SPACETALK LTD — Interim / Quarterly Report 2012

Oct 10, 2012

ASX Market Announcements ASX Limited 20 Bridge Street Sydney NSW 2000

ASX Release MGM Wireless Ltd

MGM BUSINESS UPDATE

This business update is being issued to the market in lieu of an Appendix 4C - Quarterly Cash Flow report which, following consultation with the Australian Securities Exchange is no longer required now that the company generates sustainable operating cash flow surpluses.

Sales activity was at a very high level during the September 2012 quarter with 65 new schools signing onto the MGM Wireless SMS messaging service. As at the end of September, the company was servicing a total 940 schools, including 30 in New Zealand, of which 824 were operational. Those that weren't operational will be progressively brought on line over the next few months as installation and training programs are implemented.

Marketing was maintained at a high level. The company is a regular participant at industry conferences and seminars but for the first time it organised its own client events in Sydney and Melbourne. The response from clients regarding the company's new products and service offerings was very positive, and provided the company with an ideal forum with which to communicate and engage with existing and prospective clients. Company managed client events are planned to become a feature of the marketing and client relationship management program and may very well be extended to other cities in due course.

In a further boost to marketing capabilities, MGM Wireless is undertaking a major upgrade of its CRM software. The company has migrated to the highly regarded SugarCRM, an open source application with extensive functionality that will significantly streamline and automate many business processes in sales (including marketing campaigns and collaboration), account management, relationship management and other services. It will support the company to grow and scale its operations whilst also contributing to reducing operational costs.

The company's commitment to product development remains very high with a focus on enhancing the capabilities of existing products to ensure they remain industry leaders and the launching of new products which broaden capabilities and add to the value proposition. The immediate objective is to gain sales traction with recently launched new products Rollmaker and School News Channel.

Discussions are in progress with a number of schools with a view to participation in the School News Channel, whereby the parents and other stakeholders will subscribe to receive messages from the school.

During the quarter, the company received an R&D rebate which contributed to the high cash balance of \$301K as at 30 September 2012.

Mark Fortunatow, MGM Wireless CEO said

"MGM Wireless is the clear market and technology leader in school to parent communications with our client base now rapidly approaching 1,000 schools. The strong sales rate in the September quarter and the excellent response to client events in Sydney and Melbourne are clear evidence of the strength of our value proposition in meeting a clear need from both schools and parents. We are confident, that shortly we will achieve a breakthrough when the first schools commit to the School News Channel which has the potential to greatly expand our reach and further improve the engagement of schools with parents and other key stakeholders."

About MGM Wireless Ltd and Messageyou, LLC

MGM Wireless is recognized in Australia and internationally as a pioneer of socially responsible technology-enabled school communications with a proven track record to design, develop and successfully commercialise innovative world class technology products.

The company's patented SMS School communication solutions empower schools to effectively communicate to parents and caregivers using SMS text messaging to improve student attendance, welfare, safety and parent engagement. Measurable benefits for schools include reduced operating costs, increased productivity and improved parent and community engagement which ultimately improve student learning and social outcomes.

Schools in Australia, New Zealand and the United States use Messageyou software in their day to day operations.

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