Growth Fund ACN 625 413 390 ( Bombora ) to fund the improvement of its operations and invest in its future development and a related convertible note agreement. The Key Term of these documents are as follows:

to fund the improvement of its operations and convertible note agreement. The Key Term of	invest in its future development and a related these documents are as follows:
Borrower	Mobecom Limited (ACN 125 688 940).
Lender	Bombora Investment Management Pty Ltd ATF Bombora Special Investments Growth Fund ACN 625 413 390
Term	Three months, being from 24 February 2021 to 24 May 2021.
Principal	A$1,500,000.
Interest Rate	8% p. a. accruing daily
Repayment Conditions	The Bombora Loan must be repaid within the term either in cleared funds or via the issue of Convertible Notes.
Default Interest Rate	18% p.a. default interest applies upon an event of default
Material Events of Default	Failure to convene the EGM to obtain shareholder approval to issue the Convertible Notes. An insolvency event occurs. Failure to repay the Bombora Loan by the end of the Term.
Security	General Security Deed between Bombora (as grantee) and the Company (as grantor) dated24 February 2021

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Discharge	Bombora must discharge and release its security interest under the GSD once the Bombora Loan has been paid in full and the Company has discharged its obligations under the GSD and Bombora Loan Agreement.

Convertible Note Agreement Summary of Key Terms

Convertible Note Agreement Summary	of Key Terms
Number of Convertible Notes and Face Value	10 Convertible Notes with a face value of $150,000 each.
Conversion Price	$0.02 per share.
Interest rate	8% p.a. accruing daily.
Maturity Date	24 months after the date of the Bombora Loan Agreement i.e. 24 February 2023
Conditions Precedent	The parties' obligations under the Convertible Note Agreement will be subject to shareholders approving the issue the proposed Convertible Notes at the next EGM
Conversion	The Convertible Notes are convertible into Shares at Bombora's option any time up to the maturity date or a takeover event occurring. The Convertible Notes will be converted into Shares on the earlier of the maturity date or a takeover event.
Redemption	The Convertible Notes may only be redeemed upon an event of default (i.e., an insolvency event or a failure to pay any money owing under the Convertible Note Agreement).
Transferability and Rights	The Convertible Notes are transferable and do not entitle the note holder to any voting rights.
Reorganisation of Capital	Upon any bonus issue or reorganisation of Share capital, the number of Shares which may be issued to Bombora under the Convertible Note Agreement will be adjusted to ensure that Bombora receives the same proportion of Shares as it would otherwise have received had the bonus issue or reorganisation not occurred.

The Company proposes to repay the Bombora Loan by issuing 10 Convertible Notes to Bombora at a subscription price of $150,000 per Convertible Note each. The issue of these Convertibles Notes is subject to MBM shareholder approval at the next Company General Meeting.

The full terms of the Convertible Note Agreement are available and set out in the Appendix to this announcement.

Unaudited Pro Forma Financial Position of MBM

As at the date of this announcement, MBM’s Unaudited pro-forma financial position for 31 December 2020 is as outlined below:

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Consolidated Statement of Financial Position	Unaudited 31 December 2020	Pro forma Adjustment s	Pro Forma As at 31 December 2020	Audited As at 30 June 2020
CURRENT ASSETS Cash and Cash Equivalents Capital raise Lakeba payment Bombora loan Adjusted Cash and Cash Equivalents Trade and Other Receivables Trade debtors adjustment Adjusted Trade and Other Receivables Other Assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Intangible Assets Property, Plant and Equipment Right of Use Assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Trade creditors written off Bombora loan Deferred revenue Provisions Borrowings Lease liability TOTAL CURRENT LIABILITIES	61,382 1,447,983 61,401	3,899,118 (1,064,118) 1,500,000 4,335,000 4,396,382 69,118 10,393 1,458,376 730,640 - 61,401 54,899
	1,570,766	5,916,161 854,657
	1,614,132 38,753 120,856	1,614,132 765,481 38,753 44,700 120,856 143,440
	1,773,741	1,773,741 953,621
	3,344,507	7,689,902 1,808,278
	2,840,833 - 7,913 184,247 106,766 132,642	(837,647) (837,647) 2,003,186 3,246,739 1,500,000 1,500,000 - 7,913 66,959 184,247 217,239 106,766 2,688,364 132,642 85,475
	3,272,401	3,934,754 6,304,776

