SPACETALK LTD — Investor Presentation 2019

Nov 28, 2019

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Available with Video Download Streaming at: https://mgmwireless.com/wp-content/uploads/2019/11/MWR-AGM-Presentation-ASX-291119.pdf

Retail distribution UK tripled launch

YTD revenue up more than $4.3m marketing campaign under way with high- 60%* profile advertising

‘30% of all Smartwatch sales Global ‘spending will be children on wearables aged 5-13’ forecast to be $52B in 2020’ Gartner Research ‘Smartwatches are on pace to achieve Smartwatch sales the greatest revenue forecast to grow potential among from $17.0B in 2019 all wearables to $27.4B in 2021

‘Smartwatches are on pace to achieve the greatest revenue potential among all wearables through 2021’

Australia 588 stores JB Hi-Fi Officeworks (NEW) The Good Guys (NEW)

New Zealand 588 stores 189 stores JB Hi-Fi SPARK Officeworks (NEW) Noel Leeming (NEW) Harvey Norman (NEW) The Good Guys (NEW) JB Hi-Fi (NEW) SPACETALK UK e-commerce Sky Mobile store

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Australia

• SPACETALK market-leading, very high quality and easy to use product with comprehensive customer service

Total population aged 5-12 2,090,459

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$1.6b Revenue potential

• Driving new sales to large new market sector, children 5-12 years old

• Provides mobile network operators an opportunity to responsibly acquire new customers at an early age

• Also opportunity for mobile network operator to acquire customer at lower cost

• Customer acquisition cost (CAC) for mobile network operator ~$90. The CAC of a SPACETALK customer to a telco is much lower.

• When customer upgrades to a smart phone, they are likely to continue with the same mobile network

*Roy Morgan 2016

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UK

• Average cost of acquisition generally four times average revenue per user (ARPU)

• Contract lengths of 24 months or less allow relatively little time for a telco to generate a positive margin

• Rising subscriber acquisition costs and churn

• Telcos have one of the highest industry customer acquisition costs (about £315)

• SPACETALK offers telcos the ability to secure a “sticky” customer at a younger age at less cost. This is valuable offering for which telcos will remunerate us.

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Total population aged 5-12
5,558,975 £14.5b
Revenue
potential
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*Ofcom November 2017

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66 million 1 million
People in UK Sky Mobile
(3x Australia) customers
Mobile
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10 million
350
Sky UK subscribers
with children Sky sales people
trained
aged 5-12
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• Aug-19 agreement with Sky Mobile , part of Sky UK which has 23 million subscribers and is owned by Comcast

• Sky selling SPACETALK on a £10 per month, 36-month plan

• MGM receives full wholesale payment and recognises 100% of revenue when SPACETALK is sold to Sky

• Nov-19 updated agreement: Sky granted telco exclusivity subject to minimum sales of 25,000 by September 2020. In addition:

• MGM to be paid £15.00 for each Sky SIM activated sold through a non-Sky bricks and mortar retailer

• £1 million on advertising before September 20, 2020 (£600,000 by March 2020)

• Sky to sell SPACETALK from 100 Sky retail stands

• Advanced negotiations with UK retailers which will co-brand with Sky and SPACETALK

• This new revenue model paves the way for deals with other Telcos

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Increasing users of SPACETALK

Appendix

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• Revenue YTD* above $4.0 million exceeds last year’s entire first half, with Christmas still to come

• UK post-launch sales ($425,000 YTD) more than double the first six months if sales post-launch in Australia

• Marketing in UK has ben limited to

• moderate PR, social media and word of mouth. Major TV and promotional campaigns begin 2 December (more info below)

• Sky very optimistic about sales ramp up over Christmas period

▪ Withdrawn from QVC agreement

Revenue FY20 YTD

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Revenue already
up more than
60%
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*Year to date is 1 July to 22 November 2019 (‘YTD’)

