SPACETALK LTD — AGM Information 2012

Nov 29, 2012

MGM WIRELESS 2012 CHAIRMAN'S ADDRESS

Ladies and Gentlemen welcome to the 2012 Annual General Meeting of MGM Wireless. Whilst we normally hold our AGM at our head office in Adelaide, we have taken this opportunity to hold this meeting in Melbourne where a significant part of our shareholder base resides.

2012 was our third successive year of profit with a record \$603K, up 135% over 2011. Revenue was up 9% to a record \$2.6 million. Reflecting our profit achievement, shareholders equity doubled to \$1.2 million and apart from shareholder loans, the company remains debt free.

Our client base continues to grow with the number of operational schools increasing by 16% to over 800 schools as at 30 June 2012. This has since increased to over 940 schools and we look forward to passing the 1,000 mark sometime before the next AGM.

The growth that we have achieved over the past three years and the support we continue to receive is a testament to the quality of our value proposition and the recognition of the value in text messaging in delivering a timely, non-invasive communication with a parent.

A major achievement for the company, which we believe will be, in due course, the key long term driver of growth was the launch earlier this year of School News Channel. School News Channel is a completely new business model with parents and other stakeholders paying to receive messages from their schools. This is in contrast to the current model where schools pay the costs of running the service.

It is a compelling model for both schools and parents and as evidenced by the enormous response to our initial marketing campaign, there is widespread parent support and little resistance to the idea of paying a small cost to be kept informed of school issues and activities relevant to their children.

We are confident that the first schools to commit to this model will be online in the new school year and other schools will then follow once it is apparent how smoothly the system runs.

Whilst the launch of School News Channel has been our major priority we have a suite of other products that we continue to develop and improve. Rollmarker, is a cloud based, start of the art roll marking solution which we released last year and has been strongly supported.

We also developed and launched many new features for Outreach – our school specific web based social messaging solution that allows School Leaders to securely and easily communicate to Parents and the School Community and is well suited to sending School Event Reminders, Sport Fixtures, Late Breaking News and Emergency Notifications. In fact Outreach is a key component of the School News Channel offering.

Rollmarker is a premium, attendance recording product that is all about managing Students in the easiest, most effective way possible by using the latest in education software technology – the cloud and hand-held internet devices such as tablets and smartphones.

We have increased our investment in research and product development and will continue to enhance our existing product range to ensure they remain market leaders and will launch new products that support schools in the management of their student bodies and relationships with their stakeholders.

As we have recently advised, the Directors have given deep consideration to the issue of declaring a maiden dividend. We believe a modest dividend is affordable but we wish to be absolutely certain it would be sustainable. This will be reviewed again towards the middle of next year.

During the height of the GFC, when the company's cash flow was modest, Mark Hurd and I contributed funds to support the company. These are the only borrowings of MGM Wireless. We are both happy to consider converting these loans to equity, however, based on the advice received from experts, there are significant corporate governance and regulatory issues to work through and the process is complex. As a result it could be some time before a proposal is put to shareholders to address this matter. In the meantime, the debt will continue to sit on the balance sheet as a noncurrent liability.

The company's funding position remains healthy. We are able to fund our operations and growing research and development commitment from internal cash flows and have no need, at the present time, for further borrowings or new equity raisings.

Trading has been strong since June mostly driven by the high rate of new school signings and improved account management processes. Accordingly, the 2013 interim result is expected to show a solid gain over the same period last year. However, at this stage the second half of the financial year looks like being slower and that overall growth in 2012-13 is likely to be in the range of 10% - 15%.

We expect this growth to accelerate in 2014 and beyond as school penetration moves well beyond 1,000 with market acceptance of School News Channel and as our other new products gain market traction and momentum of their own.

MGM Wireless is the market leader in SMS messaging services for schools and the company has a fantastic future.

Thank you for attending today.