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NON-CURRENT LIABILITIES Trade and other payables Deferred revenue Provisions Borrowings Lease liability TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS	375,284 375,284 502,770 178,524 178,524 - 60,910 60,910 66,553 718,366 718,366 - 33,489 33,489 63,064
	1,366,573 1,366,573 632,387
	4,638,974 5,301,327 6,937,163
	(1,294,467) 2,388,575 (5,128,885)

EQUITY Issued share capital Reserves Accumulated losses PARENT ENTITY EQUITY NET ASSETS/(DEFICIENCY) Non-controlling interest EQUITY NET ASSETS/(DEFICIENCY)	31,013,800 3,899,118 34,912,918 27,905,355 475,894 475,894 2,905,570 (32,784,161) (216,076) (33,000,237) (35,840,308)
	(1,294,467) 2,388,575 (5,029,383)
	- - (99,502)
	(1,294,467) 2,388,575 (5,128,885)

Notes to the Unaudited 31 December 2020 Pro-Forma Balance Sheet:

• Increase in cash represents the $4.0m capital raising net of the Lakeba payment of $0.9m as per the binding deed of settlement dated 30 October 2020.

• Trade Receivables comprise customer receivables of $0.4m and $1.0m of R&D rebates.

• The increase in Intangible Assets represents further investment in the development of the Mosaic platform.

• The movement in Borrowings from 30 June 2020 to the Pro Forma Balance Sheet at 31 December 2020 represent the various equity allocations for outstanding director fees and loans and Lakeba loan balances in accordance with the deed of settlement dated 30 October? 2020.

• The write off in trade creditors relates to $705,882 in settlement of invoices to Lakeba with the balance being settlement of director fees and loans through equity issues.

Sales Revenue for FY2020

MBM confirms the sales revenue figures for FY2020 and 1H2021 set out in the following table:

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	Sales revenue for FY2020	Sales revenue for 1H2021
MBM(excluding PBC)	$2,070,111	$1,275,743
Paid by Coins Pty Ltd (ACN 621 589 759) (PBC)	$1,368,600	$NIL

The revenue set out in the first row in the table above represents revenue from continuing operations and for avoidance of doubt, excludes sales revenue attributable to PBC and comprise client SaaS revenues and development fees.

Other revenues, which are not included above, comprise Research and Development rebates and Government subsidies and are recorded as Other Revenue in the consolidated statement of profit or loss and other comprehensive income and total $0.4m and $1.0m in FY2020 and 1H2021 respectively.

Working Capital Statement

The Company advises that following the recent placement which completed on 14 January 2021, completion of the Deed of Settlement and Release with Lakeba (announced to the market on 8 January 2021) and completion of the securities issues approved at the general meetings of the Company on 29 January 2021 and 27 November 2020 and the Bombora Loan of 24 February 2021, it has working capital of at least $1,500,000 and in an amount which is sufficient to carry out its objectives which are outlined below:

Grow the loyalty and rewards client base.

The Company has a growing pipeline of new opportunities both in Australia and South Africa. We are currently working with these opportunities to scope their requirements and ensure our platform meets their needs.

Complete the development of the ‘Mosaic’ enterprise platform.

We have previously delivered our first Mosaic module to Nedbank and are now working with The Unlimited to deliver the Loyalty Module which is the second module to be delivered. The Loyalty Module is now in production and will go live within the next month.

Migrate existing clients from legacy systems to the Mosaic platform,

We are currently working with Vodacom to migrate their existing Mobecom software to the new Mosaic platform. We expect this project to begin in the next month and be completed by the middle of the year. We are aiming to have all our clients migrated on to the Mosaic platform by the end of the calendar year.

Complete the implementation of the recent new contract signings.

The current implementation at The Unlimited is running on budget and ahead of schedule.

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Build to team focusing on customer integration, operations, and sales.

We have recently strengthened our operations capability with the hiring of Justin Jefferies as COO in Australia and Renier Meintjes as Head of Operations for Africa and the Middle East. Both Justin and Renier have held senior operations roles at Knight Frank and Bidvest Bank respectively.

Further, Mark Schoombie has been elevated to the role of Chief Technology Officer. He will also be relocating to Dubai to lead our Middle East presence. Prior to COVID the Company had been engaged with a number of prospects across the Middle East and Mark will work with these opportunities whilst also leading our development teams in Pune in India and Cape Town in South Africa.

