SPACETALK LTD — Interim / Quarterly Report 2009

Jan 29, 2009

MGM Wireless operations pick up in December quarter 30 January 2009

South Australian-based school communications group MGM Wireless Ltd announces that the reorganisation of its operations in Australia and the United States has made significant progress on cost reductions whilst maintaining growth in the quarter to the end of December 2008.

During the July 1 – December 31st, 2008 period, the company's revenues were $989,000 (calculated using the company's new revenue recognition policy), as compared to $ 1.1 million (using the old methodology) for the corresponding half year in 2007. Revenue for the December quarter was $472,968.

The company has focused on reducing costs, a process which included reducing head count. The costs associated with this were felt early in the September quarter. The ultimate aim of this reorganisation is to propel the company into a cash-flow positive position. MGM Wireless expects to be in a position to report on the financial progress in the upcoming interim report and for the full year to end-June.

New sales for the December quarter were pleasing, with a net number of 23 additional schools going live, bringing the total number of live and operating schools to 257. A further 92 schools were contracted in the December quarter and will progressively go live in the coming months.

At this stage, the company is not experiencing any negative effect on its business due to the economic crisis, with interest remaining solid from new school enquires. The company is continuing to work on its US sales and operations with negotiations with potential partners still in progress.

About MGM Wireless Ltd and Messageyou, LLC

MGM Wireless Ltd is a public company with a market capitalisation of A$ 2.8 m listed on the Australian Securities Exchange (ASX code: MWR). The company trades as Messageyou, LLC in the United States, with its head office in Silicon Valley at Sunnyvale, Cal.

The company's patented School Attendance Management solutions empower schools to effectively communicate to parents and caregivers using SMS text messaging in combination with culturally sensitive communication to improve attendance, student welfare and safety. MGM Wireless is recognized in Australia and internationally as pioneers and market leaders. MGM's professional services team delivers an integrated suite of software and communications using its own infrastructure. The solutions enable schools to reduce costs, increase productivity, discharge their duty of care, engage parent involvement, and ultimately improve student learning and social outcomes. Schools in Australia, New Zealand and America use Messageyou software in their day to day operations.

For further information contact:

MGM Wireless Ltd. - (ASX:MWR, MWRO) Mark Fortunatow CEO Mobile: +61 421 328 984 Phone: +61 8 8431 2300 Email: mfortunatow@mgmwireless.com Web: www.mgmwireless.com

Rule 4.7B

Appendix 4C

Quarterly report for entities admitted on the basis of commitments

Introduced 31/3/2000. Amended 30/9/2001

Name of entity

MGM Wireless Ltd

ABN Quarter ended ("current quarter")

93 091 351 530 31 December 2008

Consolidated statement of cash flows

		Current quarter	Year to date
Cash flows related to operating activities		$A'000	(.6.months)
			$A'000
1.1	Receipts from customers	682	1,079
1.2	Payments for(a) staff costs	(576)	(985)
	(b) advertising and marketing	(4)	(38)
	(c) research and development
	(d) leased assets
	(e) other working capital	(208)	(538)
1.3	Dividends received
1.4	Interest and other items of a similar nature	-	-
	received
1.5	Interest and other costs of finance paid	(5)	(16)
1.6	Income taxes paid
1.7	Other – Grants received	-	-
	Net operating cash flows	(111)	(498)

+ See chapter 19 for defined terms.

		Current quarter$A'000	Year to date(.6.months)$A'000
1.8	Net operating cash flows (carried forward)	(111)	(498)
1.9	Cash flows related to investing activitiesPayment for acquisition of:(a) businesses (item 5)(b) equity investments(c) intellectual property(d) physical non-current assets(e) other non-current assets	(1)	(2)
1.10	Proceeds from disposal of:(a) businesses (item 5)(b) equity investments(c) intellectual property(d) physical non-current assets(e) other non-current assets
1.111.121.13	Loans to other entitiesLoans repaid by other entitiesOther – Development expenses	-	-
	Net investing cash flows	(1)	(2)
1.14	Total operating and investing cash flows	(112)	(500)
1.151.161.171.181.191.20	Cash flows related to financing activitiesProceeds from issues of shares, options, etc.Proceeds from sale of forfeited sharesProceeds from borrowingsRepayment of borrowingsDividends paidOther (provide details if material)	145	295
	Net financing cash flows	145	295
	Net increase (decrease) in cash held	33	(205)
1.211.22	Cash at beginning of quarter/year to dateExchange rate adjustments to item 1.20	1(5)	236(2)
1.23	Cash at end of quarter	29	29

+ See chapter 19 for defined terms.

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

		Current quarter$A'000
1.24	Aggregate amount of payments to the parties included in item 1.2	119
1.25	Aggregate amount of loans to the parties included in item 1.11	-

1.26 Explanation necessary for an understanding of the transactions

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
• 2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest

Financing facilities available

Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).

		Amount available$A'000	Amount used$A'000
3.1	Loan facilities
3.2	Credit standby arrangements

+ See chapter 19 for defined terms.

Reconciliation of cash

Reconciliation of cash at the end of the quarter (asshown in the consolidated statement of cash flows) tothe related items in the accounts is as follows.		Current quarter$A'000	Previous quarter$A'000
4.1	Cash on hand and at bank	29	1
4.2	Deposits at call
4.3	Bank overdraft
4.4	Other (provide details)
	Total: cash at end of quarter (item 1.22)	29	1

Acquisitions and disposals of business entities

		Acquisitions(Item 1.9(a))	Disposals(Item 1.10(a))
5.1	Name of entity	N/A
5.2	Place of incorporationor registration	N/A
5.3	Consideration foracquisition or disposal	N/A
5.4	Total net assets	N/A
5.5	Nature of business	N/A

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.
• 2 This statement does give a true and fair view of the matters disclosed.

Sign here: M Fortunatow Date: 30 January 2009 Director

Print name: Mark Fortunatow

+ See chapter 19 for defined terms.

Notes

• 1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• 1. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below.
  • 6.2 reconciliation of cash flows arising from operating activities to operating profit or loss
  • 9.2 itemised disclosure relating to acquisitions
  • 9.4 itemised disclosure relating to disposals
  • 12.1(a) policy for classification of cash items
  • 12.3 disclosure of restrictions on use of cash
  • 13.1 comparative information
• 1. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.

+ See chapter 19 for defined terms.