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SPACETALK sales

• Sales of 12,800 SPACETALK units YTD* already exceeds 11,000 for 1H FY19

• Over 10,000 SPACETALK units sold in Australia and New Zealand YTD

• Sales through SPACETALK website lower, as marketing promotes purchase at retail stores

• About 2100 units sold in UK YTD; aggressive Sky advertising campaign begins on 2 December 2019

• Withdrawn from QVC agreement

• *Year to date is 1 July to 22 November 2019 (‘YTD’)

Strong Christmas sales anticipated

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All My Tribe App sales

▪ AllMyTribe App - allows parents to control who kids can call and send message to

• Enables SMS messaging, safe zones and alerts, SOS alerts and GPS tracking

• Consistently growing, recurring software services revenue

• App subscriptions now generating $82,000 per month; compares to total app fees of $98,000 for 1H FY19

Strong Christmas sales anticipated

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*Year to date is 1 July to 22 November 2019 (‘YTD’)

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$4.3m

Overall marketing program underway November 2019 – March 2020

$1.9m To be funded by MGM with additional funding by partners

Australia and New Zealand

▪ Officeworks TV campaign already started

▪ Australian and New Zealand stores stocked with SPACETALK including JB Hi-Fi, Officeworks and The Good Guys

• New Zealand advertising and PR campaigns

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UK – £1 million marketing campaign

• Begins 2 December, 2019

• Fully funded by Sky as part of exclusivity agreement

▪ Includes high-impact TV commercials, electronic and direct mail, public relations, social media and co-branded product promotion

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Rapidly assessing new market opportunities that can leverage MGM’s technology:

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4G watch release in Aged care People with Field development disabilities Workers (possible FY20 (expect FY20) launch)

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Australian school communications solutions since 2002

• Stable, profitable, subscription business

• Continues to perform steadily

• New products to be introduced in second half, expected to restart growth

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1,400 schools

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1.7m parents

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Sales of SPACETALK expected to grow 4x to 90,000 in FY20 Opportunity to capitalise on emerging new product category

Australia and New Zealand distribution increased to 777 stores

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Appendix

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Market - leading data security

SPACETALK is the most secure in the market:

▪ All data is hosted in Australia and the UK

• Data Encrypted between AllMyTribe app, servers and SPACETALK

• Two-factor authentication used in pairing process

▪ Hardware to chip level tested as secure

▪ Apps, server software and firmware developed in Australia

▪ European GDPR privacy of data compliant

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SPACETALK Simply Safer Phones for Kids

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Key features

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3G Mobile High Band 3G Mobile Low Band Reliable mobile coverage across Australia and UK Complies with Australian, NZ and UK telecommunications network requirements Tested and certified to Australian, NZ and UK standards and safe for kids Kids’ data stored in Data secure and stored in Data protected by Australian privacy and security laws and EDPR Apps developed in Australia/UK Australia/UK Australia Camera Some

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2018 audit by The University of Adelaide’s School of Electrical and Electronic Engineering and Interpol accredited global cyber expert in digital forensics – found potential security breaches in all the models reviewed except SPACETALK – and that the severity of those breaches were ‘notifiable’ to federal authorities.

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Mark Fortunatow

Chief Executive Officer

BSc (MaSc) BEc

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Amanda Lee

Account Manager, Wearable

Formerly Microsoft, JB Hi-Fi, Blackberry and Motorola

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Jarred Puro

Director of Finance and Corporate Services

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Andrew Cockburn

General Manager Education Formerly News Corp

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Paul Cooper General Manager Wearables

Formerly Microsoft, Nokia

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Tim Eckermann

HR Consultant Formerly World Bank Group HR BP

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Nathan De Rozario

SPACETALK Director of Marketing & Sales

Formerly Samsung

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Leila Henderson Non-executive Director

Fellow of Entrepreneurship Flinders University

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Megan Coleman

Marketing and E- Commerce Sales Manager – AU,UK & NZ

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Glen Butler

Non-executive Director

Founder Visy BSc

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