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The Company’s ability to generate sufficient cash depends on its future performance which, to a certain extent, is subject to a number of factors beyond the Company’s control including general economic, financial and competitive conditions.

MBM’s Corporate Structure

Details of the entities controlled by MBM as at the date of this announcement are set out in the following diagram.

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MBM hereby sets out the status of the winding up of IQ Awards Pty Limited (ACN 160 164 198), Endless Awards Pty Limited (ACN 114 569 872) and Paid by Coins Pty Ltd respectively.

• IQ Awards Pty Limited

IQ Awards Pty Limited was placed into liquidation on 7 February 2020. The liquidation process is underway and expected to be completed in the coming months.

• Endless Awards Pty

Endless Awards Pty was placed into liquidation on 10 February 2020. The liquidation process is underway and expected to be completed in the coming months.

• Paid by Coins Pty Ltd

MBM submitted an application for the deregistration of Paid by Coins Pty Ltd dated 15 January 2021, which was received by Australian Investments and Securities Commission on 22 January 2021 and published on its website on 22 January 2021. Accordingly, no less than two months after the application was gazetted, MBM expects it will be officially deregistered on 22 March 2021.

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Compliance with ASX Listing Rules

MBM confirms that MBM is in compliance with the Listing Rules and in particular Listing Rule 3.1.

MBM confirms that this announcement has been approved by the board of directors of MBM.

David Hwang Company Secretary

For further information, contact:

Iain Dunstan Executive Chairman

i.dunstan@mobecom.co

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About Mobecom Limited

Mobecom Limited (ASX:MBM) is a full-stack customer engagement technology provider that delivers end-to-end technology solutions for businesses to engage with their customers. Its primary focus is providing liquidity for digital assets through its newly developed Mosaic Enterprise Engagement Platform. With mobile payment, ordering, booking and local offer capability; the Mosaic EEP will be the gateway to delivering a new digital lifestyle rewards program.

To learn more, please visit: www.mobecom.co

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Appendix

Full Convertible Note Terms

1.1 Ranking of Convertible Notes

The Convertible Notes rank in all respects equally with each other and without any preference among themselves and among all other convertible notes issued on terms identical to those contained in this Appendix.

1.2 Priority

The Convertible Notes rank pari passu with unsecured creditors of the Company on a winding up.

1.3 Voting rights

Convertible Notes do not entitle Noteholders to have any right to vote at general meetings of the Company.

1.4 Notices

Each Noteholder will have the same rights as a holder of Shares to receive notices of general meetings, reports and financial statements of the Company.

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REGISTER OF CONVERTIBLE NOTES

2.1 Establishing the Register

The Company must establish and maintain a Register and enter on the Register:

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• the name and address of each Noteholder;

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• the number of Convertible Notes held by each Noteholder;

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• the following information in relation to each Convertible Note:

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• the Issue Date;

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• the Maturity Date;

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• the Face Value; and

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• the Interest Rate,

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• in relation to Convertible Notes no longer outstanding, particulars of their conversion into Shares; and

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• such other information as is required by any applicable law.

2.2 Register available for inspection

The Register must be kept at the registered office or principal place of business of the Company or any other place permitted by the Corporations Act. Subject to any exemption granted under the Corporations Act, the Register must be open at all reasonable times during business hours for inspection by any person.

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On the request and at the expense of any person inspecting the Register, the Company must provide to the person an extract from the Register as soon as practicable after the making of the request.

2.3 Register conclusive

In the absence of evidence to the contrary, the Register is proof of the matters shown in the Register.

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INTEREST

3.1 Interest Rate

Interest accrues on each Convertible Note at the Interest Rate, being 8% p.a.

3.2 Calculation of interest

Interest will:

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• accrue daily on the face value of the Convertible Notes;

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• be calculated from and including the date the Loan Agreement was entered into until and including the Conversion Date or Redemption Date (as applicable);

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• be calculated on the actual number of days elapsed on the basis of a 365-day year; and

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• capitalise daily.

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Total Outstanding Value

Total Outstanding Value = Aggregate Face Value + any interest calculated in accordance with paragraph 3 of this Appendix.

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REDEMPTION

5.1 Event of Default

If an Event of Default occurs, the Company must, within 7 days of the Event of Default occurring, give a written notice to all Noteholders:

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• specifying that an Event of Default has occurred; and

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• setting out reasonable details of such event or circumstances constituting the Event of Default,

( Default Notice ).

5.2 Redemption by Noteholder

Upon receipt of a Default Notice, and at any time while an Event of Default which is the subject of a Default Notice is ongoing, the Noteholder may, by written notice to the Company ( Redemption Notice ), direct that the Total Outstanding Value (together with any interest calculated in accordance with paragraph 3.2 of this Appendix) be immediately due and payable.

5.3 Redemption Notice

A Redemption Notice:

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• must be accompanied by the relevant Convertible Note Certificate (or such other evidence of title to the Convertible Notes as is reasonably acceptable to the Company); and

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• must be given in accordance with paragraph 5.2 of this Appendix.

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CONVERSION

6.1 Conversion by Company

If a Convertible Note is not redeemed in accordance with paragraph 5 of this Appendix or by the Noteholder in accordance with paragraph 6.2 of this Appendix, the Company will convert the Convertible Note upon any of the following events, whichever earliest:

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the Maturity Date; or

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• Takeover Event.

6.2 Conversion by Noteholder

The Noteholder may at any time prior to the Maturity Date or a Takeover Event occurring, elect to convert all or part of the Convertible Note at their sole discretion. The Noteholder may, by written notice to the Company ( Conversion Notice ), direct that the Total Outstanding Value (together with any interest calculated in accordance with paragraph 3.2 of this Appendix) be immediately due and payable.

6.3 Conversion Notice

A Conversion Notice:

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• must be accompanied by the relevant Convertible Note Certificate (or such other evidence of title to the Convertible Notes as is reasonably acceptable to the Company); and

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• must be given in accordance with paragraph 6.2 of this Appendix.

6.4 Conversion

The number of Shares to be issued to the Noteholder upon conversion will be determined by the relevant formula:

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Total Outstanding Value ÷ Conversion Price.

6.5 Issue of Shares

Upon conversion, the Company must by no later than 10 Business Days after receiving a Conversion Notice:

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issue the Shares to the Noteholder;

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• deliver a share certificate or a holding statement to the Noteholder in respect of the Shares.

6.6 Number of Shares

If the total number of Shares to be issued to a Noteholder upon conversion includes a fraction of a Share, that fraction will be rounded up to the nearest whole number.

6.7 Ranking of Shares

Shares issued upon conversion will rank in all respects equally with all other Shares on issue.

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CONSENTS

7.1 Conversion must not breach the law

The Company must not permit the conversion of any Convertible Note where to do so would be in breach of any Law, including without limitation Chapter 6 of the Corporations Act, the requirement to obtain the approval of any governmental organisation under the Foreign Acquisitions and Takeovers Act 1975 (Cth), or to obtain the approval of shareholders of the Company under the Corporations Act, the ASX Listing Rules or the Constitution, in respect of the issue of Shares to the Noteholder.

7.2 Noteholder assistance

The Noteholder must do all things, including by delivering all documents and other information, reasonably requested by the Company, for the purposes of satisfying any Law applicable to the conversion of any Convertible Notes, or assisting the Company to comply with its obligations under this paragraph 7.

7.3 Remedy

In the event that the conversion of any Convertible Notes would result in a breach of any Law without the approval of an Authority or the Shareholders, and such consent or approval is withheld or not forthcoming, then the Company may elect to redeem the Convertible Notes on Maturity Date as if a valid Redemption Notice has been given to the Company by the Noteholder under paragraph 5.3 of Appendix 2 instead of proceeding with conversion.

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CANCELLATION OF CONVERTIBLE NOTES

All Convertible Notes converted or redeemed in full in accordance with this document will automatically be cancelled and may not be re-issued.

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EFFECT OF RECONSTRUCTION OF SHARE CAPITAL

If, prior to conversion, there is any bonus issue of Shares or reorganisation of the issued share capital of the Company, including any consolidation, subdivision, reduction, cancellation or return then, the Conversion Price will be adjusted by the Company as appropriate and consistent with the reorganisation to ensure that the proportion which the Shares to be issued to that Noteholder on exercise of its conversion rights after the bonus issue or reorganisation has occurred bears to the total Shares on issue, is the same as it would have been had the bonus issue or reorganisation not occurred.

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TRANSFER

The Convertible Notes are freely transferrable.

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